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2016 (2) TMI 245 - PUNJAB AND HARYANA HIGH COURT

2016 (2) TMI 245 - PUNJAB AND HARYANA HIGH COURT - [2016] 90 VST 66 (P&H) - Waiver of pre-deposit - power of appellte authority under PVAT to grant interim injunction / protection - Valuation - inclusion of receipts of charges from the customers as meter rent - the receipts of charges from the customers as service line rental had been brought to tax while treating these as meter rent - Activities in respect of generation, distribution and supply of electric energy/electricity power and other all .....

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the PVAT Act. Instead of rushing to the High Court under Article 226 of the Constitution of India, the grievance can be remedied at the stage of first appellate authority. - As a sequel, it would follow that the provisions of Section 62(5) of the PVAT Act are directory in nature meaning thereby that the first appellate authority is empowered to partially or completely waive the condition of pre-deposit contained therein in the given facts and circumstances. It is not to be exercised in a rou .....

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o continue as a condition precedent to the hearing of the appeal before it. Therefore, the power to grant interim protection/injunction by the first appellate authority in appropriate cases in case of undue hardship is legal and valid. As a result, question (c) posed is answered accordingly. - CWP No.26920 of 2013 - Dated:- 23-12-2015 - MR. AJAY KUMAR MITTAL AND MR. RAMENDRA JAIN, JJ. For The Petitoner : Mr. K.L.Goyal, Senior Advocate with Mr. Sandeep Goyal, Dr. Naveen Rattan, Mr. Rohit Gupta, M .....

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te Ajay Kumar Mittal,J. 1. This order shall dispose of a bunch of 386 petitions viz. CWP Nos.26920, 22437, 27788, 27789 of 2013, 10554, 10560, 19587, 2343, 3297, 6844, 21260, 21260, 21774, 23041, 21860, 23397, 23454, 25146, 26316, 26323, 26371, 26559, 26589, 11405, 22928, 22947, 24389, 24390, 24391 of 2014, 28, 149, 319, 315, 423, 456, 478, 1105, 1118, 1119, 1142, 1253, 1254, 1299, 1393 , 1813, 1817, 1998, 2059, 2090, 2184, 2334, 2345, 2346, 2406, 2407, 2409, 2412, 2416, 2628, 2483, 2633, 2635, .....

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85, 7188, 7205, 7216, 7242, 7447, 7498, 7520, 7526, 7537, 7576, 7779, 7882, 7883, 7884, 7886, 7887, 7888, 7891 7893, 10118, 10142, 10144, 10878, 10915, 10920, 10956, 10960, 10990, 10991, 10993, 10994, 11246, 11755, 11757, 11828, 11852, 11884, 11903, 11938, 11952, 12001, 12020, 11537, 11660, 7994, 11307, 11322, 11352, 4578, 8120, 8482, 8600, 8707, 8804, 8814, 8835, 8880, 8893, 8896, 9007, 9008, 9014, 9023, 9026, 9028, 9113, 9250, 9269, 9270, 9346, 9468, 9625, 9641, 9675, 9744, 10020, 10029, 10032 .....

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6, 15550, 15553, 15653, 15664, 15677, 16101, 16165, 16190, 16202, 16203, 16189, 16988, 17073, 17075, 17038, 17303, 15915, 17849, 16382, 17561, 17568, 17584, 17595, 18097, 18104, 18108, 18109, 18127, 18128, 18136, 18148, 18166, 18174, 18246, 18730, 18733, 18914, 18915, 19012,19290, 19292, 19295, 19390, 19233, 19421, 19543, 20660, 20686, 20691, 20840, 21451, 21539. 21561, 21584. 21644, 22058, 22263, 22278, 22414, 22426, 22432, 22560, 22544, 22692, 22812, 22813, 22814, 22821, 23416, 23658, 23936, 2 .....

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bution and supply of electric energy/electricity power and other allied material to the consumers viz. domestic, commercial and industrial consumers in the State of Punjab and for that purpose, it is governed by the Indian Electricity Act, 1910 and Electricity (Supply) Act, 1948 as well as the Rules and Regulations framed thereunder. The petitioner had been filing returns as prescribed and whatever tax was payable in terms of Section 15 of the Punjab Value Added Tax, 2005 (in short, the PVAT Act .....

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nts in Form VAT 20 were also filed before the last dates. The Excise and Taxation Officer cum Designated Officer (ETO) - respondent No.2 initiated assessment proceedings for the years 2007-08, 2008-09 and 2009-10 by issuing notice under section 29 of the PVAT Act. The representatives of the petitioner attended the proceedings and tendered explanation. Assessments had been framed under the PVAT Act vide orders dated 19.9.2011, 31.10.2012 and 31.11.2012 for the assessment years 2007- 08, 2008-09 a .....

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resulting in raising demand of ₹ 26,52,79,716/-, ₹ 27,64,73,245/- and ₹ 22,18,31,454/- respectively for the aforesaid years. The petitioner challenged the order before this Court by filing CWP No.21127 of 2011. Vide order dated 7.11.2012, Annexure P.2, this Court relegated the petitioner to the remedy of appeal. The petitioner approached the appellate authority i.e. the Deputy Excise and Taxation Commissioner (Appeals) by filing appeals under Section 62 of the PVAT Act for all .....

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d in the government treasury by 27.2.2013 failing which the appeals would be dismissed in limine. Aggrieved by the order, the petitioner filed appeals before the Punjab VAT Tribunal (in short, the Tribunal ). It was pleaded by the petitioner that its financial position was very poor and it was not in a condition to make payment of 25% and the losses incurred by the petitioner had been duly explained to the appellate authority. Since the petitioner had already paid voluntarily tax of ₹ 1,97 .....

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deposit 25% of the amount of tax, penalty and interest in terms of the order in the case of Ahulwalia Contracts India Pvt. Limited. Aggrieved by the order, the petitioner filed CWP No.17370 of 2013, 17031 and 17053 of 2013 which were disposed of vide order dated 31.10.2013, Annexure P.8. The petitioner was allowed to withdraw the writ petition so as to enable it to challenge the vires of Section 62(5) of the PVAT Act alongwith challenge to the orders passed by the Tribunal. Hence the instant wr .....

