TMI Blog2019 (9) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... uld cause undue hardship to the appellant. Whether the condition of 25% pre-deposit for hearing first appeal is onerous, harsh, unreasonable and, therefore, violative of Article 14 of the Constitution of India? - HELD THAT:- The decision of the Constitution Bench of this Court in Seth Nand Lal [ 1980 (5) TMI 101 - SUPREME COURT ] did consider whether the requirement of pre-deposit would cause undue hardship. However considering that the liability in question and consequential requirement of pre-deposit was a meagre rate of the annual land-tax payable, the fetter imposed on the right of appeal/revision, even in the absence of a provision conferring the discretion on the appellant/revisional authority to relax or waive the condition was not found to be onerous or unreasonable. Thus, Section 62(5) of the PVAT Act is legal and valid and the condition of 25% of pre-deposit not to be onerous, harsh, unreasonable and violative of Article 14 of the Constitution of India. Whether the first appellate authority in its right to hear appeal has inherent powers to grant interim protection against imposition of such a condition for hearing of appeals on merits? - HELD THAT:- If the inh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62. First Appeal (1) An appeal against every original order passed under this Act or the rules made thereunder shall lie, - (a) if the order is made by a Excise and Taxation Officer or by an officer-in-charge of the information collection centre or check post or any other officer below the rank of Deputy Excise and Taxation Commissioner, to the Deputy Excise and Taxation Commissioner; (b) if the order is made by the Deputy Excise and Taxation Commissioner, to the Commissioner; (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 the Commissioner or the order of the Deputy Excise and Taxation Commissioner or of the designated officer, if it was not challenged in appeal or revision, shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs 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 ) was being deposited. For the year 2007- 08, returns for the period from 1.4.2007 to 31.3.2008 under the PVAT Act alongwith requisite information in prescribed form had been filed with the authority. Thereafter, annual statement in Form VAT 20 had been filed before the last date as prescribed under section 26 of the PVAT Act and Rule 40(1) of the Punjab Value Added Tax Rules, 2005 (in short, the Rules ). Similarly, for the years 2008-09 and 2009- 10, returns were filed in time and annual statements 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional demand created by the assessing authority. The Tribunal agreed with the contentions raised by the petitioner to the extent that the amount of voluntarily tax was required to be adjusted against the additional demand created by the assessing authority. However, the Tribunal while disposing of the appeals had observed that the petitioner was required to 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 Nos.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 writ petitions by the petitioner(s). 6. After framing the questions as aforesaid, the High Court considered the relevant decisions of this Court as well as some of the High Courts and observed as under:- It is, thus, concluded that the State is empowered to enact Section 62(5) of the Act and the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Statutory Construction, Third Edition, Articles 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 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 Section 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, 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 proceedings as will prevent the appeal if successful from being rendered nugatory. The High Court also referred to the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o question (c). All these matters were listed along with petitions raising challenge with regard to the validity of Section 48(4) of the Chhattisgarh Value Added Tax Act, 2005. The matters from Chhattisgarh were disposed of by this Court by order dated 16.04.2019 passed in Writ Petition (Civil) No.212 of 2014 and connected matters. The provisions of the PVAT Act being somewhat different, the matters from the State of Punjab were directed to be dealt with separately. We heard learned counsel for the parties 8. In The Anant Mills Co. Ltd. v. State of Gujarat and Others (1975) 2 SCC 175, a Bench of four Judges of this Court considered inter alia, challenge to the validity of Section 406 of the Bombay Provincial Municipal Corporations Act, 1949 as amended by Gujarat Act No.5 of 1970. As per the relevant provision, no appeal against the ratable value or tax would be entertained unless the amount claimed was deposited with the Commissioner. The proviso to said Section however empowered the Judge considering the appeal to relieve the appellant from the rigour of pre-deposit if in the opinion of the Judge it would cause undue hardship to the appellant. The discussion in tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the principle of equality enshrined in Article 14 of the Constitution. It is significant that the right of appeal is conferred upon all persons who are aggrieved against the determination of tax or rateable value. The bar created by Section 406(2)(e) to the entertainment of the appeal by a person who has not deposited the amount of tax due from him and who is not able to show to the appellate Judge that the deposit of the amount would cause him undue hardship arises out of his own omission and default. The above provision, in our opinion, has not the effect of making invidious 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 fail to understand as to why the Legislature while granting the right of appeal cannot impose conditions for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 (1975) 2 SCC 175). 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 revisional authority to relax or waive the condition or grant exemption in respect thereof in fit and proper cases and, therefore, the fetter imposed must be regarded as unconstitutional and struck down. It is not possible to accept this contention for more than one reason. In the first place, the object of imposing the condition is obviously to prevent frivolous appeals and revision that impede the implementation of the ceiling policy; secondly, having regard to sub-sections (8) and (9) it is clear that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the other hand, the decisions in said Seth Nand Lal 1980 (Supp) SCC 574 , Shyam Kishore (1993) 1 SCC 22 , P. Laxmi Devi (2008) 4 SCC 720 , Har Devi Asnani (2011) 14 SCC 160 and S.E. Graphites (2019) SCC Online SC 842 dealt with cases where the statute did not confer any such discretion on the Appellate Authority and yet the challenge to the validity of such provisions was rejected. 12. The decision of the Constitution Bench of this Court in Seth Nand Lal 1980 (Supp) SCC 574 did consider whether the requirement of pre-deposit would cause undue hardship. However considering that the liability in question and consequential requirement of pre-deposit was a meagre rate of the annual land-tax payable, the fetter imposed on the right of appeal/revision, even in the absence of a provision conferring the discretion on the appellant/revisional authority to relax or waive the condition was not found to be onerous or unreasonable. 13. In Shyam Kishore (1993) 1 SCC 22, the provision that came up for consideration was Section 170(b) of the Delhi Municipal Corporation Act, 1957 under which the amount in dispute relating to property tax is required t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the entertainment of the appeal itself. 46. We only wish that the statute itself is soon amended to make this position clear. After all, under the D.M.C. Act, the appellate authority is a high judicial officer, being the District Judge, and there is no reason why the Legislature should not trust such a high judicial officer to exercise his discretion in such a way as to safeguard the interests of both the Revenue and the assessees. We think that, until this is done, the provision requires a liberal interpretation so as to preserve such interests and should not be so rigidly construed as to warrant the throwing out of an appeal in limine merely because the tax is not paid before the appeal is filed. 14. In P. Laxmi Devi (2008) 4 SCC 720, validity of the proviso to Section 47A of the Indian Stamp Act, 1899 was in issue. The High Court had held said provision to be unconstitutional, which view was reversed by this Court. The proviso to said Section 47A reads:- Provided that no reference shall be made by the registering officer unless an amount equal to fifty per cent of the deficit duty arrived at by him is depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the intention of the legislature in enacting the impugned amendment to the Stamp Act. 22. In this connection we may also mention that just as the reference under Section 47-A 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 these provisions has been upheld by this Court in various decisions which are noted below. 23. In Gujarat Agro Industries Co. Ltd. v. Municipal Corpn. of the City of Ahmedabad (1999) 4 SCC 468 this Court referred to its earlier decision in Vijay Prakash D. Mehta v. Collector of Customs (1988) 4 SCC 402 wherein this Court observed: (Vijay Prakash case, SCC p. 406, para 9) 9. 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. While dealing with the submission that in terms of said proviso, no relief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a party to file a writ petition challenging the exorbitant demand made by the registering officer under the proviso to Section 47-A alleging that the determination made is arbitrary and/or based on extraneous considerations, and in that case it is always open to the High Court, if it is satisfied that the allegation is correct, to set aside such exorbitant demand under the proviso to Section 47-A of the Stamp Act by declaring the demand arbitrary. It is well settled that arbitrariness violates Article 14 of the Constitution (vide Maneka Gandhi v. Union of India (1978) 1 SCC 248 = AIR 1978 SC 597 ). Hence, the party is not remediless in this situation. 28. In our view, therefore, the learned Single Judge should have examined the facts of the present case to find out whether the determination of the value of the property purchased by the appellant and the demand of additional stamp duty made from the appellant by the Additional Collector were exorbitant so as to call for interference under Article 226 of the Constitution. 16. These decisions show that the following statements of law in The Anant Mills Co. Ltd. (1975) 2 SCC 175 have guided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edly laid down that an express grant of statutory power carries with it, by necessary implication, the authority to use all reasonable means to make such grant effective. But can such incidental or implied power be drawn and invoked to grant relief against requirement of pre-deposit when the statute in clear mandate says no appeal be entertained unless 25% of the amount in question is deposited? Would not any such exercise make the mandate of the provision of pre-deposit nugatory and meaningless? 20. While dealing with the scope and width of implied powers, the Constitution Bench of this Court in Matajog Dubey v. H. C. Bhari 1955 (2) SCR 925 also touched upon the issue whether exercise of such power can permit going against the express statutory provision inhibiting the exercise of such power. The discussion was as under:- Where a power is conferred or a duty imposed by statute or otherwise, and there is nothing said expressly inhibiting the exercise of the power or the performance of the duty by any limitations or restrictions, it is reasonable to hold that it carries with it the power of doing all such acts or employing such means as are reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge in the said case. In fact in the judgment under appeal all the three Judges have also dissented from this view of the learned Single Judge in the matter of Punj Sons 1982 Rajdhani LR 247: (1982) 21 DLT 182 (Del HC) . The reason is simple as Section 457 itself states that the procedure provided in the Code of Civil Procedure in regard to suits are to be followed as far as it can be made applicable . The other provisions of the statute totally bar the grant of such relief. The other provisions have to be harmoniously read with it and not in derogation thereto. Section 457 itself, therefore, does not help the assessee whose case depends entirely on the construction to be placed on Section 170(b). But still one has to examine Section 170(b) carefully to see whether, short of dismissing an appeal for default of payment of tax, the District Judge has any latitude in the matter. (Emphasis added) 22. Similar limitation has always been read into the width of inherent powers acknowledged by provisions like Section 151 of the CPC Code of Civil Procedure, 1908 and Section 482 of the Cr.P.C. Code of Criminal Procedure, 1976 In Vinod Sethi v. Devinder Bajaj (2010) 8 SCC 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ram Chand and Sons Sugar Mills (P) Ltd. v. Kanhayalal Bhargava (AIR 1966 SC 1899) this Court reiterated that the inherent power of the court is in addition to and complementary to the powers expressly conferred under the Code but that power will not be exercised if its exercise is inconsistent with, or comes into conflict with any of the powers expressly or by necessary implication conferred by the other provisions of the Code. Section 151 however is not intended to create a new procedure or any new right or obligation. 32. In Nain Singh v. Koonwarjee (1970) 1 SCC 732 this Court observed: (SCC p. 735, para 4) 4. Under the inherent power of courts recognised by Section 151 CPC, a court has no power to do that which is prohibited by the Code. Inherent jurisdiction of the court must be exercised subject to the rule that if the Code does contain specific provisions which would meet the necessities of the case, such provisions should be followed and inherent jurisdiction should not be invoked. In other words the court cannot make use of the special provisions of Section 151 of the Code where a party had his remedy provided elsewhere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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