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Pradip Nanjee Gala Versus Versus Sales Tax Officer & Others

2015 (5) TMI 141 - SUPREME COURT

Whether the respondent-Revenue could resile from a settlement entered into with the assessee on the basis of which the appellant has already paid and settled his dues under the Act - Held that:- Plain reading of Section 45 of the Act would indicate that the legislature has vested the power of remission of tax only with the Commissioner and subjected the exercise of said power in accordance with such circumstances and conditions as prescribed by the State Government under the Bombay Sales Tax Rul .....

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on exercise of powers of remission by the Commissioner and mandates them to be exercised only “in such circumstances and subject to such conditions as may be prescribed.” Section 2(21) of the Act provides that “prescribed” under the Act would mean as prescribed under the Rules and herein, the Rules being silent on any settlement of the nature allegedly entered into between the appellant and the State Government, the external circumstances including a settlement cannot be considered by the Commis .....

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Firm would not fall under the four corners of the Act or the Rules as has been claimed by the appellant since the beginning of the proceedings under the Act. - High Court has rightly examined the issues before it and the judgment and order passed by it does not suffer from any error - Decided against assessee. - Civil Appeal No. 4542 of 2007 - Dated:- 29-4-2015 - CJI H. L. Dattu, S. A. Bobde And Arun Mishra,JJ. For the Petitioner : Mr. S. Ravi Shankar For the Respondent : Mr. Aniruddha P. Mayee .....

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the basis of which the appellant has already paid and settled his dues under the Act. 3. Since the protracted proceedings in the instant case have spawned over three decades, we would only notice the most relevant facts necessary for disposal of the appeal. 4. Facts in brief are as follows: The appellant had joined as a partner in the assessee-Firm. His status as the partner of the said Firm, not being of any consequence to the question that arises for our consideration, does not require to be .....

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said assessments before the first appellate authority, which were dismissed by order dated 30.09.1981. 5. Being aggrieved by the aforesaid orders, the appellant had approached the Maharashtra Sales Tax Tribunal (for short, the Tribunal ). During the pendency of the said appeals, the appellant had addressed a letter to the State Minister for Finance dated 23.11.1983, seeking settlement of sales tax dues payable by him as a partner of the assessee-Firm. It is the case of the appellant that the the .....

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t and absolving him from the liability to pay for the dues of the assessee-Firm for said assessment years. Since, the question before the Tribunal was restricted to determination and payment of liability by the appellant qua the assessee-Firm, the Tribunal had refused to adjudicate upon both: (a) whether there exists any settlement between the parties regarding the tax liability and (b) whether the appellant was relieved of his obligation under the Act. 6. Aggrieved by the aforesaid, the appella .....

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er Section 45 of Act, there exists no other provision which would empower the authorities to settle the liability of an individual partner. Further, that Section 18 of the Act specifically provides that in respect of the dues of the firm, the liability of a partner is joint and several and, therefore, neither the State Minister for Finance nor the Commissioner could have legally entered into any settlement regarding the liability of individual partner in respect of the dues of the assessee-Firm. .....

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ded that under Section 18 of the Act the partners of the Firm are jointly and severally liable to pay the tax dues of the assessee-Firm and no provision under the Act contemplates a settlement between a partner of the assessee-Firm and the Commissioner to determine individual liability. The High Court has further noticed that Section 45 of the Act which speaks of power of remission of the Commissioner also does not contemplate any settlement of the nature claimed herein and therefore, could not .....

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t could not be held liable to settle tax liability of the assessee-Firm under the Act, because he has already paid his dues as a partner of the assessee-Firm under the settlement entered into between him and the State Minister for Finance. He would further refer to the order of the Commissioner dated 16.01.1984 in support of the determination of his individual dues by the respondent-Revenue and therefore submit that since the appellant has discharged his share of the liability, he ought to be ab .....

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joint and several liability of the partners of the firm towards the payment of such tax liability under the Act. Section 45 of the Act provides for remission of tax payable by a dealer under the Act. It reads: The Commissioner may, in such circumstances and subject to such conditions as may be prescribed, remit the whole or any part of the tax payable, in respect of any period, by any dealer: PROVIDED that if the amount to be remitted exceeds two thousand rupees, the remission of the excess sha .....

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of goods specified in Schedule E of the Rules. Rule 44 speaks of certain cases where an authorised dealer or commission agent who has become liable to pay purchase tax under section 14 of the Act could claim remission. Section 44A speaks of remission of purchase tax payable by authorised dealer in certain cases. 14. The plain reading of Section 45 of the Act would indicate that the legislature has vested the power of remission of tax only with the Commissioner and subjected the exercise of said .....

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the Commissioner in light of any such settlement. 15. Section 18 of the Act specifically provides that the liability of a partner in respect of the dues payable by the firm is joint and several. But for Section 45 of the Act which permits remission of the tax payable by the dealer, that is, the assessee-Firm, there is no provision under the Act empowering the State Government or the Commissioner to enter into a settlement with an individual partner regarding his liability in respect of the dues .....

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could be no settlement with an individual partner so as to discharge him from his obligation to pay the sales tax dues payable by the assessee-Firm. 16. Further, in our view, the submission advanced by Shri Ganesh that the conditions prescribed under the statute at hand ought to be read considering the facts and circumstances of the instant case to provide beneficial meaning to the statute, also does not hold any waters. The statute herein clearly and expressly provides for the limitation on exe .....

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le exercising power of remission of tax under the Act. 17. It is trite that the letter of law has to be accorded utmost respect and strictly adhered to especially while interpreting a taxing statute. There ought not exist any scope for impregnating the interpretation by reading equity into taxing statutes. The classic statement of Rowlatt, J., in Cape Brandy Syndicate v.IRC, [(1921) 1 K.B. 64, 71] still holds the field. It reads as under: In a Taxing Act one has to look merely at what is clearly .....

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