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Morisetty Bhadraiah and ors. Vs. the Sales Tax Appellate Tribunal - Court Judgment

LegalCrystal Citation
SubjectSales Tax;Civil
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petitions Nos. 258, 488, 489, 490, 595, 676, 795, 909, 941, 993, 998, 1041, 1062, 1153, 1163, 1
Judge
Reported in[1964]15STC787(AP)
AppellantMorisetty Bhadraiah and ors.
RespondentThe Sales Tax Appellate Tribunal
Appellant AdvocateA.V.S. Ramakrishnaiah, ;R. Bhaskara Rao, ;V. Venkatanarayana Gupta, ;Chenna Basavappa Desai, ;C. Mallikarjuna Rao, ;C.P. Sarathy, ;C. Jayashree Sarathy, ;J.V. Srinivasa Rao and ;T. Veerabhadrayya, Adv
Respondent AdvocateS. Ramachandra Reddy, Adv. for ;Third Government Pleader
Excerpt:
.....the scope of its powers when it disclaimed its competence to entertain the appeals on the ground that the amount of penalty has not been deposited to enable the appeals to be entertained by it......for the payment by the dealer of both the tax assessed and the penalty, if any, levied, before an appeal is entertained. while it is essential that dealers should be required to pay the tax assessed before an appeal is entertained, the insistence on payment of penalty also is likely to cause great hardship to them. it is, therefore, proposed to amend the above sections so as to omit reference to the penalty, if any, levied under the act.4. it is thus clear that the inconvenience which the existence of that provision used to cause before it was deleted was thought of by the legislature as causing a good deal of harassment and therefore it must be omitted. when the deletion is caused with that explicit intention, it would be making the amendment nugatory, if the mischief which it tried to.....
Judgment:
ORDER

Gopal Rao Ekbote, J.

1. The question which essentially requires to be answered in this enquiry is whether it is necessary for a dealer to deposit the amount of penalty under Sub-section (6) of Section 21 of the Andhra Pradesh General Sales Tax Act (No. VI of 1957), hereinafter called ' the Act' in order to make the appeal entertainable. Section 21 as far as it is relevant for the present purpose is in the following terms:-

21. (1) Any dealer objecting to an order passed or proceeding recorded-

(a) by any prescribed authority on appeal Under Section 19, or

(b) by a Deputy Commissioner suo motu under Sub-section (2) of Section 20,

may appeal to the Appellate Tribunal within sixty days from the date on which the order or proceeding was served on him.

* * *(6) No appeal shall be entertained under Sub-section (1) unless it is accompanied by satisfactory proof of the payment of the taxs determined in any appeal Under Section 19, or in revision Under Section 20, or of such instalments thereof as have become payable.

2. In order to appreciate the contention raised in these writ petitions, it is necessary to look into the antecedents of Sub-section (6) of Section 21. Previous to the Amending Act XXVI of 1959, Sub-section (6) stood as follows :-

No appeal shall be entertained under Sub-section (1) unless it is accompanied by satisfactory proof of the payment of the tax and the penalty, if any....

3. The words ' and the penalty, if any,' were deleted by the said Amending Act XXVI of 1959. In spite of this deletion, the Tribunal is insisting on the satisfactory proof of the payment of the amount of penalty in an appeal against the order directing the levy of penalty. The contention in support of such a view is that the word ' tax ' appearing in Sub-section (6) of Section 21 of the Act includes penalty inasmuch as penalty is in the nature of an additional tax. I do not think that that view is correct. In order to know as to why the words ' and the penalty, if any ' were omitted, it is, I suppose, permissible to look into the statement of objects and reasons published in the Andhra Pradesh Gazette, Extraordinary, Part IV-A, dated 12th February, 1959. Referring to Section 19(1) (b) and Section 21(6) of the Act, the following reasons are assigned for the deletion of those words :-

2. Sections 19(1)(b) and 21(6) of the Act provide for the payment by the dealer of both the tax assessed and the penalty, if any, levied, before an appeal is entertained. While it is essential that dealers should be required to pay the tax assessed before an appeal is entertained, the insistence on payment of penalty also is likely to cause great hardship to them. It is, therefore, proposed to amend the above sections so as to omit reference to the penalty, if any, levied under the Act.

