Prashant Electrodes Vs. Assistant Commissioner, Sales Tax and anr. - Court Judgment

Excerpt:
sales tax - reassessment of tax - petitioner was assessed by assessing officer - while making assessment, contention of petitioner was not accepted - hence, petitioner filed revision against assessment order in which not granting set off in relation to tax paid - revisional authority allowed and while setting aside of order of assessment held that petitioner is entitled to set off on strength of notification - accordingly, assessing officer passed fresh assessment order in light of findings rendered by revisionary authority and granted benefit of set-off while determining taxing liability - however, assessing officer issued impugned three reassessing notices - it was mentioned in reassessment notices that petitioner has been wrongly given benefit of set-off and hence why not said issue be not reassessed - against these notices, petitioner has felt aggrieved and has filed present petition - held, order of revisionary authority was given effect and consequently fresh assessment order was also passed and indeed had to be passed for reason that department did not raise question about correctness of revisionary order in higher court - in other words, revisionary authority order had become final and was thus binding on assessing authority - therefore, assessing authority had no jurisdiction to sit over order of revision and again decide same issue in garb of reassessment - in other words, assessing authority had no jurisdiction to reassess petitioner on issue of set-off but it could, if proper case of reassessment was made out, issue notice of reassessment for other issue - admittedly, reassessment notices which are impugned in this writ is founded only issue of set-off and not on any other ground - therefore, they are, not legally sustainable - accordingly, in view of aforesaid impugned notices of reassessments are without jurisdiction and hence cannot be given effect - petition is accordingly allowed - impugned notices are quashed - constitution of india 1055. article 141; [a.k. patnaik, c.j., dipak misra, abhay gohil, s. samvatsar, & s.k. gangele, jj] dismissal of slp arising from decision of high court whether binding precedent decision of division bench in rama and company v. state of madhya pradesh, [2007(ii) mpjr 229] overruled by full bench of same high court prior to delivery of decision of full bench order passed in division bench decision assailed in slp before supreme court dismissal of slp by short reasoned order, though declaration of law, but high court is bound to follow earlier decisions in field regard being had to concept of precedents as per law laid down by apex court and larger bench decision in jabalpur bus operators association, reported in [2003(1) mpjr 158]. court clarifies that dr. jaidev siddha v. jaiprakash siddha, 2007(2) mpjr (fb) 361; air 2007 mp 269 (fb) is not impliedly overruled in view of dismissal of slp articles 226 & 227; [a.k. patnaik, c.j., dipak misra, abhay gohil, s. samvatsar, & s.k. gangele, jj] power to issue writ under article 226 - [per majority] the high courts exercise original jurisdiction under article 226 of the constitution and supervisory jurisdiction and the power of superintendence under article 227 of the constitution. but, an eloquent and fertile one, a writ of certiorari is issued in exercise of original jurisdiction. whenever word supervisory has been used in the context of article 226 it is in contrast with the appellate or revisional jurisdiction. when a writ is issued under article 226 of the constitution in respect of courts or tribunals it is done in exercise of original jurisdiction and the parameters are different than article 227 of the constitution of india. it is worth noting that the power under article 227 was there in a different manner under the government of india act. power of superintendence is distinct from the exercise of power of revisional or supervisory jurisdiction which is a facet of the power of superintendence. the confusion occurs when one applies the principle of equivalence or equates the exercise of supervisory power and power of superintendence with original or supervisory jurisdiction. there is an acceptable nuance between the concept of jurisdiction and exercise of power by certain parameters. both do come within the fundamental concept of judicial review but the jurisdiction exercised is different when under article 226 a writ is issued it is issued in exercise of original jurisdiction whether against a tribunal or inferior courts or administrative authorities. the word superintendence has not been used in article 226 of the constitution. it is also evident that the term writs is not referred to in article 