B.P. Dharmadhikari, J.
1. Heard finally by consent of Shri N.C. Phadnis, learned Counsel for the petitioner and Ms. N.P. Mehta, learned Assistant Government Pleader for respondents. Rule is therefore issued and made returnable forthwith.
2. By this petition filed under Articles 226 and 227 of the Constitution of India, the petitioner a Co-operative Bank questions common judgment dated 03.05.2013 delivered in Second Appeal Nos.469 to 473 of 2012 by the 4th Bench of Maharashtra Sales Tax Tribunal at Mumbai, holding that it cannot grant leave to petitioners to file an appeal under Section 55 of the Bombay Sales Tax Act, 1959 and dismissing its appeal as unsustainable. Thus, merits of challenge have not been looked into.
3. Facts necessary to understand the challenge can briefly be stated now. Petitioner is a Co-operative Bank registered as such under the provisions of Maharashtra Cooperative Societies Act, 1960. In course of its business, it extended term loan of Rs.1 Crore to one M/s. Kamakshi Hotel Private Limited, a Company having three Directors on 10.01.1997. On 09.10.1997, it advanced Rs.50 lacs more and on 25.07.1998, another Rs.50 lacs. Thus, total loan advanced was Rs.2 Crores for opening a family resort against hypothecation by creating registered mortgage of land, building etc. in its favour. The loan could not be repaid and in view of defaults, petitioners resorted to recovery under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as œthe Securitisation Act? for short). It took symbolic possession of the property on 19.09.2003, and actual physical possession on 05.11.2004. Mortgaged property was then auctioned on 05.02.2011 and nobody, including the respondent nos.2 to 6, objected to the said public auction.
4. On 07.02.2011, Sales Tax Department approached petitioner with demand of Rs.92,27,099/- towards its dues. Petitioners state that for the first time, Sales Tax Department claimed that it had attached property on 04.10.2010, it issued a notice under Section 39 of the Bombay Sales Tax Act, 1959 on 18.02.2011 for recovery of said amount, and it was received by petitioner. Petitioner replied to it on 25.02.2011. It also applied to Sales Tax Department for supplying certified copy of the assessment orders from 01.04.2000 to 31.03.2005. It then gathered that all orders were passed on a single day i.e. 12.12.2008 and period covered therein was from 01.04.2000 to 31.03.2005. Petitioner claims that notice for assessment or then assessment orders were not properly served. They point out that total amount as per the said assessment orders for these 5 years is Rs.82,04,255/-. Department also informed the petitioner that an amount of Rs.10,22,844/- was outstanding for the period from 01.04.1994 to 31.03.1998. The department on 26.09.2012 informed the petitioner that it has to pay both these amounts, otherwise, it would approach the Reserve Bank of India for attaching the accounts of petitioner with it. Petitioner Bank immediately paid amount Rs.10,22,844/- on 29.09.2012.
5. Petitioners also state that they procured information from State Excise Department regarding licence possessed by the borrower establishment M/s. Kamakshi Resorts and as per communication dated 03.08.2011 and 17.09.2011, they learnt that liquor permit/licence granted on 10.09.1998 was not renewed from 17.04.2002 and, therefore, it expired. Details of sales conducted between 2000 to 2002 were also supplied by the Excise Department on 17.09.2011. Thus, a very small quantity of liquor/beer was sold by M/s. Kamakshi Resort and assessment undertaken by Sales Tax Officer at Nagpur (Respondent No.4) in absence of said data is, therefore, unsustainable. The Assessing Officer has passed an ex-parte order without any documentary proof or material for arriving at these figures. The petitioners state that said resort had exemption from Sales Tax for selling food and nonalcoholic drinks and liquor was not sold at all for the years 2002-03 to 2004-05.
6. Petitioners state that letter dated 26.09.2012 sent by the respondent no.4 asking it to pay entire amount, gives it a cause of action. It filed an appeal before the First Authority namely, respondent no.5 on 12.07.2012. Respondent no.5 Deputy Commissioner of Sales Tax (Appeals), vide order dated 31.10.2012 held that the petitioner Bank had no locus standi and it was not a person aggrieved to file an appeal. Against this rejection, petitioner filed Second Appeal before respondent no.6 i.e. Maharashtra Sales Tax Tribunal. The said Authority upheld the order of the First Appellate Authority.
