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N. Varadachar Vs. Commissioner of Commercial Taxes, Mysore - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKarnataka High Court
Decided On
Case NumberCivil Petition No. 200 of 1958
Judge
Reported in[1960]11STC94(Kar)
ActsConstitution of India - Article 227
AppellantN. Varadachar
RespondentCommissioner of Commercial Taxes, Mysore
Appellant AdvocateG.S. Ullal, Adv.
Respondent AdvocateD.M. Chandrasekhar, High Court Government Pleader
Excerpt:
.....and would not justify us in issuing a writ on that ground. i am of the opinion that this contention of the learned advocate for the petitioner must fail. in other words, according to their lordships it amounted to saying to the provincial government :you appoint the tribunal as and when you like, instead of my doing so. the result, therefore, is that this contention of the learned advocate for the petitioner must also fail......was dismissed on 31st january, 1957. against that order a revision petition was filed before the mysore board of revenue. on 1st october, 1957, act 25 of 1957 came into force and on 1st december, 1957, act 24 of 1957 came into force. on 12th october, 1957, the board of revenue transferred the said revision petition to the commissioner of commercial taxes. this order of transfer, it should be noted, was made after act 25 of 1957 but before act 24 of 1957 came into force. on 2nd april, 1958, this revision petition was dismissed by the commissioner of commercial taxes. the present petition is directed against the said order of dismissal and the ground on which it is founded is that the commissioner of commercial taxes had no jurisdiction to deal with the said revision petition. 2. the.....
Judgment:
ORDER

Das Gupta, C.J.

1. The petitioner before us was assessed to pay sales tax for the year 1954-55 by the Sales Tax Officer, Mysore. Against the said order of assessment he filed an appeal before the Deputy Commissioner of Sales Tax, Mysore. That appeal was dismissed on 31st January, 1957. Against that order a revision petition was filed before the Mysore Board of Revenue. On 1st October, 1957, Act 25 of 1957 came into force and on 1st December, 1957, Act 24 of 1957 came into force. On 12th October, 1957, the Board of Revenue transferred the said revision petition to the Commissioner of Commercial Taxes. This order of transfer, it should be noted, was made after Act 25 of 1957 but before Act 24 of 1957 came into force. On 2nd April, 1958, this revision petition was dismissed by the Commissioner of Commercial Taxes. The present petition is directed against the said order of dismissal and the ground on which it is founded is that the Commissioner of Commercial Taxes had no jurisdiction to deal with the said revision petition.

2. The contention of the petitioner before us rests on the provisions of Act 25 of 1957 and of Act 24 of 1957. In order to appreciate the contention of the petitioner it would be necessary to refer to the material provisions of those two Acts.

3. Sub-section (1) of section 40 of Act 25 of 1927 repealed, among others, the Mysore Sales Tax Act, 1948 (Mysore Act 46 of 1948). The said sub-section however contained a proviso which inter alia provides that the said repeal shall not affect any right, privilege, obligation or liability acquired or incurred under the enactments repealed, or any investigation, legal proceedings or remedy in respect of such right, privilege, obligation, liability etc., and any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if this Act had not been passed. Sub-section (2) of section 40 inter alia provides that notwithstanding anything contained in sub-section (1) for the purpose of giving effect to the said proviso, the State Government may by notification make such provision as appears to it to be necessary or expedient for specifying the authority, officer or person who shall be competent to exercise such functions exercisable under any of the repealed enactments or any rules, notifications or orders issued thereunder as may be mentioned in the said notification.

4. The sections of Act 24 of 1957 which would require consideration are sections 4, 11 and 12 of the said Act. Section 4 inter alia provides that all appellate and revisional powers vested in or exercisable by the Mysore Board of Revenue under the Mysore Board of Revenue Act, 1955, as amended by the said Act 24 of 1957, shall stand transferred to and be exercisable by the Mysore Revenue Appellate Tribunal constituted by the said Act 24 of 1957. Section 11 provides as follows :-

'As from the date of commencement of this Act, the Mysore Board of Revenue shall cease to function and all proceeding spending before the said Board shall on that date stand transferred to the Tribunal, and thereafter the provisions of this Act shall be applicable to such proceedings as if such proceedings had been commenced before the Tribunal'.

