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State of Tamil Nadu and ors. Vs. P.M. Madhavan Nair and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberT.C. Nos. 97, 186, 324, 325, 389, 392, 542, 543, 584, 646, 849, 865, 901, 902, 979, 990, 1077, 1145,
Judge
Reported in[1982]49STC244(Mad)
ActsTamil Nadu General Sales Tax Act - Sections 12, 14, 15, 16(1), 16(2), 31(1), 31(3) and 36; Indian Income-tax Act, 1922 - Sections 30, 30(1), 31 and 33; Limitation Act - Sections 28
AppellantState of Tamil Nadu and ors.
RespondentP.M. Madhavan Nair and ors.
Appellant AdvocateK.S. Bakthavatsalam, Additional Government Pleader
Respondent AdvocateN. Inbarajan, Adv. for ;C.S. Chandrasekara Sastri, ;C. Natarajan, ;C. Venkataraman, ;K. Duraisami, ;P.M. Sundaram and ;N. Varadarajan, Advs.
Cases ReferredMela Ram and Sons v. Commissioner of Income
Excerpt:
.....amount to confirmation of order of assessment - appeals before tribunal against orders refusing to condone delay in presentation of appeals and against orders refusing to condone delay in presentation of appeals and also against orders refusing to condone delay in representation appealable under section 36. - - on the merits being satisfied that there was sufficient cause for not presenting the appeal before the appellate assistant commissioner within the prescribed period, the tribunal set aside the orders of the appellate assistant commissioner and remanded the matter to him with a direction to take up the appeal on file and to dispose it off on merits. under section 31(1) any person objecting to an order passed by the appropriate authority under section 12, may within a period of..........: [1956]29itr607(sc) as to whether an order dismissing an appeal as out of time or refusing to condone delay in filing an appeal could be considered as one confirming, reducing, enhancing or annulling the assessment under section 31(3)(a) of the income-tax act and held that section 31 should be liberally construed so as to include not only orders passed on a consideration of the merits of the assessment but also orders passed which dispose of the appeal on preliminary issues such as limitation and the like and which amount to confirmation of the order of assessment. in fact we find in section 31(3) of the tamil nadu general sales tax act, further providing that in disposing of an appeal, the appellate assistant commissioner may confirm, reduce, enhance or annul the assessment or the.....
Judgment:

Ramaswami, J.

1. In this batch of cases a common question of law as to the maintainability of an appeal to the Tribunal under section 36 of the Tamil Nadu General Sales Tax Act against an order refusing to excuse the delay in filing an appeal made by the Appellate Assistant Commissioner is raised. In two of the cases, the order of the Appellate Assistant Commissioner was one refusing to condone the delay in representation. The maintainability of an appeal against that order is questioned in these two cases.

2. In all these cases against the original order of assessment, appeals were preferred by the assessees to the Appellate Assistant Commissioner belatedly with petitions to excuse the delay in filing. On the ground that the assessees had not shown or proved sufficient cause for not presenting the appeals within the prescribed period, the Appellate Assistant Commissioner dismissed the petitions for excusing the delay. The assessees preferred further appeals purporting to be under section 36 of the Tamil Nadu General Sales Tax Act to the Tribunal. The State representative who had appeared before the Tribunal questioned the maintainability of the appeal against the order rejecting the petition for excusing the delay. The Tribunal, however, held that the orders rejecting the petition for excusing the delay fall within the scope of section 31(3) of the Tamil Nadu General Sales Tax Act and that, therefore, the appeal was maintainable. On the merits being satisfied that there was sufficient cause for not presenting the appeal before the Appellate Assistant Commissioner within the prescribed period, the Tribunal set aside the orders of the Appellate Assistant Commissioner and remanded the matter to him with a direction to take up the appeal on file and to dispose it off on merits. The Tribunal took the same view even in respect of the orders refusing to condone the delay in representation of the appeal and remanded the matter for fresh disposal on merits. It is against this order of the Tribunal, the present revision petitions have been filed.

