Research › Search › Judgment

Madras High Court · body

2002 DIGILAW 93 (MAD)

SRI MURUGAN TRANSPORTS v. COMMERCIAL TAX OFFICER.

2002-02-11

V.KANAGARAJ

body2002
ORDER V. KANAKARAJ, J. - The petitioner-transport firm has filed this writ petition praying to issue a writ of certiorarified mandamus calling for the records of the respondent in proceedings R.C. No. 4331/95 Al dated November 29, 1996, quash the same and direct the respondent not to levy entry tax on the two chassis, bearing engine No. 119907 and chassis No. 242787 and engine No. 119051 and chassis No. 242248 respectively. In the affidavit filed in support of the writ petition the petitioner would submit that they purchased the said vehicles of the Ashok Leyland Company from M/s. Sundaram Motors, Pondicherry, as per the sale invoice No. 667/19-2-1990 with the delivery receipt dated February 19, 1990 which were sent to V. Kangaraju Lorry Buildings Labour Works, Namakkal, for construction of cabin on February 19, 1990 itself; that the chassis passed through the excise check-post at Gangaranpalayam in South Arcot District on February 19, 1990, which was acknowledged by the officer in-charge of the check-post; that after imposing the entry tax on February 20, 1990, by Ordinance No. 1 of 1990 (subsequently replaced by Act 13 of 1990), the registering officer under the Motor Vehicles Act insisted on obtaining a certificate from the Commercial Taxes Department either to the effect of the payment of the entry tax or that the vehicles did not attract the entry tax at all; that the Commissioner, Commercial Taxes, did not issue such certificate for the two vehicles in question, but collected a sum of Rs. 17,522 as per his receipt No. 940103/30-3-1990 as tax under the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 (Act 13 of 1990) (hereinafter referred to as "the Act") which came into force on February 20, 1990 only; that the petitioner is not liable to pay the tax since the chassis entered into the State of Tamil Nadu from Pondicherry on February 19, 1990 itself; that there had been no demand notice nor any assessment proceedings for the collection of the said amount as tax; that the petitioner filed the returns on May 22, 1990 in form No. I as contemplated under rules 3 and 4 of the Rules framed under the said Act; that by the direction issued by this Court dated April 2, 1991 in W.P. No. 4874 of 1991, the respondent passed an order on January 10, 1992 stating thereby that since the two chassis in question had entered into the territory of Tamil Nadu on February 19, 1990, prior to the said Act coming into force, the liability to pay the tax under the said Act did not arise, thus not only dropping the proposal but also directing refund of the said amount of Rs. 17,522 collected on May 30, 1990 to the petitioner. The further case of the petitioner is that subsequently the Joint Commissioner of Commercial Taxes addressed a letter dated August 25, 1992 to the petitioner stating that there was no evidence in support of the claim that the vehicles had entered into the territory of Tamil Nadu prior to February 19, 1990 and in the absence of such proof, the petitioner was liable to pay the entry tax under the Act; that on further representations made on the part of the petitioner, the Joint Commissioner had directed the respondent to revise the assessment as per the clarifications issued in his letter dated March 19, 1990 since according to the respondent the check-post seals and entries were found to have been tampered to the effect that the vehicles have been passed through the said check-post on February 19, 1990 and remarking that there was no evidence to establish that the said vehicles entered into the territory of Tamil Nadu on February 19, 1990, the revised assessment was passed on November 29, 1996 levying the tax of Rs. 36,842 and an appeal preferred by the petitioner before the Assistant Commissioner, Chennai (AAC) having come to be dismissed, as per the order of the appellate authority, the Joint Commissioner, Commercial Taxes dated September 25, 1997, the petitioner has come forward to file the above writ petition seeking the relief extracted supra. During arguments, the learned counsel appearing on behalf of the petitioner, besides tracing the facts as it has been put forth in the affidavit filed in support of the writ petition, would submit that in spite of the general instructions imparted by the respondent, following the instructions of the Special Commissioner and Commissioner for Commercial Taxes, Madras dated November 19, 1992 to revise the assessment as per the clarification issued on March 19, 1990, the respondent has not come forward to revise the orders passed. At this juncture, the learned counsel would point out that the assessing authority is the Commercial Tax Officer, exercising powers under section 8 of the Act pertaining to the assessment and the revisional authority under section 14 of the Act is the Commissioner and when the assessing authority completes his exercises which is quasi-judicial function, the Commissioner, being the superior authority under the Act, has no powers to give direction to the assessing authority and would