227. on a scrutiny of article 227 it would be crystal clear that power of superintendence conferred on the high courts is a power that is restricted to the courts and tribunal in relation to which it exercises jurisdiction. on the contrary the power conferred on the high court under article 226 is not constricted and confined to the courts and tribunals but it extends to any person or authority. be it noted, article 226 as has been engrafted in the constitution covers entirely a new area, a broader one in a larger spectrum. when the legislature has used the terms in exercise of original jurisdiction and supervisory jurisdiction it has to be understood that they are used in contradistinction in the constitutional context as has been interpreted by the apex court. the words of the section have to be understood to mean exercise of powers under article 226 of the constitution of india which is always original. -- m.p. samaj ke kamjor vargon ke krishi bhumi hadapne sambandhi kuchakron se paritran tatha mukti adhiniyam [3/1977]. section 2: writ appeal maintainability from order of single judge-when permissible held, maintainability of a writ appeal from an order of the learned single judge would depend upon many an aspect and cannot be put into a strait jacket formula. it cannot be stated with mathematical exactitude. it would depend upon the pleadings in the writ petition, nature of the order passed by the single judge, character and the contour of the order, directions issued, nomenclature given and the jurisdictional prospective in the constitutional context are to be perceived. it cannot be said in a hyper-technical manner that an order passed in a writ petition, if there is assail to the order emerging from the inferior tribunal or subordinate courts has to be treated all the time for all purposes to be under article 227 of the constitution of india. it would depend upon the real nature of the order passed by the learned single judge. the pleadings also assume immense significance. it would not be an over emphasis to state that an order in a writ petition can fit into the subtle contour of articles 226 and 227 of the constitution in a composite manner and they can co-inside, co-exist, overlap or imbricate. in this context it is apt to note that there may be cases where the single judge may feel disposed or inclined to issue a writ to do full and complete justice because it is to be borne in mind that article 226 of the constitution is fundamentally a repository and reservoir of justice based on equity and good conscience. it will depend upon factual matrix of each case. dr. jaidev siddha v. jaiprakash siddha, 2007(2) mpjr (fb) 361: air 2007 mp 269 (fb) is not impliedly overruled in view of dismissal of slp preferred against order reported in rama and company v. state of madhya pradesh [2007 (2) mpjr 229 (db) (mp)]. ordera.m. sapre, j.1. challenge in this writ filed under articles 226 and 227 of the constitution of india is to reassessment notices (annexures p6, 7 and 8) dated august 22, 1992, issued by the assistant commissioner, sales tax, to the petitioner for the period october 1, 1986 to september 30, 1987, october 1, 1987 to september 30, 1988 and october 1, 1988 to march 31, 1989. the question, therefore is, whether these notices seeking to reassess the petitioner is legal or/and proper facts in brief that led to issuance of these notices need mention infra.2. petitioner is a firm engaged in the business of manufacturing and sale of welding electrodes. it is a dealer duly registered as such under state as also central sales tax acts.3. for the period october 1, 1986 to september 30, 1987 the petitioner was assessed by the assessing officer (assistant sales tax commissioner) by its order dated july 12, 1989 (annexure p2). while making the assessment, for this period, one of the main question was, whether the assessing officer was justified in not giving set-off to the petitioner on the tax-paid iron purchased by the petitioner in the light of notification no. a-5-10-87-st-v-(47) dated november 17, 1987. since the contention of petitioner was not accepted by the assessing officer, the petitioner filed a revision being revision no. 65/ r/90 state to additional commissioner, sales tax, against the assessment order. in the revision, the contention of the petitioner was that in the light of notification dated november 17, 1987 they are entitled to get the benefit of set-off in relation to tax-paid goods which they purchased (iron) for manufacture of their goods. this contention found favour to revisionary authority and accordingly, revision was allowed by the additional commissioner by its order dated may 15, 1990 (annexure p3). the learned revisionary authority, while setting aside of an