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Sita Ram Jwala Prasad Vs. Commissioner of Sales Tax - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case NumberSales Tax Revision Nos. 476, 606 of 1979
Judge
Reported in[1980]45STC410(All)
AppellantSita Ram Jwala Prasad
RespondentCommissioner of Sales Tax
Appellant AdvocateO.P. Misra, Adv.
Respondent AdvocateStanding Counsel
DispositionPetition allowed
Excerpt:
- - ), again the supreme court had an occasion to consider this provision and it was held that though a memorandum of appeal under section 9 of the act filed within time is not accompanied by the treasury chalan showing payment of tax, if, before the appeal is being considered, satisfactory proof of payment of the tax is given, then the proviso to section 9(1) is satisfied. i am respectfully inclined to take the same view and i hold that the question of entertainability of an appeal under section 9 is to be determined by reference to section 9 alone and not by reference to section 8 as well. 250 in each of these two revisions and the counsel's fee in like figure, but of one set only......the amount of tax having been deposited after the expiry of the period of limitation provided for filing the appeals, the appeals had to be treated as barred by time and the question of delay could be considered only if an application for condonation of delay had been given under section 9(6) of the act and, since no such application had been given, the appeals were barred by time. further, according to the learned revising authority, in view of section 8(1-c) of the act, the interest payable is to be treated as part of the tax and since, in the instant case, the amounts of interest were deposited several months after the filing of the appeals, they were barred by time.3. so far as the facts are concerned, there is no dispute and they have been narrated above. the admitted tax was.....
Judgment:

R.R. Rastogi, J.

1. These two revisions filed by the assessee, M/s. Sita Ram Jwala Prasad, under Section 11(1) of the U.P. Sales Tax Act, 1948 (hereinafter referred to as 'the Act'), arise out of interrelated facts and hence they are being disposed of by a common judgment. The short question that falls for consideration in these revisions is as to whether the admitted tax for the purposes of Section 9 of the Act includes interest also and further whether the appeals could be entertained when admittedly the admitted tax was deposited before the filing of the appeals but the interest was deposited afterwards.

2. These revisions relate to the assessment year 1972-73. In the first revision the period involved is from 1st April, 1972, to 5th November, 1972, and in the second revision from 6th November, 1972, to 31st March, 1973. The admitted tax for these periods was Rs. 24,396.76 and Rs. 12,027.79 and interest was Rs. 2,640 and Rs. 760 respectively. The assessee had deposited the admitted tax before the filing of the appeals against the assessment order before the Assistant Commissioner (Judicial), while the aforesaid amounts of interest were deposited sometime after the filing of those appeals, but before the appeals were entertained for consideration. The Assistant Commissioner (Judicial), being of the view that the amounts of interest had not been deposited within the statutory period provided for the filing of an appeal, held that the appeals were barred by time and could not be entertained; hence he dismissed them in limine. Being aggrieved, the assessee took the matter in revision before the Additional Judge (Revisions), Sales Tax, Gorakhpur. The learned revising authority, relying upon a decision of this Court in the case of Commissioner of Sales Tax v. Rama Biscuit Factory 1978 U.P.T.C. 438, held that the amount of tax having been deposited after the expiry of the period of limitation provided for filing the appeals, the appeals had to be treated as barred by time and the question of delay could be considered only if an application for condonation of delay had been given under Section 9(6) of the Act and, since no such application had been given, the appeals were barred by time. Further, according to the learned revising authority, in view of Section 8(1-C) of the Act, the interest payable is to be treated as part of the tax and since, in the instant case, the amounts of interest were deposited several months after the filing of the appeals, they were barred by time.

3. So far as the facts are concerned, there is no dispute and they have been narrated above. The admitted tax was deposited before the filing of the two appeals, while the interest payable under Section 8(1-C) was deposited several months after the filing of the appeals. The main question that would arise for consideration is whether the interest, payable under Section 8(1-C) of the Act is to be treated as part of the admitted tax and, secondly, as to what is the import of the expression 'entertained' occurring in the proviso to Sub-section (1) of Section 9. I may first deal with the latter question. Section 9 of the Act provides that any dealer objecting to any order made by the assessing authority, other than an order mentioned in Section 10-A, may within 30 days of the date of service of the copy of the order, appeal to such authority as may be prescribed. The proviso to Sub-section (1) is material and is set out below:

Provided that no appeal against an assessment order under this Act shall be entertained unless the appellant has furnished satisfactory proof of the payment of not less than --

(a) where return is filed, -- the amount of the tax or fee due under this Act on the turnover of sales or purchases, as the case may be, admitted by the appellant in the return filed by him or at a later stage in proceedings before the assessing authority, whichever is greater; or

(b) where no return is filed, -- the amount of tax or fee due under this Act on the turnover of sales or purchases, as the case may be, admitted at any stage in proceedings before the assessing authority, or 20 per cent of the amount of tax or fee assessed, whichever is greater:

Provided further that the appellate authority may, for special and adequate reasons to be recorded in writing, waive or relax the requirements of Clause (b) of the preceding proviso.

