INDIA TYRE AND RUBBER COMPANY INDIA PRIVATE LIMITED Vs. COMMERCIAL TAX OFFICER II CENTRAL ASSESSMENT CIRCLE MADRAS

JUDGEMENT

(1.) INDIA Tyre and Rubber Co. (INDIA) Private Limited, the petitioner in all the writ petitions, has filed W. P. No. 682 of 1977 for the issue of a writ of certiorarified mandamus to quash the order of the Sales Tax appellate Tribunal, the second respondent herein, dated 22nd March, 1977, and to direct the second respondent to implied the petitioner in Appeal No. 891 of 1976 on his file. W. P. Nos. 1449, 1450 and 1451 of 1978 are filed by the petitioner for the issue of a writ of mandamus restraining the second respondent from taking up and considering Appeals Nos. 892, 893 and 894 of 1976. The facts leading to the filing of the writ petitions may be briefly stated as follows : The petitioner-company carries on business in the sales of tyres and rubber products. It also holds a manufacturing licence for tyres and rubber products. On 4th May, 1960, the petitioner-company entered into a contract with dunlop INDIA Limited, the third respondent herein. Under the said contract, dunlop INDIA Limited agreed to manufacture on behalf of the petitioner-company tyres and rubber products. It is further agreed that in all matters relating to purchase of raw materials, engagement of labour, conducting of such operations as may be incidental to or necessary for the manufacture of the said goods in the factory of Dunlop INDIA Limited, the latter shall be acting on behalf of the petitioner-company. Under the terms of the said contract, Dunlop INDIA limited would be entitled to be reimbursed the actual cost of production together with incidental expenses at the rate of 5 per cent of such raw materials and production costs. The petitioner had also covenanted to bear and pay all actual charges and expenses incurred in connection with the said goods. It is the petitioner's case that the nature of the transactions under which dunlop INDIA Limited agreed to manufacture tyres and rubber products for the petitioner-company is a works contract. The petitioner-company had been submitting returns under the Tamil Nadu General Sales Tax Act (hereinafter called the Act) and the sales tax authorities had been finalising the assessment on the basis that the first point of sale in the State is at the point where the petitioner has been selling the goods manufactured for them by dunlop INDIA Limited. It is further averred in the affidavit filed in support of the writ petitions that till 1975 the sales tax authorities had accepted that the nature of the transaction between Dunlop INDIA Limited and the petitioner-company was in the nature of a "works contract". While so, the Commercial Tax Officer II, Central Assessment Circle, Madras, the first respondent herein, issued a notice to the third respondent on 4th March, 1975. The notice was issued under section 16 of the Act for the assessment years 1969-70 to 1972-73 on the basis that the transaction between the petitioner and dunlop INDIA Limited was one of sale and that this factor had escaped notice at the time of the original assessment. Ultimately, the first respondent held that the transaction between the petitioner and Dunlop INDIA Limited was one of sale and the assessment was finalised on that basis. Against the orders of the first respondent, Dunlop INDIA Limited preferred appeals before the Appellate assistant Commissioner and the latter dismissed the appeals by his order dated 10th September, 1976, but however the matter was remitted to the assessing authority for the purpose of determining the correct amount. Against the orders of the appellate authority, Dunlop INDIA Limited have preferred Appeals Nos. 891 to 894 of 1976 before the second respondent, the Sales Tax Appellate tribunal (hereinafter called the Tribunal), Madras. All the above appeals are now pending before the Tribunal.

