TMI Blog2014 (9) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... arrant a detailed and exhaustive examination/scrutiny of the facts and the law involved to fathom and ferret out the same. A decision erroneous in law or on the ground that a different view of the same court was plausible is not envisaged within the legally recognized tenets of review jurisdiction and no re-hearing for correcting such a decision is permissible. The carefully secured distinction between these two cardinal jurisdictions is, amongst others, the time-tested endeavour to safeguard against the possibility of the same forum exercising appellate jurisdiction over its own determination—a concept anathemic to the notion of fairplay and justice—the quintessence of the rule of law. Grounds of seizure of the goods revealed that those were allegedly not matching with the invoices produced was also taken note of. Inferring that the allegations as made in the seizure lists are correct, it was held, inter alia, that as the seized goods were found not tallying with the invoices produced, those could not be said to have been accounted for in the books of accounts, registers and other documents of the respondent-company as contemplated under section 74(5)(a) (ii) of the Act. It, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard Mr. K.N. Choudhury, learned Additional AdvocateGeneral, Assam assisted by Mr. R. Dubey, learned Standing Counsel, Finance and Taxation Department of the State for the appellant and Dr. A. K. Saraf, learned senior counsel for the respondents. A fascicule of the essential facts would provide the background for the contentious pleas raised. The respondent-company has introduced itself to be one incorporated under the Companies Act, 1956 and registered both under the Central Sales Tax Act as well as the Assam Value Added Tax Act, 2003 dealing primarily in plastic and leather footwear, sports goods, readymade garments and other allied business in North-East India. It is a distributor of classified products including various branded footwear and is engaged in the business of stocking, wholesaling and retailing thereof in this region. According to it, on February 6, 2008 the Inspector of Taxes, Unit-B, Guwahati, visited its godown situated at Dhirenpara, Guwahati, for a routine inspection and on a misconception issued a notice of the even date under section 74(1) of the Act and demanded from it production of all necessary documents in the nature of books of accounts on the ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t its goods-in-trade having been duly accounted for in its books of accounts, not only one of the conditions precedent for the exercise of power under section 74(3)(a) of the Act did not exist, the seizure of its entire stock of goods in the purported invocation of power under section 74(5)(a) thereof was wholly illegal, arbitrary and without jurisdiction. Having regard to the backdrop of facts and the contours of the assailment recited hereinabove, apt it would be to extract hereinbelow the contents of the aforementioned notice to produce or cause production of the necessary documents as well as the two seizure lists: Notice under section 74(1) of the AVAT Act, 2003 To M/s. Dhanani Shoes Ltd., Dhirenpara, Amtola, Guwahati. You are hereby required to produce or cause to be produced all the necessary documents pertaining to your business to the undersigned on February 6, 2008 at 2:30 P.M. in order to ascertain the tax paid/ payable by you and for other verification. Books of accounts to be produced (1) Cash book (2) Ledger (3) Purchase bills (4) Stock register (5) Sale accounts (6) Any other relevant documents. Seizure List In exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry pre-conditions prescribed as the sine qua non for invocation of section 74(3)(a) of the Act. (ii) As the materials on record did not indicate that the goods seized had not been accounted for, the power of seizure under section 74(5)(a)(ii) could not have been applied. (iii) If it, according to the concerned Revenue authority, had sold goods without paying the requisite tax, it was at best a case of escaped assessment warranting steps under section 40 of the Act and not the seizure thereof in purported exercise of power under section 74. In refutation, it was insisted on behalf of the Revenue that: (i) the writ petition was not maintainable for non-exhaustion of the alternative and efficacious remedy available in law as well as for suppression of material facts. (ii) as the respondent-company had deliberately misclassified the leather goods as plastic goods to avoid payment of tax at the prescribed rate of 12 per cent, the seizure of the books of accounts, register, etc., under section 74(3) was valid. (iii) as enumerated in the seizure list qua the stock of goods, the same did not tally with the corresponding invoices and, thus, those could not have been said t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h) The