Skip to content


State of Orissa Vs. Member, Sales Tax Tribunal and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtOrissa High Court
Decided On
Case NumberO.J.C. No. 319 of 1970
Judge
Reported in37(1971)CLT897; [1971]28STC652(Orissa)
AppellantState of Orissa
RespondentMember, Sales Tax Tribunal and anr.
Appellant AdvocateS.C. Mohapatra, Standing Counsel (Sales Tax)
Respondent AdvocateR. Mohanty and ;R. Sharma, Advs.
DispositionApplication allowed
Cases ReferredPalai v. T.J. Joseph A.I.R.
Excerpt:
.....that after the express power is conferred on the commissioner under section 13(5), proviso, to grant stay during the pendency of a second appeal, interim reliefs can be appropriately granted and the exercise of jurisdiction by the tribunal would not be frustrated or defeated. mohanty places strong reliance on the following passage in municipal council, palai v. but it is equally well settled that there is a presumption against an implied repeal. upon the assumption that the legislature enacts laws with a knowledge of all existing laws pertaining to the same subject the failure to add a repealing clause indicates that the intent was not to repeal existing legislation. 21. on the aforesaid analysis, we are clearly of opinion that after the introduction of section 13(5), proviso, the..........the writ application was filed on 2nd april, 1970, challenging the jurisdiction of the tribunal to grant stay during the pendency of the second appeal.2. the only point for consideration is whether the tribunal has the power to grant stay.3. by the orissa sales tax (amendment) act, 1954 (orissa act 1 of 1955) (hereinafter to be referred to as the 1955 act), a sales tax tribunal was constituted. section 3-b dealt with the constitution of the tribunal and its powers and functions. by section 9 of that act, section 23(3) of the orissa sales tax act, 1947 (orissa act 14 of 1947) (hereinafter to be referred to as the 1947 act) was substituted. in section 23(3)(b) the following provision was made :23. (3)(b) notwithstanding that an appeal has been preferred under clause (a) the tax or the.....
Judgment:

G.K. Misra, C.J.

1. Opposite party No. 2 was assessed to sales tax. It preferred appeals against the orders of assessment before the Commissioner of Sales Tax. The appeals were dismissed. Second appeals were preferred before the Sales Tax Tribunal. During the pendency of the second appeals the Tribunal granted an interim stay on 30th March, 1970. The writ application was filed on 2nd April, 1970, challenging the jurisdiction of the Tribunal to grant stay during the pendency of the second appeal.

2. The only point for consideration is whether the Tribunal has the power to grant stay.

3. By the Orissa Sales Tax (Amendment) Act, 1954 (Orissa Act 1 of 1955) (hereinafter to be referred to as the 1955 Act), a Sales Tax Tribunal was constituted. Section 3-B dealt with the constitution of the Tribunal and its powers and functions. By Section 9 of that Act, Section 23(3) of the Orissa Sales Tax Act, 1947 (Orissa Act 14 of 1947) (hereinafter to be referred to as the 1947 Act) was substituted. In Section 23(3)(b) the following provision was made :

23. (3)(b) Notwithstanding that an appeal has been preferred under Clause (a) the tax or the penalty due shall be paid in accordance with the assessment made in the case : Provided that the Tribunal may, in its discretion, permit the appellant to pay such tax or penalty in such number of instalments, or give such other direction in regard to the payment thereof as it thinks fit and shall communicate such order to the appellant and the authority against whose order such appeal has been preferred and a copy of such order shall also be sent to the Commissioner.

Though the 1955 Act was enacted making provision for constitution of a Tribunal with the power to grant stay, Sections 3-B and 9 were not brought into force at all. Section 1(2) of that Act laid down that Sections 1, 2, 4, 5, 6, 7 and 11 shall come into force at once and the rest of the sections shall come into force on such date as the State Government may, by notification, appoint. The relevant Sections 3-B and 9 not having been brought into force there was no constitution of any Tribunal as envisaged in that Act.

4. The Orissa Sales Tax (Amendment) Act, 1957 (Orissa Act 20 of 1957) (hereinafter to be referred to as the 1957 Act) brought an amendment regarding the constitution and powers of the Tribunal. For Section 3 of the 1947 Act, a new Section 3 was substituted. Section 3(2) after substitution runs thus:

3. (2) A person who is or has been a member of the superior judicial service or is eligible for appointment to such service shall be appointed by the State Government to be the Sales Tax Tribunal for the purpose of exercising such judicial powers as are or may be conferred by or under the provisions of this Act: Provided that the State Government may at any time as the occasion may require appoint an Additional Sales Tax Tribunal of the same qualification for disposing of such matters as may be entrusted to him by rules made by the State Government under this Act.

