M/S Shanti Traders Thr' Its ... vs The Commissioner Of Trade Tax, ...
2017 Latest Caselaw 5153 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Court No. - 59
 

 
Case :- SALES/TRADE TAX REVISION No. - 2565 of 2005
 

 
Applicant :- M/S Shanti Traders Thr' Its Proprietor Praveen Kumar
 
Opposite Party :- The Commissioner Of Trade Tax, U.P. Lucknow
 
Counsel for Applicant :- Shubhan Agrawal
 
Counsel for Opposite Party :- S.C.
 

 
Hon'ble Yashwant Varma,J.

Heard Shri Shubham Agrawal, learned counsel for the revisionist and Shri B.K. Pandey, learned standing counsel for the respondent.

This revision raises an issue with regard to the validity of the assessment order dated 31 March 1997 as well as certain consequential proceedings taken subsequent thereto.

The primary question of law which is raised is whether the orders of assessment including the one made on 31 March 1997 would be barred by the provisions of limitation as prescribed by Section 21 (5) of the U.P. Trade Tax 1948.

Bearing in mind the nature of issues which stand raised, it would be apposite to notice the following facts.

It is not disputed that on 30 December 1995, an ex parte order of assessment came to be made against the revisionist. Seeking recall of the said ex parte order, an application under Section 30 of the 1948 Act is stated to have been moved which came to be rejected on 30 March 1996. Aggrieved by the rejection of the application under Section 30, the revisionist is stated to have filed an appeal which came to be allowed on 6 July 1996. Since the terms on which the said appeal was allowed would have some bearing, it would be apposite to refer to the following extracts as they appear in the operative portion of the order of the appellate authority:-

"okn ds lHkh rF;ks ,oe ifjfLFkfr;ks dks -fLVxr j[krs gq, okn dks /kkjk&30 ds vUrxZr [kksys tkus ds fuZns'k dj fu/kkZjd vf/kdkjh dks fn;s tkrs gS A

vihy la[;k [email protected] fu"izHkkoh gksus ds dkj.k vLohdkj dh tkrh gS A

vkns'k

vihy la[;k [email protected] Lohdkj dh x;h rFkk okn dks /kkjk 30 ds vUrxZr [kksys tkus ds funsZ'k dj fu/kkZjd vf/kdkjh dks fn;s vihy la[;k&[email protected] fu"izHkkoh gksus ds dkj.k vLohdkj dh x;h A

bl vkns'k dh ewy izfr vihy la[;k [email protected] dh irzkAoyh ij o izekf.kr izfr;ka vU; irzkofy;kssa ij j[kh tk;s A

fnukad tqykbZ6 1996."

On 31 March 1997 a fresh order of assessment was made. Against the said order of assessment, the revisionist instituted a statutory appeal which was remanded to the assessing authority by an order dated 28 December 1998. By order dated 31 March 1999, the assessment proceedings again came to be closed against the revisionist ex parte. This time, however, the application under Section 30 was allowed. On reassessment, additional tax of Rs.1,85,202/- came to be imposed upon the revisionist. Against this order of assessment, an appeal is stated to have been filed raising various grounds including the objection that the reassessment was barred under Section 21 (5). The appellate court, in the submission of the learned counsel for the revisionist, came to reject the appeal without discussing or returning any finding on the question of limitation. The revisionist also did not receive any relief at the hands of the Tribunal which dismissed the appeal on 7 September 2005.

Placing reliance upon the decision of the Full Bench of the Court in M/s. Minakshi Udyog Agra Vs. Commissioner of Trade Tax1, Shri Agrawal submitted that the period of limitation as prescribed under Section 21 (5) must be held to have commenced to run from 6 July 1996 when the appellate authority directed reopening of the assessment. His further submission was that the stand taken by the Tribunal that the issue of limitation did not arise since it had not been initially urged when the first appeal came to be disposed of on 28 December 1998, is also unsustainable. In his submission, the issue of whether the respondent could have passed a fresh order of assessment was clearly a jurisdictional issue and no rights inhering in the assessee to raise such a contention stood lost merely because this ground was not taken in the first appeal which came to be disposed of on 28 December 1998.

Shri B.K. Pandey, learned standing counsel, on the other hand has drawn the attention of the Court to the order dated 6 July 1996 to submit that there was no automatic reopening of the assessment proceedings as would be evident from the operative directions as framed by the first appellate authority. In his submission, the assessee lost their rights to raise the issue of limitation when it preferred a first appeal which came to be disposed of on 28 December 1998. He submitted that since there can be no automatic reopening of a closed assessment nor was any reassessment ordered by the first appellate authority by its order dated 6 July 1996, the principles as enunciated by the Full Bench in M/s. Minakshi Udyog would have no application. Shri Pandey has also laid stress upon the findings arrived at by the Tribunal that the issue of limitation stood lost to be raised and did not arise from the order of the first appellate authority.