respondent-company had evaded or was attempting to evade payment of tax as due from it and was keeping or has kept the accounts in such a manner as was likely to cause evasion of tax. If these accusation are true, the revenue authority had good reasons to believe that the respondent-company had evaded or had been attempting to evade payment of tax due from it and was keeping or had kept its accounts in such a manner as was likely to cause evasion of tax. In such circumstances, the exercise of power under section 74(3) and the seizure of the books of accounts, registers, etc., cannot be said to be without jurisdiction or any authority of law. (i) The allegations may or may not be true but this court in the present case has to proceed on the basis that those were true and examine and test if the grounds assigned for the seizure of the stock are sustainable in law. (j) When the goods lying in the godown of the company were allegedly found not tallying with the invoices produced by its representative it cannot be said that the goods had been accounted for by it in its books of accounts, registers, etc., and in such circumstances those cannot be said to have been accounted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated April 11, 2008 (Dhanani Shoes Ltd. v. State of Assam [2008] 14 VST 422 (Gauhati)) rendered in W.P. (C) No. 1050 of 2008 had been taken note of was also disclosed therein. Stirred by the aforenoted reverses in succession, the respondent-company filed an application seeking review of the judgment and order dated April 11, 2008 (Dhanani Shoes Ltd. v. State of Assam [2008] 14 VST 422 (Gauhati)) (registered as R.P. No. 47 of 2008) supplementing it by an impugnment of the notice dated April 16, 2008 by initiating a writ proceeding registered as W.P. (C) No. 1781 of 2008 (Dhanani Shoes Ltd. v. State of Assam [2008] 16 VST 228 (Gauhati)). Noticeably, in this endeavour it sought to invoke the writ jurisdiction of this court also for an appropriate direction to declare that the words not accounted for appearing in subsection (5)(a) of section 74 of the Act be read in terms of sub-section (5)(b) and (5)(c) thereof to signify a default of the dealer in making entries in respect of the goods in its/his books of accounts, registers and other documents, as the case may be, in course of his/its business. As the grounds catalogued in the review application would disclose, the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shoes Ltd. v. State of Assam [2008] 14 VST 422 (Gauhati)) essentially on the plea of erroneous interpretation of section 74(3) and 74(5) of the Act in the background of the contextual facts and the related documents. The Revenue in its affidavit contended that none of the grounds urged constituted one for review of a judicial decision as contemplated in law and that the learned single judge having pronounced the conclusions on a thorough examination of all material facts and the relevant records in the context of the existing provisions of the statute involved, the review application was unsustainable in and was liable to be rejected in limine. Vis-avis the challenge to the notice dated April 16, 2008, the Revenue contended that it was only a dilatory move and prematured as well inasmuch as a demand notice would follow only after due consideration of the reply filed by the assessee in response thereto. That the release of the goods in accordance with the stipulations contained in section 74(5)(d) of the Act would ensue only in compliance thereof was also underlined. The learned single judge by the judgment and order assailed herein allowed the review petition and sustained a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classification of the goods. (c) The Revenue sought to sustain the seizure of the goods on the ground that the stock of goods did not tally with the invoices produced signifying that there was no entry in existence therefor and, thus, could not be said to have been accounted for justifying invocation of the power under section 74(5)(a)(ii). (d) Notwithstanding the fact that the grounds of seizure reflected that it was also due to the alleged misclassification of goods, this was not urged by the Revenue in the writ proceeding. Rather, the same was abandoned. The decision on review was founded on the following deductions: (i) The sole basis for the court to uphold the seizure of the goods was that those did not tally with the invoices produced signifying the legal inference that no entry therefor had existed in the books of accounts, registers, etc., and those were not accounted for within the meaning of section 74(5)(a)(ii). The seizure of the goods was not sustained because of the alleged misclassification thereof as it was not a ground pressed by the Revenue. (ii) The impugned notice dated April 16, 2008 does not even suggest that the seizure was on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by lack of jurisdiction and