By Section 9, Section 23 of the 1947 Act was also substituted. Section 23(3) after substitution stood thus :

23. (3)(a) Any dealer or as the case may be, the State Government, dissatisfied with an appellate order made under Sub-section (2) may within thirty days from the date of receipt of such order prefer an appeal in the prescribed manner to the Tribunal or Additional Tribunal, as the case may be, against such order.

(b) The dealer or the State Government, as the case may be, on receipt of notice that an appeal has been preferred under Clause (a) may, notwithstanding that the said dealer or the State Government may not have appealed against such order or any part thereof, within thirty days of the service of the notice file a memorandum of cross objections and such memorandum shall be disposed of by the Tribunal or Additional Tribunal, as the case may be, as if it were an appeal presented within time under Clause (a).

Thus, the power to grant stay which was conferred on the Tribunal by the 1955 Act and which had not been brought into force was taken away by the 1957 Act.

5. By the Orissa Sales Tax (Amendment) Act, 1964 (Orissa Act 5 of 1964) (hereinafter to be referred to as the 1964 Act) power was given to the Commissioner for the first time to grant stay of recovery of tax or penalty during the pendency of an appeal. By Section 10 of that Act, Section 13 of the 1947 Act was amended. For the second proviso in Section 13, two provisos were substituted out of which the relevant proviso is as follows :

Provided further that when the dealer has presented an appeal under Section 23 the Commissioner may, on an application in that behalf filed by such dealer within thirty days from the date of receipt by him of the notice under Sub-section (4), in his discretion, stay the recovery of the amount in respect of which such notice has been issued or any portion thereof for such period as the Commissioner thinks fit.

This proviso came into force with effect from 20th January, 1964. By Section 10(c) of the Orissa Sales Tax (Amendment) Act, 1968 (Orissa Act 15 of 1968) (hereinafter to be referred to as the 1968 Act), Section 13(5) of the 1947 Act was substituted as follows :

13. (5) If any amount is not paid by the due date in pursuance of a notice issued under Sub-section (4) the Commissioner may direct that the dealer or the person, as the case may be, shall, in addition, pay by way of penalty a sum not exceeding one-half of the total amount due within thirty days from the date of service of notice upon the dealer or the person in this behalf:

Provided that in the case of continuing default the penalty may be levied in instalments from time to time so however as not to exceed one-half of the total amount due :

Provided further that--

(a) ...

(b) when the dealer or person, as the case may be, has presented an appeal under Clause (a) of Sub-section (3) of Section 23, the Commissioner may, on an application in that behalf filed by such dealer or person within sixty days from the date of receipt by him of the appellate order made under Sub-section (2) of the said section, in his discretion, stay the recovery of the amounts due from such dealer or person as a result of such appellate order or any portion thereof for such period and subject to such conditions as the Commissioner thinks fit.

Thus, by this provision, power was specifically conferred on the Commissioner to grant stay during the pendency of the second appeal before the Tribunal.

6. From a brief resume of the historical development regarding the constitution and powers of the Tribunal to grant stay it would be apparent that initially the Legislature intended to confer powers on the Tribunal to grant stay during the pendency of the appeal before it. Subsequently, however, the express provision was not brought into force. On the other hand, express power was conferred on the Commissioner to grant stay while the second appeal was pending before the Tribunal.

7. At this stage it would be proper to refer to the powers of the Tribunal while hearing a second appeal. Section 23(3)(c) of the 1947 Act deals with the matter. It lays down that while disposing of an appeal under this sub-section the Tribunal or Additional Tribunal, as the case may be, shall have the same powers subject to the same conditions as are enumerated in Sub-section (2) and any order passed under this sub-section shall, except as otherwise provided in Section 24, be final. The powers of the first appellate authority and the conditions to which they are subject to have been enumerated in Sub-section (2) of Section 23 as follows:

23. (2) Subject to such rules as may be made or procedure as may be prescribed, the appellate authority, in disposing of any appeal under Sub-section (1), may--

(a) confirm, reduce, enhance or annul the assessment or the penalty or interest, if any ; or

(b) set aside the assessment or the penalty or interest, if any, and direct the assessing authority to pass a fresh order after such further enquiry as may be directed.

