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IN THE HIGH COURT OF ALLAHABAD
S. C. Manchanda, J.
HINDUSTAN METAL WORKS - Appellant
Versus
SALES TAX OFFICER - Respondents
Civil Miscellaneous Writ 2263 Of 1963
Decided On : 09/02/1963
SALES TAX - Dismissal of appeal for default - Rule 68 (5) of the U. P. Sales Tax Rules - Whether ultra vires Section 9 of the U. P. Sales Tax Act - Interpretation of Section 9 - Scope and ambit of the powers of the appellate court - Duty of the appellate court to consider every appeal on its merits - Confirmation of assessment - Meaning of - Whether dismissal of appeal in default amounts to confirmation of assessment.
Fact of the Case:
The petitioner, a partnership firm carrying on business of fabricating and casting of nonferrous metal alloys for sale, was assessed to sales tax for the assessment years 1951-52 and 1952-53. The petitioner's claim that the sales of copper, tin, nickel and zinc or any alloy containing any of these metals was exempt from levy of sales tax was upheld by the Judge (Appeals) Sales Tax. The department filed revisions against the appellate orders and the matter was pending before the High Court. For the relevant assessment years 1954-55 and 1955-56, the Sales Tax Officer assessed the petitioner following the view taken by the Judge (Appeals) in disposing of the 1953-54 assessment. The petitioner filed appeals before the Judge (Appeals) and also applied for stay of the hearing of the appeal till the final disposal of the reference by the High Court. The Judge (Appeals) rejected the application and dismissed both the appeals for default. The petitioner filed revisions to the Judge (Revisions) and the order of dismissal was upheld. The petitioner challenged the vires of Rule 68 (5) of the U. P. Sales Tax Rules, which gives the appellate court the power to dismiss an appeal for default.
Finding of the Court:
The High Court held that Rule 68 (5) of the U. P. Sales Tax Rules, which empowers the appellate court to dismiss an appeal for default, is ultra vires Section 9 of the U. P. Sales Tax Act. The Court interpreted Section 9 as making it obligatory upon the Judge (Appeals) to dispose of every appeal once it is filed on its merits. The Court held that the dismissal of an appeal for default would not amount to a confirmation of the assessment as it would not involve the application of the mind by the appellate court to the question of the adequacy or inadequacy of the assessment.
Issues: 1. Whether Rule 68 (5) of the U. P. Sales Tax Rules is ultra vires Section 9 of the U. P. Sales Tax Act? 2. Whether Section 9 of the U. P. Sales Tax Act makes it obligatory upon the Judge (Appeals) to dispose of every appeal once it is filed on its merits? 3. Whether the dismissal of an appeal for default amounts to a confirmation of the assessment?
Ratio Decidendi: 1. The Court held that Rule 68 (5) of the U. P. Sales Tax Rules is ultra vires Section 9 of the U. P. Sales Tax Act because it gives the appellate court an additional power of dismissing an appeal in default, which is not provided for in Section 9. 2. The Court held that Section 9 of the U. P. Sales Tax Act makes it obligatory upon the Judge (Appeals) to dispose of every appeal once it is filed on its merits because the section circumscribes the powers of the appellate court and specifically provides what the Judge (Appeals) can do. The Court held that the word "confirm" in Section 9 necessarily involves the application of the mind and not merely an act which can be automatically performed in the absence of a particular party. 3. The Court held that the dismissal of an appeal for default does not amount to a confirmation of the assessment because it would not involve the application of the mind by the appellate court to the question of the adequacy or inadequacy of the assessment.
Final Decision: The Court allowed the petition and quashed the orders of the appellate and revisional authorities dated 26th April, 1958, and 27th April, 1962, in respect of the relevant assessment years 1954-55 and 1955-56. The Judge (Appeals) was directed to dispose of the appeals on their merits and in accordance with law.
( 1 ) THIS is a writ petition under Article 226 of the Constitution directed against the order of the judge (Appeals) Sales Tax and the Judge (Revisions) Sales Tax in respect of the assessment years 1954-55 and 1955-56, dismissing the appeal filed by the petitioner in default of appearance and the confirmation of that order by the Judge (Revisions ).
( 2 ) THE facts leading up to this petition need not be referred to except in the baldest outline for the reason that the question which arises here primarily concerns the interpretation to be placed on section 9 of the U. P. Sales Tax Act, hereinafter referred to as the Act (which is analogous to section 31 of the Indian Income-tax Act, 1922) and Rule 68 (5) of the U. P. Sales Tax Rules, hereinafter referred to as the rules.
( 3 ) THE petitioner is a partnership firm carrying on business of fabricating and casting of nonferrous metal alloys for sale. The principal place of business is at Hathras. The petitioner was assessed to sales tax for the assessment years 1951-52 and 1952-53. The claim of the petitioner that the sales of copper, tin, nickel and zinc or any alloy containing any of these metals was exempt from levy of sales tax under notification No. ST-3085/x-902 (16), 49 dated 3rd August, 1949, issused under the U. P. Sales Tax Act, was not accepted by the Sales Tax Officer. The judge (Appeals) Sales Tax allowed the appeal of the petitioner against the assessment order aforesaid and upheld the contentions of the petitioner that the said alloy was exempt. The department filed revisions against the aforesaid appellate orders before the Judge (Revisions), who upheld the order of the Judge (Appeals) for the assessment for 1951-52. The department filed a reference to this Court against the aforesaid order of the judge (Revisions) and that reference is still pending. The revision of the department against the order of the Judge (Appeals)for the assessment year 1952-53 is still said to be undisposed of by the Judge (Revisions)because of the aforesaid reference pending in this Court in respect of the previous year.
( 4 ) IN the assessment proceedings for the assessment year 1953-54 the Judge (Appeals) had, however, taken a different vie from his predecessor against which the petitioner filed a revision which is pending before the Judge (Revisions) Sales Tax.
( 5 ) FOR the relevant assessment years 1954-55 and 1955-56 the Sales Tax Officer assessed the petitioner by his orders dated 31st July, 1957, and 15th February, 1958, respectively, following the vie taken by the Judge (Appeals) in disposing of 1953-54 assessment against which, as already observed, a revision is pending before the Judge (Revisions ). Aggrieved by the aforesaid orders the petitioner filed two appeals before the Judge (Appeals ). The petitioner also applied for the stay of the hearing of the appeal till the final disposal of the reference by this Court. The learned judge (Appeals), however, rejected the application and dismissed both the appeals for default by his order dated 26th April, 1958. The concluding portion of these orders reads: as the appellants are absent the appeal is dismissed in default.
( 6 ) THE petitioner, thereupon, filed revisions to the judge (Revisions) and the order of dismissal was upheld.
( 7 ) THE petitioner does not appear to have followed the remedy provided by Rule 68 (7) of the rules but has come to this Court challenging the vires of Rule 68 (5) inasmuch as it gives the appellate court the power to dismiss an appeal for default.
( 8 ) THE question that falls for consideration is whether Section 9 of the Sales Tax Act contemplates any order of dismissal for default or it necessarily requires the Judge (Appeals) to dispose of every appeal once it is filed on its merits ? If the answer can be given that Section 9 clearly rules out dismissal of an appeal by the Judge (Appeals) in default and makes it obligatory upon him to hear every appeal that is filed on its merit
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