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Jagatjit Distilling and Allied Industries Limited Vs. the Assessing Authority and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Writ Petition No. 228 of 1975
Judge
Reported in[1978]42STC233(P& H)
AppellantJagatjit Distilling and Allied Industries Limited
RespondentThe Assessing Authority and ors.
Appellant Advocate Bhagirath Dass, Adv.
Respondent Advocate L.K. Sood, Adv. for the State
Cases ReferredJagatjit Distilling and Allied Industries Ltd. v. State
Excerpt:
.....a prayer was made before the tribunal to rectify or modify its earlier orders dismissing the appeals of the assessee regarding five assessment years referred to above, but the tribunal failed to exercise the jurisdiction vested in it by holding that it had no power of review. the mistake, which is apparent on the face of' the record, was pointedly brought to the notice of the tribunal by the assessee when a prayer was made that the orders of the tribunal by which the appeals of the assessee had been dismissed, should be rectified or modified, but the tribunal failed to exercise the jurisdiction vested in it by holding that the tribunal had no power to give any relief, as the appeals of the assessee had already been disposed of. it is, therefore, apparent that the tribunal has..........having been unsuccessful before the deputy excise and taxation commissioner and also before the sales tax tribunal, made an application under section 22 of the act, praying that the following questions of law in addition to the others, be referred to the high court for being answered :1. * * * *2. whether, on the facts and in the circumstances of these cases, the price of bottles is liable to sales tax when bottled liquor is sold ?3. whether, on the facts and circumstances of the case, there was any sale of the packing material (bottles) in view of the goods having been delivered at the instance of the excise authorities under the punjab excise act, 1914 and the rules framed thereunder, to such persons to whom the licence had been granted or the delivery order had been issued ?4. did.....
Judgment:

B.S. Dhillon, J.

1. This order will dispose of Sales Tax Cases Nos. 2, 3, 4, 5 and 6 of 1973, Sales Tax References Nos. 12, 13, 14, 15 and 16 of 1973 and Civil Writ Petition No. 228 of 1975.

2. The petitioner-company, M/s. Jagatjit Distilling and Allied Industries Ltd., Hamira, is a registered company under the Companies Act as a public limited company and runs a distillery at Jagatjit Nagar for the manufacture and sale of potable spirits. For the purposes of packing the manufactured liquor, it has to use glass bottles, which glass bottles are according to the specifications and requirements as required under the Punjab Distillery Rules, 1932. The petitioner-company is obliged to supply liquor in the bottles which contain the excise mark and are specially manufactured for that purpose by the suppliers from whom the petitioner-company obtained its supply of bottles.

3. Under the Punjab Excise Act, the price of liquor supplied including the packing (bottles) has been fixed by the excise authority and the liquor is supplied to the holder of L-13 and L-14 licensees who have been given the licences for the wholesale or retail vend of country spirit. There is no contract express or implied for the sale of bottles. The Assessing Authority under the Punjab General Sales Tax Act, 1948 (hereinafter referred to as the Act), assessed sales tax on the price of bottles as well, for the assessment years 1956-57, 1957-58, 1958-59, 1961-62 and 1963-64. The assessee having been unsuccessful before the Deputy Excise and Taxation Commissioner and also before the Sales Tax Tribunal, made an application under Section 22 of the Act, praying that the following questions of law in addition to the others, be referred to the High Court for being answered :

1. * * * *2. Whether, on the facts and in the circumstances of these cases, the price of bottles is liable to sales tax when bottled liquor is sold ?

3. Whether, on the facts and circumstances of the case, there was any sale of the packing material (bottles) in view of the goods having been delivered at the instance of the excise authorities under the Punjab Excise Act, 1914 and the Rules framed thereunder, to such persons to whom the licence had been granted or the delivery order had been issued ?

