1. This matter has appeared in the list of admission cases for the day. The petition is admitted and with the consent of the learned counsel on both sides, the matter is taken up for final hearing and disposed of by this order.
2. This revision petition under section 23 of the Karnataka Sales Tax Act, 1957 (the 'Act' for short), is directed against the order dated 8th August 1980, of the Karnataka Appellate Tribunal in S.T.A. No. 139 of 1980 on its file dismissing the petitioner's appeal and affirming the order dated 29th November, 1978, of the Assistant Commissioner of Commercial Taxes (Appeals) which, in turn, dismissed the assessee's appeal and affirmed the order of assessment dated 24th July, 1978, made by the Assistant Commercial Tax Officer, II S.C., Hubli, for the assessment period 14th November, 1974, to 3rd November, 1975.
3. Both the Assistant Commissioner and the Karnataka Appellate Tribunal, the two successive appellate authorities under the Act, have declined to go into the merits of the appeal having persuaded themselves to the view that under sub-section (3) of section 20 of the Act, the assessee's first appeal, not having been accompanied by satisfactory proof of the payment of tax not disputed in appeal, could not be entertained.
4. The material and relevant facts are these :
The petitioner is a dealer in automobile spare parts and carries on a business under the name and style 'Mahamai Automobiles' at Hosur, Hubli. For the assessment period concerned, he returned in form IV a total turnover of Rs. 7,166.14 of which a turnover in a sum of Rs. 4,224.26 was claimed to be exempt leaving the balance of Rs. 2,941.88 which was described in the said return as the 'net taxable turnover'. The Assistant Commercial Tax Officer, for reasons which are not relevant for purposes of this petition, did not accept the return; but determined, by the order dated 24th July, 1978, the taxable turnover at Rs. 37,799.81 and levied a tax of Rs. 4,914 thereon. The petitioner's memorandum of appeal dated 20th August, 1978, under section 20 of the Act preferred against this order, did not accompany satisfactory proof of payment of Rs. 377.59, which would be the tax if the undisputed turnover of Rs. 2,941.88 admitted by the assessee was taxable under the Act. It is not disputed that out of this sum of Rs. 377.59, the petitioner had paid only a sum of Rs. 200 before the filing of the appeal. On 23rd November, 1978, and 24th November, 1978, the petitioner paid sums of Rs. 177 and Re. 1 respectively towards what was understood as tax not disputed in appeal. The appellate authority declined to entertain the appeal, as according to it, the appeal was unaccompanied by proof of payment of the tax not disputed in appeal. The appeal was accordingly rejected in limine. In second appeal, the Karnataka Appellate Tribunal has affirmed this order.
5. Though certain questions of law said to arise from the order of the Tribunal have been formulated in this petition, we think these formulations are inapposite and do not reflect the real contention which Sri B. V. Katageri, the learned counsel for the petitioner, sought to put across. The first contention urged by Sri Katageri before us is that no concept of a 'tax not disputed in the appeal' can at all arise in the undisputed facts of this case, inasmuch as the total turnover returned by the petitioner was admittedly Rs. 7,166.14 and that under section 5(5) of the Act a dealer whose total turnover in any year is less than Rs. 25,000 shall not be liable to pay tax for that year. Secondly, he says that, at all events, demonstrably, the whole of tax levied was, in fact, disputed in appeal. He contends that the Assistant Commercial Tax Officer levied a tax of Rs. 4,914 and that the entirely of that quantum of Rs. 4,914 has been shown in column (6) of form 15, the prescribed form of appeal, as the disputed tax. Sri Katageri, accordingly, contends that both the first and the second appellate authorities proceeded on an erroneous view of both the facts of the case and the law on the matter. Sri Katageri sought our leave to raise the proper question that according to him, arises in the case.
6. After hearing the learned counsel on both sides, we permitted the petitioner to reformulate the question of law which is 'whether, on the facts and in the circumstances of this case, any concept of 'tax not disputed in the appeal' at all arises so as to attract the bar for the entertainability of the appeal under section 20(3) of the Act'.
7. Smt. Vanaja, the learned High Court Government Pleader, did not dispute before us that, having regard to the nature of the petitioner's trade, the exemption envisaged under section 5(5) up to a turnover of Rs. 25,000 is attracted to the case. She, however, sought to contend that this question, in the form in which it is now being canvassed, had not been raised before the authorities at all and that accordingly, it cannot be said that the successive appellate authorities either failed to decide the question or decided the question erroneously, as according to her, the question in that form had not been urged before the authorities at all.
We are afraid, the learned Government Pleader is attempting to make a fortress out of a mere technicality. On a plain reading of the memorandum of first appeal, it is clear that the entire tax determined under the assessment order had in fact been disputed and it was quite erroneous to say that there was any undisputed portion of the tax. On the question whether any admitted liability to tax arose before the assessing authority pursuant to the return filed by the petitioner, it appears to us that the concept of such a liability must be comprehended in the background of all the relevant provisions of the Act. When the Act, by section 5(5) expressly provides that no liability to tax shall arise in respect of a total turnover in any year if it is less than Rs. 25,000, it is hardly conceivable that a return of a total turnover of Rs. 7,166.14 respecting which section 5(5) undisputedly applied, can be said to generate any admitted liability to tax in law. The successive appellate authorities, if we may say so figuratively, counted the trees and missed the wood.
8. We therefore allow this revision petition, set aside the orders in the first and second appeals, and remit the petitioner's appeal to the first appellate authority with the direction to consider and dispose of the appeal in accordance with law without reference to the bar under section 20(3) of the Act. Ordered accordingly. No costs.
9. Petition allowed.