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right to hear appeal has inherent powers to grant interim protection against imposition of such a condition for hearing of appeals on merits? 5. Examining questions No.(a) and (b) as noticed above, these are being taken up together as the issue involved therein is overlapping. It may be noticed that vide sub section (5) of Section 62 of the PVAT Act, the State has imposed a condition of 25% of the tax etc. to be deposited as a condition precedent for hearing of an appeal. 6. It would be expedie .....

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ssioner, to the Commissioner; or (c) if the order is made by the Commissioner or any officer exercising the powers of the Commissioner, to the Tribunal. (2) An order passed in appeal by a Deputy Excise and Taxation Commissioner or by the Commissioner or any officer on whom the powers of the Commissioner are conferred, shall be further appealable to the Tribunal. (3) Every order of the Tribunal and subject only to such order, the order of the Commissioner or any officer exercising the powers of t .....

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nd interest, if any. (6) In deciding an appeal, the appellate authority, after affording an opportunity of being heard to the parties, shall make an order - (a) affirming or amending or canceling the assessment or the order under appeal; or (b) may pass such order, as it deems to be just and proper. (7) The appellate authority shall pass a speaking order while deciding an appeal and send copies of the order to the appellant and the officer whose order was a subject matter of appeal. 7. The issue .....

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of right of appeal and pre-deposit held as under:- 40. After hearing the learned counsel for the parties, we are unable to subscribe to the view taken by the High Court. Section 406 (2) (e) as amended states that no appeal against a rateable value or tax fixed or charged under the Act shall be entertained by the Judge in the case of an appeal against a tax or in the case of an appeal made against a rateable value after a bill for any property tax assessed upon such value has been presented to th .....

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osit of the amount claimed from an appellant in case he, seeks to file an appeal against a tax or against a rateable value after a bill for any property tax assessed upon such value has been presented to him. Power at the same time is given to the appellate judge to relieve the appellant from the rigour on the above provision in case the judge is of the opinion that it would cause undue hardship to the appellant. The requirement about the deposit of the amount claimed as a condition precedent to .....

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is conferred upon a person who is aggrieved with the demand of tax made from him, and the right of the Corporation to speedy recovery of the tax. The impugned provision accordingly confers a right of appeal and at the same time prevents the delay in the payment of the tax. We find ourselves unable to accede to the argument that the impugned provision has the effect of creating a discrimination as is offensive to the principle of equality enshrined in article 14 of the Constitution. It is signifi .....

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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 who despite the fact that the deposit of the amount found due from him would cause him no hardship, declines of his own volition to deposit that amount. The right of appeal is the creature of a statute. Without a statutory provision creating such a right the person aggrieved is not entitled to file an appeal. We fa .....

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Likewise, it is permissible to enact a law that no appeal shall lie against an order relating to an assessment of tax unless the tax had been paid. Such a provision was on the statute book in section 30 of the Indian Income-tax Act, 1922. The proviso to that section provided that " . . . . . no appeal shall lie against an order under sub-section (1) of section 46 unless the tax had been paid". Such conditions merely regulate the exercise of the right of appeal so that the same is not .....

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lation, and we can discern no contravention of article 14 in it. A disability or disadvantage arising out of a party's own default or omission cannot be taken to be tantamount to the creation of two classes offensive to article 14 of the Constitution, especially when that disability or disadvantage operates upon all persons who make the default or omission. 9. Following judgment in Anant Mills Limited's case (supra), the Supreme Court in Seth Nand Lal and others vs. State of Haryana and .....

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tion of making a deposit of a sum equal to 30 times the land holdings tax payable in respect of the disputed area before any appeal or revision is entertained by the appellate or revisional authority-a provision inserted in the Act by Amending Act 40 of 1976. Section 18(1) and (2) provide for an appeal, review and revision of the orders of the prescribed authority and the position was that prior to 1976 there was no fetter placed on the appellate/revisional remedy by the statute. However, by the .....

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rovided that if the appellant or the petitioner coming against the order declaring the land surplus failed in his appeal or revision, he shall be liable to pay for the period he has at any time been in possession of the land declared surplus to which he was not entitled under the law, a licence fee equal to 30 times the landholdings tax recoverable in respect of this area. On 6th June, 1978, the Act was further amended by Amending Act 18 of 1978 whereby the rigour of the condition imposed under .....

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tee shall be adjusted against the licence fee recoverable under sub section (8). In the High Court, two contentions were urged: first, that section 18(1) and (2), as originally enacted in 1972, gave an unrestricted and unconditional right of appeal and revision against the orders of the prescribed authority or the appellate authority but by inserting sub sections (7) and (8) by Act 40 of 1976, a fetter was put on this unrestricted right which was unconstitutional; secondly, even the mellowing do .....

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nd there is no reason why the legislature while granting the right cannot impose conditions for the exercise of such right so long as the conditions are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory (vide the latest decision in Anant Mills Ltd. v. State of Gujarat. Counsel for the appellants, however, urged that the conditions imposed should be regarded as unreasonably onerous especially when no discretion has been left with the appellate or revisio .....

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at the cash deposit or bank guarantee is not by way of any exaction but in the nature of securing mesne profits from the person who is ultimately found to be in unlawful possession of the land; thirdly, the deposit or the guarantee is co-related to the landholdings tax (30 times the tax) which, we are informed, varies in the State of Haryana around a paltry amount of ₹ 8/- per acre annually; fourthly, the deposit to be made or bank guarantee to be furnished is confined to the landholdings .....

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to section 18(7) must, therefore, fail. 10. In Vijay Prakash D.Mehta and another vs. Collector of Customs (Preventive) Bombay, AIR 1988 SC 2010, the Apex Court while considering identical issue held that right to appeal was neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant. If the statute gives .....

