HIGHWAY MOTORS PRIVATE LIMITED Vs. STATE OF PUNJAB

JUDGEMENT

(1.) WHETHER a question of law not expressly adjudicated upon by the Tribunal, nor established to have been pressed before it, can still be presumed to arise out of its order within the meaning of Section 22 (1) of the Punjab General Sales Tax Act, merely because it was taken in the grounds of appeal or revision is the significant and the oft-arising question which has necessitated this reference to the Full Bench. Equally at issue is the correctness of the Division Bench judgment in Kelvinator of India Ltd. v. Haryana State (G. S. T. C. No. 19 of 1966 decided on 20th January, 1970-Punjab and Haryana High Court), page 141 infra which impliedly answered the aforesaid question in the affirmative.

(2.) IN General Sales Tax Reference No. 19 of 1975, the Presiding Officer of the Sales Tax Tribunal, Punjab, referred the following two questions for the opinion of this Court under Section 22 (1) of the Punjab General Sales Tax Act: (i) Whether, on the facts and the circumstances of the case, this case falls within the ambit of Section 11-A or Section 21 (1) of the Act ? (ii) Whether the assessee in law was afforded reasonable opportunity by the revising authority before passing the order ? The Division Bench, before which the matter came up in the first instance, was inclined to take the view that the second question did not arise out of the order of the Tribunal. However, the learned counsel for the assessee-petitioner pressed his claim on the ground that though the Tribunal had not dealt with the question in its order yet this had been specifically raised in the grounds of revision, annexure H and the positive stand taken was that such a question of law once raised in the grounds of revision even though not discussed or decided by the Tribunal would still be deemed to arise therefrom on the presumption that the same had been disallowed unless there was good evidence to show that it had been specifically given up. Basic reliance for this contention was on the Division Bench judgment of the Orissa High Court in Sitaram Kamal Prasad v. Collector of Sales Tax, Orissa AIR 1953 Orissa 7, which was later followed by the Division Bench of this Court in Kelvinator of India's case (G. S. T. C. No. 19 of 1966 decided on 20th January, 1970 -Punjab and Haryana High Court) page 141 infra. Specifically dissenting from the opinion expressed in Sitaram Kamal Prasad's case AIR 1953 Orissa 7 and consequently doubting the ratio in Kelvinator of India's case (G. S. T. C. No. 19 of 1966 decided on 20th January, 1970-Punjab and Haryana High Court) page 141 infra, the matter has been referred to the larger Bench to consider the correctness of the view in the latter judgment. 2a. Whilst considering the legal issue before us, I am inclined to the view that a very substantial ground thereof is now covered by the authoritative formulation of their Lordships in Commissioner of Income-tax, Bombay v. Scindia Steam Navigation Co. Ltd. AIR 1961 SC 1633. It, therefore, becomes unnecessary to launch on any exhaustive dissertation on principle. It would suffice to mention that the specific part of the language of Section 22 (1) of the Act is in pari materia with the corresponding part in Section 66 (1) of the Indian Income-tax Act of 1922. This similarity is manifest when the two provisions are juxtaposed with each other : Section 22 of the Punjab Section 66 (1) of the Indian General Sales Tax Act Income-tax Act, 1922 Section 22. (1) Within Within sixty days of the date 60 days from the passing upon which he is served with of an order under Sect- the notice of an order under Sub-ion 20 or 21 by Tribunal, Section (4) of Section 33 the affecting any liability assessee or the Commissioner may, of any dealer to pay tax by application in the prexscribed under this Act, such form, accompanied where appldealer or the Commiss- ication is made by the assessee ioner may, by applic by a fee of one hundred rupees, ation in writing acco- requre the Appellate Tribunal, mpanied by a fee of to refer to the High Court one hundered rupees any question of law arising in case the applic- out of such order and the ation is made by a Appellate Tribunal shall within dealer, require the ninety days of the receipt of Tribunal to refer to suchapplication draw up a the High Court any statement of the caseand question of law refer it to the High Court. arising out of such order.

(3.) HOWEVER, before adverting to the ratio of the Scindia Steam Navigation's case AIR 1961 SC 1633, it is necessary to view the larger scheme of the Punjab General Sales Tax Act which cannot be lost sight of. Section 20 of this Act provides for an appeal whilst the succeeding Section 21 is the source for the exercise of the revisional power. Sections 21-A and 21-B deal with rectification of mistakes and disposal of pending appeals and applications. It is thereafter that Section 22 pertaining to a reference to the High Court finds its place. Even a broad conspectus of the aforesaid five sections would indicate that the legislature's concern was to restrict severely the field of reference to the High Court. Whilst the appellate power under Section 20 is obviously wide ranging, the revisional power under Section 21 is restricted to the legality and propriety of the proceeding only. The power of reference is even more constricted and hedged in by two pre-eminent conditions, namely, that the reference can only be on a question of law (barring all questions of fact) and not merely that but further that such a question of law must arise out of the order of the Tribunal itself. The obvious intent of the legislature and the scheme of the statute, therefore, is to narrow down and constrict the scope of a reference to the High Court in contradistinction to the appellate and the revisional jurisdictions. Therefore giving Section 22 (1) a too wide interpretation would in essence be running counter to the purpose and object of its enactment. If the scope of reference to the High Court is construed as even wider or co-equal to that of the appellate jurisdiction then the very purpose of the constriction spelled out in Section 22 (1) would be frustrated. I am inclined to the view that if one goes to the length of holding that every point of law catalogued in the grounds of appeal or revision must by a notional fiction be presumed to arise out of the order of the Tribunal even though it makes not the remotest reference thereto then this would open a Pandora's box on which the lid cannot easily be put back.