4. It is thus clear that the inconvenience which the existence of that provision used to cause before it was deleted was thought of by the Legislature as causing a good deal of harassment and therefore it must be omitted. When the deletion is caused with that explicit intention, it would be making the amendment nugatory, if the mischief which it tried to remove is allowed to be perpetuated.

5. Although this Court is not at liberty to construe an Act of the Legislature by the motive which influenced the Legislature, yet when the history of a provision of law tells the Court what the object of the Legislature was in changing the provision, the Court has to see whether the terms of the section are such as would fairly carry out that object and no other, and to read the section with a view to finding out what it means, and not with a view to extending it to something that was expressly intended not to apply. The golden rule in such cases to follow is to first find out what was the provision before the section was amended; secondly, what was the defect in the previous section; thirdly, what remedy the Legislature adopted to cure the defect and lastly to find out the true reason of the remedy now adopted by the Legislature. If the Court views the section as amended from the abovesaid perspective, there would be no difficulty in so construing the section which would suppress the mischief and advance the remedy. Incidentally, it shall suppress subtle inventions and evasions for continuance of the mischief and would add force and life to the cure and remedy according to the true intent of the Legislature.

6. In view of the express object with which the words are deleted, it can hardly be supposed that they were omitted because they were found superfluous. If the word 'tax' is to include penalty in spite of the amendment by judicial interpretation, it would defeat the obvious intention of the Legislature in deleting those words.

7. A reference to the Supreme Court decision, in my opinion, would not help the present situation. What was involved in Income-tax Commissioner v. Bhikaji Dadabhai A.I.R. 1961 S.C. 1265 at 1267 was the construction of the words 'assessment proceedings' and whether that expression included the proceedings to levy penalty, was the question required to be answered. In view of the provisions of the Hyderabad Income-tax Act and the Finance Act dealt with elaborately in that decision, their Lordships of the Supreme Court came to the conclusion that the proceedings in relation to assessment of a tax includes the proceedings initiated for the levy of penalty. That is not the case with which we are concerned in the present enquiry. It is obvious from what has been stated above, that the Legislature amended the provision with a definite object, the object being to remove the harassment which the deleted words used to cause to the dealers. When the Legislature deleted those words with an express intention, it will not be correct to so construe the word ' tax' as to include in it the word 'penalty' also. The previous provision of law treated the tax and the penalty as distinctly separate. The Amending Act also treated these two expressions as distinctly separate and purposely omitted the expression 'penalty' from Sub-section (6) of Section 21. In the view which I have taken, it becomes unnecessary to make a further probe into the question whether the word 'tax' after the amendment also includes the penalty levied under the Act or not. I am satisfied that the Amending Act removes a particular hardship which the old Act used to cause. In that view of the matter, I do not think the orders passed by the Tribunal in these writ petitions can be allowed to stand.

8. The Tribunal has a legal duty to hear and dispose of the appeals properly presented to it. It cannot refuse to exercise jurisdiction by wrongly interpreting Section 21 of the Act and if it does so decline to hear the appeal, this Court is entitled to issue the writ directing the Tribunal to perform its legal functions of a public nature, that is, to hear the appeals and dispose them of on merits. In my judgment, the Tribunal has clearly misconceived the scope of its powers when it disclaimed its competence to entertain the appeals on the ground that the amount of penalty has not been deposited to enable the appeals to be entertained by it. The Tribunal would be deemed to have declained its jurisdiction to hear the appeals properly preferred when it refused to enter into the merits, because'it held that it has no power to do so as tax includes penalty and that the penalty has not been deposited. In my opinion when it has erred in so refusing to exercise the jurisdiction which it has, writs of certiorari and mandamus must be issued by this Court.

9. In the result, the orders passed by the Tribunal refusing to entertain the appeals without the penalty being deposited, are hereby quashed and in cases where the appeals have not so far been refused to be entertained, direction is given that the Tribunal would hear the appeals without insisting on the deposit of penalties. In view of the circumstances, I make no order as costs.


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