order of assessment held that petitioner is entitled to set-off at the rate of 2 per cent on the strength of aforesaid notification. it was also found as a fact that petitioner had purchased tax-paid goods (iron) at the rate of 4 per cent and for which bills had been filed. the revisionary authority, therefore, remanded the case to assessing officer for making fresh assessment after giving the petitioner the benefit of set-off as held by him. accordingly, the assessing officer passed a fresh assessment order on june 27, 1990 (annexure p4) for the same period, i.e. (october 1, 1986 to september 30, 1987) in the light of findings rendered by the revisionary authority and granted the benefit of set-off while determining the taxing liability payable by the petitioner on their turnover for the period in question.4. likewise, for subsequent period, i.e., october 1, 1987 to september 30, 1988 and october 1, 1988 to march 31, 1989 the assessing officer passed two assessment orders on may 31, 1990 (annexures p5 and p6). in these two assessment orders, the petitioner was granted the benefit of set-off because by the time these two assessment orders were passed, the revisionary court had already passed the order arising out of assessment order for the earlier period. in effect, therefore, the petitioner got the benefit of set-off in all the three years assessment. in the first year by virtue of revisionary authority order and in other two subsequent period, without there being any specific direction by revisionary authority but on principle that was laid down by the revisionary authority.5. however, on august 22, 1992, the assessing officer issued impugned three reassessing notices for the aforementioned periods. in substance, it was mentioned in the reassessment notices that the petitioner has been wrongly given the benefit of set-off and hence why not the said issue be not reassessed. it is against these notices, the petitioner has felt aggrieved and has filed this writ.6. the state has tried to support the issuance of notices.7. heard shri p.m. choudhary, learned counsel for the petitioner and shri s. mukati, learned government advocate for respondents.8. learned counsel for the petitioner while assailing the legality of the impugned reassessment notices urged that these notices are per se without jurisdiction. according to learned counsel when the issue relating to set-off was finally decided in favour of the petitioner, by the revisionary authority then the assessing authority has no jurisdiction to reagitate the same issue by issuing reassessment notices. learned counsel urged that in fact the issue relating to set-off has attained finality when it resulted in merger in revisionary order. it was essentially on these lines the submission was for quashing of these notices.9. in reply, the state counsel supported the notices.10. having heard the learned counsel for the parties and having perused the record of the case, i find force in the submission of learned counsel for the petitioner. in my considered view the petition has to be allowed resulting in quashing of impugned reassessment notices.11. the issue whether petitioner is entitled to set-off was admittedly the subject-matter of revision at the instance of petitioner. it was also undisputed that eventually, the revisionary authority did decide this issue in favour of the petitioner and held the petitioner to be entitled to claim the set-off in the light of notification dated november 17, 1987. this order of revisionary authority was given effect to and consequently fresh assessment order was also passed and indeed had to be passed for the reason that state (department) did not question the correctness of revisionary order in the higher court/tribunal. in other words, the revisionary authority order had become final and was thus binding on the assessing authority. in effect, therefore, the assessing authority had no jurisdiction to sit over the order of revision and again decide the same issue in the garb of reassessment. in other words, the assessing authority had no jurisdiction to reassess the petitioner on the issue of set-off but it could, if proper case of reassessment was made out, issue notice of reassessment for other issue. admittedly, the reassessment notices which are impugned in this writ is founded only the issue of set-off and not on any other ground. they are, therefore, not legally sustainable.12. accordingly, in view of aforesaid discussion, the impugned notices of reassessments are without jurisdiction and hence cannot be given effect to. petition is accordingly allowed. impugned notices dated august 22, 1992 (annexures p6, p7 and p8) are quashed by writ of certiorari.no costs. security amount, if deposited, be refunded.