7. In this background, Shri N.C. Phadnis, learned Counsel appearing on behalf of the petitioner state that Section 55 of the Sales Tax Act, does not deny remedy of filing appeal to the present petitioner, and present petitioner is aggrieved, in as much as entire amount of so called Sales Tax liability of M/s. Kamakshi Resorts Pvt. Ltd., is being recovered from it. He points out that the respondents did not initiate any steps to recover old dues or even dues between 2000 to 2005 and by order passed on a single day in 2008, a huge amount is sought to be recovered from the petitioners, after they had proceeded as per the Securitisation Act against M/s. Kamakshi Resorts. He states that the petitioner Bank has to recover an amount of Rs.14,90,61,750/- as on 30.04.2013 and it could recover only Rs.3,84,00,000/- by auctioning mortgaged property. It is proceeding further to sale other property of Directors. He also points out that M/s. Kamakshi Hotels Pvt. Ltd., has filed a Writ Petition No.4910/2012 challenging notification dated 28.01.2003 issued under Section 2(1)(c)(v) of the Securitisation Act, on applicability of the said Act to the Cooperative Bank and that challenge is pending before this Court.
8. He has relied upon a Division Bench judgment of this Court reported at 2010 (1) LJSOFT 171 (State of Maharashtra .vrs. Bharat Petroleum Corporation Ltd. and another), to urge that identical issue on scope of provisions of Section 55 of the Sales Tax Act has been again gone into there and this Court has found that an aggrieved person is not restrained from filing an appeal there-under. He also relies upon a judgment reported at (1949) 51 BOMLR 58 (The Province of Bombay .vrs. Western India Automobile), where the Division Bench of this Court has held that Civil Procedure Code allows an aggrieved person a remedy of filing appeal. Judgment of Punjab and Haryana High Court reported at 1996 Sales Tax Cases (Vol.100) 41 (Om Prakash and another .vrs. State of Haryana and others), is also relied upon by him.
9. By inviting attention to the consideration of this challenge by the Tribunal, he contends that unnecessarily Section 55 has been interpreted in a narrow sense. He contends that the assessment made by the respondent no.4 needed to be challenged before the respondent no.5, which is a Competent Authority in terms of Bombay Sales Tax Act, and holding that such an appeal cannot be entertained, is nothing, but refusal to exercise jurisdiction.
10. Ms. N.P. Mehta, learned Assistant Government Pleader appearing on behalf of respondents, invites attention to the affidavit in reply filed by respondent no.3. She contends that appeal is a statutory remedy to be availed in terms of the said statute. In addition to Section 55, she invites attention to Rule 58 of the Bombay Sales Tax Rules to point out how appeals need to be filed/ presented and also to Rule 60 to show a power to summarily reject the appeal. She contends that respondent no.4 has on 04.10.2010 exercised powers under the Maharashtra Land Revenue Code, 1966 and attached the immovable property of M/s. Kamakshi Resorts. She further points out that by various judgments of Hon'ble Supreme Court, the liability towards Sales Tax has been given precedence by treating it as first charge. The properties were auctioned on œas is where is basis? and hence, even on that account, the department is entitled to recover its dues out of funds collected by the petitioners. She submits that the various case laws sighted by the petitioners are already looked into by the Tribunal in its judgment dated 03.05.2013, and the said judgment does not suffer from any jurisdictional error or perversity. She therefore prays for dismissal of the Writ Petition.
11. It is important to note that against the assessment orders petitioners filed appeals under Section 55(7) of the Bombay Sales Tax Act, 1959 and those appeals have been dismissed by respondent no.5 vide order dated 31.10.2012, holding the same to be not maintainable. Further common judgment delivered by the Tribunal on 03.05.2013 again shows that the Tribunal also had no occasion to go into the merits of the controversy. It is in this background, that we are looking into the matter.
12. Section 55 provides an appeal against every original order. It does not specify the authority or person who can prefer such appeal. The Division Bench of this Court in State of Maharashtra .vrs. Bharat Petroleum Corporation Ltd. and another (supra), in paragraph no.10 has noted this and in paragraph no.11 has also taken note of the contentions of respondent before it that State Government cannot be treated as an aggrieved party and, therefore, cannot file appeal. There effort was to show that authorities which were passing various orders under Sales Tax Act were in-fact protecting the interest of the State Government. In paragraph no.12, the Division Bench has found that Section 55(1) a neutrally worded provision, enables filing of appeal against every order and by adopting the natural meaning of the word employed therein, it held that Court cannot read a restriction not introduced by the legislature. It has expressly found that words used in said section are not susceptible to the interpretation that the Appellate remedy is available only to the assessee. It has looked into the various judgments to arrive at this conclusion, however, as not much effort has been made to demonstrate to this Court that the view taken by the Division Bench is incorrect and a reference to Larger Bench is, therefore needed; we need not delve into the various judgments appreciated by the said Division Bench.
13. In The Province of Bombay .vrs. Western India Automobile (supra), this Court has noted that the Civil Procedure Code does not in terms lay down as to who can be a party to appeal and then proceed to observe that only party against whom the decision is given has right to file an appeal. Thus in absence of an intention to the contrary, effort to restrict express language of Section 96 of the Civil Procedure Code has not been countenanced.
