TMI Blog2006 (5) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... ting ink, by furnishing the necessary declaration in form 18 and therefore, the selling dealer was paying tax only at the rate of three per cent. While so, the first respondent issued exhibit P1 notice, in respect of the assessment year 2000-01, purportedly under section 45A of the KGST Act, stating that purchase of ink by the petitioner at the concessional rate of three per cent tax, by furnishing the declaration in form 18, is illegal. According to the first respondent, the ink purchased is used for printing newspapers and weeklies and there is no manufacturing process in printing the newspapers. Further, newspapers and weeklies are not taxable goods. So, the pre-conditions for availing the concessional rate of tax, are not present in the transaction. Therefore, the statutory declaration has been misused. The misuse of a statutory declaration is an offence, which should be dealt with under section 45A of the KGST Act. Based on the above facts, it was proposed to impose a fine of Rs. 14,66,256, being double the amount of tax due on the purchase turnover. The petitioner was called upon by the said notice, to file objections, if any, to the said proposal, within seven days. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are issued without jurisdiction and relying on non-existing statutory provisions. They have been issued in violation of the principles of natural justice also. So, even if there is a statutory remedy, the petitioner is entitled to approach this court directly. The printing of newspapers and journals is a manufacturing process. So, the petitioner is bound to pay only the concessional rate of tax, while purchasing the raw material of printing ink. The proceedings under section 45A of the KGST Act are quasi-criminal. Only deliberate defiance of law or similar conduct will be visited with penalty under section 45A of the Act. It is also contended that the impugned orders offend the fundamental rights of the petitioner, guaranteed under article 14 of the Constitution of India. So, the petitioner seeks to quash exhibits P9 to P11. The first respondent has filed a counter-affidavit, denying all the allegations in the writ petition. According to the said respondent, even in the absence of the first proviso, the petitioner is liable to pay tax, as the products manufactured by it, are not goods, in terms of section 2(xii) of the KGST Act. It is also pointed out that the petitioner ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing the writ petition on merits. As per the statutory scheme, a dealer, who is aggrieved by an order of penalty under section 45A of the KGST Act, is entitled to file a revision against that order, before the statutory revisional authority. So, normally, when there is a statutory remedy available to the petitioner, this court should not invoke its extraordinary jurisdiction under article 226 of the Constitution of India. The learned Senior Counsel for the petitioner tried to canvass that the powers of this court are wider than the powers of the revisional authority under the statute. Since the said point is not raised in the writ petition, I am not dealing with the said contention. But, the learned Senior Counsel vehemently contended that the remedy of filing a revision before the departmental officers is not efficacious, in view of the facts pleaded by the petitioner in paragraph 6 of the writ petition, quoted earlier. I think, it is the paramount duty of every newspaper to bring out corruption, in public interest. Every department should welcome such exposures, as it gives the department concerned, an opportunity to set its house in order. So, I think, it is difficult t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lic law' domain, the entire proceeding before the appropriate authority is illegal and without jurisdiction or the defect or infirmity in the order goes to the root of the matter and makes it in law invalid or void [referred to in Firm of Illuri Subbayya Chetty case [1963] 14 STC 680 (SC) and approved in Dhulabhai's case [1968] 22 STC 416 (SC)]. The matter may have to be considered in the light of the provisions of the particular statute in question and the fact-situation obtaining, in each case. It is difficult to visualise all situations hypothetically and provide an answer. Be that as it may, the question that frequently arises for consideration, is, in what situation/cases the non-compliance or error or mistake, committed by the statutory authority or Tribunal, makes the decision rendered ultra vires or a nullity or one without jurisdiction? If the decision is without jurisdiction, notwithstanding the provisions for obtaining reliefs contained in the Act and the 'ouster clauses', the jurisdiction of the ordinary court is not excluded. So, the matter assumes significance. Since the landmark decision in Anisminic Ltd. v. Foreign Compensation Commission [1969] 2 AC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lord Baid ascribed to it in Anisminic Ltd. v. Foreign Compensation Commission [1969] 2 AC 147, namely, the entitlement to enter upon the enquiry in question . If there was an entitlement to enter upon an inquiry into the question, then any subsequent error could only be regarded as an error within the jurisdiction. The best known formulation of this theory is that made by Lord Denman in R. v. Bolton [1841] 1 QB 66. He said that the question of jurisdiction is determinable at the commencement, not at the conclusion of the enquiry. In Anisminic Ltd.'s case [1969] 2 AC 147 Lord Reid said: 'But there are many cases where, although the Tribunal had jurisdiction to enter on the enquiry, it has done or failed to do something in the course of the enquiry which is of such a nature that its decision is a nullity. It may have given its decision in bad faith. It may have made a decision which it had no power to make. It may have failed in the course of the enquiry to comply with the requirements of natural justice. It may in perfect good faith have misconstrued the provisions giving it power to act so that it failed to deal with the question remitted to it and decided some ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution Bench decision, Hari Prasad Mulshankar Trivedi v. V.B. Raju AIR 1973 SC 2602, delivering the judgment of the Bench, Mathew, J., in para 27 at page 2608 of the judgment, stated thus: (SCC pages 423-24, para 28) '. . . Though the dividing line between lack of jurisdiction or power and erroneous exercise of it has become thin with the decision of the House of Lords in the Anisminic case [1967] 3 WLR 382, we do not think that the distinction between the two has been completely wiped out. We are aware of the difficulty in formulating an exhaustive rule to tell when there is lack of power and when there is an erroneous exercise of it. The difficulty has arisen because the word 'jurisdiction' is an expression which is used in a variety of senses and takes its colour from its context [see per Diplock, J., at page 394 in the Anisminic case [1967] 3 W.L.R. 382]. Whereas the pure theory of jurisdiction would reduce jurisdictional control to a vanishing point, the adoption of a narrower meaning might result in a more useful legal concept even though the formal structure of law may lose something of its logical symmetry. At bottom the problem of defining the concept o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )-(1995)]. In chapter 5, titled as 'Jurisdiction, Vires, Law and Fact' (pages 223-294), there is exhaustive analysis about the concept, 'jurisdiction', and its ramifications. The authors have discussed the pure theory of jurisdiction, the innovative decision in 'Anisminic' case [1969] 2 AC 147, the development of the law in the post-Anisminic period, the scope of the 'finality' clauses (exclusion of jurisdiction of courts) in the statutes, and have laid down a few propositions at pages 250-256 which could be advanced on the subject. The authors have concluded the discussion thus at page 256: 'After Anisminic virtually every error of law is a jurisdictional error, and the only place left for non-jurisdictional error is where the components of the decision made by the inferior body included matters of fact and policy as well as law, or where the error was evidential (concerning, for example, the burden of proof or admission of evidence). Perhaps the most precise indication of jurisdictional error is that advanced by Lord Diplock in Racal Communications Ltd., In re [1981] AC 374 when he suggested that a Tribunal is entitled to make an error when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea in which the issue arose, the nature of the subject-matter, the value of that subject-matter, or the non-existence of any other prerequisite of a valid adjudication. Excess of jurisdiction is not materially distinguishable from lack of jurisdiction and the expressions may be used interchangeably.' 'Where the jurisdiction of a Tribunal is dependent on the existence of a particular state of affairs, that state of affairs may be described as preliminary to, or collateral to the merits of, the issue, or as jurisdictional.' (p. 114) 'There is a presumption in construing statutes which confer jurisdiction or discretionary powers on a body, that if that body makes an error of law while purporting to act within that jurisdiction or in (1)Here italicised. exercising those powers, its decision or action will exceed the jurisdiction conferred and will be quashed. The error must be one on which the decision or action depends. An error of law going to jurisdiction may be committed by a body which fails to follow the proper procedure required by law, which takes legally irrelevant considerations into account, or which fails to take relevant considerations into account, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r rules which have now superseded them, much for the benefit of the law. Together they are as follows: Errors of fact Old rule: The court would quash only if the erroneous fact was jurisdictional. New rule: The court will quash if an erroneous and decisive fact was (a) jurisdictional; (b) found on the basis of no evidence; or (c) wrong, misunderstood or ignored. Errors of law Old rule: The court would quash only if the error was (a) jurisdictional; or (b) on the face of the record. New rule: The court will quash any decisive error, because all errors of law are now jurisdictional. (Emphasis Here italicised. supplied) So, if an order without jurisdiction is permitted to be challenged directly before this court, bypassing the statutory remedy, now, every order can be challenged before this court, going by the expanded meaning given to the word jurisdiction . Lack of jurisdiction is also a point, which can be urged before the revisional authority. So, this court need not entertain matters, which other authorities can also deal with. If the petitioner's grievances are not redressed, even after exhausting the statutory remedies, it can approach t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vel, as to inspire confidence in the litigants that justice will be meted out to them at the High Court level and other levels. Faith must be inspired in the hierarchy of courts and the institution as a whole, not only in this court alone. And his objective can be achieved only by this court showing trust in the High Court by directing the litigants to approach the High Court in the first instance. Besides, as a matter of fact, if matters like the present one are instituted in the High Court, there is a likelihood of the same being disposed of much more quickly and equally effectively, on account of the decentralisation of the process of administering justice. We are of the opinion that the petitioner should be directed to adopt this course and approach the High Court. I think the principle analogous to what is stated above, will apply in this case, where the petitioner has a statutory remedy, but it elects to approach this court directly. In a recent decision in Union of India v. Hindalco Industries [2004] 135 STC 281 (SC); [2003] 5 SCC 194, the apex court has held as follows: There can be no doubt that in matters of taxation, it is inappropriate for the High Court to i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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