Orissa Stores Vs. State of Orissa - Court Judgment

Excerpt:
- state financial corporations act, 1951 [63/1951]. section 29; [p.k. tripathy, a.k. parichha & n.prusty, jj] discharge of loan orissa forest act (14 of 1972), section 56 confiscation of vehicle - held, the authorities under section 56 of the orissa forest act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of orissa state financial corporation when such vehicles were purchased on being financed by the orissa state financial corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. on the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the department which initiated the confiscation proceeding. apart from that, the claim of the orissa state financial corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the state financial corporation act, 1951 or the heirs and successors of such persons. procedure is provided in the act, 1951 and the rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. if such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. the financial corporation is concerned with repayment of loan either from the property or persons offered as surety. thus, a vehicle, which is subject matter of confiscation proceeding under the act, 1872, being not available to the orissa state financial corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the orissa state financial corporation. agreement between the orissa state financial corporation and the loanee is a pure and simple contract governed by the provisions of the contract act, 1872 read with the provisions in the act, 1951 and its rules. on the other hand, a confiscation proceeding under the act, 1972 is punitive in nature for commission of a forest offence. thus, by virtue of the provision in section 56 read with section 64 (2) of the act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by orissa state financial corporation. by doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the orissa state financial corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. in other words, on payment of the sale proceeds of the confiscation proceeding to the orissa state financial corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. such a concept is totally not conceivable from any provision in the act, 1972 or the act, 1951. [air 2002 orissa 130 overruled]. -- state financial corporations act, 1951. section 29; discharge of loan orissa forest act (14 of 1972), section 56 confiscation of vehicle - held, the authorities under section 56 of the orissa forest act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of orissa state financial corporation when such vehicles were purchased on being financed by the orissa state financial corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. on the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the department which initiated the confiscation proceeding. apart from that, the claim of the orissa state financial corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the state financial corporation act, 1951 or the heirs and successors of such persons. procedure is provided in the act, 1951 and the rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. if such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. the financial corporation is concerned with repayment of loan either from the property or persons offered as surety. thus, a vehicle, which is subject matter of confiscation proceeding under the act, 1872, being not available to the orissa state financial corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the orissa state financial corporation. agreement between the orissa state financial corporation and the loanee is a pure and simple contract governed by the provisions of the contract act, 1872 read with the provisions in the act, 1951 and its rules. on the other hand, a confiscation proceeding under the act, 1972 is punitive in nature for commission of a forest offence. thus, by virtue of the provision in section 56 read with section 64 (2) of the act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by orissa state financial corporation. by doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the orissa state financial corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. in other words, on payment of the sale proceeds of the confiscation proceeding to the orissa state financial corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. such a concept is totally not conceivable from any provision in the act, 1972 or the act, 1951. [air 2002 orissa 130 overruled]. s.c. mohapatra, j.1. statement of the case was called for under section 24(3) of the orissa sales tax act, 1947, on the following question :'whether, on the facts and in the circumstances of the case, the learned tribunal was justified in remanding the matter for fresh assessment instead of annulling the entire assessment ?'2. the dealer has been assessed under section 12(4) of the act in respect of the year 1972-73 and the quarter ending june, 1973. notice was not served on the dealer personally. the tribunal found that such notice was served on one maheswar dolai who is not connected with the business in any manner. the tribunal remitted the matter back to the sales tax officer for assessing the dealer in accordance with law after giving notice to him. making grievance of the same, the dealer filed application that period of limitation for completing assessment having expired, there was no scope for remand of the case and the assessment should have been annulled.3. section 12(7), second proviso, fixed the period of limitation for completion of assessment. it reads as follows :'12. assessment of tax.--(1) to (6)..............(7) any assessment made under this section shall be without prejudice to any prosecution instituted for an offence under this act :provided..........provided further that no order assessing the amount of tax due from a dealer in respect of any year or part thereof shall be passed later than thirty-six months from the expiry of the year :provided further that the period of limitation fixed in the proviso immediately preceding shall not apply to assessment under sub-section (5) or sub-section (8) of this section or to enhancement of assessment or order of fresh assessment made or passed under section 23.(8) .............'4. in view of the aforesaid provision for the year 1972-73, assessment under section 12(4) is required to be completed within thirty-six months from march 31, 1973, i.e., within march 31, 1976. in respect of the quarter ending june, 1973, such assessment is to be completed within thirty-six months from the expiry of the year, which ends on march 31, 1974. accordingly, assessment for this quarter is to be completed on or before march 31, 1977.5. no assessment can be completed without notice. order without notice is liable to be vacated. order being vacated proceeding remains pending. it is true that limitation fixed would not be attracted to fresh order of assessment made or passed under section 23 as is provided in the third proviso to section 12(7). but such fresh assessment means where notice had been validly served. on the assessment order being set aside it goes to the stage where the defect or deficiency is found out. where the defect or deficiency as found affects the jurisdiction as in the case of absence of notice, protection under third proviso is not available. merely because the tribunal sets aside the order of assessment under section 23 for absence of notice, the third proviso cannot give protection to revenue. accordingly, as on april 16, 1974, completion of assessment has become barred by limitation and there was no scope for any assessment.6. even though assessment cannot be completed under section 12(4) of the act beyond the period of limitation, there is no prohibition for accepting the return as provided under section 12(1) of the act. accordingly, assessment is not to be annulled but the same is to be confined to the return figure.7. in the result, answer to the question is made in favour of the dealer to the extent indicated above. no costs.j.m. mahapatra, j.8. i agree.