14. Even the Division Bench of Punjab and Haryana High Court in Om Prakash and another .vrs. State of Haryana and others (supra), has recognized right of a surety to file an appeal under Section 39 of the Haryana General Sales Tax Act. There the language of Section 39(1) is, similar when compared with S.55 in Bombay Act. The surety who wanted to file an appeal was aggrieved against demand of Sales Tax against M/s. Sirisurya Complex, sought to be executed against it as it had stood surety for it. Facts there show that the assessee did not appear before the Assessing Authority and an ex-parte best judgment assessment was made. Demand of Rs.84,960/- was raised and petitioners questioned the same by filing two appeals. The Appellate Authority dismissed the same on the ground that the appeals were not maintainable. The Division Bench found that Section 39(1) does not refer to party which can prefer the appeal. It further held that any person who is aggrieved by an order which adversely affects him, has therefore, right to file appeal before the Appellate Authority.
15. Respondent no.6 “ Tribunal, in common judgment, has applied its mind from paragraph no.6 onwards. It has noted that the Division Bench of this Court in case of State of Maharashtra .vrs. Bharat Petroleum Corporation Ltd. and another (supra), was considering a question where removal of Nparafin from kerosene was held not amounting to manufacturing process, and hence, State Government had questioned it in appeal before the Tribunal under Section 55. It held that the decision of Commissioner under Section 52 was not a decision of the State, and hence, State Government was competent to file an appeal, as it has vital interest in collection of revenue. The State Government had independent interest which was not looked into properly and the Tribunal there had erred in equating the rule and position of Commissioner as a quasi judicial authority with same position as that of a State. It concluded that the Bombay High Court held that an appeal under Section 55 would be maintainable by a third person, if he is directly affected by the order. It found that said judgment does not lay down a blanket rule that any third party, even though it is not directly affected by the order under the Bombay Sales Tax Act can file an appeal. Thus, principally, it found petitioner not directly affected by the recovery in dispute.
16. We are not in a position to sustain the above application of mind by the Tribunal. The assessee M/s Kamakshi Resorts had not attended the assessment proceedings which were therefore, ex-parte and all assessment orders were passed on one single day, perhaps by taking recourse to best judgment method. M/s. Kamakshi Resorts did not challenge those order and on the date on which the assessment was made, the property was already in possession of petitioners. Respondent Department did not stop petitioners from proceeding further with the sale of the mortgaged property, and conveniently staked its claim after the auction was over and funds were received by the petitioners. Thus petitioner is directly affected by such an action and belated assessment. If the Sales Tax Authorities do not wish to proceed against funds received by the assessee, petitioner will not be required to challenge the assessment made. However, if stale dues or then assessment made long after the stopping of business by M/s. Kamakshi Resorts Pvt. Ltd., are to be enforced against the petitioner, petitioner can very well question not only that assessment, but also the genuineness or bona-fides of the department. With that aim only, the petitioners secured data under Right to Information Act, which shows even an attempt by it to raise challenge to the quantum of demand arrived at by Sales Tax Department. However, as respondent no.5 or respondent no.6 have not looked into the merits of the assessment, it is not necessary for us to dwell more in this respect.
17. The Division Bench of Punjab and Haryana High Court in case of Om Prakash and another .vrs. State of Haryana and others (supra), has clearly found that a third party aggrieved by assessment order is entitled to maintain the appeal. This aspect is lost sight of by the Tribunal by restricting its consideration by giving undue importance to the fact that petitioner Omprakash before the said High Court was a surety. However, we find that his being surety does not make him a dealer, and for that purpose it has also noted use of word œperson? in proviso to Section 39(5). In view of the Division Bench ruling of this Court already noted above by us, we find effort to distinguish this judgment of Punjab High Court made by respondent no.6 Tribunal not proper.
18. The Tribunal has also relied upon a decision of Madras High Court reported at 47 STC 273 (M/s. India Tyre and Rubber Co. (India) Pvt. Ltd. .vrs. Commercial Tax Officer II, Central Assessment Circle, madras and others). There effort was made by a third party to get itself impleaded as a party to the appeal filed by the assessee under Tamil Nadu General Sales Tax Act, before the Tribunal. The High Court has found that the authorities are entitled to deal with the procedure for assessment and recovery of Sales Tax from a dealer, and the law does not support any other claim by any other person against the assessee. The Sales Tax Department is not concerned with the effect that the assessment had made on the dealer or somebody else. It also found that it would open flood gate to litigation if every purchaser would come on record and is permitted to intervene in such appeal. Thus there the assessee was very much before the Tribunal and was prosecuting his cause. In that situation, the Madras High Court has considered the locus of a person like purchaser who had a subsequent deal with such assessee. Consideration by Madras High Court therefore, does not throw any light in so far as interpretation of present Section 55 is concerned.