is, thus, unsustainable. The judgment and order under review as well as the impugned notice were accordingly interfered with. Mr. Choudhury has assiduously argued that as none of the grounds enumerated in the review application is apparently recognized in law for review of a judicial decision, the impugned judgment and order is ex facie unsustainable and is liable to be interfered with. The learned Additional Advocate-General maintained that the assertions in the review application against the original decision though may be envisaged for impugnment thereof in an appeal, those by no means, having regard to the legally circumscribed limits of review jurisdiction, are entertainable for the review thereof. Mr. Choudhury relying on the relevant portions of the original decision emphasized that the same had been rendered on an indepth scrutiny of all factual and legal aspects and the determination having been made on the merit of such evaluation, the review thereof on an overall reappraisal of the same facets of the debate was impermissible. While clarifying that the challenge in the instant appeal vis-a-vis the judgment on review is chiefly focused on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribam Tuleshwar Sharma v. Aribam Pishak Sharma [1979] 4 SCC 389. (ii) Lily Thomas v. Union of India [2000] 6 SCC 224. (iii) State of West Bengal v. Kamal Sengupta [2008] 8 SCC 612. Dr. Saraf per contra has argued with detailed reference to section 74 of the Act that as on the face of the contemporaneous documents, namely, the books of accounts, registers, etc., of the respondent-company and the seizure memos, the goods had been accounted for, the learned single judge was justified in reviewing the original decision in the interest of justice. Contending that section 74(3)(a) and 74(5) operate in two independent and distinctly different fields with varying preconditions defining the scope and extent of the exercise of power by the authorities concerned thereunder, the learned senior counsel has insisted that the words not accounted for used in section 74(5)(a) when read cumulatively with section 74(5)(b) would assuredly mean absence of any entry in respect of the goods in the books of accounts, registers and other documents of the dealer. As in the original decision, this decisive legal aspect had escaped the attention of the learned single judge facilitating the demand f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tious and studied scrutiny. As has been emphasized on behalf of the appellant time and again in course of the arguments, the only thrust of the instant assailment is the impermissibility of entertainment of the grounds of review suitably attired to secure a rehearing of the issues once decided as if in appeal before a higher forum. A breach of the legally recognized parameters of judicial review has been emphatically projected seeking interference with the impugned judgment and order. The present adjudicative pursuit logically would, thus, be limited within this periphery. The factual background with the progression of events culminating in the decision appealed against as well as the grounds for review and the deductions made thereon having been adverted to hereinabove in sufficient details, it would be expedient at this juncture to traverse the law of curial review culled from the authorities cited at the Bar. While the decision in State of Maharashtra v. Ramdas Shrinivas Nayak [1982] 2 SCC 463 propounds the inexpediency and impermissibility of questioning matters of judicial record being against public policy as well as judicial decorum making it incumbent upon the party e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nature of the undertaking may also call for a review of the order. An application for review would also be maintainable if there exists sufficient reason therefor. What would constitute sufficient reason would depend on the facts and circumstances of the case. The words 'sufficient reason' in Order 47, rule 1 of the Code are wide enough to include a misconception of fact or law by a court or even an advocate. An application for review may be necessitated by way of invoking the doctrine actus curiae neminem gravabit. Incidentally, in Board of Control for Cricket in India [2005] 4 SCC 741, their Lordships while dwelling on the grounds for review as ordained by order 47, rule 1 of the Code, remarked that the observations made by the apex court in Moran Mar Basselios Catholicos v. Most Rev. Mar Poulose Athanasius AIR 1954 SC 526 that any other sufficient reason ought to be at least analogous to those specified in the rule was not of universal application. In other words, the apex court in Board of Control for Cricket in India [2005] 4 SCC 741 propounded that the words any other sufficient reason appearing in Order 47, rule 1 of the Code ought to be accorded some flexi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-heard and corrected and that there is a