Arts and Cini House v. State of Kerala — 1993 DIGILAW 387 (KER)

Judgment :- K.P. Balanarayana Marar, J. These, revision petitions by the same assessee are directed against the order of the Appellate Tribunal, Agricultural Income-tax and Sales Tax, Additional Bench, Palghat, in Review applications Nos. 6 and 7 of 1990 in T.A. Nos. 758 and 759 of 1988. Revision petitioner is an assessee under the Kerala general Sales Tax Act. The assessments for the years 1985-86 and 1986-87 were challenged before the Appellate Tribunal in T.A. Nos. 758 and 759 of 1988 which were disposed of by the Tribunal by a common judgment on December 27,1988. The assessee moved the Tribunal by two review applications, viz., 6 and 7 of 1990 for review of the order passed by the Tribunal in the appeals T.A. Nos. 758 and 759 of 1988. The Chairman of the Tribunal decided the matter in favour of the assessee on merit. The Departmental Member decided the matter against the assessee. While doing so, he held the review applications to be not maintainable. The Chairman did not express any opinion on the maintainability of the review applications. In view of the difference between the Chairman and the Depart- mental Member the cases were referred to a third Member-Member (Accounts) under S.39(4) read with S.4(3)(i) of the Kerala General Sales Tax Act. The third member concurred with the Departmental Member on merits but did not decide the question as to the maintainability of the application. The result is that on merits the Departmental Member and the Accounts Member decided against the assessee-revision petitioner and the Chairman in favour of the assessee. Regarding the maintainability of the review petitions the Departmental Member alone expressed his opinion. He held the petition to be not maintainable. The Chairman did not enter a finding on this aspect and the Accounts Member also declined to express any opinion on that aspect. In these circumstances, this Court by order dated February 24, 1993 directed the Appellate Tribunal, Additional Bench, Palghat, to enter definite findings regarding the maintainability of the review applications in order to enable this Court to pronounce a decision in the revisions satisfactorily. This was necessitated in view of the absence of an express finding by the Chairman and the total absence of a finding itself by the Member (Accounts). 2. In pursuance to the directions of this Court the Chairman and the Member (Accounts) considered the matter. This was necessitated in view of the absence of an express finding by the Chairman and the total absence of a finding itself by the Member (Accounts). 2. In pursuance to the directions of this Court the Chairman and the Member (Accounts) considered the matter. By order dated May 18, 1993 the Member (Accounts) agreed with the findings entered into by the Member (departmental) regarding the maintainability of the review application. In other words, the Member (Accounts) held the review application to be not maintainable in law on the basis of the reasoning given by the Departmental Member. The Chairman is of the view that the application for review is maintainable. 3. After receipt of the findings of the Chairman and the Member (Accounts), revision petitioner sought amendment of the revision petition by incorporating an additional question of law in paragraph (6) of the revision petition. That question is to the following effect: Whether, on the facts and in the circumstances of the case the Tribunal is right in holding that the revision application is not maintainable in law?" 4. Heard counsel for revision petitioner Shri P.O.K. Wariyar and Senior Government Pleader Shri V.C. James, for respondent. 5. The first question to be considered in these revisions is whether the review application filed by the petitioner is maintainable in law. The review petitions arc seen filed under sub-section (7) of S.39 of the Kerala General Sales Tax Act. Sub-clause (a) of that sub-section reads: "The appellant or the respondent may apply for review of any order passed by the Appellate Tribunal under sub-section (4) on the basis of the discovery of new and important facts which after the exercise of due diligence were not within his knowledge or could not be produced by him when the order was made". 6. The Departmental Member held that there is no discovery of new and important facts so as to enable the assessee to get the order of the Appellate Tribunal reviewed. To this view the Member (Accounts) concurred. The Chairman has taken a different view and according to him the petition is maintainable. No reasons are seen given by him for this conclusion. To this view the Member (Accounts) concurred. The Chairman has taken a different view and according to him the petition is maintainable. No reasons are seen given by him for this conclusion. After obtaining the express finding by the Chairman and the Member (Accounts) in pursuance to the direction of this Court the assessee-revision petitioner, filed C.M.P. No. 2059 of 1993 seeking amendment of the revision petition by incorporating one more ground. By the order dated February 24,1993 this Court has permitted the assessee or the Revenue to file objections against the findings of the Appellate Tribunal. The civil miscellaneous petition is therefore allowed and the assessee is permitted to incorporate the additional ground mentioned therein in paragraph (6) of the revision petition. 