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aw that adjudication by itself following the rules of natural justice would be violative of any right- constitutional or statutory, without any right of appeal, as such. If the statute gives a right to appeal upon certain conditions, it is upon fulfilment of those conditions that the right becomes vested and exercisable to the appellant. The proviso to Section l29E of the Act gives a discretion to the Tribunal in cases of undue hardships to condone the obligation to deposit or to reduce. It is a .....

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to the case Chatter Singh Baid v. Corporation of Calcutta and others, AIR 1984 Calcutta 283. It was a case relating to the payment of house-tax and the right of the aggrieved party who filed an appeal. Petitioners in the said case were the owners of Premises No. 11, Indra Kumar Karnani Street. and with effect from 4th quarter, 1978-79 the Corporation of Calcutta had determined the annual value of the said premises at ₹ 4,30,606/ -. Objections filed by the owners were disposed of by Special .....

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by the decision of the Court of Small Causes, in the case of an appeal to the High Court, has been deposited in the municipal office and -such consolidated rate is continued to be deposited until the appeal is finally decided." 46. This provision is similar to the provision contained in S. 170 of Delhi Municipal Corporation Act. 47. An argument was advanced by learned counsel for the petitioners that unless the appellate authority is given discretionary powers to relax or modify such condit .....

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cretion left to the appellate and revisional authority so relax or waive the said condition. This case fully supports the view we are taking. 48. The proviso to S. 170 of the Delhi Municipal Corporation Act does not make the right of appeal nugatory or illusory because it is only on account of his own default to comply with the condition for deposit, the appellant himself may fail to avail of the remedy by way of appeal. We are clearly of the view that the ratio of the decision in Anant Mills .....

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the touchstone of hardship or stringency. If a provision made in a statute is not invalid, any person desirous of availing the right of appeal has no option but to comply with the condition under which this right of appeal can be exercised. A restriction is, undoubtedly, bound to be irksome and painful to the citizens even though it may be for public good. However, important the right of a citizen or an individual may be, it has to yield to the larger interest of the country or the community., .....

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operty even when no such tax was due from him. We do not agree with this submission. The law presumes that all authorities function properly and bona fide with due regard to the public interest, however, in case there is any such contingency a party can resort to the writ jurisdiction of the High Court under Art. 226 of the Constitution of India. The mere fact that an assessed might have to deposit the amount of the tax when filing an appeal could not in every case justify his bypassing the reme .....

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hi) it has been held that as a matter of practice and procedure the Courts do not normally permit the aggrieved party to abandon the normal remedies of appeal etc. under the Act in favor of a petition under Art. 226 of the Constitution of India but if any action is taken without jurisdiction or if the Court comes to the conclusion that the alternative remedy provided under the Act is not adequate cannot inspire confidence inasmuch as it would amount to an appeal from 'Ceaser to Ceaser' t .....

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cision of the Full Bench of Delhi High Court in Shyam Kishore and others vs. Municipal Corporation of Delhi, (1993) 1 SCC 22. The Apex Court hearing appeal in Shyam Kishore's case (supra) concurred with the majority view taken by the Full Bench. 13. In Gujarat Agro Industries Co. Limited vs. Municipal Corporation of City of Ahmedabad and others, (1999) 4 SCC 468, it was held by the Apex Court as under:- 8. By the Amending Act 1 of 1979 discretion of the Court in granting interim relief has n .....

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r it should be conditionally given. Right of appeal which is statutory right can be conditional or qualified. It cannot be said that such a law would be violative of Article 14 of the Constitution. If the statute does not create any right of appeal, no appeal can be filed. There is a clear distinction between a suit and an appeal. While every person has an inherent right to bring a suit of a civil nature unless the suit is barred by statute. However, in regard to an appeal, position is quite opp .....

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Act. This Section provided for filing of appeal against any rateable value or tax fixed or charged under that Act but no such appeal could be entertained unless : (d) in the case of an appeal against a tax, or in the case of an appeal made against a rateable value the amount of the disputed tax claimed from the appellant, or the amount of the tax chargeable on the basis of the disputed rateable value, up to the date of filing of the appeal, has been deposited by the appellant with the Commissio .....

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hall be entertained unless the consolidated rate payable up to the date of presentation of the appeal on the valuation determined (a) by an order under Section 182, in the case of an appeal to the Court of Small Causes, (b) by the decision of the Court of Small Causes, in the case of an appeal to the High Court, has been deposited in the municipal office and such consolidated rate is continued to be deposited until the appeal is finally decided. Similar provisions existed in the Delhi Municipal .....

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ade under Section 126, and, in the case of any other tax, within thirty days next after the date of the receipt of the notice of assessment or of alteration of assessment or, if no notice has been given, within thirty days after the date of the presentation of the first bill or, as the case may be, the first notice of demand in respect thereof : Provided that an appeal may be admitted after the expiration of the period prescribed therefor by this section if the appellant satisfies the court that .....

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hi High Court. The decision of this Court is reported as Shyam Kishore and Ors. vs. Municipal Corporation of Delhi & Anr. [(1993) 1 SCC 22]. This Court relied on its earlier decisions in Ganga Bai case and Anant Mills case. Reference was also made to another decision of this Court in Vijay Prakash D. Mehta/Shri Jawahar D. Mehta vs. Collector of Customs (Preventive), Bombay [(1988) 4 SCC 402] where Justice Sabyasachi Mukharji, J., speaking for the Court, said : Right to appeal is neither an a .....

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reto. Any challenge to its constitutional validity on the ground that onerous conditions have been imposed and right to appeal has become illusory must be negatived. 11. We also note that under clause (c) of sub-section (2) of Section 406, a complaint lies to the Municipal Commissioner against imposition of any property tax and only after that when the complaint is disposed of that appeal can be filed. Appeal to the Court as provided in clause (e) may appear to be rather a second appeal. Then un .....

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sions relating to arbitration in suits shall apply. That apart, if a person cannot avail of the right of appeal under Section 406 of the Act, other remedies are available to him under the law. In that case, it may not be possible for the Municipal Corporation to contend that an alternative remedy of appeal exist under Section 406 of the Act. 12. When leave was granted in these appeals by order dated December 12, 1980 this Court granted stay on the condition that seventy-five per cent of the tax .....

