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S.K. Natesam Pillai Vs. Deputy Commercial Tax Officer and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberWrit Petition No. 893 of 1966
Judge
Reported in[1971]28STC517(Mad)
AppellantS.K. Natesam Pillai
RespondentDeputy Commercial Tax Officer and anr.
Appellant AdvocateS.K. Ahmed Meeran, Adv.
Respondent AdvocateP. Venkataraman, Adv. for ;First Assistant Government Pleader
DispositionPetition allowed
Cases ReferredIn Basheshar Nath v. Income
Excerpt:
.....several other dealers similarly placed and situate like the petitioner did have the advantage, it would be to advance mischief and deny justice. the command of the article is directed to the state and the reality of the obligation thus imposed on the state is the measure of the fundamental right which every person within the territory of india is to enjoy. article 14, therefore, is an injunction to both the legislative as well as the executive organs of the state and the other subordinate authorities. 1285, revenue, dated 27th april, 1959, and this advantage having been denied by the revenue as well as the authorities functioning as quasi-judicial tribunals under the act and ultimately the benefit having been denied by the very executive who passed the above g. 7. as the petitioner has..........to grant any relief and directed the petitioner to approach the appropriate authority, namely, the state government, for redress. the petitioner accordingly filed a petition to the government, and the government in a laconic order dated 23rd july, 1965, without referring to the g.o. above-cited, stated that they saw no reason to cancel the assessment. having failed, therefore, to obtain the relief to which the petitioner is entitled to in the light of the g.o. above-cited, the petitioner has come up to this court to quash the assessment proceedings resulting in the levy on the ground that he has been discriminated against, as others similarly placed, gained exemption under the government order and he has been singled out and tax has been levied and a part of it has been collected. the.....
Judgment:
ORDER

Ramaprasada Rao, J.

1. The petitioner is a dealer in plantain in Gandhi Market, Tiruchirapalli. For the year 1959-60, on a turnover of Rs. 2,44,254.25, he was assessed to sales tax in the sum of Rs. 2,442.54 by the Deputy Commercial Tax Officer, Trichy Town II, by his order dated 30th October, 1960. The petitioner took up the matter in appeal before the appellate authority and to the Sales Tax Appellate Tribunal, who in turn, confirmed the assessment. The consistent stand of the petitioner before the revenue as well as the Appellate Tribunal was that in accordance with G.O. Ms. No. 1285, Revenue, dated 27th April, 1959, he was not liable to sales tax for the year 1959-60, as, under the G.O., the plantain dealers, who are not income-tax assessees or who have not submitted or called upon to submit returns under the Indian Income-tax Act, are not liable to pay sales tax. The appellate authority found that there was such a G.O., but felt helpless to grant any relief and directed the petitioner to approach the appropriate authority, namely, the State Government, for redress. The petitioner accordingly filed a petition to the Government, and the Government in a laconic order dated 23rd July, 1965, without referring to the G.O. above-cited, stated that they saw no reason to cancel the assessment. Having failed, therefore, to obtain the relief to which the petitioner is entitled to in the light of the G.O. above-cited, the petitioner has come up to this Court to quash the assessment proceedings resulting in the levy on the ground that he has been discriminated against, as others similarly placed, gained exemption under the Government order and he has been singled out and tax has been levied and a part of it has been collected. The respondent in the counter-affidavit admits that there was a G.O. which exempted plantain dealers under certain circumstances from paying sales tax for the year 1959-60. The respondent also concedes that some other dealers got exemption. But his case is that the Government order being an executive instruction and not being a notification within the meaning of Section 17 of the Madras General Sales Tax Act granting an exemption as regards the article in question, the petitioner is not entitled to the relief. As regards the contention that Article 14 has been violated, reliance is placed upon Mathra Parshad and Sons v. State of Punjab [1962] 13 S.T.C. 180 and it is urged that there can be no estoppel against law and therefore the petitioner should suffer the tax.

2. The petitioner is now seeking for the issue of a writ of certiorari by calling for the records in connection with his assessment and to quash the resultant orders therein. As stated already, G.O. Ms. No. 1285, Revenue, dated 27th April, 1959, provides as follows :

In supersession of the orders issued in the Government orders read above, the Government have decided (1) that no sales tax or registration fee need be levied or collected from dealers dealing exclusively in one or more of the following goods, namely, fresh vegetables (other than those mentioned in the First Schedule to the Madras General Sales Tax Act, 1959) fresh fruits, betels and plantain leaves, flowers, eggs, meat and fish (other than canned meat and fish) unless such dealers have either submitted returns or have been called upon to submit returns to the Income-tax authorities during any one of the last two years; and

(2) that the registration and assessing authorities should obtain a list of such dealers from the Income-tax authorities and call upon only those dealers to register themselves under the Madras General Sales Tax Act, 1959, and to produce accounts for the purpose of assessment.

The Board of Revenue is requested to issue suitable instructions confidentially to the assessing and registering authorities in this regard.

