STATE OF GUJARAT v. ATUL METAL CORPORATION. — 1991 DIGILAW 178 (GUJ)

JUDGMENT The judgment of the Court was delivered by A. P. RAVANI, J. - This is a reference under section 69(1) of the Gujarat Sales Tax Act, 1969 (for short "the Act") at the instance of the Revenue. The opponent is a proprietary concern and is carrying on the business of purchase and sale of utensils of brass, stainless steel, etc., in Ahmedabad city. It is registered as a dealer under the Act. Order of assessment was passed by the Sales Tax Officer in respect of the accounting period of samvat year 2030 on April 16, 1976. However, before the said order was passed, the business premises of the opponent-assessee were searched. On the strength of the books of accounts and other seized materials, reassessment was made. Against this order of reassessment, the opponent-assessee preferred appeal wherein the appellate authority allowed the appeal and remanded the matter to the Sales Tax Officer for fresh proceedings. During the pendency of the proceedings, further material had also come to the notice of the Sales Tax Officer. The Sales Tax Officer ultimately passed assessment order dated January 31, 1978. As per this order, the total amount of tax payable by the opponent-assessee was assessed at Rs. 11,392.24. A penalty of Rs. 2,809 under section 45(6) of the Act and a penalty of Rs. 150 under section 46(2) of the Act was also imposed. The assessee preferred appeal and in appeal the Assistant Commissioner reduced the amount of suppressed turnover to the extent of Rs. 52,683 as per order dated November 29, 1979. 2. The opponent-assessee filed second appeal before the Gujarat Sales Tax Tribunal on January 18, 1980. The Tribunal issued notice dated June 17, 1980, to the assessee calling upon it to remedy the defects as provided under regulation 8(2) of the Gujarat Sales Tax Tribunal Regulations, 1973 (for short "the Regulations"). A copy of this notice was sent to the Commissioner of Sales Tax also which was received by him on June 18, 1980. Another notice dated July 15, 1980, informing about the appeal having been admitted was issued to the Commissioner as provided under regulation 16(1) of the Regulations which was received by him on the same day. A copy of this notice was sent to the Commissioner of Sales Tax also which was received by him on June 18, 1980. Another notice dated July 15, 1980, informing about the appeal having been admitted was issued to the Commissioner as provided under regulation 16(1) of the Regulations which was received by him on the same day. On July 28, 1980, the learned Government Agent filed cross-objections against part of the order passed by the Assistant Commissioner of Sales Tax by which he reduced the estimated amount of suppressed turnover of sales of the opponent-dealer. 3. On behalf of the opponent-assessee, it was contended that the cross-objections were filed beyond the period of limitation prescribed under section 65(5) of the Act. It was contended that the notice of appeal having been preferred was received by the Commissioner on June 18, 1980, while the cross objections were filed on July 28, 1980. The Tribunal upheld the contention raised on behalf of the opponent-assessee and in substance passed order dismissing the cross-objections on the ground of limitation. 4. The Revenue felt aggrieved by the aforesaid decision and requested the Tribunal to make reference to this Court. The Tribunal has referred the following question to this Court for its opinion : "Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in holding that the period of limitation for filing cross-objections under section 65(5) of the Gujarat Sales Tax Act, 1969, runs from the date of service of the copy of the notice issued in form 'C' prescribed under regulation 8(4) of the Gujarat Sales Tax Tribunal Regulations, 1973, to the Commissioner of Sales Tax and not from the date of notice of admission of appeal issued in form 'L' under regulation 16(1) of the said Regulation ?" 5. Our answer to the question is in the negative, in favour of the Revenue and against the assessee for the reasons articulated hereinbelow. 6. It is a cardinal principle of interpretation of statutes that procedural law has to be interpreted so as to advance the cause of justice. The object being to do justice - substantial justice and not to uphold technicalities. For achieving this object, it may even be permissible to stretch the language of the law. This is so because the raison d'etre for the existence of the court is to do justice. The object being to do justice - substantial justice and not to uphold technicalities. For achieving this object, it may even be permissible to stretch the language of the law. This is so because the raison d'etre for the existence of the court is to do justice. The courts are not created, nor do they exist, for upholding the technicalities. Even without the aid of the aforesaid principle of interpretation of statutes, had the Tribunal approached the question strictly in accordance with law, it would not have fallen in error which it has committed while construing the provisions of section 65(5) of the Act and the provisions of regulation 8(4) and that of regulation 16(1) of the Regulations. We regret to say that the Tribunal has adopted a hyper-technical approach and has not even examined the scheme of the Regulations in proper perspective. 