Sub-section (6) of Section 9 provides that Section 5 of the Limitation Act, 1963, shall apply to appeals under this section. The relevant rules may now be seen. Rule 66(2) reads:

The memorandum of appeal shall be accompanied by adequate proof of payment of the fee payable and a certified copy of the order appealed against, and the chalan showing deposit in the treasury of the tax admitted by the appellant to be due or of such instalments thereof as might have become payable.

Rule 67(3) reads:

If the memorandum of appeal is not in order it may be rejected or be returned after the necessary endorsement on its back about its presentation and return to the appellant for correction and representation within the time to be fixed by the Deputy Commissioner (Appeals) or the Assistant Commissioner (Judicial), as the case may be, or be amended then and there.

5. The meaning of the word 'entertained' in the proviso to Section 9 was explained by the Supreme Court in Lakshmiratan Engineering Works v. Assistant Commissioner, Sales Tax A.I.R. 1968 S.C. 488. The view taken was that it would be correct to adopt the dictionary meaning of the word 'entertained' and that meaning is 'admitted to consideration'. It would, therefore, appear that the direction to the court under the proviso to Section 9 is that the court shall not proceed to admit to consideration an appeal which is not accompanied by satisfactory proof of the payment of the admitted tax. In Lalta Prasad Khinni Lal v. Assistant Commissioner [1972] 29 S.T.C. 201 (S.C.), again the Supreme Court had an occasion to consider this provision and it was held that though a memorandum of appeal under Section 9 of the Act filed within time is not accompanied by the treasury chalan showing payment of tax, if, before the appeal is being considered, satisfactory proof of payment of the tax is given, then the proviso to Section 9(1) is satisfied. It was explained that if the memorandum of appeal has been filed within the period of limitation but without proof of payment of the amount of admitted tax accompanying it, that appeal can be said to have been preferred only when proof of payment of the tax is furnished. In other words, the appeal will be deemed to have been properly filed on the date on which the amount of admitted tax is paid. If the furnishing of that proof is done after the expiry of the period of limitation, Section 9(6) will come into operation and it will be open to the appellant to apply for condonation of delay under that provision. Thus, the correct approach is to treat the appeal as having been preferred on the date on which the proof of payment of tax was furnished and then to see whether under Section 9(6) there was sufficient cause for excusing the delay in preferring the appeal. This decision was followed by a Division Bench of our Court in Commissioner of Sales Tax v. Rama Biscuit Factory 1978 U.P.T.C. 438. In the instant case, the admitted tax had admittedly been deposited by the assessee before the filing of the appeals. The amount of interest payable under Section 8(1) was of course deposited after the institution of the appeals but before they came up for consideration. If such interest is treated as a part of the admitted tax and the assessee was obliged to deposit it before the filing of the appeals, then the appeals will become proper only on the date when the interest was deposited. The assessee, in that event, should have given an application for condonation of delay under Section 9(6) of the Act read with Section 5 of the Limitation Act, but that was not done and, therefore, the appeals could not have been treated as within time. This leads me, therefore, to consider as to whether the interest formed a part of the admitted tax?

Section 8(1) of the Act, as applicable to the year under consideration, required that the tax assessed under this Act shall be paid within 30 days from the date of service of the notice of assessment and demand and, in such manner, as may be specified in the notice. In default of such payment, the whole of the amount then remaining due shall become recoverable in accordance with Sub-section (8). Sub-section (8) provides for the recovery of any tax or other dues payable to the State Government as arrears of land revenue. As for the charge of interest, provision was made in Sub-section (1-A) of the Act. Sub-sections (1) and (1-A) were subsequently replaced by Sub sections (1), (1-A), (1-B) and, (1-C) by Section 14 of the U.P. Sales Tax (Amendment and Validation) Act, 1975 (U.P. Act No. 38 of 1975). Sub-sections (1) and (1-C) read as under:

(1) The tax admittedly payable shall be deposited within the time prescribed or by the thirty-first day of August, 1975, whichever is later, failing which simple interest at the rate of two per cent for every month or part thereof shall become due and be payable on the unpaid amount with effect from the day immediately following the last date prescribed or with effect from the first day of June, 1975, whichever is later, and nothing contained in Section 7 shall prevent or have the effect of postponing the liability to pay such interest.