3. No doubt, this is an executive instruction and is on a par with administrative orders. It is by now well-settled that if administrative orders are issued by the executive and 'if such orders have an impinge on civil rights and if such rights, which flow from such executive instructions, are not respected by the executives themselves, then, courts exercising jurisdi6tion under Article 226 can extend their arm and correct such an apparent error in the non-implementation of such an administrative order. In the instant case, dealers dealing exclusively in plantains, vegetables, fresh fruits, flowers, meat, fish etc., are literally exempt from the levy or collection of sales tax. But this is subject to the condition that for the years 1957-58 and 1958-59, the dealer in question did not either submit returns on his own volition or has been called upon to submit returns by the revenue under the Indian Income-tax Act in connection with his income for the two years in question. It is common ground that the petitioner did not either submit a return or has been called upon to submit a return for the year 1957-58. But, for the year 1958-59, it appears that the petitioner submitted a return, but it resulted in a nil assessment. Such executive instructions, which confer a certain benefit to a dealer and relieve him from the burden of taxation, have to be liberally interpreted. The mere fact that a return was submitted for the year 1958-59 cannot be the sine qua non to bring the dealer into the net of taxation and deprive him of the benefit of the exemption envisaged in the G.O. in question. As the returns submitted by him for the year 1958-59 ended in nil assessment, it is obvious that he was not assessed to income-tax for that year as well. The primary intendment of the G.O. appears to be that persons who are not assessed to income-tax ought not to be assessed to sales tax as well during the relevant year in question. If this is the fair result that flows from the G.O. in question, then it is for consideration whether, if the instruction is not garbed as a notification under Section 17 of the Madras General Sales Tax Act, it ceased to have any legal effect at all. Formalities prescribed by statute are no doubt to be observed. But they could be pressed into service only up to a certain limit or stage. In a case like this, when the G.O., which authorised even the Board of Revenue to issue suitable instructions confidentially to the assessing and registering authorities to implement it, is to be disregarded only on the ground that it is not fitted in the prescribed form under Section 17, notwithstanding the fact that several other dealers similarly placed and situate like the petitioner did have the advantage, it would be to advance mischief and deny justice. Article 14 of the Constitution has to be observed even in cases where courts are concerned with the interpretation of executive instructions of the kind in question. It is not denied that other plantain dealers did have the benefit under the G.O. But the contention is that that cannot be taken advantage of by the petitioner. Mathra Parshad & Sons v. State of Punjab [1962] 13 S.T.C. 180 is a case where an individual was given an assurance that no tax could be collected from him, though it was recoverable in law. In that case, the question whether such an assurance was given to more than one person and whether such an assurance was given effect to in favour of some and denied to some others never loomed large. It was in those circumstances, the Supreme Court said:

There can be no estoppel against a statute. If the law requires that a certain tax is to be collected, it cannot be given up, and any assurance that it would not be collected, would not bind the State Government, whenever it chose to collect it.

4. The above observations are not of universal application, but they have to be applied to the facts of that case. In the instant case, it is not denied' that some plantain dealers did have the benefit of the executive instructions and in that sense they were exempt from payment of sales tax. As law has to be given effect to not with an unequal hand, it is necessary that the petitioner be given the benefit as other dealers, who, trading in the same commodity, did obtain the relief. In Basheshar Nath v. Income-tax Commissioner : [1959]35ITR190(SC) , the Supreme Court dealing with Articles 14 and 19 said:

The command of the article is directed to the State and the reality of the obligation thus imposed on the State is the measure of the fundamental right which every person within the territory of India is to enjoy... In the third place it is to be observed that, by virtue of Article 12, 'the State' which is, by Article 14, forbidden to discriminate between persons includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India. Article 14, therefore, is an injunction to both the legislative as well as the executive organs of the State and the other subordinate authorities.

5. Thus, therefore, the executive also cannot escape the effects of unequal application of law over the citizen. In the instant case, the petitioner has been discriminated for no reason whatsoever. When the State Government, which issued the instructions, was apprised of the situation, it keeps discreetly silent about it but rejects the memorandum of the petitioner on the ground that it sees no reason to cancel the assessment. The attitude of the Government in not having exercised its executive power consistent with its own executive instructions in the G.O. aforesaid, bespeaks of discrimination and its order is, therefore, violative of Article 14 of the Constitution.

6. In the foregoing circumstances it is clear that the petitioner is entitled to take advantage of G.O. Ms. No. 1285, Revenue, dated 27th April, 1959, and this advantage having been denied by the revenue as well as the authorities functioning as quasi-judicial tribunals under the Act and ultimately the benefit having been denied by the very executive who passed the above G.O., the entire process of assessment projects errors apparent on the record. Besides, at every stage when the petitioner was subjected to the levy, it was beyond the jurisdiction of the authorities so to act, as it was in the teeth of the clear exemption envisaged in the G.O. I have already expressed the view that the absence of form in the sense that there was no notification under Section 17 in this particular regard will not make any difference whatsoever.

7. As the petitioner has failed to obtain justice in the hands of the appropriate authorities functioning within and without the Madras General Sales Tax Act, I, in my discretion, make the rule nisi absolute, and this writ petition is allowed. No costs.


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