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Judgment
Ashok Bhan, J.-Being aggrieved by the judgment under appeal delivered by a Single Judge dismissing the writ petition thereby upholding the order of deferment dated 16-5-1996 Annexures-G and H passed by the Joint Commissioner of Commercial Taxes for the year 1993-94, purporting to act under Section 12(6)(b) of the Karnataka Sales Tax Act, 1957, (for short, ''the Act'') as amended by Karnataka Act No. 5 of 1996, has filed this appeal.
Appellant is a Small Scale Industrial Unit registered as dealer under the provisions of the Karnataka Sales Tax and Central Sales Tax Act. It is engaged in the business of manufacture and sale of cashew kernels and it obtained a registration certificate from the Department of Industries and Commerce on 6-7-1992. It has also obtained a new unit certificate, certifying the date of commencement of commercial production and FAVC certificate seeking that the unit located in the third zone as per G.O. dated 27-9-1990 was liable for 100% tax exemption for a period of five years from the date of commencement of commercial production.
Assessing Authority issued notice in Form No. 5 under Rule 17(2) of the Act dated 29-10-1992 requiring to pay an advance tax on raw cashew. Appellant challenged the said notice on the ground that no tax was payable on the raw cashew on various grounds by filing a writ petition bearing No. 37943 of 1992, wherein the operation of the said notice was stayed by an interim order dated 9-12-1993, Annexure-A. There was no stay regarding the framing of assessment. Since the very same question of liability of tax on raw-cashew was involved in the said writ petition pending before this Court, the Assessing Officer found it desirable to seek an order of deferment till the matter was adjudicated by this Court. Appellant was served with a show-cause notice Annexures-B and C requiring him to file his objections for the proposed deferment for the aforesaid reasons. Pursuant to the said notice the petitioner filed his reply as per Annexures-E and F. The Joint Commissioner of Commercial Taxes (Administration), after taking into consideration the objections filed by the appellant passed the impugned orders defering the framing of the assessment till 31st of December, 1996.
Appellant assailed the orders Annexures-G and H whereby framing of the assessment was deferred till 31st December, 1996 on three grounds namely, (i) Section 12(6)(b) of the Act, does not confer power on the Joint Commissioner to defer the assessment which ought to have been provided under some specific independent provision; (ii) No opportunity of personal hearing was granted to the appellant and (iii) the ground taken for deferment is extraneous and irrelevant for the said purposes. All the three contentions raised by the appellant were rejected by the learned Single Judge, aggrieved by which the present appeal has been filed.
Before us first two grounds which were urged before the Single Judge were addressed in arguments. On the third ground no arguments were addressed.
For appreciating the contentions raised by the Counsel for the appellant it would be appropriate to notice relevant sub-sections of Section 12 which is to the following effect:
"Section 12(5): No assessment under this Section for any year shall be made after a period of three years from the date on which the return under sub-section (1) for that year is submitted by a dealer:
Provided further that nothing in this sub-section limiting the time within which assessment may be made, shall apply to an assessment made in consequence of, or to give effect to, any findings, directions or orders made under Section 20, 21, 22 or 22-A or any judgment or order made by any Court.
(6) In computing the period of limitation for assessment under this Section.-
(a) the time during which the proceedings for assessment in question have been deferred on account of any stay order granted by any Court or any other authority shall be excluded;
(b) the time during which the assessment has been deferred in any case or class of cases by the Commissioner for reasons to be recorded in writing shall be excluded:"
A perusal of sub-section (6)(b) reproduced above discloses that in computing the period of limitation for assessment, the time during which the assessment had been deferred in any case or class of cases by the Joint Commissioner for the reasons to be recorded in writing shall be excluded. There is no independent provision in the Act under which the Joint Commissioner can pass an order of deferment. The arguments raised is that as there was no specific independent provision authorising the Joint Commissioner to defer the framing of the assessment, the Joint Commissioner did not have the jurisdiction to pass an order of deferment of the framing of the assessment. We do not agree with this contention. Though in the Act, there is no independent provision authorising the Joint Commissioner to pass an order of deferment, sub-section (6) itself makes the intention of the legislature clear that it has intended to confer such power on the Joint Commissioner and once such order is passed, the limitation prescribed in sub-section (5) gets extended. It is well accepted that a statute levies tax by inserting a charging section by which a liability is created or fixed and then proceeds to provide the machinery to make the liability effective. The charging section which fixes the liability is strictly construed but that rule of strict construction is not extended to the machinery provisions which are construed like any other statute. The machinery provision has to be construed in a manner so that it would effectuate the object and purpose of the statute and not defeat the same. If more than one interpretation is possible then the one which makes the Act workable has to be preferred to the one which would render it otiose or sterile. Sub-section (6) is a machinery provision. The power to defer can be traced in sub-section (6)(b) itself and has to be read into it to give workability to the Act and to effectuate the intention of the legislature. Exclusion of the period during which framing of assessment stood deferred is meaningless unless power to defer is vested in the authority. It presupposes that the intention of the legislature was to confer such a power in the authority. The Joint Commissioner is required to record reasons in writing to defer framing of assessment in a case or class of cases. This also indicates that the Legislature intended to confer such a power on the Joint Commissioner. The intention of the legislature has to be carried especially when no prejudice is caused to the assessee and not being opposed to any statutory law. The legislature is competent to devise innovative mechanism to express itself. Thus the first contention fails.