8. Mr. Mohapatra, the learned Standing Counsel advances the following contentions:

(i) The Act contains no express provision conferring power on the Tribunal to grant stay; on the contrary, the fact that the provision to grant stay in the 1955 Act was not brought into force and was subsequently omitted from the 1957 Act is clear evidence of the legislative intention that the Tribunal has no power to grant stay.

(ii) Whatever may be the earlier position, after the passing of the 1968 Act, the Commissioner alone is competent to grant stay during the pendency of a second appeal and that the Tribunal has no such power.

Mr. Mohanty, on the other hand, contends that prior to the 1968 Act the Tribunal had implied power to grant stay which was incidental and ancillary to the wide power conferred upon it for exercise of the second appellate jurisdiction and that such power still continues even after the 1968 Act came into force whereunder express power was conferred upon the Commissioner to grant stay during the pendency of the second appeal.

The rival contentions require careful examination.

9. Income-tax Officer, Cannanore v. M. K. Mohammed Kunhi [1969] 71 I T.R. 815 (S.C.) throws light directly on the question in issue though it arose out of the Income-tax Act, 1961. Section 254(1) of that Act deals with orders of the Appellate Tribunal. Sub-section (1) thereof lays down that the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. Indisputably powers have not been expressly conferred upon the Appellate Tribunal to stay proceedings relating to the recovery of penalty or tax due from an assessee. Under Section 220(6) power of stay by treating the assessee as not being in default during the pendency of an appeal has been given to the Income-tax Officer only when an appeal has been presented under Section 246 to the Appellate Assistant Commissioner. Thus, there is express provision in the Income-tax Act for stay of proceedings by the Income-tax Officer relating to recovery of penalty and tax when a first appeal is pending but there is no corresponding express provision to grant stay when the second appeal is pending before the Appellate Tribunal.

Despite the absence of such express provision for grant of stay, their Lordships held that the Tribunal had implied powers to grant stay. The logic through which such a conclusion was reached is instructive and has a direct bearing on the case before us. The basic principle is to be found in Maxwell on Interpretation of Statutes, Eleventh Edition, at page 350. The statement is that 'where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution.

Their Lordships applied the aforesaid principle to the wide powers exercised by the Tribunal under Section 254(1). They concluded thus :

If the Income-tax Officer and the Appellate Assistant Commissioner have made assessments or imposed penalties raising very large demands and if the Appellate Tribunal is entirely helpless in the matter of stay of recovery, the entire purpose of the appeal can be defeated if ultimately the orders of the departmental authorities are set aside. It is difficult to conceive that the Legislature should have left the entire matter to the administrative authorities to make such orders as they choose to pass in exercise of unfettered discretion. The assessee, as has been pointed out before, has no right to even move an application when an appeal is pending before the Appellate Tribunal under Section 220(6) and it is only at the earlier stage of appeal before the Appellate Assistant Commissioner that the statute provides for such a matter being dealt with by the Income-tax Officer.

Their Lordships' ultimate conclusion was summed up in paragraph 8 as follows :

In our opinion the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. This is particularly so when Section 220(6) deals expressly with a situation when an appeal is pending before the Appellate Assistant Commissioner but the Act is silent in that behalf when an appeal is pending before the Appellate Tribunal. It could well be said that when Section 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceeding as will prevent the appeal if successful from being rendered nugatory.

10. The aforesaid decision thus firmly establishes the following principles :

(i) Where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts or employing such means as are essentially necessary to its execution. This implied power is incidental and ancillary to the exercise of the appellate jurisdiction.

(ii) If, however, the statute confers express power on any authority to deal with a particular contingency, then by necessary implication that particular power is to be taken as excluded from the ambit of implied power. In other words, the theory of implied powers cannot be invoked when express jurisdiction has been conferred on any authority to exercise a particular power.

To illustrate, the Appellate Assistant Commissioner hearing first appeals under Section 246 of the Income-tax Act has not the implied power to grant stay as an express power has been conferred on the Income-tax Officer under Section 220(6) during the pendency of the first appeal. As in that Act, however, there is no provision conferring express power on any authority to grant stay while the second appeal is pending, the Appellate Tribunal has the implied power to grant stay. That power is incidental and ancillary to the exercise of its appellate jurisdiction.