5. Section 12 of the said Act provides that in the Mysore Board of Revenue Act, 1955, sub-section (1) of section 4, sections 6, 11 and 12 and the Schedule shall be omitted.

6. I should have mentioned that under sub-section (1) of section 4 of the Mysore Board of Revenue Act all appellate or revisional powers, which were exercisable amongst others by the Commissioner of Sales Tax were to be exercised by the Board of Revenue.

7. The learned Advocate for the petitioner contended before us that the result of all these provisions is that the Commissioner of Commercial Taxes had no jurisdiction to decide the application for revision and the Mysore Board of Revenue had no jurisdiction also to transfer the said application to the said Commissioner of Commercial Taxes. He contended, in the first place, that the provision of sub-section (2) of section 40 which authorised the Government to specify an authority for exercising functions which are exercisable under the Mysore Sales Tax Act, 1948 (Mysore Act 46 of 1948), is ultra vires the powers of legislature for the legislature delegated one of its essential functions to the Government which it could not do. In the second place, the learned Advocate contended before us that by virtue of the provisions of section 11 of Act 24 of 1957 the matters which were before the Mysore Board of Revenue stood transferred to the Tribunal and the Mysore Board of Revenue could not transfer the said matters to the Commissioner of Commercial Taxes. At this stage I should mention that by a notification issued by the State Government dated 8th December, 1957, the Commissioner of Commercial Taxes was specified as the authority for exercising the powers of revision exercisable under the Sales Tax Act of 1948 (Mysore Act 46 of 1948). The learned Advocate contended before us that before the notification was issued by the Government, Act 24 of 1957 had already come into operation and by virtue of section 11 of Act 24 of 1957 the revision petition which was then pending before the Mysore Board of Revenue stood transferred to the Revenue Appellate Tribunal. He urged that the Government had no powers thereafter to specify the Commissioner of Commercial Taxes as the authority to deal with the petition. He also urged that the Board of Revenue could not also transfer the same to the said Commissioner of Commercial Taxes particularly because at the date when the said transfer was ordered and Commissioner of Commercial Taxes was not specified under sub-section (2) of section 40 of Act 25 of 1957 as the authority for exercising powers of revision under the Mysore Sales Tax Act.

8. In my opinion, none of these contentions of the learned Advocate for the petitioner can be accepted as sound. I shall first take up the second contention urged by the learned Advocate for the petitioner before us, viz., that the Board of Revenue could not in the circumstances of this case transfer this revision petition to the Commissioner of Taxes and the Commissioner of Commercial Taxes could not deal with the said petition.

9. The true position in the matter seems to me to be as follows :- It is not disputed before us that the proviso to sub-section (1) of section 40 kept alive the right which had already accrued prior to the coming into operation of Act 25 of 1957 and under the said proviso any legal proceedings which may have been started for enforcement of that right has to be continued as if Act 25 of 1957 had not come into operation. The result of this proviso so far as it relates to the present question is that the revision petition which had already been filed before the said Act came into force has to be contained under the provisions of the Mysore Sales Tax Act, 1948, as if the said Sales Tax Act had not been repealed by Act 25 of 1957. It should be mentioned that by virtue of sub-section (1) of section 4 of the Mysore Board of Revenue Act the powers of revision exercisable under the Mysore Sales Tax Act are to be exercised by the Board of Revenue. Therefore in spite of the fact that Act 25 of 1957 had come into force it was the Mysore Board of Revenue which had no deal with the present revision petition. I have already mentioned that the said proviso is subject to the limitation contained in sub-section (2) of section 40. The said sub-section, I have mentioned, inter alia provides that the State Government may for the purpose of giving effect to the said proviso specify an authority to exercise the functions exercisable under any of the repealed enactments. It, therefore, follows that although the Board of Revenue was empowered to deal with the revision petition by virtue of the proviso to sub-section (1) of section 40 the Government by virtue of sub-section (2) of section 40 had the power notwithstanding the proviso to specify the authority which would deal with such revision petition. The Government in this case has specified the authority on 8th December, 1957, and that is the Commissioner of Commercial Taxes. Therefore, it is the Commissioner of Commercial Taxes who would be entitled to deal with such revision petition, instead of the Board of Revenue. The question which then arises is whether or not the provisions of Act 24 of 1957 made any difference in this result.