4. Did the dealer have any volition in the sale of the goods ordered to be delivered to a particular licensee and whether such a delivery could constitute sale within the meaning of the definition as given in the Sale of Goods Act ?5 * * * *

4. This reference came up before a Division Bench of this Court and the Bench answered all the three questions referred to above, in favour of the assessee. Consequently, the assessee was not subjected to sales tax for the assessment years referred to above. It is not disputed that the State of Punjab filed an appeal against that judgment in the Supreme Court which was also dismissed and thus the judgment of this Court became final. This judgment is reported as Jagatjit Distilling and Allied Industries Ltd. v. State [1971] 28 S.T.C. 709. Proceedings were also initiated for the assessment of sales tax for the years 1959-60, 1960-61, 1962-63, 1964-65 and 1965-66. The Assessing Authority imposed the liability of tax. The appeals of the company before the Deputy Excise and Taxation Commissioner were also dismissed. The Sales Tax Tribunal dismissed the second appeal of the assessee. The appeal concerning assessment year 1959-60 was dismissed on 1st November, 1960; for the year 1960-61 on 6th June, 1970, for the year 1962-63 on 13th May, 1970, for the year 1964-65 on 26th September, 1969 and for the year 1965-66 on 26th September, 1969. The assessee then filed an application under Section 22 of the Act and requested the Tribunal to refer the following questions of law to this court:

1. * * * *2. * * * *3. Whether, on the facts and circumstances of the case, there was any sale of the packing material (bottles) in view of the goods having been delivered at the instance of the excise authorities under the Punjab Excise Act, 1914 and the Rules framed thereunder, to such persons to whom the licence had been granted or the delivery order had been issued ?

4. Did the dealer have any volition in the sale of the goods ordered to be delivered to a particular licensee and whether such a delivery could constitute sale within the meaning of the definition as given in the Sale of Goods Act ?

Additional question: Whether, on the facts and circumstances of the case, the decision dated 3rd August, 1971, of the Punjab and Haryana High Court in the case of the petitioner-company and reported in 28 S.T.C. 709, is binding for the year 1965-66, wherein the same questions of law are involved and petition under Section 22 of the Act to refer the question of law was pending before the Tribunal ?

5. A prayer was also made by the assessee to the Sales Tax Tribunal that, in view of the decision of the High Court in Jagatjit Industries' case1, the orders passed by the Tribunal dismissing the appeal of the assessee for the assessment years, referred to above, be rectified/modified. The Presiding Officer of the Sales Tax Tribunal held as under :

It is no doubt correct that the law laid down by the High Court or the Supreme Court would be applicable in finally disposing of the appeals which are pending before the Tribunal. In the present case, the appeals have been finally disposed of. The Tribunal has no inherent jurisdiction to rehear such appeals. Sub-section (5) of Section 22 gives powers to the Tribunal to dispose of a particular case in which a reference is made to the High Court.

6. The Tribunal refused to refer questions Nos. (3) and (4) to the High Court on the ground that the said questions of law already stand answered by the High Court in Jagatjit Industries' case1 and, therefore, the question of law, which has already been decided, cannot be referred to the High Court. As regards the last question of law, the Tribunal referred the said question to this court in Sales Tax References Nos. 12, 13, 14, 15 and 16 of 1973. In Sales Tax Cases Nos. 2, 3, 4, 5 and 6 of 1973, the assessee has approached this court for asking the Tribunal to refer questions Nos. (3) and (4), which according to the assessee are questions of law pertaining to the assessment years 1959-60, 1960-61, 1962-63, 1964-65 and 1965-66. In Civil Writ Petition No. 228 of 1975, the assessee has challenged the order of the Tribunal dated 13th November, 1972, refusing to rectify the orders, annexures P-8 to P-12, dismissing the appeals of the assessee pertaining to the years 1959-60, 1960-61, 1962-63, 1964-65 and 1965-66, attached with the writ petition.

