Delhi High Court
Swastik Industrial Powerline ... vs Commissioner Trade & Taxes And ... on 30 July, 2012
Author: S.Ravindra Bhat
$~11
* IN THE HIGH COURT OF DELHI AT NEW DELHI
DECIDED ON: 30.07.2012
+ ST.APPL. 31/2012 & CM APPL.5358/2012
SWASTIK INDUSTRIAL POWERLINE PVT LTD .....Appellant
Through: Mr.Rajesh Mahna & Mr.Ruchir Bhatia,
Advocates
versus
COMMISSIONER TRADE & TAXES & ORS ..... Respondents
Through: Mr.Vineet Bhatia, Advocate
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE R.V.EASWAR
MR. JUSTICE S.RAVINDRA BHAT (OPEN COURT)
%
1. The sole question which arises for consideration in this case is whether an
aggrieved dealer, who appeals to the Tribunal constituted under the Delhi Sales
Tax Act (order of which ought to be now considered by the VAT Tribunal under
Section 76 of the Delhi VAT Act), is to deposit as precondition for hearing the
entire amount of tax as determined as well as interest for the relevant period.
2. The appellant was assessed for the year 1983-1984 by order dated 18th
March, 1988 by the Sales Tax Officer and a demand for Rs.1,97,517/- was made.
The first appeal was heard and disposed of by order dated 31st March, 1989 and
the matter was remitted for consideration. The assessment was subsequently
finalized on 28th March, 1993.
3. The assessment order was challenged by way of an appeal to the Deputy
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Commissioner-I; this was dismissed on 27th September, 2004. The review of the
assessee was unsuccessful; it was also dismissed on 3rd February, 2010.
Thereafter, the appellant approached the Tribunal.
4. Before the Tribunal, the revenue contended that the appeal could not be
heard without the dealer, as pre-condition, depositing the entire amount i.e. tax
liability and interest which accrued thereon. The revenue had relied upon Section
27(4) which enacts that the interest payable under Section 27(1) would be deemed
to be tax. The revenue's contentions were accepted by the majority order of the
Tribunal. The Chairman, however, disagreed and held that interest liability was
not liable to be deposited at the stage of filing of the appeal.
5. Learned counsel for the appellant relied upon the judgments of the
Allahabad High Court and the Punjab & Haryana High Court in „Sita Ram Jwala
Prasad v. Commissioner of Sales Tax, 45 STC 410 and Oswal Woollen Mills v.
State of Punjab, 1995 (111) PLR 72 respectively. It was contended that the
appellant could not be put to greater hardship by accepting the contentions that the
majority order had accepted in this case.
6. Learned counsel for the revenue submitted that the order of the majority of
the members of the Tribunal is sound. He relied upon Section 27(4) and also
submitted that the controlling expression is "for the purpose of this Act". Reliance
was placed on the Section 25(7) of the Delhi Sales Tax Act, 1975, now repealed.
7. Section 43(5) of the Delhi Sales Tax Act, which is relevant and in terms of
which the Delhi VAT Tribunal has to consider the appeal (by virtue of the Section
106 of the Delhi VAT Act), reads as follows:-
"43(5) No appeal against an order of assessment with or without penalty or against an
order imposing the penalty shall be entertained by an appellate authority unless such
appeal is accompanied by a satisfactory proof of the payment of tax with or without
penalty or, as the case may be, of the payment of the penalty in respect of which the
appeal has been preferred :
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PROVIDED that the appellate authority may, if it thinks fit, for reasons to be recorded in
writing, entertain an appeal against such order-
(a) without payment of the tax and penalty, if any, or as the case may be, of the penalty,
on the appellant furnishing in the prescribed manner security for such amount as it may
direct, or
(b) on proof of payment of such smaller sum, with or without security for such amount of
tax or penalty which remains unpaid, as it may direct :
PROVIDED FURTHER that no appeal shall be entertained by to appellate authority
unless it is satisfied that such amount of tax as the appellant may admit to be due from
him has been paid."
8. Section 25 (7) deals with payment and recovery of tax. Sub section (5)
says that when a dealer or individual is in default or is deemed to be default in
making payment of tax and penalty, he would also liable to pay, by way of
penalty, any amount that may be imposed from time to time. However, it further
clarifies that total amount of penalty should not exceed the amount of arrears.
Procedurally, the dealer has to be given a reasonable opportunity of being heard.