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under Section 47A of the Indian Stamp Act, 1899. After considering its earlier pronouncements on the subject under different statutes interpreting similar provision, it was recorded as under:- 22. In this connection we may also mention that just as the reference under Section 47A has been made subject to deposit of 50% of the deficit duty, similarly there are provisions in various statutes in which the right to appeal has been given subject to some conditions. The constitutional validity of thes .....

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judicial and quasi-judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant." 24. In Anant Mills Ltd. vs. State of Gujarat (1975) 2 SCC 175 this Court held that the right of appeal is a creature of the statute and it is for the Legislature to decide whether the right of appeal should be unconditionally given to an aggrieved party or it should be conditionally given. The right to appeal which is a statutory right can be condi .....

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cipal Corporation of the city of Ahmedabad and Ors. (supra). This Court has also referred to its decision in Shyam Kishore and Ors. vs. Municipal Corporation of Delhi and Anr. (1993) 1 SCC 22 in which a similar provision was upheld. 26. It may be noted that in Gujarat Agro Industries Co. Ltd. vs. Municipal Corporation of the city of Ahmedabad and Ors. (supra) the appellant had challenged the constitutional validity of Section 406(e) of the Bombay Municipal Corporation Act which required the depo .....

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f the High Court declaring it unconstitutional is not correct. 15. In Smt.Har Devi Asnani vs. State of Rajasthan and others, AIR 2011 SC 3748, Proviso to Section 65(1) of the Rajasthan Stamp Act, 1998 requiring deposit of 50% of demand as precondition for filing revision against the order to pay deficit stamp duty was held to be within legislative powers of the State. It was recorded as under:- 5. For appreciating the contentions of the learned counsel for the parties, we must refer to Section 6 .....

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satisfactory proof of the payment of fifty percent of the recoverable amount. (2) The Chief Controlling Revenue Authority may suo moto or on information received from the registering officer or otherwise call for and examine the record of any case decided in proceeding held by the Collector for the purpose of satisfying himself as to the legality or propriety of the order passed and as to the regularity of the proceedings and pass such order with respect thereto as it may think fit: Provided th .....

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ced by Andhra Pradesh Act 8 of 1998 in the Indian Stamp Act, is extracted hereinbelow: "47-A. Instruments of conveyance, etc. how to be dealt with-(1) Where the registering officer appointed under the Registration Act, 1908, while registering any instrument of conveyance, exchange, gift, partition, settlement, release, agreement relating to construction, development or sale of any immovable property or power of attorney given for sale, development of immovable property, has reason to believ .....

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made by the registering officer unless an amount equal to fifty per cent of the deficit duty arrived at by him is deposited by the party concerned." Under sub-section (1) of Section 47-A quoted above, a reference can be made to the Collector for determination of the market value of property and the proper duty payable thereon where the registering officer has reason to believe that the market value of the property which is the subjectmatter of the instrument has not been truly set forth in .....

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Andhra Pradesh High Court by P. Laxmi Devi and the Andhra Pradesh High Court held that this proviso was arbitrary and violative of Article 14 of the Constitution and was unconstitutional. The Government of Andhra Pradesh, however, filed an appeal by special leave before this Court against the judgment of the Andhra Pradesh High Court and this Court held in para 18 at page 735 of [(2008) 4 SCC 720] that there was no violation of Articles 14, 19 or any other provision of the Constitution by the en .....

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her vs. Collector of Customs (Preventive), Bombay (supra) and Gujarat Agro Industries Co. Ltd. vs. Municipal Corporation of the City of Ahmedabad and Others (supra) in which this Court has taken a consistent view that the right of appeal or right of revision is not an absolute right and it is a statutory right which can be circumscribed by the conditions in the grant made by the statute. Following this consistent view of this Court, we hold that the proviso to Section 65(1) of the Act, requiring .....

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iso to Section 65(1) of the Act. We have perused the decision of the Division Bench of the High Court in M/s Choksi Heraeus Pvt. Ltd., Udaipur v. State & Ors. (supra) and we find that the Division Bench has rightly taken the view that the decision of this Court in the case of Mardia Chemical Ltd. and Others vs. Union of India and Others (supra) is not applicable to the challenge to the proviso to Section 65(1) of the Act inasmuch as the provision of sub-section (2) of Section 17 of the Secur .....

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erous and oppressive. In our considered opinion, therefore, the proviso to Section 65(1) of the Act is constitutionally valid and we are therefore not inclined to interfere with the order dated 16.11.2009 in D.B.CWP No.14220 of 2009. The Civil Appeal arising out of S.L.P. (C) No.20964 of 2010 is therefore dismissed. 16. A full Bench of this Court in M/s Emerald International Limited vs. State of Punjab and others, (2001)122 STC 382, summed up the legal position in the following terms:- 22. In ad .....

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the date of presentation of the appeal on the valuation determined- (a) by an order under Section 182, in the case of an appeal to the Court of Small Causes, (b) by the decision of the Court of Small Causes, in the case of an appeal to the High Court, has been deposited in the municipal office and such consolidated rate is continued to be deposited until the appeal is finally decided." While dealing with the aforementioned section, it was held that right of appeal was not a natural or inhe .....

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ll. The following observations of the Calcutta High Court deserve reproduction : "A right of appeal is not a natural or inherent right attaching to every litigation and the right of appeal does not exist and cannot be assumed unless expressly given by statute (See Rangoon Botatung Co. Ltd. v. Collector, Rangoon (1903) 30 Ind. App. 197 : ILR 40 Cal. 21, Soorajmull Nagarmull v. State of West Bengal, AIR 1963 SC 393, Smt. Ganga Bai v. Vijay Kumar AIR 1974 SC 1126. Therefore, the provision, viz .....

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. Pradip Kumar Ghosh, learned Advocate for the respondents, has drawn my attention to nearly similar provisions for deposit of disputed tax duty and rates contained in various other taxing, municipal and fiscal laws. Mr. Dipankar Ghosh, however, submitted that unless the appellate authority is given discretionary powers to relax or modify such condition for deposit of the disputed amount, the condition precedent ought to be pronounced as unreasonable. In my view, the observations made in para 40 .....