(2.) WHILE so, the petitioner-company filed petitions on 15th march, 1977, before the Tribunal which were diarised as serial Nos. 6767 to 6770 praying that it might be impleaded as party to Appeals Nos. 891 to 894 of 1976 filed by Dunlop India Limited. The Tribunal by its order dated 22nd March, 1977, returned the petitions on the ground that they did not fall under section 36 (1) of the Act. The said order has been signed by the Secretary to the tribunal. W. P. No. 682 of 1977 has been filed to quash the order of the tribunal returning the petitions filed by the petitioner-company and to get itself impleaded in Appeal No. 891 of 1976 filed by Dunlop India Limited; and w. P. Nos. 1449, 1450 and 1451 of 1978 are filed to restrain the second respondent from taking up and considering Appeals Nos. 892, 893 and 894 of 1976. Counter-affidavits have been filed on behalf of respondents Nos. 1 and 2. According to the counter-affidavit, Dunlop India Limited is an assessee on the file of the first respondent. The first respondent revised the assessments for the years 1969-70 to 1972-73 by the order dated 10th November, 1975, by which it was held that the transactions between the assessee and the petitioner-company were sales eligible to single point tax at the assessee's hands. Against these orders, the assessee filed appeals before the Appellate assistant Commissioner and the appellate authority concurred with the assessing authority in its finding as regards the liability of Dunlop India Ltd. to tax, but remanded the case for determination of the correct turnover. Against the said orders of the appellate authority, Dunlop India Limited have preferred appeals Nos. 891 to 894 of 1976. Dunlop India Limited themselves have preferred petitions purporting to be under section 36 (2) of the Act for impleading the petitioner-company as the second respondent. That petition is still pending consideration. WHILE so, the petitioner filed four petitions before the tribunal for being impleaded as a party in the appeals filed by Dunlop India limited. As the petitions themselves were not maintainable, the Tribunal rejected the petitions under regulation 7 (2) of the Sales Tax Appellate tribunal Regulations. It is stated that since the petitioner-company was not a party before the assessing authority or the appellate authority, it had no locus standi to get itself impleaded as a party in the appeals before the tribunal. It is further stated that under regulation 7 (2) of the Sales Tax appellate Tribunal Regulations, the Chairman, Sales Tax Appellate Tribunal, has power either to reject or order the papers to be returned to the party. The papers were returned in view of the fact that the Chairman had invoked the power under the said provisions. Mr. Parasaran, the learned counsel for the petitioner, raised the following contentions : (1) The petitioner was not heard before the second respondent passed the order returning the petitions filed by the petitioner-company to get itself impleaded in Appeals Nos. 891 to 894 of 1976. (2) The Tribunal has an inherent power to implied necessary or proper parties in the appeals, which are pending before them. (3) Under section 36 any person objecting to an order passed by the Appellate Assistant Commissioner under sub-section (3) of section 31 or an order passed by the Deputy commissioner under sub-section (1) of section 32 has a right of appeal to the tribunal. The words used in the section being "any person", any person aggrieved by the order of the Appellate Assistant Commissioner or the order passed by the Deputy Commissioner will have a right of appeal to the tribunal. The words "any person" in the section, according to Mr. Parasaran, should not be confined only to the assessee alone against whom an order has been passed by the Appellate Assistant Commissioner or the Deputy commissioner. In the submission of the learned counsel, the impact of the order of the assessing authority and the Appellate Assistant Commissioner, holding that the transaction between the petitioner and Dunlop India Limited is not in the nature of a works contract but in the nature of a sale, will be on the petitioner-company. Dunlop India Limited will be entitled to recover the amount of sales tax that might be levied against them from the petitioner-company. The amount involved will come to about Rs. 62, 00, 000. Therefore, the petitioner-company is aggrieved by the order of the assessing authority and the appellate authority and will have even a right of appeal against the order of assessment passed by the Appellate Assistant Commissioner under section 36 of the Act as a person aggrieved. If that is so, then certainly the petitioner-company will be a proper party in the appeals pending before the tribunal. The real persons who will be affected by any order that might be finally passed by the Tribunal will be the petitioner-company and that, consequently, the petitioner-company has got a right to be heard in the appeals filed by Dunlop India Limited. The question for consideration is whether the contentions of the learned counsel for the petitioner are sustainable.

(3.) MR. Parasaran referred to section 96 of the Civil procedure Code. The language of section 96 is that an appeal shall lie from every decree passed by any court exercising original jurisdiction to the court authorised to hear appeals from the decisions of such court. As a general principle no one can appeal from a decree unless he was a party to the action or was treated as such or is the legal representative of a party, or unless his privity in estate, title or interest is apparent on the face of the record. But a person who is not a party to the action may be allowed to appeal if he is adversely affected by the order, provided the appellate court thinks fit in its discretion to grant such leave. In State of Punjab v. Amar Singh the Supreme court observed as follows : "a person who is not a party to a decree or order may, with the leave of the court, prefer an appeal from such decree or order if he is either bound by the order or is aggrieved by it or is prejudicially affected by it. " It is therefore clear that any person claiming a right to prefer an appeal against a decree or order under section 96, C. P. C. , must be a person who is bound by the decree or order or he is aggrieved by it or is prejudicially affected by it. In Maharaj Singh v. State of U. P. it is stated : "the test whether a person is'an aggrieved person' is to see whether he has a genuine grievance because an order has been made which prejudicially affects his interests."