3. The learned Additional Government Pleader for the State contended that an order excusing the delay in presentation of the appeal or refusing to condone the delay is one made under section 31(1) of the Tamil Nadu General Sales Tax Act (hereinafter referred to as the Act) and that an appeal to the Tribunal is provided under section 36 only against an order of the Appellate Assistant Commissioner made under section 31(3) and since orders under section 31(1) had not been made specifically appealable, the appeals before the Tribunal in these cases were incompetent and not maintainable. Under section 31(1) any person objecting to an order passed by the appropriate authority under section 12, may within a period of thirty days from the date on which the order was served on him, appeal against such order to the Appellate Assistant Commissioner (having jurisdiction). There are two provisos which read as follows :

'Provided that the Appellate Assistant Commissioner may admit an appeal presented after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting the appeal within the said period;

Provided further that in the case of an order under section 12, section 14, section 15, or sub-sections (1) and (2) of section 16, no appeal shall be entertained under this sub-section unless it is accompanied by satisfactory proof of the payment of the tax admitted by the appellant to be due or of such instalments thereof as might have become payable, as the case may be.'

4. Under section 36, any person objecting to an order passed by the Appellate Assistant Commissioner under sub-section (3) of section 31, may, within a period of sixty days from the date on which the order was served on him appeal against such order to the Appellate Tribunal. The question for consideration therefore is whether an order refusing to condone the delay would be construed as one made under the proviso to section 31(1) or it would be construed as one made under the proviso to section 31(1) or it would be an order made in the appeal or in disposing of an appeal within the meaning of section 31(3). Section 31(3) reads as follows :

'In disposing of an appeal, the Appellate Assistant Commissioner may, after giving the appellant a reasonable opportunity of being heard,

(a) in the case of an order of assessment -

(i) confirm, reduce, enhance or annul the assessment or the penalty or both;

(ii) set aside the assessment and direct the assessing authority to make a fresh assessment after such further inquiry as may be directed; or

(iii) pass such other orders as he may think fit; or

(b) in the case of any other order, confirm, cancel, or vary such order : Provided that at the hearing of any appeal against an order of the assessing authority, the assessing authority shall have the right to be heard either in person or by a representative.'

5. We are relieved of considering the provisions of sections 31 and 36 in detail as under the comparable provisions in the Indian Income-tax Act, 1922, the Supreme Court had considered an identical question in Mela Ram and Sons v. Commissioner of Income-tax : [1956]29ITR607(SC) . Under section 30(1) of the Income-tax Act an assessee is given a right of appeal to the Appellate Assistant Commissioner against an order of assessment. Sub-section (2) of that section provided that the appeal shall ordinarily be presented within thirty days of receipt of the notice of demand relating to the assessment, but the Appellate Assistant Commissioner may admit an appeal after the expiration of the period if he is satisfied that the appellant had sufficient cause for not presenting it within that period. Section 33 dealt with the appeals against the orders of Appellate Assistant Commissioner and that specifically provided that an assessee objecting to an order passed by the Appellate Assistant Commissioner under section 31 may appeal to the Appellate Tribunal within sixty days of the date on which such order is communicated to him. Sub-section (2) of section 30 of the Income-tax Act, which prescribed the period of limitation and conferred jurisdiction on the Appellate Assistant Commissioner to condone the delay in filing the appeal, if any, was not specifically referred to in the appeal provisions in section 33 and therefore, in the decision before the Supreme Court reported in Mela Ram and Sons v. Commissioner of Income-tax : [1956]29ITR607(SC) the appealability of the order refusing to condone the delay was questioned. The main provisions in section 30(1) of the Income-tax Act conferring a right of appeal and section 30(2) prescribing a period of limitation and vesting a power in the Appellate Assistant Commissioner to condone the delay in preferring an appeal, are identical as those contained in section 31(1) and the first proviso to that sub-section in the Tamil Nadu General Sales Tax Act.