Judgment:
ORDER

A.M. Sapre, J.

1. Challenge in this writ filed under Articles 226 and 227 of the Constitution of India is to reassessment notices (annexures P6, 7 and 8) dated August 22, 1992, issued by the Assistant Commissioner, Sales Tax, to the petitioner for the period October 1, 1986 to September 30, 1987, October 1, 1987 to September 30, 1988 and October 1, 1988 to March 31, 1989. The question, therefore is, whether these notices seeking to reassess the petitioner is legal or/and proper Facts in brief that led to issuance of these notices need mention infra.

2. Petitioner is a firm engaged in the business of manufacturing and sale of welding electrodes. It is a dealer duly registered as such under State as also Central Sales Tax Acts.

3. For the period October 1, 1986 to September 30, 1987 the petitioner was assessed by the assessing officer (Assistant Sales Tax Commissioner) by its order dated July 12, 1989 (annexure P2). While making the assessment, for this period, one of the main question was, whether the assessing officer was justified in not giving set-off to the petitioner on the tax-paid iron purchased by the petitioner in the light of Notification No. A-5-10-87-ST-V-(47) dated November 17, 1987. Since the contention of petitioner was not accepted by the assessing officer, the petitioner filed a revision being revision No. 65/ R/90 State to Additional Commissioner, Sales Tax, against the assessment order. In the revision, the contention of the petitioner was that in the light of notification dated November 17, 1987 they are entitled to get the benefit of set-off in relation to tax-paid goods which they purchased (iron) for manufacture of their goods. This contention found favour to revisionary authority and accordingly, revision was allowed by the Additional Commissioner by its order dated May 15, 1990 (annexure P3). The learned revisionary authority, while setting aside of an order of assessment held that petitioner is entitled to set-off at the rate of 2 per cent on the strength of aforesaid notification. It was also found as a fact that petitioner had purchased tax-paid goods (iron) at the rate of 4 per cent and for which bills had been filed. The revisionary authority, therefore, remanded the case to assessing officer for making fresh assessment after giving the petitioner the benefit of set-off as held by him. Accordingly, the assessing officer passed a fresh assessment order on June 27, 1990 (annexure P4) for the same period, i.e. (October 1, 1986 to September 30, 1987) in the light of findings rendered by the revisionary authority and granted the benefit of set-off while determining the taxing liability payable by the petitioner on their turnover for the period in question.

4. Likewise, for subsequent period, i.e., October 1, 1987 to September 30, 1988 and October 1, 1988 to March 31, 1989 the assessing officer passed two assessment orders on May 31, 1990 (annexures P5 and P6). In these two assessment orders, the petitioner was granted the benefit of set-off because by the time these two assessment orders were passed, the revisionary court had already passed the order arising out of assessment order for the earlier period. In effect, therefore, the petitioner got the benefit of set-off in all the three years assessment. In the first year by virtue of revisionary authority order and in other two subsequent period, without there being any specific direction by revisionary authority but on principle that was laid down by the revisionary authority.

5. However, on August 22, 1992, the assessing officer issued impugned three reassessing notices for the aforementioned periods. In substance, it was mentioned in the reassessment notices that the petitioner has been wrongly given the benefit of set-off and hence why not the said issue be not reassessed. It is against these notices, the petitioner has felt aggrieved and has filed this writ.

6. The State has tried to support the issuance of notices.

7. Heard Shri P.M. Choudhary, learned counsel for the petitioner and Shri S. Mukati, learned Government Advocate for respondents.

8. Learned counsel for the petitioner while assailing the legality of the impugned reassessment notices urged that these notices are per se without jurisdiction. According to learned counsel when the issue relating to set-off was finally decided in favour of the petitioner, by the revisionary authority then the assessing authority has no jurisdiction to reagitate the same issue by issuing reassessment notices. Learned counsel urged that in fact the issue relating to set-off has attained finality when it resulted in merger in revisionary order. It was essentially on these lines the submission was for quashing of these notices.

9. In reply, the State counsel supported the notices.

10. Having heard the learned counsel for the parties and having perused the record of the case, I find force in the submission of learned counsel for the petitioner. In my considered view the petition has to be allowed resulting in quashing of impugned reassessment notices.

11. The issue whether petitioner is entitled to set-off was admittedly the subject-matter of revision at the instance of petitioner. It was also undisputed that eventually, the revisionary authority did decide this issue in favour of the petitioner and held the petitioner to be entitled to claim the set-off in the light of notification dated November 17, 1987. This order of revisionary authority was given effect to and consequently fresh assessment order was also passed and indeed had to be passed for the reason that State (department) did not question the correctness of revisionary order in the higher court/Tribunal. In other words, the revisionary authority order had become final and was thus binding on the assessing authority. In effect, therefore, the assessing authority had no jurisdiction to sit over the order of revision and again decide the same issue in the garb of reassessment. In other words, the assessing authority had no jurisdiction to reassess the petitioner on the issue of set-off but it could, if proper case of reassessment was made out, issue notice of reassessment for other issue. Admittedly, the reassessment notices which are impugned in this writ is founded only the issue of set-off and not on any other ground. They are, therefore, not legally sustainable.

12. Accordingly, in view of aforesaid discussion, the impugned notices of reassessments are without jurisdiction and hence cannot be given effect to. Petition is accordingly allowed. Impugned notices dated August 22, 1992 (annexures P6, P7 and P8) are quashed by writ of certiorari.

No costs. Security amount, if deposited, be refunded.