Piari Lal and others vs Jitindar Nath A.S.T.O. and Commr., Sales Tax, Patiala

Teja Singh, C.J.—This order will dispose of the eight petitions mentioned in the margin. C.M.A. No. 7 of 1951 Piare Lal v. A.S.T.O. and another C.M.A. No. 8 of 1951 Ram Chand v. do, C.M.A. No. 9 of 1951 Khushal Das v. do, C.M.A. No. 10 of 1951 Sajjan Singh v. do, C.M.A. No. 11 of 1951 Ram Chand v. do, C.M.A. No. 12 of 1951 Ram Sarup v. do, C.M.A. No. 16 of 1951 Madho Ram v. do, C.M.A. No. 20 of 1951 Ramesh Chand v. do. They are all under Art. 226 of the Constitution of India for issue of appropriate writs against the Sales Tax Officer, Patiala and the Sales Tax Commissioner, Patiala & E.P. States Union.

The petitioners in petitions Nos. 7, 8, 12, 16 and 20 are Halwais while the rest are Dhabawals, i.e., keepers of wayside hotels. The Sales Tax Officer took proceedings against them under S. 11 of the Patiala and East Punjab states Union General Sales Tax Ordinance (No. 33 of 2006) and assessed them to certain amounts of tax. Against these orders the petitioners preferred revision petitions to the Commissioner of Sales Tax. The Commissioner called upon them to furnish proof of payment of the tax and also informed them that in case they failed to furnish such proof within a week of the notice issued to them their petitions would be summarily dismissed. The petitioners instead of complying with the demand of the Commissioner came to this Court with their respective petitions. The allegations of the petitioners are that the articles prepared or sold by them were exempt from payment of sales tax, that none of them was registrable under S. 7 of the Ordinance and that the Assistant Sales Tax Officer had no authority or power to assess them to any tax. They further allege that the Sales Tax Commissioner acted without jurisdiction in laying down that unless the petitioners paid the tax levied by the Assistant Sales Tax Officer their petitions were liable to the dismissed summarily. Accordingly, they pray that the orders issued by the Assistant Sales Tax Officer against the petitioners be quashed and writs of Mandamus be issued to the Sales Tax Commissioner directing him to decide the revision petitions made to him by the petitioners without calling upon them to pay their respective taxes.

Shri Chetan Dass, who appears on behalf of the respondent, opposes the petitions. First of all he urges that since a remedy by way of a regular appeal was open to all the petitioners under S. 20 of the Ordinance and they deliberately did not avail of it the petitions for writs under Art. 226 were not maintainable. He further urges that the Commissioner''s order asking the petitioners to pay in their respective taxes before their revision petitions could be heard was in accordance with the provisions of law and was even otherwise proper and consequently it could not be questioned in these proceedings. Last of all, he urges that there was nothing wrong or illegal in the proceedings taken against the petitioners by the Assistant Sales Tax Officer and his orders by which he levied tax against them were proper and legal.

In order to be able to understand the points of view, both of the petitioners and the respondents, it is desirable to refer briefly to the relevant provisions of the Ordinance.

Section 5 lays down that subject to the provisions of the Ordinance there shall be levied on the taxable turnover every year of a dealer a tax at such rates as the Government may by notification direct. Section 6 is to the effect that no tax shall be payable under the Ordinance on the sale of goods specified in the first column of the schedule subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column thereof. Section 7 deals with registration of dealers. Section 10 lays down, inter alia, that every registered owner shall furnish such returns by such dates and to such authority as may be prescribed. Sub-ss. (1) and (2) of S. 11 are worded as below:

If no returns are furnished by a registered dealer in respect of any period by the prescribed date, or if the assessing authority is not satisfied that the returns furnished are correct and complete the Assessing Authority shall, within twelve months after the expiry of such period, after giving the dealer a reasonable opportunity of being heard, proceed in such manner as may be prescribed to assess to the best of its judgment the amount of tax due from the dealer.

If for any reason the Assessing Authority is satisfied that any dealer who imports for sale any goods into the Union or himself manufactures or produces any goods for sale, has been liable to pay tax under this Ordinance in respect of any period and has nevertheless willfully failed to apply for registration, the Assessing Authority shall, at any time within, twelve months from the expiry of such period, after giving the dealer a reasonable opportunity of being heard, proceed in such manner as may be prescribed to assess to the best of its judgment the amount of tax due from the dealer in respect of such period and all subsequent periods, and that Assessing Authority may direct that the dealer shall pay by way of penalty in addition to the amount of tax so assessed a sum not exceeding one and a half times that amount.

Section 20 makes a provision for appeals and it is laid down in sub-s. (1) that when a dealer receives notice of assessment under sub-s. (3) of S. 11 he may appeal to such authority as may be prescribed within sixty days from the receipt of the notice. The proviso to this sub-section is that no appeal shall be entertained by such authority unless it is satisfied that the amount of tax assessed on the dealer has been paid. Section 21 gives the Commissioner the power of revision. The words of sub-section (1) are:

The Commissioner may, of his own motion, or on an application made to him, call for the record of any proceedings which are pending before or have been disposed of by any Assessing or Appellate authority appointed under this Ordinance for the purpose of satisfying himself as to the legality or propriety of such proceedings or of any order made therein and may pass such orders in relation thereto as he may think fit.

