Easun Engineering Co. Ltd. vs The Government of Madras

Ismail, J.—The petitioner purports to prefer this tax revision case u/s 38 of the Tamil Nadu Act 1 of 1959 against an order dated 28th

November, 1969, of the Sales Tax Appellate Tribunal, Madras. In respect of the assessment year 1961-62, the petitioner had collected a sum of

Rs. 50,530.84 by way of sales tax from its customers, when the petitioner itself, was not liable to pay that amount to the Government as sales tax.

Consequently, the assessing authorities relying on Section 22(3) of the Act recovered the said sum of Rs. 50,530.84 from the petitioner. Against

this order of the assessing authority, the petitioner preferred an appeal to the Appellate Assistant Commissioner (Commercial Taxes), Madras-1.

The appellate authority reduced the amount so demanded by Rs. 17,945.63, with the result, the demand u/s 22(3) was reduced to Rs. 32,585.21.

The petitioner preferred a further appeal to the Sales Tax Appellate Tribunal. By that time, it had been decided by this court in Kathan Nadar

Company v. State of Madras [1963] 14 S.T.C. 694 and by the Supreme Court in R. Abdul Quader and Co. Vs. Sales Tax Officer, Hyderabad, ,

that when the dealer himself is not liable to sales tax, the amounts which he collected from his customers purporting to be sales tax could not be

recovered by the State, since the State Legislature itself has no power to enact that the amount collected by way of sales tax by a dealer when no

sales tax is payable by him should be paid over to the Government. In view of these decisions, the Tribunal by its order dated 30th January, 1965,

allowed the appeal preferred by the petitioner herein and directed the refund of Rs. 32,585.21 assessed by the appellate authority. The result is,

the petitioner succeeded fully in respect of this claim. After the order of the Tribunal, the Joint Commercial Tax Officer, Esplanade Division I,

passed an order on 5th January, 1967, giving effect to this order of the Tribunal. From the very nature of the case, since the petitioner had

succeeded fully before the Tribunal and the Joint Commercial Tax Officer simply implemented the order of the Tribunal, the petitioner could not

have been aggrieved by the order dated 5th January, 1967, of the Joint Commercial Tax Officer, Esplanade Division I. Notwithstanding this, the

petitioner purported to prefer an appeal against this order dated 5th January, 1967, before the Appellate Assistant Commissioner, Commercial

Taxes. In that appeal, the petitioner sought to put forward an entirely a new claim, namely, that it was entitled to exemption of certain portions of

the turnover which was originally assessed on the ground that the turnover related to sales in the course of import. Before the appellate authority, it

also contended that it filed a petition on 10th January, 1967, for claiming that exemption and that petition had been dismissed on 23rd January,

1967. However, the appellate authority dismissed the appeal preferred by the petitioner stating that the petitioner had not put forward the claim for

exemption at the time when the original assessment was made and, therefore, it could not put forward any such claim at all. He also stated :

It is also seen that the assessing officer has faithfully carried out the orders of the Appellate Assistant Commissioner (Commercial Taxes) I and the

Sales Tax Appellate Tribunal and, in fact, the appellants have no grievance in that regard. I, therefore, see no reason to interfere on behalf of the

appellants. The appeal is accordingly dismissed.

Against this order of the appellate authority, the petitioner purported to prefer a further appeal before the Sales Tax Appellate Tribunal, Madras

and the said appeal was numbered as Appeal No. 1292 of 1967. In that appeal, the petitioner purported to file an application T.M.P. No. 75 of

1969 praying that the hearing of the appeal, namely, T.A. No. 1292 of 1967 should be deferred during the pendency of a revision to this court

against the order of the Tribunal in T.A. No. 190 of 1967. This T.M.P. No. 75 of 1969 as well as T.A. No. 1292 of 1967 were disposed of by

the Tribunal by the impugned order dated 28th November, 1969. The Tribunal held that the appeal itself was incompetent and not maintainable

and, therefore, it had to be dismissed. It also pointed out that the order of the Tribunal in T.A. No. 190 of 1967 had nothing to do with the present

order of the Tribunal in T.A. No. 1292 of 1967. It is a ainst this order, the present revision has been preferred by the petitioner u/s 38 of the Tamil

Nadu Act 1 of 1959.

