TMI Blog1984 (1) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... ay siding, while, in the case of transport by road, the delivery will be at the works at the risk of the buyer on production of the identical copy of the order form issued by the company. A further clause provided that though the price is f.o.r. destination, the company's responsibility for loss or shortage or damage during transit ceased from the time of delivery at the works to the carrier and the obtaining of a clean railway receipt for the goods. The Tamil Nadu Sales Tax (Surcharge) Act, 1971 (Act 24 of 1971), was passed to levy surcharge on sales tax on the sale or purchase of goods within the limits of the area where the Act was in force. That Act came into force in the then municipal town of Coimbatore on 29th June, 1971. Under section 1(3)(b)(iii) thereof, the Government was empowered to direct by notification that the Act shall come into force on such date as may be specified in suburban areas of the city of Madurai or the municipal towns of Salem, Coimbatore, Tiruchirappalli, or other municipal town or township. Section 2(c)(ii) of the Act defined a suburban area as an area within such distance not exceeding 32 kilometres of the municipal towns of Salem, Coimbatore or Tir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om one of its direct consumers pointing out that surcharge was not leviable on transactions of sales of cement effected by the company from its works at Madukkarai. On receipt of that letter, the company consulted its lawyer and secured legal opinion on 9th October, 1978, to the effect that surcharge was not leviable in respect of the transactions of sales effected by the company, and realised that the company had been paying the surcharge demanded without the authority of law under Tamil Nadu Act 24 of 1971 by mistake. For the assessment years 1971-72 to 1975-76 above referred to, the company had preferred appeals against the orders of the assessing authorities questioning its liability to pay sales tax on the turnover relating to freight and levy of surcharge thereon. It appears that for all these years, originally the company disputed its liability to tax on the freight and the surcharge thereon under the Tamil Nadu Sales Tax (Surcharge) Act, 1971, as under: ----------------------------------------------------------------- Sl. No. Year Amount (1) (2) (3) ----------------------------------------------------------------- Rs. P. 1. 1971-72 11,507.70 2. 1972-73 8,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity. Ultimately, the Tribunal upheld the levy of surcharge on freight, as the appeals preferred by the company disputing its turnover by the inclusion of freight had been rejected. The appeals filed by the company as well as the petitions for amendment were, therefore, dismissed. Tax Revision Cases Nos. 1077 to 1081 of 1979 have been preferred by the company against that order under section 38 of the Tamil Nadu General Sales Tax Act. 2.. Besides, the company preferred W.P. Nos. 3396 to 3398 of 1979 in relation to the assessment years 1972-73, 1975-76 and 1974-75 respectively praying for the issue of a writ of mandamus or other appropriate writ. In those proceedings, the company after referring to the circumstances under which it became aware that surcharge was not leviable and the proceedings taken by it before the Tribunal and the result thereof took the stand that no surcharge was payable by the company for the years in question as such levy was not authorised by law, but had been paid by mistake which was discovered only on 9th October, 1978, and that the Tribunal had also failed to discharge its statutory duties. Claiming that the company had no other alternative remedy and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution of India. Reliance was also placed on the dismissal of W.P. Nos. 3396 to 3398 of 1979 to contend that the relief prayed for by the company for refund of the surcharge was not sustainable either factually or legally. 5.. During the pendency of W.A. Nos. 489 to 491 of 1979 and W.P. Nos. 3364 and 3365 of 1979, the company filed C.M.P. Nos. 15112 to 15114 of 1982 and W.M.P. Nos. 14606 and 14607 of 1982 respectively to permit the company to amend the prayer in all the writ petitions into one of a writ of certiorarified mandamus and directing the State of Tamil Nadu as well as the Joint Commercial Tax Officer to refund to the company the respective amounts levied by the authorities by way of surcharge and paid by the company. We do not see any serious objection to the granting of the amendment of the prayer and, indeed, there cannot be any objection to the granting of the amendment relating to the nature of the writ prayed for. We, therefore, order C.M.P. Nos. 15112 to 15114 of 1982 in W.A. Nos. 489 to 491 of 1979 and W.M.P. Nos. 14606 and 14607 of 1982 in W.P. Nos. 3364 and 3365 of 1979. 6.. Thus, the main question for consideration is, whether the company is entitled to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs in question. In this state of affairs, the question is, whether the company is not entitled to a refund of the amounts admittedly levied and paid by the company, without the authority of law. 7.. We first proceed to consider whether relief could not be given to the company in the tax revision cases in view of certain recent pronouncements of this Court, contrary to the view earlier held and referred to by the Tribunal. We may recall that the Tribunal, while dealing with the appeals preferred by the company, thought fit to dismiss them on the short ground that the freight had been properly included in the turnover under the Tamil Nadu General Sales Tax Act and the levy of surcharge thereon was, therefore, in order and that the subject-matter of the appeal sought to be introduced in C.T.M.P. Nos. 278 to 282 of 1978 by an amendment at the instance of the company was not agitated before the first appellate authority and, therefore, the Tribunal had no jurisdiction or even inherent power to entertain such a claim. Though it may be that this view was, to some extent, justified by the state of law, as it then stood, the width and the amplitude of the jurisdiction and powers of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a