TMI Blog2016 (6) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... arily and for valid reasons it would always be open for the authority to pass another or different order before it is signed. However, in the present case, the order remained at a draft stage only on account of wholly unauthorised interference by the external authority. We therefore, direct the Joint Commissioner to proceed to pass the order in terms of the draft order dated 26.2.2010 latest by 10th July, 2016. We are informed that the then Joint Commissioner who had framed the draft order has retired and he has been replaced by another officer. For our purpose this would make no difference. The Government agencies are not without any remedy in case an erroneous or even palpably wrong order being passed. Statute provides for sufficient safeguards in terms of the appeals and revisions. It is always open to the Government to have any such order legally scrutinised and resort to such legal remedy as is provided in the statute. - Decided in favor of petitioner. - SPECIAL CIVIL APPLICATION NO. 4984 of 2016 - - - Dated:- 8-6-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : M/S WADIAGHANDY CO, ADVOCATE FOR THE RESPONDENT : ADVANCE COPY SERVED TO GP/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed order on merits after examination of record considering the points raised by the appellant and also keeping in mind the observations made above with direction to pass necessary order latest by Dt. 30.11.2009 after giving proper opportunity of hearing and after considering written and oral submissions that will be made before him. He is also directed to give reasons for not accepting any contention of the appellant. The appellant is also directed not to seek unnecessary adjournments and corporate in the proceedings. 2. The petitioners thereupon appeared before Joint Commissioner and claimed refund of tax already collected. It is the case of the petitioners to which the respondents have raised no serious dispute that the Joint Commissioner was convinced that refund of ₹ 75,73,923/- was payable to the petitioners. In fact, he passed a draft order dated 26.2.2010 in which he considered various issues at considerable length. In addition to taxability of the product in question, he also examined the implication of the decision of the Supreme Court in the case of Mafatlal Industries Ltd . vs.Union of India etc . reported in 1997(5) SCC 536. However, instead of proceeding to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dure is devised where the payable refund is in excess of ₹ 5 lakhs. The decision of the Joint Commissioner in draft order is palpably erroneous. He has neither considered the facts of the judgment of the Supreme Court in the case of M/s. Kothari Products Ltd . vs. Government of A.P reported in 119 Sales Tax Cases 553 nor that of Mafatlal Industries Ltd . (Supra). 8. In addition to the documents on record, we have perused the original files. We have noticed that after the Tribunal remanded the proceedings before the Appellate Authority i.e. Joint Commissioner to decide the issue afresh bearing in mind observations made by the Tribunal, the Appellate Authority granted hearing to the petitioner. As culmination of such exercise, the Appellate Authority was of the opinion that the petitioners were entitled to refund of a sum of ₹ 75,73,923/-. In fact, he passed a detailed speaking order on 26.2.2010. He however, termed his order as a draft order presumably because of internal directives of the Government for pre-audit in such cases in which refund amount exceeds ₹ 5 lakhs. He forwarded copy of the draft order to the higher authority i.e. Additional Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l against an order of assessment shall ordinarily be entertained by an appellate authority, unless such appeal is accompanied by satisfactory proof of payment of the tax in respect of which an appeal has been preferred [Provided that an appellate authority may, if it thinks fit, for reasons to be recorded in writing, entertain an appeal against such order- (a) without payment of tax with penalty (if any) or, as the case may be, of the penalty, or (b) on proof of payment of such smaller sum as it may be consider reasonable, or (c) on the appellant furnishing in the prescribed manner, security for such amount as the appellate authority may direct] (5) The Commissioner, on receipt of notice that an appeal against the order passed in appeal by the Deputy Commissioner or, as the case may be, by the Joint Commissioner has been preferred by the other party to the Tribunal may, within thirty days of receipt of the notice, file a memorandum of cross objection against any part of the order passed in appeal by the Deputy Commissioner or, as the case may be, by the Joint Commissioner and such memorandum shall be disposed of by the Tribunal as if it were an appeal. (6) Subject t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hanges, he is permitted to pass the order. He was also asked to forward a copy of such order to the Additional Commissioner. 14. Under no circumstances, procedure adopted by the respondents can be countenanced. Respondents have not produced any instructions issued by the Government in this regard. Source of powers to issue such direction is also not shown. The Joint Commissioner, as an appellate authority had statutory duties and functions to perform. He was acting as a quasi judicial authority. In case of such a quasi judicial authority who is entrusted with statutory powers, duties and functions; it is his judgment alone which must prevail. No other outside agency or authority can direct him to act in a particular manner. Merely because the Additional Commissioner happens to be placed higher in rank as per administrative hierarchy or set up, would not give him any authority to govern the discretion of the Joint Commissioner vested in him as per statute while exercising appellate powers. 15. In the case of Mahadayal Premchandra vs. Commercial Tax Officer , reported in A.I.R. 1958 SC 667, the Constitution Bench of the Supreme Court considered the case where the Assistant Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a report to the Additional Chief Secretary and asked for permission to proceed under TADA. Why ? Was it because he was reluctant to exercise jurisdiction vested in him by the provision of Section 20-A(1)? This is a case of power conferred upon one authority being really exercised by another. If a statutory authority has been vested with jurisdiction, he has to exercise it according to its own discretion. If the discretion is exercised under the direction or in compliance with some higher authority's instructions, then it will be a case of failure to exercise discretion altogether. In other words, the discretion vested in all the DSP in this case by Section 20-A(1) was not exercised by the DSP at all. 12. Reference may be made in this connection to Commissioner of Police vs. Gordhandas Bhanji in which the action of Commissioner of Police in cancelling the permission granted to the respondent for construction of cinema in Greater Bombay at the behest of the State Government was not upheld, as the rules concerned had conferred this power on the Commissioner, because of which it was stated that the Commissioner was bound to bear his own independent and unfettered judgment and de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority viz. The District Superintendent of Police would amount to such other authority clutching at the jurisdiction of the designated officer, no matter such officer or authority purporting to exercise that power is superior in rank and position to the officer authorised by law to take the decision. 20. The lone issue is thus sufficiently clear. The Joint Commissioner of Commercial Tax who is an appellate authority was duty bound to hear and decide the proceedings without any outside interference or insistence. The entire structure of appeal and revision would break down if superior officer in the Government set up is allowed to control the statutory powers of the competent authority, be it the assessing officer or an appellate authority. In the present case, Additional Commissioner insisted that Joint Commissioner who was in charge of the appeal as the appellate authority modifies his order and only thereafter he would have permission to pass the order. On all counts, the procedure adopted by the department was wholly unauthorised and impermissible in law. To be bound by an order of higher authority in an administrative set up is entirely different from the discretion of a s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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