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said observations in upholding the validity of Section 183(3-A) of the Calcutta Municipal Act, I am unable to accept Mr. Dipankar Ghosh's submission, that, the court's power under Section 406(2) of the Bombay Provincial Municipal Act to relax the condition for deposit the tax due had at all weighed with the Supreme Court in making the aforesaid observations in Anant Mills v. State of Gujarat AIR 1975 SC 1234. The ratio of the said decision is that the right of appeal is a creature of sta .....

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argument that conditions imposed on right of appeal were onerous because no discretion had been given to the appellate or revisional authority to relax or waive the said condition in view of subjects for imposing such a condition." 24. As a sequal to our discussion on the question of law referred to us the following conclusions can be deduced : (a) The appeal is a creation of a statute and in case a person wants to avail of the right of appeal, he has to accept the conditions imposed by the .....

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ales Tax Act, 1948 and the Haryana General Sales Tax Act, 1973, it could safely be held that there is a complete bar to the entertainment of an appeal by the appellate authority without the payment of tax amount unless the authority is satisfied that the dealer is unable to pay the amount so assessed and only in that situation the appellate authority for the reasons to be recorded in writing can entertain the appeal without deposit of the payment of such amount. (e) Neither on the wording nor in .....

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ndition of pre-deposit of tax and the existing alternative remedy in such circumstances would be no ground to refuse interference. 17. In M/s Elora Construction Company vs. The Municipal Corporation of Gr. Bombay and others, AIR 1980 Bombay 162, the validity of the provisions of amended Section 217 of the Bombay Municipal Corporation Act, 1888 (as amended in 1975) was challenged on the ground that it was violative of Articles 19, 31 and 265 of the Constitution of India. The payments of property .....

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ourt. The right of appeal under Section 183(1) of the Act was not held to be nugatory or illusory by requiring to deposit consolidated rate payable before filing appeal. It was observed thus:- 15. The condition laid down by Sub-section (3-A) of Section 183 of the Calcutta Municipal Act is not something which is without any parallel. Both Mr. Dipankar Ghosh, learned advocate for the petitioner, and Mr. Pradip Kumar Ghosh, learned advocate for the respondents, has drawn my attention to nearly simi .....

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ove submission of the petitioners. With reference to Section 406 (2) of the Bombay Provincial Municipal Act, the Supreme Court upheld the power of the legislature to impose similar condition for deposit while granting right of appeal. According to the Supreme Court, there was no legal or constitutional impediment to imposition of such a condition. I respectfully agree and apply the aforesaid observations in upholding the validity of Section 183 (3-A) of the Calcutta Municipal Act. I am unable to .....

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e is no constitutional or legal impediment to imposition of such a condition for deposit of tax. The Supreme Court in their subsequent decision in the case of Nandalal v. State of Haryana, , had followed their earlier decision in Anant Mills v. State of Gujarat (supra). The Supreme Court in Nandlal v. State of Haryana (supra), had rejected similar argument that conditions imposed on right of appeal were onerous because no discretion had been given to the appellate or revisional authority to rela .....

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no substance in the petitioner's apprehension that in a given case the consolidated rate determined according to the new valuation may be so high that it might be impossible for the appellant under Section 183 (1) to deposit the consolidated rate according to the said new valuation is not a relevant point for deciding the validity of the statute. It is presumed that the power to determine valuation and to assess consolidated rate would be reasonably exercised and in case said powers arbitra .....

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of any disputed amount of stamp duty including interest thereon or penalty shall be entertained unless the applicant had furnished satisfactory proof of the payment of not less than one third of such disputed amount. The provision was held to be valid. 20. In Sujana Metal Products Limited and another vs. State of Andhra Pradesh, 2005 Law Suit (AP) 1157, the Andhra Pradesh High Court was considering the constitutional validity of second proviso to Section 19 of the Andhra Pradesh General Sales T .....

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the Act provides for an appeal to the prescribed authority against any order passed or proceeding recorded by any authority under the provisions of the Act other than an order passed or proceeding recorded by an Additional Commissioner or Joint Commissioner or Deputy Commissioner under Sub-section (4C) of Section 14 of the Act. The second proviso further provides that an appeal so preferred shall not be admitted by the appellate authority concerned unless the dealer produces proof of payment of .....

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the admission of the appeal. The proviso mandates that the appellate authority shall not admit the appeal preferred by the appellant in the absence of proof of payment of 12% per cent of the difference of the tax assessed by the assessing authority and the tax admitted by the appellant. The pre-condition of deposit as provided for under the proviso is an integral part of Section 19, which provides for an appeal against any order or proceeding recorded by the authority under the provisions of th .....

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eal provided subject to complying with certain conditions cannot be characterised or held to be unconstitutional. It is unnecessary to burden this order with various pronouncements of the apex court whereunder the similar provisions under various enactments such as the Workmen's Compensation Act, 1923 and the Payment of Wages Act, 1936 requiring the pre-deposit as a condition precedent for entertaining the appeal have been upheld. 5. In Anant Mills Co. Ltd. v. State of Gujarat the apex court .....

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t for hearing or determining of the appeal where the appellate authority has no discretion to grant any stay of the disputed amount or dispense with the requirement of pre-deposit of the amount in appeal with or without conditions. 6. In Penguin Textiles Ltd. v. State of A.P. [2000] 117 STC 378 : [1999] 29 6 APSTJ 244 a Full Bench of this court having exhaustively referred to the scheme of the Act relating to appeals, revisions and stay applications in relation thereto and certain well-settled p .....

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of the authoritative pronouncement of the Supreme Court in Anant Mills's case that it is permissible to enact a law to the effect that no appeal shall lie against an order relating to an assessment of tax unless the tax had been paid, nothing remains for us to decide as to whether the impugned proviso suffers from any constitutional infirmities. The law is so well-settled that the Legislature in its wisdom may impose accompanying liability upon a party upon whom a legal right of appeal is c .....