10. The learned Advocate, as I have already stated, strenuously argued before us that by virtue of section 11 of Act 24 of 1957 all matters which were pending at the date of commencement of that Act before the Mysore Board of Revenue stood transferred to the Mysore Revenue Appellate Tribunal and this revision petition being also pending at the said date, must also be held to have stood transferred to the said Tribunal. That being so, the learned Advocate contended, there was no question of the matter going to the Commissioner of Commercial Taxes for the purpose of disposal.

11. It should be noted that the order of specification by which the Commissioner of Commercial Taxes was authorised to deal with such matters came into existence only on 8th December, 1957, and before that on 1st December, 1957, Act 24 of 1957 had come into existence. The learned Advocate for the petitioner strongly relied on that fact and contended before us that, had the order of the Government specifying the authority under sub-section (2) of section 40 of Act 25 of 1957 come into existence before 1st December, 1957, there might have been some justification for the contention that the Commissioner of Commercial Taxes would be the proper authority to deal with this revision petition. But the said notification of the Government having come into existence after Act 24 of 1957 was wholly inoperative and could not defeat the provisions of section 11 of Act 24 of 1957.

12. At the first sight, I must confess, this contention of the learned Advocate for the petitioner seems to be attractive. But on deeper consideration of the matter I have to come to the conclusion that notwithstanding the provisions of section 11 of Act 24 of 1957 the Government still retained the power under sub-section (2) of section 40 of Act 25 of 1957 to specify the authority to deal with the matters which were saved by the proviso to sub-section (1) of section 40 including the matter in question. In the first place it should be noted that what the proviso to sub-section (1) of section 40 contemplates amongst others is that any legal proceeding which has been commenced shall be continued as if this Act had not been passed, which means as if the Mysore Sales Tax Act of 1948 had not been repealed. It cannot therefore be disputed that until Act 24 of 1957 came into operation it would be the Board of Revenue which would be entitled to deal with the said revision application. The result of Act 24 of 1957 coming into force is that the matters which were pending before the Board stood transferred to the Revenue Appellate Tribunal. I am assuming for the moment that the Revenue Appellate Tribunal would be competent to deal with the matter in question although, as I shall presently point out, Act 24 of 1957 does not authorise the Revenue Appellate Tribunal to deal with such revision petitions. Even on such assumption the only result of Act 24 of 1957 coming into operation is that the Mysore Revenue Appellate Tribunal would be the authority to deal with matters of this kind instead of the Board of Revenue. But the authority of the said Tribunal to deal with such matters initially rests on the proviso to sub-section (1) of section 40 which kept alive the old Mysore Sales Tax Act being Act 46 of 1948. But the proviso itself is subject to sub-section (2) of section 40 of Act 25 of 1957. The Government can under the said sub-section specify the authority which would be competent to deal with such matters. It, therefore, follows that the power of the Revenue Tribunal to deal with such matters is always subject to Government specifying an authority which would be competent to deal with the same. Till the Government did not specify the authority under sub-section (2) of section 40 it would be the Board of Revenue and after the passing of Act 24 of 1957 the Mysore Revenue Appellate Tribunal would, by virtue of the said proviso, be competent to deal with the said proceedings. But after the State Government specified the authority under sub-section (2) of section 40, the proviso stood superseded to the extent namely that instead of the authority who would be entitled to act under the said proviso, that is to say the authority who would have acted if Act 25 of 1957 had not come into force, the authority specified by the Government would alone be able to deal with such matters. In this case the Commissioner of Commercial Taxes being specified by Government would be the authority competent to proceed with such matters. I am unable to hold that the enactment of section 11 of Act 24 of 1957 in any way took away the powers of the Government in this respect. I have arrived at the same conclusion by a different process of reasoning which I shall presently indicate.