We are clearly of the opinion that there is absolutely no substance whatever in this tax revision case. The petitioner''s purported appeal to the

Appellate Assistant Commissioner and further appeal to the Tribunal were not at all maintainable for two independent reasons. One is, as we

pointed out already, the petitioner succeeded fully before the Tribunal and the Joint Commercial Tax Officer by his order dated 5th January, 1967,

merely implemented the order of the Tribunal and as pointed out by the Appellate Assistant Commissioner, he faithfully carried out the directions of

the Tribunal. Therefore, the petitioner cannot be said to have been aggrieved by the order of the Joint Commercial Tax Officer dated 5th January,

1967. Section 31 of the Act which alone deals with appeals to the Appellate Assistant Commissioner states that any person objecting to an order

passed by the appropriate authority can appeal. By no stretch of imagination, the petitioner could have objected to the order dated 5th January,

1967, passed by the Joint Commercial Tax Officer, Esplanade Division I, because that order was merely implementing the success, which the

petitioner achieved at the hands of the Tribunal. As a matter of fact, even the learned counsel for the petitioner could not explain how the petitioner

could have objected to this order dated 5th January, 1967. His real grievance, if it can said to be grievance at all, is against some other order of the

Joint Commercial Tax Officer dated 23rd January, 1967, dismissing the claim made by the petitioner for the first time on 10th January, 1967.

However, the appeal preferred to the Appellate Assistant Commissioner was not against the order dated 23rd January, 1967, but against the

order dated 5 th January, 1967, to which admittedly the petitioner could not have taken any objection.

The second ground is that the order dated 5th January, 1967, had been passed by the Joint Commercial Tax Officer u/s 36(4) of the Tamil

Nadu General Sales Tax Act. Section 36(4) dealing with appeals to the Tribunal states :

Where as a result of the appeal any change becomes necessary in the order appealed against, the Appellate Tribunal may authorise the assessing

authority to amend such order accordingly and on such amendment being made any amount overpaid by the appellant shall be refunded to him

without interest, or the further amount of tax, if any, due from him shall be collected in accordance with the provisions of this Act, as the case may

be.

It is under this section that the order dated 5th January, 1967, was passed. Section 31 of the Act dealing with appeals to the Appellate Assistant

Commissioner stated on the relevant date under Sub-section (1) thereof as follows:

Any person objecting to an order passed by the appropriate authority u/s 4-A, Section 12, Section 14, Section 15, Sub-sections (1) and (2) of

Section 16, Section 18, Section 23, Section 27, Sub-section (4) of Section 41, or Sub-section (3) of Section 42, may, within a period of thirty

days from the date on which the order was served on him in the manner prescribed, appeal against such order to the Appellate Assistant

Commissioner having jurisdiction.

Thus, this section enumerates the orders against which appeals can be preferred to the Appellate Assistant Commissioner. An order passed u/s

36(4) is not one of the orders mentioned in Sub-section (1) of Section 31 and, therefore, such order was not appealable and no appeal against

such order could have been preferred to the Appellate Assistant Commissioner. If no appeal could be preferred to the Appellate Assistant

Commissioner, it is clear that against an order rejecting such an appeal by the Appellate Assistant Commissioner, no appeal could have been

preferred to the Tribunal also. Therefore, we are clearly of the opinion that the Tribunal was right in holding that the appeals to the Appellate

Assistant Commissioner as well as to the Tribunal were incompetent and not maintainable. The result is the tax revision petition fails and is

dismissed with costs. Counsel''s fee Rs. 250.