7. The Gujarat Sales Tax Tribunal is constituted under the provisions of section 28 of the Act. It is enjoined with a duty to make regulations for the purpose of regulating its procedure and disposal of its business, as provided under section 28(9) of the Act, consistent with the provisions of the Act and the Rules. Under section 28(9) of the Act, the Tribunal has framed the Gujarat Sales Tax Tribunal Regulations, 1973. As defined in regulation 2(b), appeal also includes second appeal under section 65(2) of the Act and it also includes cross-objections under section 65(5) of the Act. Chapters I and II of the Regulations deal with the provisions with regard to title, definition, sitting and office hours of the Tribunal. Chapter III deals with presentation, registration and admission of appeals and applications and Chapter IV deals with cross-objections. While Chapter V deals with hearing, adjournment and judgment of the appeals/applications. Bare reading of the Regulations indicates the following stages before an appeal becomes ready for final hearing : (1) Presentation (regulations 6 an 7). (2) Scrutiny of the appeal/application, remedy the defects therein and registration thereof on removal of defects (regulations 8 and 9). (3) Calling for the record and proceedings from the lower authorities and placing the matter for admission before the President of the Tribunal or before any member authorised by him (regulations 11 and 13). (4) Fixing the appeal for hearing and issuance of notice of hearing (regulations 14 and 15). (3) Calling for the record and proceedings from the lower authorities and placing the matter for admission before the President of the Tribunal or before any member authorised by him (regulations 11 and 13). (4) Fixing the appeal for hearing and issuance of notice of hearing (regulations 14 and 15). (5) Filing of cross-objections, scrutiny thereof and procedure in relation thereto (regulations 16, 17 and 18). (6) Hearing, adjournment and judgment (regulations 19 to 38). 8. At the initial stage, when an appeal/application is presented in the office of the Tribunal, the Registrar is required to receive the same and examine the form and contents thereof [regulation 8(1)]. If the appeal/application is in conformity with the appropriate provisions of the Regulations, it is required to be registered. In case there is any defect, the Registrar is required to issue notice to the appellant/applicant as the case may be. This notice is required to be issued in form "B" [regulation 8(2)]. If the party to whom notice in form "B" is issued remedies the defect, the appeal/application will be registered [regulation 8(3)]. In case, the defects pointed out to the party are not remedied within time, another notice is required to be issued in form "C" [regulation 8(4)]. However, before issuance of this notice, the matter is required to be placed before the President of the Tribunal or before any other member authorised by the President. Thereafter notice is required to be issued to the appellant/applicant as the case may be, calling upon him to remove the defects. In case the party does not remove the defects, the matter may be summarily rejected. Such rejection would be summary rejection for non-prosecution or for non-removal of the office objection. In case the party satisfies the Tribunal that the defects are in fact no defect or that there is sufficient compliance with the provisions of the Regulations, the Tribunal may order the same to be registered. Either with the summary rejection of the appeal/application or with the order of the Tribunal to register the same, the second stage is over. 9. Thereafter, the third stage of admission of the matter is provided in regulation 13. Such order of admission is required to be passed by the President of the Tribunal or a member of the Tribunal as the case may be. 9. Thereafter, the third stage of admission of the matter is provided in regulation 13. Such order of admission is required to be passed by the President of the Tribunal or a member of the Tribunal as the case may be. Only after the matter is admitted, the stage of filing or not filing of the cross-objection is reached. After the matter is admitted, the Registrar is required to issue notice to the Commissioner in form "L" as provided in regulation 16(1). The cross-objections are also required to be in the form of appeal and that they should be in conformity with the provisions of regulation 8. After the cross-objections are filed, registered and served upon the other side, the matter becomes ready for final hearing. Thereafter the stage of final hearing of the appeal reaches, the procedure for which is provided in Chapter V of the Regulations. Regulation 44 enjoins duty upon the office of the Tribunal to issue notice only in the forms prescribed. 10. In the context of the aforesaid scheme of the Regulations, provisions of section 65(5) of the Act be examined. Section 65(5) of the Act reads as follows : "65(5). The Commissioner on receipt of notice that an appeal against the order passed in appeal by the Assistant Commissioner has been preferred by the other party to the Tribunal, may, within thirty days of the receipt of the notice, file a memorandum of cross-objection against any part of the order passed in appeal by the Assistant Commissioner and such memorandum shall be disposed of by the Tribunal as if it were an appeal." The aforesaid provision indicates that the Commissioner should have received a notice to the effect that an appeal against the order passed in appeal by the Assistant Commissioner has been preferred by the other party. Only after the receipt of such notice by the Commissioner the period of limitation for filing cross-objection would start to run. Examination of the scheme of the Regulations clearly indicates that notice in form "B" [regulation 8(2)] or in form "C" [regulation 8(4)] is not required to the served upon the Commissioner. Notices under regulation 8(2) and 8(4) in form "B" and in form "C", respectively are required to be served upon the appellant. Form "B" notice informs the appellant as regards the defects in the appeal filed. Notices under regulation 8(2) and 8(4) in form "B" and in form "C", respectively are required to be served upon the appellant. Form "B" notice informs the appellant as regards the defects in the appeal filed. Form "C" notice would be necessary in case the party does not remove the defects within the time specified in form "B". Both these notices are not required to be served upon the Commissioner. For some administrative reason or by inadvertance, if notice in form "B" or in form "C" is served upon the Commissioner, the time for filing the cross-objection would not start to run from the date or receipt of such notice because such notice is not a notice of appeal having been preferred by the other party. Up to this stage, the appeal cannot be said to have been preferred. 