7. Section 21A of the Act is as follows :

21A. (1) The Commissioner or the officer on whom powers of the Commissioner under Sub-section (1) of Section 21 have been conferred by the State Government may, at any time within two years from the date of any order passed by him, of his own motion rectify any mistake apparent from the record and shall within a like period rectify any such mistake which has been brought to his notice by any person affected by such order:

Provided that no such rectification shall be made if it has the effect of enhancing the tax or reducing the amount of refund, unless the Commissioner or the officer on whom powers of the Commissioner under Sub-section (1) of Section 21 have been conferred by the State Government has given notice in writing to such person of his intention to do so and has allowed such person a reasonable opportunity of being heard.(2) The provisions of Sub-section (1) shall apply to the rectification of a mistake by a Tribunal as they apply to the rectification of a mistake by the Commissioner....

8. As has been observed earlier, a prayer was made before the Tribunal to rectify or modify its earlier orders dismissing the appeals of the assessee regarding five assessment years referred to above, but the Tribunal failed to exercise the jurisdiction vested in it by holding that it had no power of review. The mere reading of the provisions of Section 21A of the Act would suggest that the said provisions have been enacted by the legislature to rectify any mistake apparent from the record. The Tribunal in its impugned order, came to the conclusion that the decision of this court in Jagatjit Industries' case [1971] 28 S.T.C. 709 was binding on it and that the assessee was not liable to pay sales tax in view of the above-mentioned decision, but no relief could be given to the assessee as the appeals filed by the assessee before the Tribunal had been dismissed before the decision of the High Court in Jagatjit Industries' case [1971] 28 S.T.C. 709. The language of the provisions of Section 21A is widely worded. The Tribunal is duty bound to rectify the mistake apparent on the record when it comes to its notice or when it is brought to its notice by the person affected by the said order. The contention of the learned counsel, that the assessee should have filed an application under Section 21A of the Act and only then the Tribunal could exercise its jurisdiction is without any merit. The provisions of Section 21A of the Act are widely worded and nowhere restrict the exercise of jurisdiction only on making an application, as the power vested in the Tribunal can be exercised on its own motion or when the mistake is brought to the notice of the Tribunal. It would thus be seen that, according to the finding of the Tribunal itself, the assessee is not liable to pay the tax. The Tribunal refused to refer questions Nos. (3) and (4) to the High Court on the plea that the said questions already stand answered in favour of the assessee. The net result of these findings is that even though the assessee in law admittedly is not liable to pay the sales tax, but in fact he is being charged with the same. The prayer for rectification has been refused and his prayer for referring the questions Nos. (3) and (4) to the High Court has also been refused. The bare reading of the provisions of Section 21A would suggest that the said provisions have been enacted by the legislature to rectify any mistake apparent on the record. This mistake can be rectified by the Tribunal on its own motion or when the matter is brought to its notice by any person affected by the said order. The mistake, which is apparent on the face of' the record, was pointedly brought to the notice of the Tribunal by the assessee when a prayer was made that the orders of the Tribunal by which the appeals of the assessee had been dismissed, should be rectified or modified, but the Tribunal failed to exercise the jurisdiction vested in it by holding that the Tribunal had no power to give any relief, as the appeals of the assessee had already been disposed of. It is, therefore, apparent that the Tribunal has failed to exercise the jurisdiction vested in it under the provisions of Section 21A of the Act. We, therefore, quash the order of the Tribunal wherein it was held that the Tribunal had no jurisdiction to rehear the appeals thereby impliedly refusing to rectify the mistake apparent on the record. In fact, there is no question of rehearing the appeals. The only question is of rectification of the mistake of law which is apparent on the record. We, therefore, direct the Tribunal to exercise the jurisdic-diction vested in it under Section 21A of the Act and rectify the mistake of law apparent on the face of the record in accordance with law.

9. For the reasons recorded above, Civil Writ Petition No. 228 of 1975 is allowed to the extent indicated above with no order as to costs.

10. The above relief having been given to the petitioner in the writ petition, the learned counsel for the petitioners says that Sales Tax Cases Nos. 2, 3, 4, 5 and 6 of 1973 and Sales Tax References Nos. 12, 13, 14, 15 and 16 of 1973 be dismissed as withdrawn. The learned counsel for the State has no objection to this being done. We order accordingly with no order as to costs.

K.S. Tiwana, J.

11. I agree.


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