13. It appears on reference to the provisions of Act 24 of 1957 that the Revenue Appellate Tribunal constituted by the said Act will have no jurisdiction to deal with revision petitions. Section 4 of the said Act to which I had already referred, provides that the appellate and revisional powers vested or exercisable by the Mysore Board of Revenue under the Mysore Board of Revenue Act, 1955, as amended by this Act, shall stand transferred to and exercisable by the Tribunal. Thus the powers of the Mysore Board of Revenue as amended by Act 24 of 1957, are powers which are to be exercised by the Revenue Appellate Tribunal both in its appellate and its revisional jurisdiction. But by section 12 of the said Act sub-section (1) of section 4 of the Mysore Board of Revenue Act, 1955, along with some other sections of the said Act are omitted. Thus by the said amendment the revisional powers which vested in the Board by virtue of sub-section (1) of section 4 no longer remained with the same. This is the amendment made by Act 24 of 1957 to the Mysore Board of Revenue Act, 1955. Subject to this amendment, therefore, the powers of the Mysore Board of Revenue Act, 1955, are to be exercised by virtue of section 4 of Act 24 of 1957 by the Mysore Revenue Appellate Tribunal. The result is that the Mysore Revenue Appellate Tribunal would have no jurisdiction to deal with revision petition which were pending before the Mysore Board of Revenue at the date of the commencement of this Act. This position was not seriously disputed by the learned Advocate appearing for the petitioner before us. If that is so, then it follows that although by virtue of section 11 of Act 24 of 1957 all proceedings pending before the Mysore Board of Revenue at the date of commencement of that Act may have stood transferred to the Revenue Appellate Tribunal constituted by the said Act, the said Revenue Appellate Tribunal will have no jurisdiction to hear and dispose of revision petitions. The question then arises which would be the authority competent to deal with such matters.

14. For that purpose reference should again be made to the provisions of sub-section (2) of section 40 of Act 25 of 1957. Under that provision the Government can specify the authority which would be competent to exercise the functions exercisable under the repealed Acts including the Mysore Sales Tax Act of 1948. The power of revision is one of the powers which was conferred upon the Board of Revenue by the Sales Tax Act of 1948 read with the Mysore Board of Revenue Act, 1955. That power by virtue of the provisions of section 11 of Act 24 of 1957 is no longer available to the Board. The State Government in such circumstances, in my opinion, can specify the authority which would be entitled to exercise the said powers which are saved by the proviso to sub-section (1) of section 40 of Act 25 of 1957. In my opinion, the contention of the learned Advocate for the petitioner that the power of the Government to act under sub-section (2) was completely gone because of the provisions of section 11 of Act 24 of 1957 cannot be accepted as sound.

15. Before concluding my judgment on this part of the case I should mention that I entertain considerable doubt as to whether or not on a proper reading of the provisions of sections 11, 12 and 4 of Act 24 of 1957 the revision matters can at all be said to have stood transferred to the Revenue Appellate Tribunal under section 11 of the said Act. It is, however, not necessary for me, in view of my previous decision which is sufficient to dispose of the present contention of the learned Advocate for the petitioner, to express any final opinion on this point.

16. The learned Advocate for the petitioner then contended before us that although the Commissioner of Commercial Taxes may have power to deal with the present matter, the Board of Revenue could not transfer the revision petition which was then pending before it to the said Commissioner of Commercial Taxes. He contended that this transfer took place on 12th October, 1957, and at that time the Government had not specified the authority which would be competent to deal with the said matter. Therefore, according to him, the Board could not transfer the said matter to the Commissioner of Commercial Taxes. The learned Advocate further urged before us that the Commissioner of Commercial Taxes could not in the circumstances deal with the said matter.