Explanation. -- For the purposes of this Sub-section, the tax admittedly payable means the tax which is payable under this Act on the turnover of sales or, as the case may be, the turnover of purchases, or of both, as disclosed in the accounts maintained by the dealer or admitted by him in any return or proceeding under this Act, whichever is greater, or if no accounts were maintained, then according to the estimate of the dealer.

(1-A) ...

(1-B) ...

(1-C) The amount of interest payable under Sub-sections (1) and (2) shall be without prejudice to any other liability or penalty that the dealer may incur under this Act or under any other law for the time being in force and shall be added to the amount of tax and be also deemed for all purposes to be part of the tax.

6. A cursory reading of these provisions undoubtedly makes the interest, that has accrued on the tax admitted, a part of the tax, which the assessee has to pay. A twofold question, however, arises in this behalf: Firstly, whether Section 8 (1-C) can be applied to the year under consideration and, secondly, whether the entertainability of an appeal under Section 9 has to be determined by reference to Section 9(1)(a) alone or read with Section 8(1) and 8(1-C).

7. So far as the first aspect is concerned in the U.P. Sales Tax (Amendment and Validation) Act, 1975, itself, in respect of the amendments made, the date or dates from which they are to take effect have been indicated. However, in regard to Section 8(1), (1-A) and (1-C) no such indication has been given and it has to be taken that these amendments were not to be given retrospective effect. Apart from this the right of appeal is not a mere matter of procedure but is a substantive right. As laid down by the Supreme Court in Garikapati v, Swbbiah Choudhry A.I.R. 1957 S.C. 540, the principles applicable in this behalf are that the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding; the right of appeal is not a mere matter of procedure but is a substantive right; the institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit; the right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date the Us commences and, lastly, that this vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise. In view of this pronouncement, therefore, the amended provisions contained in Section 8(1) and 8(1-C) will not apply to the assessment year under consideration and since there was no provision earlier similar to the one contained in Section 8(1-C), interest could not be treated as a part of the admitted tax and the deposit of interest could not have been required as a condition precedent for the entertainment of an appeal.

8. Coming to the second aspect, I find that a learned single Judge of this Court in Commissioner of Sales Tax, U.P. v. Vijay and Company 1979 U.P.T.C. 1204.took the view that all that Section 9(1)(a) requires 'is that the assessee should deposit the amount of tax/or fee admitted by him in the returns filed by him or at any stage in any proceeding under the Act, whichever is greater'. It was further held that although the interest payable under Section 8 that accrued on the tax due is a part of the tax, which the assessee has to pay, entertainability of an appeal under Section 9 has to be determined by reference to Section 9 and not Section 8 of the Act. In taking this view, the decision of the Supreme Court in the case of Kanpur Vanaspati Stores, Kanpur v. Commissioner of Sales Tax, 1973 U.P.T.C. 685, was followed. I am respectfully inclined to take the same view and I hold that the question of entertainability of an appeal under Section 9 is to be determined by reference to Section 9 alone and not by reference to Section 8 as well. The assessee, in the present case, had filed all the returns and as such Section 9(1)(a) was applicable to the case. Before filing the appeals the assessee did deposit the admitted tax and although interest payable under Section 8 had accrued on the tax due and in view of Section 8(1-C) it became a part of the tax, which the assessee had to pay, there was no obligation on the assessee to deposit such interest before the filing of the appeals and, particularly in this case Section 8(1-C) was not attracted also, and the interest which had accrued on the tax admitted could hot have been treated as a part of the admitted tax. In my opinion, therefore, the Assistant Commissioner (Judicial) as also the revising authority erred in holding that the appeals filed by the assessee were barred by time and could not be entertained.

9. In view of the above discussion, the revisions are allowed and the Assistant Commissioner (Judicial) is directed to entertain the appeals and dispose them of according to law. The assessee is entitled to costs which are assessed at Rs. 250 in each of these two revisions and the counsel's fee in like figure, but of one set only.


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