11. If that were not so, it was very easy for their Lordships to say that every appellate authority discharging judicial functions had necessarily implied power to grant stay despite existence of a provision in the statute conferring express power on some other authority. There was no necessity for their Lordships to refer at several places in the judgment to the distinguishing feature that in the case of first appellate authority the Income-tax Officer had power to grant stay while he had no such power when the second appeal was pending.

12. The distinction between inherent power and implied power must not, however, be lost sight of. Only courts having general jurisdiction like civil courts have inherent power. Courts or Tribunals of limited jurisdiction created under special statutes have no inherent power. In The Province of Bihar v. Jokhi Ram Ram Prasad and Anr. [1948] 1 S.T.C. 202, a Bench of the Patna High Court observed thus:

Even if it be assumed that the Board is a court, it is still a statutory court of limited jurisdiction, with no powers beyond those conferred by the relevant statute or statutes. It has no inherent powers.

Similar views have been expressed in Patna Electric Supply Workers' Union v. A. Hassan and Anr. A.I.R. 1958 Pat. 427, Haji Zakeria Suleman v. The Collector, Yeotmal and Ors. A.I.R. 1963 Bom. 233 and Anand Prakash and Anr. v. Assistant Registrar, Co-operative Societies and Ors. A.I.R. 1968 All. 22. In J.K. Iron & Steel Co. Ltd., Kanpur v. The Iron and Steel Mazdoor Union, Kanpur A.I.R. 1956 S.C. 231, their Lordships observed thus :

All the same, wide as their powers are, these Tribunals are not absolute, and there are limitations to the ambit of their authority...

Their powers are derived from the statute that creates them and they have to function within the limits imposed there and to act according to its provisions. Those provisions invest them with many of the 'trappings' of a court and deprive them of arbitrary of absolute discretion and power.

13. In Income-tax Officer, Cannanore v. M.K. Mohammed Kunhi [1969] 71 I.T.R. 815 (S.C.), their Lordships held that the Appellate Tribunal had power to grant stay on the theory of implied powers and not on the basis of the Tribunal possessing inherent powers corresponding to Section 151, Civil Procedure Code.

14. The learned Standing Counsel contended that there was marked difference in the language of Section 23(2)(a) of the 1947 Act and that of Section 254(1) of the Income-tax Act and it is this difference in language which is responsible for their Lordships' conclusion that the Appellate Tribunal under the Income-tax Act had implied powers to grant stay. Emphasis is laid on the words 'pass such orders thereon as it thinks fit' in Section 254(1) of the Income-tax Act which is non-existent in Section 23(2)(a) of the 1947 Act. In our opinion, this difference in language showing that much wider power has been conferred under Section 254(1) on the Appellate Tribunal in the matter of disposal of the appeal would not make any difference to the ultimate conclusion that the theory of implied power is to be invoked in the absence of express provision for exercise of the appellate jurisdiction in an effective manner. Before the 1968 Act, there was no express provision conferring the power to grant stay on any authority during the pendency of the second appeal before the Sales Tax Tribunal. The theory of implied power had full application prior to the 1968 Act and the Tribunal had the power to grant stay.

15. The learned Standing Counsel further contended that from the history of the legislation it would be apparent that the Legislature had no intention to confer the power of stay on the Sales Tax Tribunal. Doubtless, initially the power to grant stay was expressly conferred upon the Tribunal under the 1955 Act. By the 1957 Act this power was taken away. Apparently it appears that the Legislature did not intend to confer the power of stay on the Sales Tax Tribunal. The Legislature did not, however, confer such power expressly on any other authority during the pendency of the second appeal. In the absence of such express power, dealers were not entitled to any relief before the second appellate authority during the interim period. Appeals against heavy assessments by the Sales Tax Officer and the Assistant Commissioner of Sales Tax would naturally be frustrated or defeated unless interim reliefs are granted. In the circumstances, the theory of implied power has full application.

16. The more important question for consideration, however, is whether the Sales Tax Tribunal would have such implied power after the coming into force of the 1968 Act whereunder express power was conferred upon the Commissioner under Section 13(5), proviso, to grant stay during the pendency of the second appeal. The conferment of such power indicates the legislative intention. When the Legislature conferred express power on the Commissioner to grant stay during the pendency of the second appeal, the occasion or necessity for invoking implied power disappears. As has already been pointed out, the basic theory underlying the exercise of implied power is that when an Act confers a jurisdiction it impliedly also grants the power of doing all such acts or employing such means as are essentially necessary to its execution. After the conferment of express power on the Commissioner the exercise of implied power by the Tribunal is not essentially necessary to the execution of its jurisdiction.