cite the following judgments rendered respectively in : (i) [1958] 9 STC 428 (SC) (Mahadayal Premchandra v. Commercial Tax Officer); (ii) [1962] 46 ITR 152 (Punj) (S. Sewa Singh Gill v. Commissioner of Income-tax, New Delhi); (iii) [1978] 115 ITR 323 (Cal) [Income-tax Officer v. Eastern Scales (Pvt.) Ltd.]; (iv) [2000] 119 STC 61 (SC) (State of West Bengal v. Md. Khalil). So far as the first judgment cited above is concerned, in a case where the Commercial Tax Officer made his assessment on instructions and advice of the superior obtained behind the back of the assessee, it has been held that "the procedure adopted by the officer was contrary to the principles of natural justice and it was unfair and was calculated to undermine the confidence of the public in the impartial and fair administration of the Sales Tax Department". In the second judgment cited above, wherein the Commissioner of Income-tax had directed the Income-tax Officer to make a draft assessment order and got it approved by the Inspecting Assistant Commissioner before finalising the said assessment and the Income-tax Officer prepared the draft assessment order and submitted to the Inspecting Assistant Commissioner for approval, it has been held that "the direction of the Commissioner to make a draft assessment order and submit it to the Inspecting Assistant Commissioner for approval before the assessment was finalised was illegal and unwarranted, and the so-called draft assessment must be regarded as the final assessment of the Income-tax Officer". So far as the third judgment cited above is concerned, in a case wherein the Income-tax Officer made rectification at the behest of the Additional Commissioner, Income-tax, West Bengal, remarking that section 119(3) of the Income-tax Act does not permit the authorities mentioned therein to interfere with the exercises of judicial or quasi-judicial functions by the Income-tax Officer in making the assessment, the court has held : "The Income-tax Officer has to act judicially or quasi-judicially in the assessment proceedings and any direction by any higher authority as to the manner in which such proceedings are to be disposed of would be interference with the judicial or quasi-judicial functions of the Income-tax Officer. If the Income-tax Officer acts in accordance with such directions and disposes of assessment proceedings accordingly, his orders will be liable to be set aside on that ground." In the last judgment cited above, disagreeing with the contention of the petitioner therein that under section 14(3) of the Taxes on Entry of Goods into Calcutta Metropolitan Area Act, 1972, when the person in possession of the goods is required to produce the accounts register or documents under sub-section (6) of section 14 has failed to do so, a presumption arises that the specified goods have been brought by him into that area without payment of tax, the honourable apex Court held that : "A presumption is a rule of law which requires the court to draw a given conclusion on proof of existence of certain facts and leaves it to the party disputing the conclusion to rebut the same. Presumptions may be of fact or of law. A presumption is an inference sanctioned by law which does not logically or necessarily follow from the proved facts. Presumptions may be of fact or of law. A presumption is an inference sanctioned by law which does not logically or necessarily follow from the proved facts. For raising a presumption ..., there must be a specific provision in the Entry Tax Act. No provision in the said Act is brought to our notice which may enable the authority to raise the presumption that a possessor of the specified goods, who fails to produce before the authority his accounts register or document on being required to do so, has imported the goods into the Calcutta Metropolitan area without payment of tax." On such arguments the learned counsel for the petitioner would pray to allow the writ petition to the prayer extracted supra. No counter has been filed but the learned counsel appearing on behalf of the respondent would submit that even according to the return filed by the petitioner under section 3 of the Act, the tax due to the respondent-department is Rs. 36,842 as per rule 4 of the said Act; that originally, the petitioner was granted exemption by the Special Commissioner and the Commissioner of Commercial Taxes as per the authority's order dated February 19, 1990 passed on the petitioner's representation under the impression that the vehicles in question entered into the territory of Tamil Nadu prior to February 20, 1990, which later came to be proved false since no vehicle particularly the vehicles in question belonging to the petitioner passed through the State of Tamil Nadu on February 19, 1990; that since the Act came into force w.e.f. February 20, 1990, only those vehicles which passed through the State of Tamil Nadu prior to the coming into being of the said Act, could be exempted from levying the entry tax and it is the firm case of the petitioner that his vehicles passed through the State of Tamil Nadu on February 19, 1990, but on verification, the said statement came to be proved false and no such