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A. Thippanna Rayappa Vs. Government of Andhra - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case NumberTribunal Miscellaneous Petition Nos. 195, 269 and 225 of 1955 in Tribunal Appeal No. 412 of 1954 and
Judge
Reported in[1957]8STC660(AP)
ActsMadras General Sales Tax Act - Sections 12B(1)
AppellantA. Thippanna Rayappa
RespondentGovernment of Andhra
Advocates:T.S. Narasinga Rao and ;D. Venkatappaya Sastri, Advs. for ;M. Seshachalapathi, Adv.
DispositionRevision allowed
Excerpt:
sales tax - power of appellate tribunal - section 12 b (1) of madras general sales tax act - petitioner did not dispute amount of turnover before commercial tax officer - whether he can be permitted to object the same in appeal before appellate tribunal - section 12-a (4) confers wide powers on tribunal enabling it to rehear the case - tribunal empowered to consider law and facts at time of hearing appeal and direct necessary amendments in pleadings - held, tribunal erred in rejecting petitions on ground of absence of jurisdiction - revision allowed directing tribunal to decide merit of petition. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language..........tax appellate tribunal, wherein three miscellaneous petitions, nos. 195, 225 and 269 of 1955, in tribunal appeal no. 412 of 1954, have been dismissed, and the subject-matter of the aforesaid appeal has been held to be confined to the disputed amount of turnover in the appeal memo.2. the correctness of the legal view, on which the order has been passed, can hardly be determined without stating some facts of the case. it appears that the assessee had disputed before the commercial tax officer the liability to pay sales tax only on two sums of rs. 20, 558-4-9 and rs. 47, 240-1-6, and before the appellate tribunal the disputed sum in the turnover was further limited to rs. 47, 240-1-6. the petitions were filed to enable raising objections against the liability to sales tax on a higher.....
Judgment:
ORDER

Mohammed Ahmed Ansari, J.

1. The revision petition is against an order by the Sales Tax Appellate Tribunal, wherein three Miscellaneous Petitions, Nos. 195, 225 and 269 of 1955, in Tribunal Appeal No. 412 of 1954, have been dismissed, and the subject-matter of the aforesaid appeal has been held to be confined to the disputed amount of turnover in the appeal memo.

2. The correctness of the legal view, on which the order has been passed, can hardly be determined without stating some facts of the case. It appears that the assessee had disputed before the Commercial Tax Officer the liability to pay sales tax only on two sums of Rs. 20, 558-4-9 and Rs. 47, 240-1-6, and before the Appellate Tribunal the disputed sum in the turnover was further limited to Rs. 47, 240-1-6. The petitions were filed to enable raising objections against the liability to sales tax on a higher turnover of Rs. 2, 77, 009-1-7. It was stated in petition No. 225 of 1955 that the assessee had instructed his representative before the Commercial Tax Officer to object to the entire turnover being made liable to pay the tax; but this his representative was prevented by the officer from pleading the objection. In the report of the officer the allegation of the petitioner has been denied and the Tribunal has rightly accepted the report; for the appeal memo before the officer does not show raising the plea of the entire turnover being free from liability. In these circumstances, the finding of the Tribunal that the records do not corroborate the allegations of the petitioner should stand, and also the rejection of this petition.

3. The Appellate Tribunal has further held that the assessee cannot be permitted to enlarge the pecuniary limits of his dispute beyond what had been questioned in the first appeal, and has relied on the case of Kalam Somasundaram Chettiar & Sons v. The State of Madras (1955 6 S.T.C. 304), in support of this view. The case, among other things, decides that the Sales Tax Appellate Authority has no power to add a new item to the turnover and include therein what was not before the assessing authority. But the Tribunal, in the particular case, has held that as a corollary, the reverse position also must be accepted, namely that the Appellate Tribunal cannot entertain disputes about the new item in the turnover which was not before the first appellate authority. There could have been no objection to the rejections having been made in exercise of discretionary powers vested in the appellate authority The Tribunal, however, has dismissed the petitions on the ground of absence of jurisdiction, and consequently the following question of law has been raised in this revision against the order :-

'Can an assessee in his appeal to the Appellate Tribunal against the order by the Commercial Tax Officer be permitted to object to his liability in respect of an amount of turnover that was not disputed before the Commercial Tax Officer ?'

