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TMI Blog2000 (11) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessment. Shri Rakesh Mehta, Advocate, and Shri Harpal Singh, Office Superintendent, appeared on behalf of the petitioner and produced the records. After hearing them, respondent No. 4 passed the order dated May 21, 1998 (annexure P1) for levy of tax, penalty and interest amounting to Rs. 1,41,88,234.36 and after taking note of the fact that a sum of Rs. 1,41,64,080 had already been paid, he issued demand notice for payment of Rs. 24,154. For the assessment year 1996-97, respondent No. 4 passed order, annexure P4, dated February 18, 1999, vide which he held the petitioner liable to pay tax amounting to Rs. 99,37,858. The petitioner challenged that order by filing the appeal under section 39(1) of the 1973 Act. He also filed an application under proviso to section 39(5) of the 1973 Act for grant of exemption from payment of tax on the ground that due to legal complications involved in the Railway Department, he was not in a position to pay the amount of tax. Respondent No. 3 rejected the same on August 10, 1999 assigning the following reasons: I have considered the arguments from both the sides and have gone through the record of the case. Now it is a well-settled law th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax stipulated in the order of assessment and this aspect has been completely overlooked by respondent No. 3 and the Tribunal. He then argued that the petitioner's case falls in the category of exceptional cases and, therefore, respondent No. 3 and the Tribunal should have accepted his prayer for grant of exemption. Learned counsel submitted that a Department of the Government or a State Agency cannot be treated at par with private assessees in the matter of grant of exemption and respondent No. 3 and the Tribunal have committed a serious error by applying the rule of thumb while deciding the applications filed by the petitioner for grant of exemption. Shri Dogra relied on the decision of the Supreme Court in State of Orissa v. Ion Exchange India Ltd. [2000] 117 STC 436, and the decision of the Full Bench of this Court in Emerald International Ltd. v. State of Punjab [2001] 122 STC 382; (1997) (2) 116 PLR 797, in support of his argument that respondent No. 3 and the Tribunal should have granted exemption to the petitioner from payment of tax. He lastly submitted that this Court should relieve the petitioner of the burden of paying the tax and direct respondent No. 3 to ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de under this Act, the time spent in obtaining the certified copy of the order shall be excluded in computing the period of sixty days. A reading of the provisions quoted above shows that an appeal from every original order made by an assessing authority lies to the Deputy Excise and Taxation Commissioner or such other officer who may be appointed in this behalf by the State Government and an appeal against the appellate order passed by the Deputy Excise and Taxation Commissioner or the officer appointed by the State Government, lies before the Tribunal. Sub-section (5) of section 39, which contains a non obstante clause, declares that no appeal shall be entertained unless it is filed within 60 days from the date of order appealed against and the appellate authority is satisfied that the amount of tax, penalty and interest has been paid. First proviso to section 39(5) empowers the appellate authority to entertain the appeal without insisting on payment of the whole of the amount of tax, penalty or interest due, if, for reasons to be recorded in writing, it is satisfied that the appellant is unable to pay the same. 5.. The ambit and scope of the first proviso to section 39(5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation for grant of stay by an appellate authority. (g) The High Court in exercise of its jurisdiction under article 226 of the Constitution of India in rarest of the rare cases in the given facts and circumstances, can grant stay and waive the condition of pre-deposit of tax and the existing alternative remedy in such circumstances would be no ground to refuse interference. 6.. In Anant Mills Co. Ltd. v. State of Gujarat AIR 1975 SC 1234, a Constitution Bench of the Supreme Court while considering challenge to the validity of some of the provisions of the Bombay provisional Municipal Corporations Act, 1949 observed as under: .The bar created by section 406(2)(e) to the entertainment of the appeal by a person who has not deposited the amount of tax due from him and who is not able to show to the appellate Judge that the deposit of the amount would cause him undue hardship arises out of his own omission and default. The above provision, in our opinion, has not the effect of making invidious distinction or creating two classes with the object of meting out differential treatment to them; it only spells out the consequences flowing from the omission and default of a person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 39(5) of the 1973 Act in the context of challenge to the order passed by this Court in C.W.P. No. 6932 of 1998 relieving the respondent of its obligation to deposit the tax in terms of section 39(5) of the 1973 Act on the ground that it had not collected additional tax from the customers and, therefore, it was unable to deposit the amount of additional demand created by the Assessing Authority. Their Lordships of the Supreme Court outlined the object of section 39(5), referred to the decision of the Supreme Court in Lakshmiratan Engineering Works Ltd. v. Assistant Commissioner (Judicial) I, Sales Tax, Kanpur Range, Kanpur [1968] 21 STC 154; AIR 1968 SC 488 and the full Bench decision of this Court in Emerald International Ltd. v. State of Punjab [2001] 122 STC 382; (1997) (2) 116 PLR 797, and held that the order passed by the division Bench of the High Court directing the Tribunal to dispose of the appeal on furnishing of bank guarantee by the company was legally unsustainable. Some of the observations made by the Supreme Court are extracted below: The object of sub-section (5) of section 39 of the Act is to ensure the deposit of amount claimed from an assessee in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , is not ultra vires the provisions of the Constitution, we further hold that exemption from payment of the tax in terms of section 39(5) can be granted only if the appellate authority is satisfied that due to financial stringency the appellant is unable to pay the amount of tax assessed, penalty or interest. But, at that stage, it is not open to the appellate authority/Tribunal to go into the merits of the appeal. 8.. The decision of the Supreme Court in State of Orissa v. Ion Exchange India Ltd. [2000] 117 STC 436, relied upon by Shri Dogra, does not have any bearing on the points raised in this petition. In that case their Lordships interpreted section 24(7) of the Orissa Sales Tax Act, 1947, and held that the bar created by a statute cannot bar exercise of jurisdiction by the High Court under article 226 of the Constitution. At the same time, their Lordships observed that the High Court should keep in mind the legislative intention indicated by sub-section (7) of section 24 and should respect it. 9.. In this case, the petitioner had neither pleaded nor any evidence was produced before the appellate authority and the Tribunal that on account of financial difficulty he was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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