7. Learned counsel for the revision petitioner has pointed out the mistake committed in drafting the question of law. The question that really arises is whether the Tribunal was right in holding that the review application is not maintainable in law. Petitioner is therefore permitted to incorporate the additional ground in this form. 8. The ground for review of the order of the Tribunal is slated to be the discovery of a new material since the date of the order. X-ray film according to the petitioner, is covered by the entry "photographic films" in item No. 151 of the First Schedule to the Kerala General Sales Tax Act. Petitioner was prevented from bringing this fact to the notice of the Tribunal at the time when final order was passed in the appeals whereas it came to his notice since then. The Departmental Member is of the view that there is no discovery of a new and important fact so as to enable petitioner to seek the aid of subsection (7) of S.39 of the Act. It is stated that entry 151 was available in the First Schedule to the Act even at the time when the appeals were heard by the Tribunal. That entry Sy itself "does not include X-ray films. It is stated that entry 151 was available in the First Schedule to the Act even at the time when the appeals were heard by the Tribunal. That entry Sy itself "does not include X-ray films. The Departmental Member has also referred to the decision of the Madras High Court in Gollapudi Siuyanarayana chetty v. State of Tamil Nadu [1980] 45 STC 227 wherein it was held that S.36(6)(a) of the Tamil Nadu General Sales Tax Act, 1959, contemplated a review application being filed only where new and important facts were discovered by the assessee and such facts should not have been available to the assesses or should not have been within his knowledge prior to the disposal of the appeal. It was further held that a subsequent decision of the High Court could not be brought within the scope of the power of review. The rejection of the application for review by the Tribunal was held to be proper. The Departmental Member was therefore of the view that a new ground was sought to be raised in the review application. With this view the Member (Accounts) also concurred. After hearing counsel on both sides, we are of the view that the majority of the Tribunal had not committed any error in disallowing the request for review. 9. Relying on the decision of the Punjab and Haryana High Court in Sushi! Flour, Dal & Oil Mills v. Chief Commissioner [1982] 50 STC 222, learned counsel for the revision petitioner would contend that in case an order has been passed by the court in ignorance of a material provision of law which is likely to affect the merits of the order that by itself makes out a good ground for review of the order. It is pointed out that an error of law was committed by the Tribunal in not treating X-ray films as photographic films coming within entry 151 of the First Schedule. This was discovered only since the date of the Tribunal's order. In order to enable petitioner to get the order of the Tribunal reviewed discovery of a new/ and important fact has to be established and the further aspect that after exercise of due diligence this fact was not within the knowledge of the petitioner at the time of the earlier order. In order to enable petitioner to get the order of the Tribunal reviewed discovery of a new/ and important fact has to be established and the further aspect that after exercise of due diligence this fact was not within the knowledge of the petitioner at the time of the earlier order. What petitioner now wants is to include X-ray films in photographic films so as to bring that item under entry 151 of the First Schedule. This point was available even at the time of hearing of the appeal. It cannot be said that even after the exercise of due diligence this was not known to the petitioner at that time. We are therefore of the view that there is no discovery of any new and important fact which after the exercise of due diligence was not within the knowledge of the petitioner when the original order of the Tribunal was made. 10. In the view that we have taken we are supported by the decision of the Madras High Court in Tamil Nadu Iron and Steel Co. v. State of Tamil Nadu [1980] 46 STC 293. Interpreting identical provision contained in the Tamil Nadu General Sales Tax Act, 1959, it was held: "But a reasonable construction of the provision would only admit of one interpretation, my/.., that the new and important facts discovered must be after the exercise of due diligence and the facts should not have been within the knowledge of the applicant. Further, the facts should be such as could not be produced by the applicant when the order was made. The non-production must also be due to some inability after the exercise of due diligence. Only if after the exercise of due diligence the applicant did not have knowledge of, or was not in a position to produce, the facts, the applicant can avail himself of the remedy of review. In either event, the facts must be such which came to the knowledge of the assessee subsequently and which could not be produced after the exercise of due diligence. The requirement of exercise of due diligence applies to both the limits, viz., knowledge and inability to produce". 11. We are in respectful agreement with the above observations of the Madras High Court. The requirement of exercise of due diligence applies to both the limits, viz., knowledge and inability to produce". 11. We are in respectful agreement with the above observations of the Madras High Court. The result is that there has not been a discovery of new and important fact since the date of the order of the Tribunal enabling petitioner to seek review of the order. The petition was rightly held to be not maintainable by the majority of the members of the Tribunal. There is no error of law requiring correction in revision. Both the tax revision cases are therefore dismissed. No costs.