4. It is well to remember that the powers of appellate authority may be of two kinds : it may be given jurisdiction of merely correcting errors in the decisions of the Subordinate Courts, or it may enjoy the powers by way of rehearing the entire case. In the latter case, the appellate Court can make such order as the Judge of first instance could have made. In this connection, the following observation of Lord Gorrel in Attorney-General v. Birmingham, Tame and Rea District Drainage Board (1912 A.C. 788 at p. 801) may be referred to :-

'Under the Judicature Acts and Rules the hearing of an appeal from the judgment of a Judge is by way of rehearing, and the Court has power to give any judgment and to make any order which ought to have been made, and to make such further or other order as the Court may think fit.

It seems clear, therefore, that the Court of Appeal is entitled and ought to rehear the case as at the time of rehearing, and if any authority were required for this proposition it is to be found in the case of Quilter v. Mapleson (1882 9 Q.B.D. 672)'.

5. Also Varadachariar, J., in Lachmeshwar Prasad Shukul v. Keshwar Lal (A.I.R. 1941 F.C. 5), has examined the power of an appellate court in this country and has held that under the procedural law of India the hearing of an appeal is in the nature of rehearing, and, therefore, in moulding the relief to be granted on appeal, the appellate Court is entitled to take into account facts and events which have come into existence after the decree appealed against. The learned Judge further held in the case that the appellate Court was competent to take into account legislative changes since the decision in appeal was given and its powers were not confined only to see whether the lower Court's decision was correct according to the law as it stood at the time when its decision was given. It cannot be said that what has been said is true only of the Civil Courts; for there is authority that the power of an Appellate Tribunal in a taxing statute may be also of an extensive character so as to constitute the authority a Court with power to rehear the case. In Kamakshya Narain v. Income-tax Commissioner, Bihar and Orissa : [1954]26ITR563(Patna) , it was held that the powers conferred on the Tribunal under section 33(4) of the Income-tax Act or of an extensive character and that authority was competent to take into account legislative changes since the decision in appeal was given, and these powers were not confined only to see whether the lower Court's decision was correct according to the law as it stood. The learned Judges observe at page 181 :-

'It is clear that the powers conferred on the Tribunal under section 33(4) are of an extensive character. These powers are more extensive than the powers of an appellate Court conferred by section 107, Civil Procedure Code.'

6. It follows from the aforesaid authorities that the power of rehearing means that the whole case is litigated again in the Court of Appeal and the appellate authority has wide powers of granting reliefs. A particular instance of the wide power is to be found in Order 41, rule 33, of the Civil Procedure Code, wherein it has been provided that the power of passing any decree under the rule may be exercised notwithstanding that the appeal is as to a part only of the decree. It further follows from the aforesaid authorities that where there be legislative changes affecting the subject-matter of litigation, consideration of a partly having partly appealed would not be of material importance. The position should not be different where a recent pronouncement has interpreted a Constitutional provision contrary to the prevailing view. It appears from the Tribunal's order that the assessee had filed the petitions relying among others on the case of the Bengal Immunity Co., Ltd. v. The State of Bihar (1955 6 S.T.C. 446) and the aforesaid authority has interpreted Article 286 differently. Therefore, the crucial point in the case is whether the provisions of section 12-A of the Madras General Sales Tax Act confer on the Tribunal powers as wide as those of section 107 of the Civil Procedure Code, or section 33(4) of the Income-tax Act.

7. The relevant part of the section runs as follows :-

'12-A. Appeal to the Appellate Tribunal. - (1) Any assessee objecting to an order relating to assessment passed -

(i) by the Commercial Tax Officer whether on appeal under section 11 or suo motu under section 12, sub-section (1), or

(ii) by the Deputy Commissioner suo motu under section 12, sub-section, may, if the assessee has not preferred an application for revisions of the order under section 12, sub-section (2), or under sub-section (3) of that section, as the case may be, appeal to the Appellate Tribunal within sixty days from the date on which the order was communicated to the assessee.