6. The first point that was considered and answered by the Supreme Court in the above decision was as to whether a power to excuse the delay in presenting an appeal on sufficient cause being shown would include a power to reject such an application or not being satisfied of the sufficient cause. The Supreme Court held that when a power is granted to an authority to be exercise at his discretion, it is necessarily implicit in the grant that he may exercise it in such manner as the circumstances might warrant and if he has a discretion to excuse the delay, he has also a discretion in appropriate cases to decline to do so. The Supreme Court then observed : 'We are therefore of opinion that the refusal to excuse delay is an order under section 30(2) (of the Income-tax Act).' We are unable to read this sentence quoted in the sense that an order refusing to condone the delay in filing the appeal is an order under section 30(2) and not one under section 31 because in the latter portion of the judgment, the Supreme Court had held that it will be one of the orders contemplated under section 31 which is appealable under section 33. In the context of an argument that section 30(2) did not enable the Appellate Assistant Commissioner of Income-tax to refuse to condone the delay and that an order refusing to condone will fall outside the scope of section 30(2), the Supreme Court observed that the power for refusing to condone the delay also has to be traced to section 30(2). It is in that sense, they referred to section 30(2) as the provision under which the Appellate Assistant Commissioner refuses to excuse the delay, but not to make the order itself as one coming under section 30(2), but under section 31. The Supreme Court having held that the power to refuse to condone the delay could be traced to section 30(2) of the Income-tax Act, then proceeded to consider the question whether an appeal filed beyond the period of limitation is in the eye of law, no appeal, unless and until there is condonation of delay and that, in consequence, an order passed thereon cannot be held to be passed in appeal so as to fall within section 31. Their Lordships answered this question with the following observation :

'It is well established that rules of limitation pertain to the domain of adjectival law, and that they operate only to bar the remedy but not to extinguish the right. An appeal preferred in accordance with section 30(1) must, therefore, be an appeal in the eye of law, though having been presented beyond the period mentioned in section 30(2) it is liable to be dismissed in limine. There might be a provision in statute that at the end of the period of limitation prescribed, the right would be extinguished, as for example, section 28 of the Limitation Act; but there is none such here. On the other hand, in conferring a right of appeal under section 30(1) and prescribing a period of limitation for the exercise thereof separately under section 30(2), the legislature has evinced an intention to maintain the distinction well-recognised under the general law between what is a substantive right and what is a matter of procedural law.'

7. After noting a certain decision, the Supreme Court further observed, '..................... it must be held that an appeal presented out of time is an appeal, and an order dismissing it as time-barred is one passed in appeal.' The Supreme Court then proceeded to consider the next question as to whether it is an order passed under section 31 of the Income-tax Act and held, 'that section is the only provision relating to the hearing and disposal of appeals, and if an order dismissing an appeal as barred by limitation is one passed in appeal, it must fall within section 31'. This decision squarely applies to the facts in this case as the provisions under the Tamil Nadu General Sales Tax Act are identical with those in the Income-tax Act.

8. We may also point out that the Supreme Court further considered in the said decision in Mela Ram and Sons v. Commissioner of Income-tax : [1956]29ITR607(SC) as to whether an order dismissing an appeal as out of time or refusing to condone delay in filing an appeal could be considered as one confirming, reducing, enhancing or annulling the assessment under section 31(3)(a) of the Income-tax Act and held that section 31 should be liberally construed so as to include not only orders passed on a consideration of the merits of the assessment but also orders passed which dispose of the appeal on preliminary issues such as limitation and the like and which amount to confirmation of the order of assessment. In fact we find in section 31(3) of the Tamil Nadu General Sales Tax Act, further providing that in disposing of an appeal, the Appellate Assistant Commissioner may confirm, reduce, enhance or annul the assessment or the penalty or both or set aside the assessment and direct the assessing authority to make a fresh assessment after such enquiry as may be directed which would cover almost all conceivable types of orders in appeals, further provided that he may 'pass such other orders as he may think fit'. A similar residuary power though not found in section 31 of the Income-tax Act, the Supreme Court considered and held that even orders which have no bearing on the merits of the assessment would come within the provisions of section 31(3) of the Income-tax Act. The provisions in section 31(3) of Tamil Nadu General Sales Tax Act, which confer also a residuary power should therefore be considered as a fortiori case. We are therefore of the view that the decision of the Supreme Court is thus conclusive on all the points raised in these tax revision cases and, accordingly, we hold that the appeals before the Tribunal against the orders refusing to condone the delay in presentation of the appeals and also against orders refusing to condone the delay in representation are appealable (sic) under section 36 of the Tamil Nadu General Sales Tax Act. These tax revision cases are accordingly dismissed. There will be no order as to costs.

9. Petitions dismissed.


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