Section 27 enacts that in the event of default or failure of the assessee-dealer who
fails to pay the tax due as required by the sub section (3) of Section 21, (of the
enactment) he would also be liable to pay interest as is specified at the enacted
rate. The relevant sub-section i.e. Section 27(4) reads as follows:-
"27(4) The interest payable under this section shall be deemed to be tax due
under this Act".
9. A Division Bench of Punjab & Haryana High Court in Oswal Woollen
Mills dealt with almost pari materia provision, i.e. Section 11D of the Punjab
Sales Act. That provision casts interest liability upon the defaulting dealer and
also specifies the rate of interest. Section 11D (3)(ii) is cast in terms identical with
Section 27(4); it states that for the purpose of collection and recovery, interest
amount would be deemed to be tax under this Act. Section 20 provides for
payment and also directs the aggrieved dealer to deposit the tax or penalty as the
case may be imposed or both. The Court noticed that the Haryana General Sales
Tax Act, 1973 did not contain any provision identical to Section 11D. The
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Division Bench ruled that the pre-condition for depositing the tax did not include
liability to pay interest for the purpose of filing and hearing of the appeal. The
Court held as follows:-
"10. A combined reading of Sections 11B, 11D and Section 20 of the Act shows
that amount of tax and penalty as well as interest payable under the Act can be
recovered as arrears of land revenue. The amount of interest is payable by the
dealer who fails to pay the amount of tax due from him as required by Section
10(4). Section 11D(2) speaks of the rate of interest for different periods and
Section 11D(3) speaks of the mode of calculation of the interest. Sub Clauses (ii)
and (iii) of Section 11D(3) makes it further clear that amount of interest payable
under Section 11D shall be in addition to the penalty imposed under the Act and
for the purpose of collection and recovery it shall be deemed 10 be tax. Section
20(5) imposes a bar to the entertaining of appeal by the Appellate Authority
unless the appeal is accompanied by a satisfactory proof of the payment of tax or
penalty, if any imposed. Proviso to this sub-section empowers the competent
authority to entertain the appeal without the tax or penalty or both having been
paid, in case it is satisfied that the dealer is unable to pay the tax assessed or the
penalty imposed. Of course the competent authority is required to record reasons,
in writing, for entertaining the appeal without the payment of tax and penalty. To
us it is clear that the Legislature has deliberately omitted the word „interest‟ from
Section 20(5) and proviso thereto. For a limited purpose of collection and
recovery, the interest has been treated as tax under the Act. The deeming
provision contained in this part of the statute has a limited application. Else it was
not necessary for the Legislature to have amended Section 11D by the amending
Act No.26 of 1978 to insert the expression „or interest payable‟ in the said section.
Similarly, if the Legislature intended that the appeal filed under Section 20 can be
entertained only on payment of interest apart from the amount of tax and the
penalty, nothing prevented it from inserting a similar expression in Section 20(5)
and proviso thereto. It is one of the settled principles of law that all the parts of
the statute are to be read together in order to gather the Legislative‟s intendment
behind the enactment of a particular law. It is equally well settled that if different
parts of the statute contain different words expressions, appropriate meaning
should be given to all such words and expressions and what is not provided in a
particular part of the statute cannot be read in it by way of implication. Yet
another principle of interpretation is that where a stringent provision has been
made for entertaining an appeal, the conditions precedent incorporated in such a
provision, which are required to be fulfilled in order to effectively avail the
remedy of appeal, must be construed strictly. By applying these principles of
interpretation of statute, we find that the omission of the expression „or interest
payable‟ from Section 20(5) and proviso thereto is not accidental but is deliberate
and the Legislature never intended that the appellant must pay the amount of
interest before an appeal filed under Section 20 can be entertained by the
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Appellate Authority."
10. This Court is of the opinion that the view taken by the Division Bench of
Allahabad High Court and Punjab & Haryana High Court which has in effect been
followed by the dissenting order of the Chairman in this case is sound, since the
provisions are pari materia, although the said dissenting opinion in the impugned
order has not adverted to it, we concur with the view and reasoning in Oswal
Woollen Mills (supra). We, therefore, set aside the majority order of the Tribunal
and direct the appellant to comply with the order of the Chairman in the dissenting
opinion, and deposit the amount indicated. Upon satisfying itself that the appellant
has complied with the said direction, the Tribunal shall proceed to hear this case
on merits.
The appeal is allowed in the above terms.
S. RAVINDRA BHAT, J
R.V.EASWAR, J
JULY 30, 2012
vk
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