clear distinction between erroneous decision and an error apparent on the face of the record. That a re-hearing of the dispute on aspects of a case not highlighted earlier or perhaps could have been argued more forcefully or reinforced by binding precedents not cited to facilitate a favourable verdict is not contemplated in a proceeding for review as observed in Haridas Das v. Usha Rani Banik [2006] 4 SCC 78 was also underlined. It referred with approval as well the observations made in Ajit Kumar Rath v. State of Orissa [1999] 9 SCC 596, that a review cannot be claimed or asked for merely for a fresh hearing or arguments or correction of an erroneous view taken earlier and can be invoked only for correction of a patent error of law or facts which stares in the face without any elaborate argument being needed for establishing the same. While cataloguing the principles gleaned from the whole gamut of its decisions on the law of judicial review, their Lordships eventually concluded that the expression any other sufficient reason appearing in Order 47, rule 1 of the Code has to be interpreted in the light of other specified grounds and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 440. The enunciations though are suggestive of marginal transigence in approach in the recent times qua the review jurisdiction permitting consideration of any subsequent event as a conceivable facet of the expression sufficient reason , the fundamental difference between an appeal and a review has not been obliterated thereby and though very subtle, subsists with overwhelming realism. Indubitably, review jurisdiction is one conferred by law and necessarily has to be circumscribed by the prerequisites for the exercise thereof ordained by it. The salutary objectives thereof though embodied in the pristine maxim actus curiae neminem gravabit, the invocation of review jurisdiction unmistakably has to be within the contours enjoined by law lest its subsumption in the appellate jurisdiction eventuates. The ambit of this jurisdiction dominantly is presided over by the two grounds enumerated in Order 47, rule 1 of the Code, i.e., (i) discovery of new and important matter or evidence which after the exercise of due diligence was not within the applicant's knowledge or could not be produced by him at the time when the decision was made, and (ii) mistake or error apparent on the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llying with the invoices produced, those could not be said to have been accounted for in the books of accounts, registers and other documents of the respondent-company as contemplated under section 74(5)(a) (ii) of the Act. It, thus, concluded that the conditions precedent for the exercise of power under this provision of the Act did exist and, thus, the seizure of the goods could not be repudiated to be without jurisdiction or authority of law. The grounds of review as adverted to hereinabove in essence sought a reinterpretation of section 74(3) and 74(5) of the Act to highlight the distinction between the pre-conditions for the application thereof. It was sought to be contended that as admittedly the relevant entry vis-a-vis the seized goods had been made in the books of accounts, registers, etc., of the respondent-company, those by no means could have been said to be not accounted for by the dealer as contemplated in section 74(5) and, thus, an error apparent on the face of the record had ensued. The learned single judge in the impugned decision on a review of the original determination underlined that as the Revenue had sought to justify the seizure of the goods only on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke the exercise. The text of the notice dated April 16, 2008, in our estimate, cannot be accommodated in any of the grounds for review recognized in law. On a totality of the deductions as above, we are of the unhesitant opinion that the decision rendered by way of review of the original judgment and order dated April 11, 2008 (Dhanani Shoes Ltd. v. State of Assam [2008] 14 VST 422 (Gauhati)) cannot be sustained in law and on facts. The impugned notice dated April 16, 2008 though mentions that the decision dated April 11, 2008 (Dhanani Shoes Ltd. v. State of Assam [2008] 14 VST 422 (Gauhati)) had been taken note of in issuing the same, we are of the view that the respondent-company ought to avail of its remedies under the law vis-a-vis the same. Having reversed the judgment and order dated July 2, 2008 (Dhanani Shoes Ltd. v. State of Assam [2008] 16 VST 228 (Gauhati)) whereby this notice too had been annulled on the limited considerations recited hereinabove, we consider it expedient not to offer any comment on the merit of the challenge to the notice dated April 16, 2008 and leave the parties to exhaust their remedies otherwise available in law. In the result, the impugned j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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