Coming to the next point regarding personal hearing we are of the opinion that it was not necessary to grant personal hearing especially when the objections filed by the appellant have been duly considered in the impugned order. Appellant was served with a notice-Annexure-B for deferment of the framing of the assessment in view of the pendency of the writ petition in the High Court involving the same point and granting stay to the assessee''s Form No. 5 of the Karnataka Sales Tax for the year 1979. He was given time to submit his objection or written statement in the office personally or through the authorised legal representative at the time and the date fixed. According to the appellant he had gone to the office of respondent 3 at the time fixed but he was informed that the 3rd respondent was on leave and therefore he could not avail the opportunity of a personal hearing. In the statement of objections filed by the 3rd respondent it has been stated that he was very much present in the Court on the said date and time. In respect of the said fact the copies of attendance register and office diaries were produced. It is not necessary for us to adjudicate upon this disputed fact. Admittedly, the objections filed by the appellant were duly considered in the impugned order. Assuming that the appellant was not given the personal hearing that does not amount to violation of principles of natural justice. The Act is silent regarding giving of opportunity before passing the order deferring framing of assessment. A learned Single Judge in Writ Petition No. 22497 of 1991, decided on 15th September, 1995, has held that when the period of three years expires as provided under Section 12(5) of the Act, a valuable right accrues to an assessee and if that be so and before altering that position, it is appropriate that the assessee be heard by the Commissioner before making an order under Section 12(6) of the Act. In case the opportunity is not provided then the proceedings initiated would be bad per se. We would accept the proposition that notice is required to be given to the assessee proposing to defer the assessment, but we would not read in this that a personal hearing is to be provided before an order of deferment is passed. Personal hearing is not at all contemplated and the requirement of meeting with the principles of natural justice would be satisfied if opportunity of filing objections had been given. Under different situations and conditions requirement of compliance of principles of natural justice can vary. The substantive rights of an assessee that tax liability cannot be created without framing the assessment is not taken away, only the framing of assessment is to be deferred on good and reasonable grounds after recording reasons for the same. Requirement of principles of natural justice that order be not passed without affording an opportunity is adequately met if the assessee is given an opportunity to file his written objections to the proposed deferment and a reasoned order is passed after taking into consideration those objections. Supreme Court considered the question regarding grant of personal hearing by the statutory authorities in the case of Union of India and Another v Jesus Sales Corporation, AIR 1996 SC 1509, wherein it has been held:
"The High Court has primarily considered the question as to whether denying an opportunity to the appellant to be heard before his prayer is dispense with the deposit of the penalty is rejected, violates and contravenes the principles of natural justice. In that connection, several judgments of this Court have been referred to. It need not be pointed out that under different situations and conditions the requirement of compliance of the principle of natural justice vary. The Courts cannot insist that under all circumstances and under different statutory provisions personal hearings have to be afforded to the persons concerned. If this principle of affording personal hearing is extended whenever statutory authorities are vested with the power to exercise discretion in connection with statutory appeals, it shall lead to chaotic conditions. Many statutory appeals and applications are disposed of by the competent authorities who have been vested with powers to dispose of the same. Such authorities which shall be deemed to be quasi-judicial authorities are expected to apply their judicial mind over the grievances made by the appellants or applicants concerned, but it cannot be held that before dismissing such appeals or applications in all events the quasi-judicial authorities must hear the appellants or the applicants, as the case may be. When principles of natural justice require an opportunity to be heard before an adverse order is passed on any appeal or application, it does not in all circumstances mean a personal hearing. The requirement is complied with by affording an opportunity to the person concerned to present his case before such quasi-judicial authority who is expected to apply his judicial mind to the issues involved. Of course, if in his own discretion if he requires the appellant or the applicant to be heard because of special facts and circumstances of the case, then certainly it is always open to such authority to decide the appeal or the application shall not be held to be invalid merely on the ground that no personal hearing had been afforded. This is all the more important in the context of taxation and revenue matters".
For the reasons stated above, we do not find any merit in either of the submissions raised by the counsel for the appellant and dismiss this appeal with no order as to costs.