(2) * * * *(3) The appeal shall be in the prescribed form, shall be verified in the prescribed manner and shall be accompanied by such fee not exceeding one hundred rupees as may be prescribed.

(4) The Appellate Tribunal shall, after giving both parties to the appeal a reasonable opportunity of being heard, pass such order thereon as it thinks fit.

(5) Notwithstanding that an appeal has been preferred under sub-section (1), tax shall be paid in accordance with the assessment made in the case :

Provided that the Appellate Tribunal may, in its discretion, permit the appellant to pay the tax in such number of instalments, or give such other directions in regard to the payment of the tax, as it thinks fit :

Provided further that if as a result of the appeal any change becomes necessary in such assessment, the Appellate Tribunal may authorise the assessing authority to amend the assessment, and on such amendment being made, the amount overpaid by the assessee shall be refunded to him without interest, or the further amount of tax due from him shall be collected in accordance with the provisions of this Act, as the case may be.'

8. It may be mentioned that both section 12-A(3) of the Act and rule 13-B(a) of the General Sales Tax Rules require the appeal before the Tribunal to be in a particular form. Form XIII of the aforesaid rules prescribes an entry for 'disputed turnover' if turnover is disputed, and for 'turnover involved' if rate of tax is disputed. These provisions, however, should not be treated as circumscribing the wide powers conferred by section 12-A(4); for, once the sub-section is construed as enabling the Tribunal to rehear the case, the power to direct amendment of pleading follows, and relief could be given after the memorandum has been appropriately amended. The other objection to construing section 12-A(4) as conferring wide powers on the appellate authority is the decision in the case of Kalam Somasundaram Chettiar & Sons v. The State of Madras (1955 6 S.T.C. 304). Therein, the learned Judges have laid down three propositions and the first of them has been made the basis of the Tribunal's order under this revision. That proposition reads as follows :-

'(1) The Appellate Tribunal have no authority to add a new item to the turnover and include therein what was not before the assessing authority for that would be a matter not assessed but omitted from the assessment.'

9. We think the proposition in no way conflicts with the view of the power of the appellate authority under section 12-A(4) of the Act being one of rehearing. For in accepting the appeals under the Act to be continuation of assessing turnover to sales tax, it does not follow that the appellate authority can deal with what does not form part of the turnover. The position is different when something is part of the turnover and has been made liable, but is not included in the appeal memo. Here the appellate authority may be called upon to decide questions which may be common to the parts of the turnover before the authority and what has been omitted. An example of the objection going to the very root of assessment is the challenge to the constitutionality of the tax and when the Tribunal upholds the objection its judgment is bound to affect the entire liability, because the assessment thereby becomes vitiated. There is also no statutory bar against such results, because section 12-A(4) of the Act expressly provides for such orders as the Tribunal thinks fit. The exercise of the powers should not be circumscribed by consideration of whether the entire turnover has at all stages been disputed. The aforesaid sub-section deliberately uses wide words to enable the appellate authority to take into consideration the law and the facts as at the time of hearing the appeal, and should technical difficulties arise, they can be adjusted by directing necessary amendments. The jurisdiction to make just orders being there, whether it should be exercised in the particular circumstances is a matter of discretion. Therefore, the proposition relied on by the Tribunal is no authority for the view that it has taken. Evidently, the appellant in the case before the Tribunal was invoking the power of passing just orders and the Tribunal has erred in rejecting the petitions on the ground of absence of jurisdiction. Of course, the Appellate Tribunal has the discretion to disallow the amendments, but the merits of the two petitions have not yet been gone into. We, therefore, answer the question formulated earlier in this judgment in the affirmative, allow the revision and the Appellate Tribunal should decide the merits of the remaining two petitions. In the circumstances of the case, we make no order as to costs.


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