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he statute. The Legislature can impose conditions under which this is to be exercised. Moreover, the proviso to Section 18 does not require the entire amount to be deposited, but only 50% thereof which can be reduced to a minimum of 25% of the sum. We see no illegality in this proviso. There are similar provisions in many enactments and they are being upheld by the Supreme Court. For example, in the second proviso under Section 15 (1) of the Foreign Trade (Development and Regulation) Act, 1992, .....

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402 wherein the Supreme Court observed: "The right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant. 18. In Anant Mills Ltd. v. State of Gujarat the Supreme Court held that the right of appeal is a creature of the statute and it is for the Legislature to decide whether the ri .....

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provision and its judgment has been referred to with approval in the decision of Supreme Court in Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the city of Ahmedabad and Ors. (supra). The Supreme Court has also referred to its decision in Shyam Kishore and Ors. v. Municipal Corporation of Delhi and Anr. in which a similar provision was upheld. 20. It may be noted that in Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the city of Ahmedabad and Ors.(supra) the appella .....

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vs. Municipal Corporation of the City of Pune and others, AIR 2014 Bombay 47, the Bombay High Court was considering the constitutional validity of Section 406(2)(e) of the Bombay Provincial Municipal Corporations Act, 1949 which provided that no appeal shall be entertained unless the amount was deposited by the appellant with the Commissioner. It was noticed as under:- 4) Mr. S. G. Aney, the Senior Advocate appearing for the Petitioner made the following submissions in support of the Petition: .....

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f depositing the entire disputed tax claimed as a precondition for entertainment of the appeal. The very imposition of such an onerous and unreasonable condition renders the right of appeal illusory. There is no provision contained in Section 406 empowering the judicial authority to waive this condition in case of genuine and undue hardships. For these reasons, the provisions contained in Section 406(2)(e) are ex facie illegal, arbitrary, unconstitutional, null and void. 5) to 17) xxxxxxxxxxxxxx .....

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filed. The right of appeal is neither an absolute right nor an ingredient of the principles of natural justice. There is a clear distinction between a suit and an appeal. While every person has an inherent right to bring a suit of civil nature unless the suit is barred by statute, in regard to an appeal, the position is opposite. The right to appeal inheres in no one and therefore, for maintainability of an appeal there must be authority of law. When such a law authorizes filing of an appeal, it .....

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the default or omission. 19) In this case, we are concerned with a statute which deals with recovery of tax upon lands and buildings in Municipal areas. In this sense, we are concerned with a statute dealing with an economic matter. There is always a presumption in favour of the constitutionality of a statute. Every legislation particularly in economic matters is essentially empiric and it is based on experimentation or what one may call-trial and error method. There may be crudities and inequit .....

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nomic policies and must not interfere, unless the exercise of legislative judgment appears to be palpably arbitrary. 23. In Ganesh Yadav vs. Union of India and others, 2015 Law Suit (Allahabad) 1541, the Allahabad High Court was considering the provisions of section 35F of the Central Excise Act, 1944 requiring the deposit of 10% of the duty or penalty in case of an appeal to the Tribunal against the order passed by the Commissioner (Appeals). The said requirement was not held to be arbitrary or .....

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alty is in dispute. The first proviso restricts the amount to be deposited to a maximum of ₹ 10 crores. Prior to the amendment, the Commissioner (Appeals) or the Appellate Tribunal were permitted to dispense with such deposit in a case of undue hardship subject to such conditions as may be imposed so as to safeguard the interest of the revenue. Stay applications and the issue of whether a case of undue hardship was made out, gave rise to endless litigation. There would be orders of remand .....

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r of the Commissioner (Appeals). This requirement cannot be regarded or held as being arbitrary or as violative of Article 14.xxxxxxx 24. From the reading of the judicial pronouncements noticed above, the inevitable conclusion is that right of appeal is a creature of a statute and it being a statutory right can be conditional or qualified. If the statute does not create any right of appeal, no appeal can be filed. Right to appeal is neither an absolute right nor an ingredient of natural justice, .....

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l does not nullify the right of appeal. All that the statutory provision seeks to do is to regulate the exercise of the right of appeal. The object of the provision is to keep balance between the right of appeal and the right of the revenue to speedy recovery of the amount. The conditions imposed including prescription of a pre-deposit are meant to regulate the right of appeal and the same cannot be held to be violative of Article 14 of the Constitution of India unless demonstrated to be onerous .....

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hority. Any challenge to the constitutional validity of this provision for pre-deposit before entertaining an appeal on the ground that onerous condition has been imposed and right to appeal has become illusory must be negatived and such a provision cannot be said to be ultra vires Article 14 of the Constitution of India. The object of the provision is to keep in balance the right of appeal conferred upon a person aggrieved with a demand of tax and the right of the revenue to speedy recovery of .....

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position of such a condition for hearing of appeals on merits, the following facets of the argument would arise for our consideration:- (a) Inherent powers of the Court to grant interim protection; (b) Whether the expression shall used in Section 62(5) of the PVAT Act is mandatory or by implication would be read as directory meaning thereby whether the first appellate authority can grant partial or complete waiver of condition of pre-deposit; The legal position in this regard is being discussed .....

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is the power to do all things that are reasonably necessary for administration of justice within the scope of court's jurisdiction. The basic principal is to be found in Maxwell On Interpretation of Statutes, eleventh Edition at page 350. The statement contained therein is that where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means as are essentially necessary to its execution. Learned counsel for the petitioners vehemently arg .....

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y imposed by the departmental authorities on an assessee during the pendency of an appeal before it. After considering the matter, the Apex court held that the Appellate Tribunal has power to grant stay as incidental or ancillary to its appellate jurisdiction subject to there being a strong prima facie case and satisfaction that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue during the pendency of the appeal. The relevant .....

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only when an appeal has been presented under s. 246 which will be to the Appellate Assistant Commissioner and not to the Appellate Tribunal. There is no provision in s. 220 under which the Income-tax Officer or any of his superior departmental officers can be moved for granting stay in the recovery of penalty or tax. It may be that under s. 225 notwithstanding that a certificate has been issued to the Tax Recovery Officer for the recovery of any tax (the position will be the same with regard to .....