Dealing with the last submission first, this Court notes that there is no dispute with regard to the fact that the issue of limitation was in fact raised in the subsequent first appeal which was preferred by the revisionist asssessee. It is also contended that the first appellate authority dismissed the appeal without returning any finding on the issue of limitation which stood directly raised. In view thereof the finding recorded by the Tribunal that this issue did not arise from the order of the first appellate authority is not liable to be sustained.

The conclusion recorded by the Tribunal and noticed above is also unsustainable and liable to fail for yet another reason.

As the language of Section 21 (5) would evidence, the said provision does not essentially prescribe a period of limitation which operates upon or against the assessee. It prescribes a period within which a fresh order of assessment or reassessment is liable to be made. In this sense, the obligation to decide within six weeks from the date of an order being passed setting aside an ex parte assessment order stands cast upon the assessing authority. It intrinsically prescribes the period within which a fresh order of assessment may be made. If the period so prescribed is allowed to lapse, no rights of the assessee stand obliterated or effaced. In fact and to the contrary it is the jurisdiction of the assessing authority which stands eclipsed and results in denuding the assessing authority with the power to pass a fresh order of assessment.

"Jurisdiction" as is well recognised is an expression of multiple and varied hues. Essentially and unless the context otherwise suggests or commands a narrow interpretation being conferred on it, would include within its fold all such matters as would touch upon the authority of the Court, tribunal or adjudicatory forum to decide a lis or exercise its powers. In this sense the issue of limitation is also one which is determinative of the jurisdiction conferred upon an authority.

Dealing with the issue of whether the question of limitation would be a jurisdictional issue, in Foreshore Coop. Housing Society Ltd. Vs. Praveen D. Desai2, the Supreme Court made the following pertinent observations:

"45. The term "jurisdiction" is a term of art; it is an expression used in a variety of senses and draws colour from its context. Therefore, to confine the term "jurisdiction" to its conventional and narrow meaning would be contrary to the well-settled interpretation of the term. The expression "jurisdiction", as stated in Halsbury's Laws of England, 4th Edn., Vol. 10, Para 715, is as follows:

"715. Meaning of ''jurisdiction'.--By ''jurisdiction' is meant the authority which a court has to decide matters that are litigated before it or to take cognisance of matters presented in a formal way for its decision. The limits of this authority are imposed by the statute, charter or commission under which the court is constituted, and may be extended or restricted by similar means.

If no restriction or limit is imposed the jurisdiction is said to be unlimited. A limitation may be either as to the kind and nature of the claims and matters of which the particular court has cognisance, or as to the area over which the jurisdiction extends, or it may partake of both these characteristics."

46. In American Jurisprudence, Vol. 32-A, Para 581, it is said that:

"Jurisdiction is the authority to decide a given case one way or the other. Without jurisdiction, a court cannot proceed at all in any case; jurisdiction is the power to declare law, and when it ceases to exist, the only function remaining to a court is that of announcing the fact and dismissing the cause."

Further, in Para 588, it is said that lack of jurisdiction cannot be waived, consented to, or overcome by agreement of the parties.

47. It is well settled that essentially jurisdiction is an authority to decide a given case one way or the other. Further, even though no party has raised objection with regard to jurisdiction of the court, the court has power to determine its own jurisdiction. In other words, in a case where the court has no jurisdiction it cannot confer upon it by consent or waiver of the parties.

51. In NTPC Ltd. v. Siemens Atkeingesellschaft [(2007) 4 SCC 451] , this Court considering the similar question under the Arbitration and Conciliation Act held as under: (SCC p. 463, para 17)

17. "In the larger sense, any refusal to go into the merits of a claim may be in the realm of jurisdiction. Even the dismissal of the claim as barred by limitation may in a sense touch on the jurisdiction of the court or tribunal. When a claim is dismissed on the ground of it being barred by limitation, it will be, in a sense, a case of the court or tribunal refusing to exercise jurisdiction to go into the merits of the claim. In Pandurang Dhondi Chougule v. Maruti Hari Jadhav [AIR 1966 SC 153] this Court observed that: (AIR p. 155, para 10)

''10. ... It is well settled that a plea of limitation or a plea of res judicata is a plea of law which concerns the jurisdiction of the court which tries the proceedings. A finding on these pleas in favour of the party raising them would oust the jurisdiction of the court, and so, an erroneous decision on these pleas can be said to be concerned with questions of jurisdiction which fall within the purview of Section 115 of the Code.'"