vehicles entered into the borders of Tamil Nadu on February 19, 1990, so as to become entitled to exemption as per the Act and Rules. The learned counsel would further submit that manipulation of entries also came to be detected on verification of the records submitted on the part of the petitioner as a result of which, the authority had to revise its own order and the order impugned has been passed requiring the petitioner to pay the entry tax for his two vehicles, for the reasons assigned therein. The learned counsel would also cite a judgment of the division Bench of this Court reported in (1997) 3 CTC 255 (R. Gandhi v. Union of India) upholding the validity of the Act stating that this judgment squarely applies to the case of the petitioner. In consideration of the pleadings by parties, having regard to the materials placed on record and upon hearing the learned counsel for both, what comes to be known is that the writ petition has been filed by the petitioner not challenging the Act nor any particular provision of law for being declared void or unconstitutional so as to go into the question of upholding the validity of the Act, but the only question that pertains for decision to the prayer of the writ petition is "whether the impugned order passed by the respondent dated November 29, 1996 is to be quashed for the reasons assigned on the part of the petitioner and further is it necessary for this Court to direct the respondent not to levy entry tax on the two chassis of the petitioner, mentioned supra, in the facts and circumstances revealed and in the position of law on the subject ?" The firm case of the petitioner, on facts, is that these two vehicles belonging to him passed through Tamil Nadu on February 19, 1990, i.e., one day prior to the coming into being of the Act on February 20, 1990. No doubt, an order had been passed by the appellate authority, the Special Commissioner and the Commissioner of Commercial Taxes in her proceeding L. Dis. Acts Cell IV/30183/90, dated March 16, 1990 thereby informing the petitioner that the truck chassis No. ALEP 242134 and engine No. ALEP 119258 had entered into the State of Tamil Nadu prior to February 20, 1990 and hence no liability under the Act would arise in the said case. Acts Cell IV/30183/90, dated March 16, 1990 thereby informing the petitioner that the truck chassis No. ALEP 242134 and engine No. ALEP 119258 had entered into the State of Tamil Nadu prior to February 20, 1990 and hence no liability under the Act would arise in the said case. However, on a general instruction given by the same Commissioner to revise the assessment as per the clarification issued in the Act dated March 19, 1990, which finds place in the impugned order, to all the authorities below, the authority below is said to have gone into the facts and has passed the impugned order, which has been seriously taken note of by the learned counsel appearing for the petitioner and in the light of the decided judgments by other courts, such as Calcutta, Delhi, Kerala, etc., which have held to suit the facts of the cases dealt with by the said courts, for instance, in the case cited from [1958] 9 STC 428 (SC) (Mahadayal Premchandra v. Commercial Tax Officer) the Supreme Court would find that the Commercial Tax Officer had made his assessment on instructions and advice of the superior obtained behind the back of the assessee wherein the said court has held that such a procedure adopted was unfair and contrary to the principles of natural justice. In the case reported in [1962] 46 ITR 152 (Punj) (S. Sewa Singh Gill v. Commissioner of Income-tax, New Delhi), the Income-tax Officer made a draft assessment order and got it approved by the Inspecting Assistant Commissioner before finalising the assessment and it was held illegal and unwarranted. In the third case cited by the learned counsel for the petitioner reported in [1978] 115 ITR 323 (Cal) [Income-tax Officer v. Eastern Scales (Pvt.) Ltd.], the Income-tax Officer had made rectification at the behest of the Additional Commissioner, Income-tax with certain remarks. In the last judgment reported in [2000] 119 STC 61 (SC) (State of West Bengal v. Md. In the third case cited by the learned counsel for the petitioner reported in [1978] 115 ITR 323 (Cal) [Income-tax Officer v. Eastern Scales (Pvt.) Ltd.], the Income-tax Officer had made rectification at the behest of the Additional Commissioner, Income-tax with certain remarks. In the last judgment reported in [2000] 119 STC 61 (SC) (State of West Bengal v. Md. Khalil), disagreeing with the contention of the petitioner therein that under section 14(3) of the Taxes on Entry of Goods into Calcutta Metropolitan Area Act, 1972, when the person in possession of the goods is required to produce the accounts, register or documents under sub-section (6) of section 14, has failed to do so, presumption arises that the specified goods have beery brought by him into that area without payment of tax, the honourable apex Court held that "a presumption is a rule of law which requires the court to draw a given conclusion on proof of existence of certain facts and leaves it to the party disputing the conclusion to rebut