17. I am unable to accept this contention of the learned Advocate for the petitioner. Even though at the time when the Board of Revenue transferred the matter to the Commissioner of Commercial Taxes, the Commissioner of Commercial Taxes had no jurisdiction to deal with the same, the Commissioner of Commercial Taxes had jurisdiction to deal with the same on 2nd April, 1958, when he dealt with it. The mere fact that the matter came to him at a time when he was not clothed with such jurisdiction would not in my opinion make any difference in this respect. The main thing to be considered is whether or not the Tribunal had jurisdiction to deal with the matter at the time when it dealt with it. The question as to how the matter came before the said Tribunal would, in my opinion, be irrelevant for the purpose of determining its jurisdiction to deal with the same. In any event this contention of the learned Advocate for the petitioner would at best amount to a mere technical objection and would not justify us in issuing a writ on that ground. I should also mentioned that neither the petitioner nor his counsel was present on the date when the case was taken up for hearing. It should further be mentioned that the Commissioner had previously adjourned the case in order to enable the counsel to be ready with this point. But neither the petitioner nor his counsel was present to argue this point on the said adjourned date. We are informed by the learned Advocate appearing for the petitioner before us that in support of his petition a memo containing the arguments advanced on behalf of the petitioner was sent to the Commissioner. That may be so, but the fact remains that neither the petitioner nor his counsel was present before the Commissioner to argue this case before him on the date when it was heard. I am of the opinion that this contention of the learned Advocate for the petitioner must fail. I hold that the Commissioner of Commercial Taxes had jurisdiction to deal with this revision petition.

18. The next contention of the learned Advocate for the petitioner was that the provisions of sub-section (2) of section 40 were ultra vires the powers of the Legislature in view of the fact that the Legislature by the said provisions delegated to the State Government its essential legislative function. The learned Advocate contended that the determination of the authority which would be competent to deal with the matters under the Act is essentially a legislature function and the Legislature cannot delegate the same to the State Government. The learned Advocate in support of this connection mainly relied on a decision of the Assam High Court reported in S. Dowarah v. A. M. Kidwai (A.I.R. 1956 Assam 142), and he adopted the reasoning for the purpose of his argument which are to be found in the judgment of Sarjoo Prosad, C.J. In the said case their Lordships held that the Court can interfere if there is no policy discernible at all or the delegation is of such a vague nature as to amount to abdication. On the facts of the case their Lordships also held that the provisions of the Act in question did not indicate or lay down any basic policy or principle by which the Provincial Government is to be guided in exercising the power delegated to it for constituting a Tribunal. On the other hand, the entire legislative discretion has been conceded to the Provincial Government. Their Lordships in that case did not accept the contention that the matters as to how the Tribunal had to be constituted, who would be its members, what would be their qualification and tenure of office and the functions which they would discharge are matters of detail which could be conveniently left to the discretion of the executive authority and about which the Legislature was not concerned. In other words, according to their Lordships it amounted to saying to the Provincial Government : 'You appoint the Tribunal as and when you like, instead of my doing so.' The decision of their Lordships of the Assam High Court went up to the Supreme Court and was overruled by their Lordships of the Supreme Court in the case reported in Assam State v. Sristikar : [1957]1SCR295 . Das, C.J., in dealing with this question observed as follows :-

'It is next suggested that even if the Legislature itself constituted the authority it nevertheless delegated essential legislative functions with respect to the appointment of members, for the Legislature had not laid down any policy or principle as to the number, qualification, remuneration or period of service of persons to be appointed to perform the duties of the tribunal ....... It is clear that the tribunal was to sit in appeal over the decision of the Excise Commissioner and that by itself gives some indication that the person or persons to be appointed to the tribunal should have the requisite capacity and competency to deal with appeals from such high officials. We do not consider that there has been an excessive delegation of legislative power.'

19. These observations of their Lordships, which are binding on us, are applicable to the present case. The very fact that the Tribunal to be constituted was to sit in revision over the decisions of the Deputy Commissioner of Sales Tax by itself gives some indication that the person or persons to be appointed to such Tribunal should have the requisite capacity and competency to deal with revision petitions of such nature. In my opinion, therefore, it must be held, following the principle laid down by their Lordships of the Supreme Court in the said case there is sufficient indication in the present Act as to the type of persons who have to be appointed to discharge such duties as at present. The result, therefore, is that this contention of the learned Advocate for the petitioner must also fail.

20. The petition is, therefore, dismissed. Each party will bear and pay its own costs of this petition.

Somnath Iyer, J.

21. I agree.

22. Petition dismissed.


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