Sub-section (1) of S. 22 provides for reference to the High Court by the Commissioner on his own motion or on a reference from the assessing Authority or any other Sales Tax authority subordinate to him. Sub-section (2) deals with the right of a dealer to have a reference made to the High Court on any question of law arising out of an order of assessment.

It is admitted by the petitioner''s counsel that proceedings were taken against his clients under sub-section (2) of S. 11 and it was under the provisions of this sub-section that they were assessed and notices were issued to them under sub-s. (3) of S. 11 to pay the tax. He, however maintains that they could not prefer any appeals because they were not liable to pay any tax and the article''s sold by them were exempt under the schedule to the Ordinance. In my opinion with a view to finding out whether or not the petitioners had a right to appeal under S. 20 it is not necessary to determine whether the petitioners'' contention that articles in which they dealt were exempt from tax and whether they were legally assessable to any tax. The words of sub-s. (1) of S. 20, which are quoted above are quite clear and they give the right of appeal to every dealer to whom a notice is given under sub-s. (3) of S. 11. As far as I have been able to see the Ordinance does not limit the scope of an appeal and it is, therefore permissible to think that if the dealer objects to the notice on the ground that he was not liable to pay any tax or that the articles in which he dealt are exempt, the appellate authority is bound to go into these matters and in case it comes to the conclusion that the position taken up by the dealer is correct, he is bound to set aside the order assessing the tax and cancel the notice. To hold that no dealer can prefer an appeal under S. 20 unless the notice issued to him under sub-s. (3) of S. 11 is legal and proper is to defeat the very object of the provisions relating to appeals. I, therefore, hold that the petitioners had the right of appeal and they failed to avail of it.

As regards the applications for revision that the petitioners made to the Commissioner they were no doubt covered by S. 21 but they could not take the place if appeals for the simple reason that when an appeal is preferred the appellate authority is bound to go into the questions raised by the appellant and give him the proper relief to which he is found entitled, while in case of a revision it is discretionary with the Commissioner to interfere or not. So the fact that the petitioners approached the Commissioner on the revision side cannot in any way exonerate them from the blame that they did not avail of the valuable remedy of appeal which the Ordinance gave them. In addition, they failed to pay the tax within the time allowed to them by the Commissioner. Their counsel argued that payment of tax was a condition precedent to the entertainment of the appeal but not of a revision petition and he urged that the Commissioner''s order laying down that unless they paid the tax within a week of the notice given to them their revision petitions would not be heard was illegal. I have no hesitation in coming to the conclusion that this contention is without any force, because R. 61 of the rules framed by the Government makes the provisions of Rr. 58 and 59 regarding the appeals applicable to revision petitions and it is laid down in R. 58 that the memorandum of appeal shall inter alia be endorsed with a note that the amount of tax assessed and the penalty (if any) has been paid, and R. 59 is to the effect that an appeal may be summarily rejected if the appellant fails to comply with any of the requirements of R. 58. Here it is admitted that the petitioners have not paid the amount of tax to which they were assessed. Accordingly it must be held that virtually speaking they did not avail of the remedy of revision either.

The question now is what is the effect of this upon these petitions. It cannot be denied that it is discretionary with the Court to grant a relief under Art. 226 and relying upon this fact it has been held in several cases that when another and effective remedy is open to the petitioner a petition under this Article should not be entertained. See in this connection ''Devinder Singh v. Gurdial Singh and Deputy Commissioner, Patiala'', 2 Pep LR 443 in which I discussed the case law on the point and held that a writ can be properly refused if the petitioner has another effective remedy for the protection of his rights. A similar view was taken by a Bench of the Madras High Court) in Re In Re: Gadea Nagabhushana Reddi and Another, who wrote the judgment of the Bench observed that the general rule applied to the case of writs like Mandamus, prohibition and certiorari, viz. that these writs will not issue if there is another adequate remedy, should apply to the issue of a direction, order or writ under Art. 226 in spite of the apparently wide language employed. The petitioner''s counsel relies upon certain observations made by Sapru, C.J. in Moti Lal and Others Vs. The Government of the State of Uttar Pradesh and Others, but in my opinion they do not help him, because even though his Lordship observed that the principle, that mandamus will not issue where the applicant has not exhausted his right of appeal, is not a rule from which no deviation can be made in appropriate cases, he added that only in most exceptional cases where the conduct of the authorities concerned is such as to make it clear that they have not been discharging their duties and are not likely to do so without the guidance of the Court that the Court will be justified in issuing mandamus. In this case, there is nothing to show that the Sales Tax Officer or the Commissioner did not discharge their duties or that they were not likely to discharge their duties without the guidance of the Court and accordingly this being an exceptional case appropriate writs should be issued even though the petitioners have not availed of the remedies provided by the Ordinance. In fact, it appears to me that either because of the wrong advice given to them or because of certain other reasons which are not clear from the record, the petitioners rushed to this Court without any cause whatsoever.

In the result I would dismiss the petitions with costs. Counsel''s fee Rs. 20/- in each case.

Gurnam Singh, J.

I agree.