Moreover, by the power conferred under Section 13(5), proviso, the power to grant stay would be exercised by the Commissioner subject to an application in that behalf being filed by the dealer within sixty days from the date of receipt of the order of the first appellate authority.

17. As to how a power of stay is to be exercised in the matter of taxation and revenue laws has been indicated in Income-tax Officer, Cannanore v. M.K. Mohammed Kunhi [1969] 71 I.T.R. 815 (S.C.), para 9. Their Lordships observed thus:

A certain apprehension may legitimately arise in the minds of the authorities administering the Act that, if the Appellate Tribunals proceed to stay recovery of taxes or penalties payable by or imposed on the assessees as a matter of course, the revenue will be put to great loss because of the inordinate delay in the disposal of appeals by the Appellate Tribunals. It is needless to point out that the power of stay by the Tribunal is not likely to be exercised in a routine way or as a matter of course in view of the special nature of taxation and revenue laws. It will only be when a strong prima facie case is made out that the Tribunal will consider whether to stay the recovery proceedings and on what conditions, and the stay will be granted in most deserving and appropriate cases where the Tribunal is satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue during the pendency of the appeal.

18. It would thus appear that the power to grant stay is to be exercised very judiciously and cautiously, particularly with reference to taxation and revenue laws. The Sales Tax Tribunal is presided over by a District Judge. The Commissioner of Sales Tax is recruited from the rank of senior members of the Indian Administrative Service (I.A.S.). It is difficult to accept the contention of Mr. Mohanty that an officer of the rank of a Commissioner would exercise the power to grant stay capriciously and arbitrarily merely because the Commissioner is the administrative head of the Sales Tax Department. Such high ranking officers by virtue of their experience and status are presumed to exercise the statutory power vested in them fairly and judiciously free from any bias. We are clearly of opinion that after the express power is conferred on the Commissioner under Section 13(5), proviso, to grant stay during the pendency of a second appeal, interim reliefs can be appropriately granted and the exercise of jurisdiction by the Tribunal would not be frustrated or defeated.

19. Moreover, the exercise of implied power by the Tribunal would render nugatory the restrictions imposed in Section 13(5), proviso. To maintain such an application, it is to be filed within sixty days from the date of receipt by the dealer of the appellate order of the Assistant Commissioner. The implied power to be invoked by the Tribunal is not hemmed in with any such restriction.

20. Mr. Mohanty places strong reliance on the following passage in Municipal Council, Palai v. T.J. Joseph A.I.R. 1963 S.C. 1561:

It is undoubtedly true that the Legislature can exercise the power of repeal by implication. But it is equally well settled that there is a presumption against an implied repeal. Upon the assumption that the Legislature enacts laws with a knowledge of all existing laws pertaining to the same subject the failure to add a repealing clause indicates that the intent was not to repeal existing legislation. Of course, this presumption will be rebutted if the provisions of the new Act are so inconsistent with the old ones that the two cannot, stand together.

This principle has no' application to the present case. It applies to cases where there is repugnancy between the provisions of two separate statutes or in separate provisions in the same statute. The present case is not one of that category. Before the 1968 Act, there was no provision in the 1947 Act conferring power on any authority to grant stay during the pendency of the second appeal. Such a power was conceded not on account of any statutory provision but on the principle of interpretation of statutes that unless such a power is implied the exercise of a particular jurisdiction may be frustrated. After the incorporation of Section 13(5), proviso, in the 1947 Act, there is no question of repeal of any inconsistent provision in the statute. It is not a case, of repugnancy but is one of not invoking the implied power after conferment of express power on a particular functionary.

That apart, as has already been stated, Section 13(5), proviso, is inconsistent with the exercise of implied power. If implied power is invoked, the proviso would be rendered nugatory.

21. On the aforesaid analysis, we are clearly of opinion that after the introduction of Section 13(5), proviso, the Tribunal cannot invoke the implied power in the matter of granting stay during the pendency of the second appeal. With regard to other matters for which there is no express provision in the statute, it is still open to the Tribunal to exercise implied power.

22. In the result, the writ application is allowed. A writ of certiorari be issued quashing the impugned order passed by the Tribunal on 30th of March, 1970. In the circumstances, parties to bear their own costs.

Patra, J.

I agree.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //