Shanker Stores v. State of Rajasthan — 1968 DIGILAW 83 (RAJ)

This reference has been formulated on 30-6-67 by a Division Bench composed of Shri S.L. Kakar and Shri B.C. Mukerji. The framing of the reference is as belows : "Whether in view of the facts and circumstances of the case, the judgment of the Board of Revenue in Shrikrishna vs. Badrilal lays down correct law in holding that no penalty can be imposed u/s. 16(l)(e) of Rajasthan Sales Tax Act for the period prior to 27-12-1959 " The Advocate for the assessee argued that the reference was incompetent on two grounds. Our order will be confined to the question of maintainability and so the facts of the case need not be considered at all for the present. The Advocate for the assessee firm stated that the first ground on which the reference was to be held as incompetent was that there was no provision in the Rajasthan Sales Tax Act (the case was one of sales-tax) to make a reference to a larger Bench. In addition and alternately to the above, a second ground has been taken regarding the incompetence of the reference. It was stated that a Division Bench of the Board of Revenue cannot make a reference to a larger Bench in terms of sec. 11 of Rajasthan Land Revenue Act. During the course of the arguments we heard not only the Advocate for the assessee firm and the Government Advocate, but also a good many other counsels who interprosed as amicus curiae. We have perused the record. In support of the preliminary objection No. 1, it was argued by the Advocate for the assessee firm and others that only provision for reference in the Rajasthan Sales Tax was sec. 15 of that Act, which provides for reference to High Court. It was stated that the Rajasthan Sales Tax Act is a special law and is governed solely by the provisions incorporated in it. It was pointed out that there were considerable differences between the procedure outlined in the Rajasthan Land Revenue Act and the Rajasthan Sales Tax Act. For instance under the Rajasthan Sales Tax Act, revisions could be presented by post, while under the Rajasthan Land Revenue Act, it was necessary to present them in person. It was pointed out that there were considerable differences between the procedure outlined in the Rajasthan Land Revenue Act and the Rajasthan Sales Tax Act. For instance under the Rajasthan Sales Tax Act, revisions could be presented by post, while under the Rajasthan Land Revenue Act, it was necessary to present them in person. Revisions under the Rajasthan Land Revenue Act could be disposed of by a Single Member, but revisions under the Rajasthan Sales Tax Act are to be disposed of by a Division Bench. In view of these facts, it was contended that the question of reference could not be governed by the provisions of the Rajasthan Land Revenue Act; but solely by those of the Rajasthan Sales Tax Act. 1968 R.R.D. page 66 was cited in favour of the plea that if a rule is laid down by the Supreme Court, not to consider it, is an error apparent on the face of the record 1967 R. R. D. page 324 holds that references under the Sales Tax Act to the High Court are made u/s 15 of it 1964 S. T. C. page 22 lays down that where a special enactment confers a power of review, on the tribunal of its creation in restricted terms., that power cannot be enlarged or extended in the guise of inherent power. It was argued on behalf of the Government that the Board of Revenue had been defined under Rajasthan General Clauses Act (sec. 32(5) and also the Rajasthan Board of Revenue Ordinance of 1949. How the Board of Revenue was to function was prescribed in sec. 10 onwards of the Rajasthan Land Revenue Act, while the establishment, composition and powers were laid down in sec. 4 to 9 of the same Act. On these grounds it was contended that the absence of relevant provision in Rajasthan Sales Tax Act cannot make the reference incompetent because the procedure of Rajasthan Land Revenue Act governs the Board of Revenue. We have considered preliminary point No, 1 No doubt, there are certain differences in the procedure outlined in the Rajasthan Sales Tax Act, and Rajasthan Land Revenue Act. In sales tax cases there are certain differences as compared with land revenue cases. For instance, the Board of Revenue does not hear appeals in sales tax cases at all. We have considered preliminary point No, 1 No doubt, there are certain differences in the procedure outlined in the Rajasthan Sales Tax Act, and Rajasthan Land Revenue Act. In sales tax cases there are certain differences as compared with land revenue cases. For instance, the Board of Revenue does not hear appeals in sales tax cases at all. In these variations, the procedure of Rajasthan Sales Tax Act and the rules made thereunder hold the ground for sales tax cases, but otherwise the procedure of Rajasthan Land Revenue Act with regard to the Board of Revenue necessarily governs the sales tax cases also. When revision to the Board of Revenue has been provided under the Rajasthan Sales Tax Act, it is a necessary concomitant thereto that where there is no inconsistency and the context requires it, the procedure laid down in the Rajasthan Land Revenue Act for the Board of Revenue obtains for the sales tax cases also. The first preliminary objection is, therefore, over-ruled. The second preliminary objection was developed by many Members of the Bar. It was stated that u/s 11 of the Rajasthan Land Revenue Act, only the Chairman or other Member of the Board sitting singly could refer any question of law or custom for the opinion of the Bench. It was pointed out that there was no provision for a Division Bench to make such a reference. Many rulings were cited in favour of the plea that the positive language of the statute should be followed and neither long practice nor considerations of inconvenience should impel the Courts to substitute their own ideas of equity as against the language of the law. A. I. R. 1963 Supreme Court page 1128 holds that the words of sec. 76 of Electricity Supplies Act must be given their ordinary meanings and the mention of a single species does not constitute a genus. A. I. R. 1965 Rajasthan page 213 holds that where the language of the Act is clear and expressive, it should be given effect to whatever the consequences. The statute may not be extended to meet a case. But at the same time, it should be borne in mind that there is another important use of interpretation which requires that the statute should be understood in the context in which it appears and should not be bereft of its setting. The statute may not be extended to meet a case. But at the same time, it should be borne in mind that there is another important use of interpretation which requires that the statute should be understood in the context in which it appears and should not be bereft of its setting. A. I. R. 1965 Supreme Court page 1164 holds that if retrospective operation is not clearly directed, a retrospective use cannot be put, 1966 RRD page 250 holds that hardship cannot be decisive factor in interpreting statute. Similarly, 1952 Supreme Court page 324, 1963 Supreme Court page 90, 1961 Supreme Court page 1101 and 1963 Supreme Court page 113, lay, down that the clear meaning of the language of the statute is to be followed. 1966 Supreme Court page 529 holds that the result of statutory provision is never an evil, whether the Court likes it or not it has to follow the language of the statute. 1966 S. C page 1953 states hypothetical considerations can have no weight; and similarly Principles of Statutory Interpretation by G. B. Singh lay down at page 43 that words of the statute must be understood in their natural and grammatical sense Similarly, A.I.R. 1954 Rajasthan page 138, A. I. R. 1962 Rajasthan page 19, A.I.R. 1942 Nagpur page 8, A.I.R. 1953 Alld. page 25, A. I. R. 1950 Federal Court page 83. A.I.R 1933 Nagpur page 83, A.I.R. 1933 Nagpur page 913, AIR. 1948 Patna page 225 and A.I.R. 1953 S.C. p. 148 all relate to interpretation of statutes. It was also contended that the Revenue Courts Manual which prescribed the procedure for the Board of Revenue, was ultra vires in many respects as u/s 261 of the Raj. Land Revenue Act, Rules u/s 10 of the same Act had to be made only by the Government. The Rajasthan Revenue Court Manual had been promulgated, it was pointed out, by the authority of the Board of Revenue. So it was argued that so far as the Rajasthan Revenue Courts Manual impugned on the field of Rajasthan Land Revenue Act, sec. 261 sub-sec. 2, it was ultra-vires. It was argue d by one of the Advocates that the reference had not been rightly made at all, inasmuch as the Division Bench had directed that the question be referred to a Larger Bench. 261 sub-sec. 2, it was ultra-vires. It was argue d by one of the Advocates that the reference had not been rightly made at all, inasmuch as the Division Bench had directed that the question be referred to a Larger Bench. It should have referred the case to the Chairman, who after applying his mind judicially was to make the reference. It was also contended that when the Chairman ordered that the matter be referred to a larger Bench, he simply passed an executive order which was wrong. He should have recorded reasons for it. Regarding 1964 R.R.D. page 101 which holds that a Division Bench can make a reference to a larger Bench., it was argued that this ruling had simply stated that the practice had developed of a Division Bench making a reference to a larger Bench. It was contended that an illegal practice cannot be held as valid. It was suggested by the Government Advocate that the reference had in fact been made by the Chairman, as he had directed on 25 7-67 that the case should be put up before a larger Bench and had constituted that Bench. We have considered the matter. So far as the last point is concerned, it is clearly inadmissible. The reference is not from the Chairman, but from the Division Bench. Sec. 11 of Rajasthan Land Revenue Act reads as below : "The Chairman or any other Member of the Board sitting singly for the disposal of any case or proceedings may, if he thinks fit, for reasons to be recorded in writing, refer any question of law or custom having the force of law or of the construction of any document arising before him in such case or proceedings for the opinion, of the Bench, and the case or proceedings shall be disposed of in accordance with such opinion." Now it is quite clear that the Chairman has not recorded any reasons for making the reference. In fact he had not applied his mind to the judgment at all, but has simply given executive directions for formulation of the Bench and putting the case before it. Nor is this illegal in any way. The judicial consideration is done by the Bench which makes the reference and the Chairman simply makes suitable arrangements so that the reference can be disposed of. Nor is this illegal in any way. The judicial consideration is done by the Bench which makes the reference and the Chairman simply makes suitable arrangements so that the reference can be disposed of. We do not find that the Division Bench committed any irregularity in directing that the reference should be made to the larger Bench. The order was in accordance with sec. 11. We further find that in the order-sheet dated 30-6 67, the Division Bench had directed that the case may be put up before the Chairman for placing it before the larger Bench. I We now come to the main point in issue. R.R.D. 1964 page 101 in considering the matter has observed as below : "The argument of some of the lawyers that this reference from the Division Bench to a larger Bench was incompetent and was in contravention of the provisions of the Act has absolutely no force. A Member sitting singly as well as a Division Bench could always make a reference to a larger Bench when found necessary and this practice has grown in the Board and no infringement of any provision of the Land Revenue Act had been observed. There is no doubt that sec. 11 speaks of a reference by the Chairman or a Member sitting singly on a point of law to a Bench but there is nothing to prevent a Bench referring a point of law to a larger or a Full Bench because the jurisdiction of the Board can be exercised as laid down in sec. 10 of the same Act, either by the Chairman or any other Member of the Board sitting singly or by a Bench of the Board consisting of two or more Members. Therefore, this larger Bench is fully competent to make a decision on this important point of law on a reference made by a Division Bench. This objection, therefore, or some of the Members of the Bar is ruled out." It is true that in sec. 11 of Rajasthan Land Revenue Act. Therefore, this larger Bench is fully competent to make a decision on this important point of law on a reference made by a Division Bench. This objection, therefore, or some of the Members of the Bar is ruled out." It is true that in sec. 11 of Rajasthan Land Revenue Act. only the Chairman and Member sitting singly have been mentioned as the authorities who are competent to make the reference, but as observed by the Bench composed of four Members, which decided the case referred to in 1964 R. R. D. page 101, there is nothing in the Rajasthan Land Revenue Act that prevents reference by a Division Bench to the larger Bench. It was argued before us that like appeal, reference is a creation of statute. We note that the competence of the Members of the Board of Revenue or the Chairman to make a reference has been fully provided in the law. The Board of Revenue in a Division Bench exercises all the legal powers provided in the Rajasthan Land Revenue Act. We have further to note that according to A.I.R. 1968 page 623 (May part) the established views of the Supreme Court should not be assailed in any judgment by its Judges. It has been held that such a practice tends to bring the Supreme Court into disrepute. In its far lesser field, the same considerations should apply to the Board of Revenue also. A bench composed of the Chairman and 3 Members of the Board of Revenue after giving full consideration to the matter have held that a Division Bench is competent to make a reference to a larger Bench. Even before this rule, the Division Benches were making references and they have been treated as properly made. The practice has continued unaltered after this rule also. Of course neither considerations of inconvenience nor of settled practice should intervene if there is a patently illegal order. But in this case, as noted above, a Board of Revenue Bench have given cogent grounds for holding that the reference from a Division Bench was tenable; and such an established rule is not lightly to be set aside. So far as the point of illegality of the Revenue Courts Manual is concerned, it was argued by some Advocates that under sec. So far as the point of illegality of the Revenue Courts Manual is concerned, it was argued by some Advocates that under sec. 261(1) of the Rajasthan Land Revenue Act, provisions of the Board had been defined in respect of making rules and u/s 261(2) the provisions of the State Government had been defined in the same connection. It was contended that the Revenue Courts Manual trenched on the field of sec. 261(2) inasmuch as it described the manner in which the jurisdiction of the Board may be exercised and its business may be distributed : We find that sec. 261(1) reads as below : "The Board may, with the previous sanction of the State Government make rules consistent with the provisions of this Act and of the Rules made under sub-see.(2). Sec. 261(2)(ii) reads as below : "The State Government may make rules consistent with the provisions of this Act prescribing u/s 10 the manner in which the jurisdiction of the Board may be exercised and its business will be distributed." Now the State Government did not make such rules, but that does not make the rules made by the Board of Revenue ultra-vires. The Board can make rules consistent with the provisions of the Land Revenue Act and of the Rules made under sub-sec. (2). If no rules whatever have been made by the Government in regard to any case and the Board makes rules which are not inconsistent with the provisions of the Land Revenue Act, we do not think that the rules made by the Board become ultra-vires. We, therefore, over-rule this preliminary objection also and direct that the case may be listed for hearing on some future date.