11. After the notice in form "C" is served and the party appears and satisfies the Tribunal as regards the defects either having been removed or showing that there was no defect as such, the appeal may be ordered to be registered. In case there is no satisfactory explanation, the appeal may be summarily rejected for non-prosecution or for non-removal of the defects. Only after the stage of regulation 8 is over, the appeal would be registered as provided under regulation 9. 12. After the appeal is registered, it would be placed for admission as required under regulation 13. Thereafter notice in form "L" as provided under regulation 16(1) is required to be issued upon the Commissioner. The form of this notice clearly contains the statement that the second appeal "has been admitted". It is this notice which is contemplated under the provisions of section 65(5) of the Act. 13. In the aforesaid context, the expression "appeal ...... has been preferred" occurring in section 65(5) of the Act is required to be interpreted. The dictionary meaning of the term "prefer" is (i) to bring before, (ii) to prosecute, (iii) to try, (iv) to proceed with (see Black's Law Dictionary). In the context of the scheme of the Regulations and the Act, the term "preferred" has to be understood as "admitted". It is only after the admission that the other side is required to be heard by the Tribunal on merits of the appeal. In the context of the scheme of the Regulations and the Act, the term "preferred" has to be understood as "admitted". It is only after the admission that the other side is required to be heard by the Tribunal on merits of the appeal. Before the admission of appeal, all that happens is strictly between the office of the Tribunal and the appellant. Some times the Tribunal may issue notice even before the matter is admitted. That would ordinarily be for seeking clarification on certain points or for suggesting some amicable solution of the matter. Such notice would not be for final hearing of the matter on merits. 14. Even as per the scheme of the Regulations appeal is not to be registered unless all the formalities as provided in regulation 8 are completed. In case there is no formal order of admission of appeal and straightaway notice under form "L" [regulation 16(1)] is issued, it may be contended that there is no admission of the appeal and time for filing cross-objection would not start to run even when the notice is served. However, such question does not arise in this reference. In this reference, the short question is from which date the time would start to run. Would it start to run from the date of service of notice under regulation 8(4) or from the date of service of notice under regulation 16(1) ? As indicated hereinabove, the limitation for filing cross-objection would start to run only from the date of receipt of notice in form "L" as provided in regulation 16(1). Such notice contains the statement that the second appeal is admitted. Thus in no case, time would start to run from the date of receipt of notice either under form "B" [regulation 8(2) or under form "C" [regulation 8(4)]. 15. If the other interpretation as suggested by the learned counsel for the assessee is accepted, the entire scheme of the Regulations would become unworkable. At the stage of notice in form "C" [regulation 8(4)], the appeal is not registered at all. At this stage, on account of the service of notice in form "C" or from any other source, the Commissioner may come to know about the appeal having been filed. At the stage of notice in form "C" [regulation 8(4)], the appeal is not registered at all. At this stage, on account of the service of notice in form "C" or from any other source, the Commissioner may come to know about the appeal having been filed. The day on which he comes to know about the filing of the appeal or on the next day if he files cross-objections, the office of the Tribunal would not be in a position to receive the same because the right to file cross-objection would arise in favour of the Commissioner only after the appeal is admitted. At the stage of notice in form "B" [regulation 8(2)] or in form "C" [regulation 8(4)] there is no appeal in the eye of law in the office of the Tribunal. At this stage the appeal is not taken on register at all. Therefore, the only interpretation that can be given to the expression "appeal ....... has been preferred" occurring in section 65(5) of the Act is that the appeal has been admitted. Unless there is receipt of notice by the Commissioner as appeal having been admitted, limitation for filing cross-objection would not start to run. 16. The learned counsel for the assessee submitted that notice in form "J" (as contemplated in regulation 11) is the correct form in which the notice ought to have been issued by the Registrar. It is further submitted that on service of notice in form "J", the limitation for filing cross-objection would start to run. The contention is not well-founded. Notice in form "J" is for calling the records and proceedings from the office of the Commissioner. It does not provide for giving notice of admission of the matter or that of the registration of the matter. Be it noted that it is a notice as provided in regulation 11. Therefore at this stage, there cannot be a notice of admission. Admission of the matter would be only after the stage of regulation 13 is over. Regulation 13 contemplates placing of the matter before the Tribunal for admission and appropriate order thereon. Thus it is evident that notice in form "J" to the Commissioner is purely an administrative matter calling for records and proceedings from the office of the Commissioner. It is no notice whatsoever as regards the admission of the appeal or as regards the hearing of the appeal. Thus it is evident that notice in form "J" to the Commissioner is purely an administrative matter calling for records and proceedings from the office of the Commissioner. It is no notice whatsoever as regards the admission of the appeal or as regards the hearing of the appeal. Therefore, limitation for filing cross-objections cannot start to run from the date of receipt of notice in form "J" even if one such notice is served upon the Commissioner. 17. For the aforesaid reasons, we answer the question referred to us as stated in para 5 of this judgment. This reference is answered accordingly with no order as to costs. Reference answered in the negative.