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n 220(6) which is confined only to the stage of pendency of an appeal before the Appellate Assistant Commissioner. The argument advanced on behalf of the appellant before us that in the absence of any express provisions in sections 254 and 255 of the Act relating to stay of recovery during the pendency of an appeal it must be held that no such power can be exercised by the Tribunal, suffers from a fundamental infirmity inasmuch as it assumes and proceeds on the premise that the statute confers s .....

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mposed penalties raising very large demands and if the Appellate Tribunal is entirely helpless in the matter of stay or recovery the entire purpose of the appeal can be defeated if ultimately the orders of the departmental authorities are set aside. It is difficult to conceive that the Legislature should have left the entire matter to the administrative authorities to make such orders as they choose to pass in exercise of unfettered discretion. The assessee, as has been pointed out before, has n .....

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Construction, Third Edition, Arts. 5401 and 5402). The powers which have been conferred by section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers, fully effective. In Domat's Civil Law Cushing's Edition, Vol. 1 at page 88, it has been stated: "It is the duty of the Judges to apply the laws, not only to what appears-to be regulated by their e .....

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sa esse vindentur, sine quibus jurisdictio explicari non potuit." An instance is given based on Ex. parte Martin that "where an inferior court is empowered to grant an injunction, the power of punishing disobedience to it by commitment is impliedly conveyed by the enactment, for the power would be useless if it could not be enforced." 5. xxxxxxxxxxxx 6. It is well known that an Income-tax Appellate Tribunal is not a court but it exercises judicial powers. The Tribunal's powers .....

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f Appeal to grant stay at page 443: "It appears to me on principle that the Court ought to possess that jurisdiction, because the principle which underlies all orders for the preservation of property pending litigation is this, that the successful party, is to reap the fruits of that litigation, and not obtain merely a barren success. That principle, as it appears to me, applies as much to the Court of first instance before the first trial, and to the Court of Appeal before the second trial .....

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Tribunal. The controversy centred in that case mainly on the scope of the discretionary power conferred by section 45 of the Indian Income-tax Act, 1922, on the Income-tax Officer. It was held that a writ petition to compel the Income-tax Officer to exercise his discretion under section 45 or to exercise it honestly and, objectively was not barred. But on the merits the Court declined issue a writ. Viswanatha Sastri J., in his separate judgment made the following observations at page 271: " .....

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s there a provision for allowing the tax to be paid in instalments or for taking security for deferred payment. Neither the Appellate Assistant Commissioner nor the Appellate Tribunal is given the power to stay the colletion of tax. Whether the law should not be made more, liberal so as to enable an assessee who has preferred an appeal, to obtain from the appellate forum, a stay of collection of the tax, either in whole or in part, on furnishing suitable security, is a matter for the legislature .....

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but it is very doubtful if the power of stay can be spelt out from that provision. In our opinion the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. This is particularly so when section 220(6) deals expressly with a situation when an appeal is pending before the Appellate Assistant Commissioner, but the Act is silent in that behalf when an appeal is pending before the Appellate Tribunal. It could well be said that when se .....

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ay recovery of taxes or penalties payable by or imposed on the assessees as a matter of course the revenue will be put to great loss because of the inordinate delay in the disposal of appeals by the Appellate Tribunals. It is needless to point out that the power of stay by the Tribunal is not likely to be exercised in a routine way or as a matter of course in view of the special nature of taxation and revenue. laws. It will only be when a strong prima facie case is made out that the Tribunal wil .....

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of inherent powers of a Court. It would be advantageous to notice the relevant observations which read as under:- 8. This takes us to the question as to what is 'inherent power'. Words and Phrases. (Permanent Edition, volume 21 A, pages 16 and 17) defines inherent power as follows: "Jurisdiction" is conferred on Court by constitutions and statutes, whereas "inherent powers" of Court are those necessary to ordinary and efficient exercise of jurisdiction already conferr .....

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more or less loose explanations concerning it. It must necessarily be that the Court has inherent power to preserve its existence, and to fully protect itself in the orderly administration of its business. Its inherent power will not carry it beyond this. That Courts possess certain "inherent powers" means that when the constitution declares that the legislative, judicial and executive powers shall remain separate, it thereby invests those officials charged with the duty of administeri .....

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39;jurisdiction' of a Court. Inherent power merely enables the orderly and efficient exercise of the jurisdiction conferred on, or possessed by, the Court. When a statute specifies how a jurisdiction should be exercised or restricts the jurisdiction of a Court, the inherent power of the Court cannot be invoked either to expand the jurisdiction or alter the manner of exercise of jurisdiction. Consequently exercise of inherent power cannot in any way conflict with what has been expressly provi .....

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to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit." The Supreme Court quoted with approval the following passage from Maxwell on Interpretation of Statutes [XI Edition, page 350]: "Where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts or employing such means, as are essentially necessary to its execution." The Supreme Court answered the question raised before it in the affirmative in MOHAMMED KUNHI (su .....

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, the Tribunal has been given very wide powers under Section 254(1), for it may pass such orders as it thinks fit after giving full hearing to both the parties to the appeal. If the Incometax Officer and the Appellate Assistant Commissioner have made assessments or imposed penalties raising very large demands and if the Appellate Tribunal is entirely helpless in the matter of stay of recovery, the entire purpose of the appeal can be defeated if ultimately the orders of the departmental authoriti .....

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COMMISSIONER OF INCOME TAX, DELHI v. BANSI DHAR , (1986) 157 ITR 665 (SC), the Supreme Court considered whether the incidental or inherent power to grant stay in appellate jurisdiction will extend to reference jurisdiction also. It referred to the following passage from HUKUM CHAND BOID v. KAMALANAND SINGH, ILR 33 (1906) CAL 927 : "It may be added that the exercise by Courts, of what are called their inherent powers or "incidental powers' is familiar in other systems of law, and s .....