53. In ITW Signode India Ltd. v. CCE [(2004) 3 SCC 48] , a similar question came before a three-Judge Bench of this Court under the Central Excise Act, 1944, when this Court opined as under: (SCC p. 74, para 69)

69. "The question of limitation involves a question of jurisdiction. The finding of fact on the question of jurisdiction would be a jurisdictional fact. Such a jurisdictional question is to be determined having regard to both fact and law involved therein. The Tribunal, in our opinion, committed a manifest error in not determining the said question, particularly, when in the absence of any finding of fact that such short-levy of excise duty related to any positive act on the part of the appellant by way of fraud, collusion, wilful misstatement or suppression of facts, the extended period of limitation could not have been invoked and in that view of the matter no show-cause notice in terms of Rule 10 could have been issued." (emphasis supplied)

Since the issues arising from section 21 (5) are determinative of the authority and power of the assessing authority to reassess and reopen, it is clearly jurisdictional in character and cannot be said to have been lost to the assessee to raise at the stage of the second first appeal. In any view of the matter, there could be no conferment of authority upon the assessing officer to reassess by the mere fact that the assessee did not raise this objection. As is often said, jurisdiction cannot be conferred by consent. It must be shown and established to exist of its own. In view of the above, this Court finds itself unable to accept or approve the line of reasoning adopted by the Tribunal to the effect that this issue stood lost to be raised by the assessee.

This then takes the Court to the submission of Shri Pandey that the order of the first appellate authority dated 6 July 1996 did not amount to a final disposal of an application referable to Section 30 and it was only an order liable to be viewed as remitting the matter to the assessing authority to consider whether circumstances warranted the assessment being reopened under Section 30. It was in order to evaluate this submission that this Court had in the earlier part of the judgment, extracted the order passed by the first appellate authority dated 6 July 1996. As is evident from the operative directions, the first appellate authority in unequivocal and unambiguous terms directed the assessing authority to reopen proceedings under Section 30. Section 30 as contained in the 1948 Act envisages an enquiry being undertaken by the assessing authority to consider whether circumstances warrant reopening or setting aside an assessment made ex parte. As the Court reads the operative directions in the order dated 6 July 1996, it does not find the conferment of a discretion in the assessing authority to consider whether to reopen and set aside the ex parte order. The language employed by the first appellate authority is a clear and unambiguous command to reopen and consequently reassess. The use of the words "re-open" left no discretion in the hands of the assessing authority This conclusion of the Court is further fortified when one reads the order of assessment which was ultimately passed on 31 March 1997 wherein the assessing authority does not refer to any subsequent or independent proceedings being drawn up by him to reconsider whether the ex parte order of assessment was liable to be recalled. As is evident from the said order of assessment, the assessing authority proceeded on the basis that the ex parte order of assessment had been set aside by the first appellate authority itself exercising powers under Section 30. In view thereof, the Court comes to the conclusion that the submissions of Shri Pandey urged to the contrary are not liable to be accepted.

The issue as to the point from which the period of limitation is liable to be computed is no longer res integra. We may in this connection only refer to the following observations as they appear in the opinion formulated by the Full Bench in Minakshi Udyog and which reads thus:

"13. In our opinion, when an appeal against the order under Section 30 is allowed by holding that the dealer did not receive notice or was prevented by sufficient cause from appearing on the date fixed the assessment stands re-opened automatically, and it does not require any order of the Assessing Authority re- opening the case. We cannot accept the argument that when the Appellate Authority has allowed the assessors appeal against the order under Section 30 for want of notice or for sufficient cause for non-appearance, and ordered that the assessment be re-opened, the actual re-opening will not be automatic and immediate but will depend on the sweet will of the Assessing Officer who may pass an order for re-opening the case as and when he likes. Such a view would frustrate the period of limitation under Section 21(5). The legal effect of an order allowing the appeal against an order under Section 30 on the ground that the dealer did not receive notice or was prevented by sufficient cause from appearing is that the ex parts assessment stands cancelled and the case stands re-opened immediately and automatically. In the present case, the order dated 13,12.1993 States that there was no service of notice on the dealer. Hence there was immediate and automatic re-opening of the case on 13.12.1993.

xxx xxx xxx

15. In the present case, the appellate order of the Assistant Commissioner (Judicial) dated 13.12.1993 was served on the Assessing Authority on 11.1.1994. Hence whether we take 13.12.1993 as the date from which the period of limitation begins, or 11.1.1994, in either case the period of limitation for making an assessment had expired before 17.8.1994 when the fresh assessment was actually made.

xxx xxx xxx

17. For the reasons given above, we answer the question referred by observing that it will be Section 21(5) which will apply in cases where the appeal is allowed against an order rejecting the application under section 30 of the u.p. trade tax act.

18. As regards the question as to from what date the limitation period will run, in our opinion, if the parties or the Counsels were present before the Appellate Authority when he passed his order, then the limitation will run from the date of the order, but if they came to know about the order only subsequently, it will run from the date of service of the order or knowledge of the order, whichever is earlier."

If the above principles as enunciated by the Full Bench are borne in mind, it is evident that the period of limitation will have to be necessarily recognised to have commenced from 6 July 1996. Since the order of assessment came to be made evidently after the expiry of the period prescribed under Section 21 (5), the order dated 31 March 1997 as well as all consequential proceedings initiated and drawn up subsequent thereto must necessarily fall and stand set aside.

Accordingly and for the reasons noted above, this revision is allowed. The order dated 7 September 2005 passed by the Tribunal is hereby set aside. The revisionist will be entitled to all consequential reliefs.

Order Date :- 7.10.2017

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