19. Provisions of Bombay Sales Tax Act need to be perused in this background. Provisions of Section 2 itself reveal a person, dealer, commission agent, importer, as different concepts. Definition of 'person' in Section 2(19) shows that it may include a Company or an Association or a Body of Individuals, a Firm or Local Authority also. Section 3 dealing with incidence of tax and other provisions upto Section 7 deal with incidence of tax, liability of dealer etc. Section 8A is about power with State Government to specify points of sale at which goods may be taxed. Section 13-AA is on purchase tax and it implies phrases like Dealer, Commission Agent, any person. First proviso to Section 14 again shows the same position. Subsection (1-A) thereof implies the word œany person? or œdealer?. Second and Third proviso to Section 15 speaks of a person. We need not elaborate more on use of these different words having different connotations in the context in which the legislature has used it, shows that a third person who is not otherwise a dealer or commission agent, may also be covered and found himself subjected to the provisions of Bombay Sales Tax Act. Section 38B is about special powers of Sales Tax Authorities for recovery of tax as arrears of land revenue. It enables the department to recover tax from any other person, apart from dealer. Section 38-C again shows the same position. Section 39 is about special mode of recovery and clauses (a) and (b) therein again shows possibility of such third person who is neither a dealer nor a commission agent, being subjected thereto. It is not in dispute that respondents have proceeded against the petitioner under these provisions.
Section 54 which appears in Chapter VII dealing with proceedings and it speaks of bar to challenge to an order of assessment or to an order passed under Bombay Sales Tax Act. Orders passed under Section 38-B, 38-C and 39 against such third person shall be definitely subjected to such bar and hence, those orders cannot be called in question in any Court and only remedy there-for, is an Appeal under Section 55. We have already noted above that Section 55 is neutrally worded, same is the case of Section 54. Section 57 which deals with revision contains a important provision in this respect. Subsection [3] thereof stipulates that no order can be passed in revision which may adversely affect any person, unless such person has been given reasonable opportunity of being heard. Thus the word œperson? employed in Section 57(3) is in wider sense and includes even a third person. In view of the scheme of Bombay Sales Tax Act, we find that petitioner is a person who is recognized as such under Bombay Sales Tax Act and hence, appeal filed by it cannot be said to be not maintainable. It is directly aggrieved by the order of assessment, as department is treating him as a person who has stepped in the shoes of assessee for the purposes of recovery.
20. Here, petitioner Bank has stepped into the shoes of assessee M/s Kamakshi Resorts. On all relevant dates when Sales Tax Department woke up, the assessee was not available and his property was in custody and possession of the petitioner. Physical possession was taken by the petitioners as claimed by them on 05.11.2004 itself. The sales tax assessment for period from 01.03.2000 to 31.03.2005 has been made by the respondents on a single date i.e. 12.12.2008. Respondents claim that they have entered charge on property of defaulting company on 07.03.2007 for Rs.10,22,844/- and later on revised it to Rs. 92,27,099/on 29.07.2010. They also claim that demand notice was duly served on the Directors of the defaulting company on 21.08.2010 and one copy was pasted at the conspicuous portion near main gate of the Hotel. They also claim that respondent no.3 attached immovable property on 04.10.2010. Thus all these steps are long after 05.11.2004.
21. When the assessee M/s. Kamakshi Resorts Private Limited has chosen not to respond to any notice, has been proceeded ex-parte, and therefore, respondents want to effect recovery from petitioners, Petitioner definitely is competent to raise all defences which were available to M/s. Kamakshi Resorts Pvt. Ltd. Petitioner is aggrieved because respondents are trying to force recovery upon them. In this situation, it cannot be said that it lacks locus to file appeal. Language of Section 55 no where denies it a right to approach the Appellate forum raising appropriate grievances.
22. As neither respondent no.5 nor respondent no.6 have looked into the grievances on merits, we do not wish to observe anything more. Our conclusions above are sufficient to show that the appeals preferred by the petitioners could not have been dismissed as not maintainable. Their grievance needed to be looked into on merits to find out whether it is cognizable within the scheme of Bombay Sales Tax Act or not. Accordingly we set aside the common judgment dated 03.05.2013 delivered in Second Appeal Nos.469 to 473 of 2012. As only issue looked in the said common judgment is tenability of the appeals, we allow those second appeals. Consequently orders dated 31.10.2012, passed by the First Appellate Authority (Respondent No.5) are set aside. 5 Appeals filed on 12.07.2012 by the petitioners before respondent no.5 are restored back for its due consideration on merits by the said Authority.
23. Writ Petition is thus allowed. Rule is made absolute in aforesaid terms. However, in the circumstances of the case, there shall be no order as to costs.