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de. If there was jurisdiction to do certain matters then all powers to make that jurisdiction effective must be implied to the authority unless expressly prohibited. But in references under the 1922 Act as well as the 1961 Act, the Courts merely exercised an advisory or consultative jurisdiction while the appeals are kept pending before the Tribunal. Therefore, nothing should be implied as detracting from the jurisdiction of the Tribunal. Power to grant stay is incidental and ancillary to the ap .....

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nalties payable by or imposed on the assessees as a matter of course, the revenue will be put to great loss because of the inordinate delay in the disposal of appeals by the Appellate Tribunal. It is needless to point out that the power of stay by the Tribunal is not likely to be exercised in a routine way or as a matter of course in view of the special nature of taxation and revenue laws. It will only be when a strong prima facie case is out that the Tribunal will consider whether to stay the r .....

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ed tax subject to furnishing security to the satisfaction of the Appellate Authority in respect of the disputed tax. When he files a second appeal to the Tribunal, Section 22 provides for stay of 50% of the disputed tax on payment of 50% of the disputed tax. Thus, by the time the matter comes up before the High Court under Section 23, admitted tax would have been paid, 50% of the disputed tax would have been paid and remaining 50% of the disputed tax would be covered by adequate security. Furthe .....

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ch power of stay only in appropriate cases, if need be, by imposing appropriate terms and conditions depending on the facts of the case." 28. In ITC vs. Commissioner of Central Excise, 2001 (127) ELT 338 Mad, the Madras High Court following the law laid down in Mohamad Kunhi's case (supra) held as under:- 43. Even if there is no particular provision for grant of stay, it is by now well settled that the Appellate Authority who has got the power to set aside, modify or reverse the orders .....

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ch means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceeding as will prevent the appeal if successful from being rendered nugatory. 44. Their Lordships of the Apex Court in this respect held thus : "Section 255(5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision. In our opini .....

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or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceeding as will prevent the appeal if successful from being rendered nugatory. A certain apprehension may legitimately arise in the minds of the authorities administering the Act that if the Appellate Tribunals proceed to stay recovery of taxes or penalties payable by or imposed on the assessees as a matter of course the R .....

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n most deserving and appropriate cases where the tribunal is satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue during the pendency of the appeal. 29. In Debasish Moulik N. vs Dy. Commissioner Of Income Tax, (1998) 150 CTR Cal 387, the Calcutta High Court observed as under:- 4. Admittedly an appeal has been preferred by the petitioner and the same is pending adjudication. The power to grant stay of collection o .....

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at an assessee as not in default, the same will not in any way militate against the power of the appellate authority to grant stay. I am fortified by a judgment of the Kerala High Court in the case of V.N. Purushothaman v. Agrl. ITO (1984) 149 ITR 120 (Ker) and also by the judgment of the Allahabad High Court in the case of Prem Prakash Tripathi v. CIT (1994) 208 ITR 461 (All). 5. The appellate authority before whom the appeal is pending has the power to grant stay of the demand impugned in the .....

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in turn, are based upon the Supreme Court judgment in M.K. Mohammed Kunhis case (Supra) 5. The appellate authority before whom the appeal is pending has the power to grant stay of the demand impugned in the appeal pending before him. It is appropriate that the petitioner-assessee should be relegated to availing of the said remedy before invoking the jurisdiction of this court under article 226 of the Constitution of India. I cannot accede to the contention of learned counsel for the petitioner .....

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clothed. The issue has been considered by a Full Bench of this Court in CIT vs. Punjab Financial Corporation, (2002) 254 ITR 6 wherein it was noticed that the meaning and intention of the legislature must govern and these are to be ascertained not only from the phraseology of the provision but also by considering its nature, design and the consequences which would follow from construing it one way or the other. The use of the word shall in a statutory provision, though generally taken in a manda .....

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roceeding further, we may notice some of the principles of interpretation of the statutes. These are : (1) The question as to whether a statute is mandatory or directory depends upon the intent of the Legislature and not upon the language in which the intent is clothed. The meaning and intention of the Legislature must govern, and these are to be ascertained, not only from the phraseology of the provision, but also by considering its nature, its design, and the consequences which would follow fr .....

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ere the word "may" has been used, the statute is only permissible or directory in the sense that non-compliance with those provisions will not render the proceedings invalid-State of U. P. v. Manbodhan Lal Srivastava, AIR 1957 SC 912 (headnote). (3) All the parts of a statute or sections must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction put to be on a particular provision makes c .....

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TR 535 (SC) (headnote). 31. In P.T.Rajan vs. TPM Sahir and others, (2003) 8 SCC 498, it was recorded as under:- 45. A statute as is well known must be read in the text and context thereof. Whether a statute is directory or mandatory would not be dependent on the user of the words shall and may . Such a question must be posed and answered having regard to the purpose and object it seeks to achieve. Reference may be made to quoting from Domat's Civil Law Cushing's Edition, Volume I at page .....

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n injunction, the power of pushing disobedience to it by commitment is impliedly conveyed by the enactment, for the power would be useless if it could not be enforced. In Principles of Statutory Interpretation by Justice G.P.Singh (12th Edition, 2010), the learned author has stated as under:- "In selecting out of different interpretations 'the court will adopt that which is just, reasonable and sensible rather than that which is none of those things' ...A construction that results i .....

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(Civil) 353 to which one of us (Ajay Kumar Mittal,J.) was a member which was dealing with similar provision i.e. Section 13B of the Punjab Village Common Lands (Regulation) 1961 wherein entertainment of appeal was subject to deposit of amount of penalty imposed under sub section (2) of Section 7 of the said Act with the Collector. This court after considering the entire case law on the point and by reading down the provision held that Section 13B of the said Act would be read down to incorporat .....

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and intendment in view of various pronouncements and legal proposition expounded above and in the interest of justice, it would essentially be held that the power to grant interim injunction/protection is embedded in Section 62(5) of the PVAT Act. Instead of rushing to the High Court under Article 226 of the Constitution of India, the grievance can be remedied at the stage of first appellate authority. As a sequel, it would follow that the provisions of Section 62(5) of the PVAT Act are directo .....

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