the same. Presumptions may be of fact or of law. A presumption is an inference sanctioned by law which does not logically or necessarily follow from the proved facts. For raising a presumption ..., there must be a specific provision in the Entry Tax Act. No provision in the said Act is brought to our notice which may enable the authority to raise the presumption that a possessor of the specified goods, who fails to produce before the authority his accounts, register or document on being required to do so, has imported the goods into the Calcutta metropolitan area without payment of tax". From among the above four judgments cited by the learned counsel for the petitioner, the last judgment, so far as forming the presumption is concerned, it is not applicable to the case in hand since it is not on presumption the impugned order has been passed but on facts ascertained on verification and therefore the ratio held in this judgment cannot be applied to the case in hand. Regarding the other three judgments also, neither any assessment has been made on instructions or advice of the superiors obtained behind the back of the assessee as it has been held in the first judgment nor has the Commissioner of Income-tax directed the Income-tax Officer to make draft assessment order and got it approved by him as in the second judgment cited. The appellate authority herein has not acted in so far as the passing of the impugned order nor even the authority, who made the order, made rectification at the behest of the superior officer pertaining to a legal position as it has been in the said case regarding section 119(3) of the Income-tax Act. Therefore, though the general legal proposition that the authority has to pass orders in exercise of his powers as a judicial or quasi judicial authority in application of mind and acting independently without any alien influence much less by the superior authorities to it holds good, still, no such interference seems to have been made on the part of the Special Commissioner or Commissioner, Commercial Taxes in the passing of the impugned order by the respondent herein nor is the Commissioner a party to the proceedings so as to rebut such allegations. The passing remark made on the part of the respondent in his order that the Special Commissioner and Commissioner of Commercial Taxes, Madras, gave instructions to follow the clarification issued in the Acts Cell dated March 19, 1990 and to revise the assessment in accordance with the clarification rendered by the Acts Cell, cannot be taken as the Special Commissioner and Commissioner, Commercial Taxes, Madras in its capacity as the appellate authority either interfered with or instructed to pass the impugned order in accordance with its instructions but as a superior authority in the official capacity, it had only alerted the lower authorities to follow the clarification issued to the Act by the Acts Cell (and not by itself) dated March 19, 1990 and to revise the orders wherever irregularities have occurred which is a general caution or clarification issued to all subordinates and this cannot in any manner be construed either to have influenced the impugned order nor could it be termed as interference caused, much less in its capacity as the appellate authority. This has absolutely no bearing on the impugned order independently passed by the respondent herein. This has absolutely no bearing on the impugned order independently passed by the respondent herein. Therefore, the petitioner, under the pretext of the proposition of law, cannot become entitled to escape from the payment of tax. On facts, it is established that the vehicles did not at all pass through the territory of Tamil Nadu prior to the commencement of the Act that was prior to February 20, 1990 and the stand taken on the part of the petitioner that these vehicles passed through the territory of Tamil Nadu on February 19, 1990 had not been established on his part with positive evidence placed on record. On physical verification of the connected records, it had been established that the two vehicles in question had not at all passed through the territory of Tamil Nadu on February 19, 1990. Therefore, the exemption clause is not at all attracted in the case of the petitioner pertaining to these two vehicles and in consequence, the impugned order passed by the respondent does not at all require to be quashed. The exemption granted by the Commissioner earlier based on the false particulars furnished on the part of the petitioner cannot be construed as the contra-evidence made available on the part of the petitioner and therefore it cannot be said that the said exemption granted could not be revised by the respondent. Thus, the impugned order in all respects only deserves to be confirmed. For all the above discussions held, the well considered and merited order passed by the respondent to the facts and circumstances of the case and in adherence to the law does not at all warrant any interference by this Court as it has been sought to be made on the part of the petitioner. In result, the above writ petition does not merit acceptance and the same is dismissed. No costs. Writ petition dismissed.