reduction in the assessment. These are special and exceptional attributes of the jurisdiction of a tax appellate authority. These attributes underline the truth that the appellate authority is no different, functionally and substantially, from the assessing authority itself. This position has been well brought out in more than one decision of the Supreme Court. The McMillan's case [1958] 33 ITR 182 (SC), which we earlier referred to, may be regarded as highlighting only one aspect of the wide range and peculiar slant of the appellate power in fiscal matters. We may cite another decision, of the Supreme Court, Mahalakshmi Textile Mills' case [1967] 66 ITR 710 (SC), which also had arisen under the Indian Income-tax Act, 1922, as highlighting, from another angle, the peculiar position of tax appellate tribunals. A general view of the position of appellate authorities under the tax codes is laid down in yet another decision of the Supreme Court. In Commissioner of Income-tax v. Kanpur Coal Syndicate [1964] 53 ITR 225 (SC) the Supreme Court again examined the nature and scope of the powers of the appellate authorities under the Income-tax Act, and observed that the scope of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are only engaged in an administrative act of adjusting the taxpayer's liability. Under our fiscal jurisprudence, we may regard the appellate authorities as exercising quasi-judicial functions in the same sense as a taxing officer does. But, even so, the proceedings before them lack the basic elements of adversary proceedings. It, therefore, follows that the discussion and the scope of the appellate jurisdiction of the Tribunal and other authorities under the tax code cannot be pursued by drawing a parallel to civil litigation with particular reference to appeals from decrees, and the like. The insistence on one party to the appeal being entitled to the fruits of finality, as it is called, and the appellate authority being confined to the subject-matter of the appeal are all ideas which might have relevance if the discussion centres on purely civil litigation and such like adversary proceedings as in an industrial dispute. But in a case where the revenue is all the while a party, in a manner of speaking, and is also at the same time, an authority vested with the responsibilities of drawing up the assessment and laying down the correct liability, it would not be in accord with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idavit in support of the writ petitions, the company had clearly set out the circumstances under which it became aware that the surcharge was not leviable and how, under a mistake, the company had been paying the surcharge levied. The letter dated 6th August, 1977, originating from M/s. Jay Shree Tea Industries Limited, Calcutta-17, was responsible for the launching of an enquiry into the applicability of the Tamil Nadu Sales Tax (Surcharge) Act, 1971, to the company with reference to the sales effected by it at its factory at Madukkarai. Thereafter, the company had taken steps to secure legal opinion in that regard and the record discloses that such an opinion was made available to the company only on 9th October, 1978. Armed with the opinion of the counsel, the company wrote on 11th January, 1979, to the Commercial Taxes Department for a clarification whether the provisions of the Tamil Nadu Sales Tax (Surcharge) Act, 1971, are applicable to the transactions of sale and despatch of cement effected by the company from its factory at Madukkarai. The reply to that, earlier extracted, was issued only on 15th March, 1979. It has also been admitted by the Commercial Taxes Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the assessment years 1974-75 and 1975-76, the assessment orders were passed on 30th October, 1976, and 15th April, 1977, respectively and obviously in July, 1979, when the writ petitions were filed claiming refund, that claim could not have become barred. Prima facie, therefore, there is nothing to indicate that the question of limitation can be pleaded as a bar to the claim of the company for refund of the surcharge admittedly illegally levied and collected. 10.. We have earlier pointed out how the levy of surcharge on the company by the assessment proceedings for the years in question is clearly without the authority of law and would merit interference by this Court by quashing the assessments and directing a refund, unless the company had in any manner disabled itself from claiming such reliefs. No circumstance which would disentitle the company from claiming the relief of refund has been brought to our notice. We may also state that the demand for surcharge, in the circumstances of this case, was illegal and in such cases, as pointed out by the Supreme Court in Shiv Shanker Dal Mills v. State of Haryana AIR 1980 SC 1037, there is no law of limitation especially for public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anted contrary to such an order. Such is not the situation in this case, as the company had challenged the orders before the Tribunal and this Court as well and that decision cannot assist the State in any manner. The substance of the complaint in these cases is that the surcharge had been levied without any authority of law and the order relating to that is a nullity as being one ex facie without jurisdiction and the challenge in such cases is against the order, which is non est and, therefore, the question of exhausting the alternative remedy could hardly be stated to arise. On the facts of this case, we do not see any justification at all for turning down the prayer for the issue of a writ on the negative plea of alternative remedy. We, therefore, hold that the company is well-founded in its complaint before this Court that the levy of surcharge made on it by the assessing authority for the assessment years in question on the sales of cement effected by it at its factory at Madukkarai is a nullity and that it is entitled to claim a refund of the surcharge so levied and paid by the company. 12.. Earlier, in the course of this judgment, we have already set out the amount of surc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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