R.K.Datta Chaudhuri, Member (J) - (1.) IN this application under section 8 of the West Bengal Taxation Tribunal Act, 1987, the applicant, a dealer registered under the provisions of the West Bengal Sales Tax Act, 1994 prays for quashing the order passed on May 27, 2009 by the Senior Joint Commissioner of Commercial Tax, Corporate Division in the matter SOD -163/CD/2006 -07 four quarters ending March 31, 2000 revoking under section 12 of the WBST (Settlement and Dispute) Act, 1999, the certificate of settlement issued under section 8(1) of the said Act on April 24, 2007 on the ground of suppression of the fact of pendency of criminal prosecution against him on the complaint that the dealer made fictitious claim with production of fake Central F forms which is punishable under section 88(6) and under section 88(7) of the West Bengal Sales Tax Act, 1994 and also for payment of exemplary cost. The fact as stated by the applicant in short is this: On completion of the assessment of 2002 -03, the Bureau of Investigation initiated investigation and in pendency of the said investigation on March 31, 2005 the Bureau of Investigation made a complaint of commission of offences punishable under section 88(6) and 88(7) of the West Bengal Sales Tax Act, 1994. The applicant was arrested and on being compelled, he paid a sum of Rs. 20 lakhs. When this amount was not adjusted by re -opening assessment, he made an application bearing No. RN -193 of 2005 in this Tribunal. This Tribunal directed under order dated April 27, 2005 to complete the investigation within four months and also directed re -opening of the assessment within a period of two months thereafter. The applicant impeached this order in the honourable High Court in WPTT 8 of 2005 and under order dated June 10, 2005 the honourable Calcutta High Court modified the order of this Tribunal to the extent that the reopening of assessment and adjustment of excess tax had to be made within one month. But this order not being complied with, the applicant filed a contempt application before the honourable Calcutta High Court. Thereafter on November 14, 2006 the applicant received a copy of an application for variation of the order dated June 10, 2005 claimed to have been filed by the respondent. Both the contempt application and variation application were pending. The appeal was disposed of ex parte. The applicant filed a revisional application before the West Bengal Commercial Taxes, Appellate and Revisional Board under section 82 of the West Bengal Sales Tax Act, 1994 on October 20, 2003 disputing the claim of Rs. 95,693.10 as tax, interest and penalty. In pendency of the revisional application, the applicant filed an application under section 5 of the WBST (Settlement of Dispute) Act, 1999 before the designated authority who thereafter issued a notice in form 3. The applicant removed the deficiencies. The dispute relating to the period four quarters ending March 31, 2000 was settled and intimation in form 3A was issued vide Memo No. 409 dated April 24, 2007. A show -cause notice dated February 23, 2009 was served on the applicant's proposing to revoke the said settlement certificate. Under order dated April 17, 2009 passed by this Tribunal in RN -160 of 2009 (Sambhu Prasad Agarwal v. Senior Joint Commissioner of Sales Tax, Corporate Division, (2010) 31 VST 148 (WBTT) this notice was set aside. Thereafter a second notice dated April 30, 2009 on same matter was served upon him. In response to this notice the applicant sent a letter setting out some grounds of objections and also prayed for adjournment for making further objections. The prayer for adjournment was rejected and the matter was concluded ex parte under the impugned order. The applicant contended that (i) the reasonable opportunity of being heard was denied to him by refusing prayer for adjournment, (ii) the second notice on same matter was barred by the principle of res judicata, (iii) that respondent No. 1 had no jurisdiction to act as "appropriate designate authority" as defined in rule 2(b) of the WBST (Settlement of Dispute) Rules, 1999, (iv) the revocation of the settlement certificate nearly 2 years after issue of the certificate was improper, and (v) the certificate of Settlement was issued as per the Government policy having knowledge of the criminal prosecution as complained of. By the supplementary affidavit the applicant challenged retrospectivity of the Notification Nos. 843 FT and 844 FT both dated June 9, 2009 making amendment in the Notification No. 2229 FR dated August 18, 2003 by substituting on Senior Joint Commissioner of Commercial Taxes referred to in clause (qa) for "Deputy Commissioner of Commercial Taxes", referred to in clause (k) with effect from January 16, 2009 and prayed for setting aside the same on the ground that these are ultra vires to section 3 of the WBST (Settlement of Dispute) Act, 1999 because under section 3 of the Act, the Government has no power to issue notification with retrospective validity. The applicant disclosed pendency of criminal prosecution against him in RN -193 of 2005, RN -205 of 2006 of this Tribunal and in WPTT 8 of 2005, RN -449 of 2005 and RN -160 of 2009 (Sambhu Prasad Agarwal v. Senior Joint Commissioner of Sales Tax, Corporate Division, (2010) 31 VST 148 (WBTT).
(2.) RESPONDENT No. 1 introducing himself as Senior Joint Commissioner of Commercial Taxes, Corporate Division, as well as designated authority under the WBST (Settlement of Dispute) Act, 1999 contested the application by filing AO supporting the impugned order of revocation of the Certificate of Settlement. He submitted that the principle of constructive res judicata is not applicable because in the present case fraud was committed. Section 3 of the Settlement of Dispute Act requires State Government to appoint, by notification published in the official gazette, one or more authorities referred to in section 3, 4 or 5 of the West Bengal Sales Tax Act, 1994 to be the designated authority. Accordingly by Notification No. 2677 FR dated September 29, 2003 the State Government has appointed the Deputy Commissioner of Commercial Taxes posted in the Corporate Division to be the designated authority for carrying out the purposes of the Settlement of Dispute Act in relation to any dealer the appropriate assessing authority is posted in Corporate Division. Therefore the State Government has specified Senior Joint Commissioner of Corporate Division as the designated authority under section 3 of the Settlement of Dispute Act. By Notification No. 844 FT dated June 9, 2009 the State Government substituted the words "Deputy Commissioner of Commercial Taxes" with the words "Senior Joint Commissioner of Commercial Taxes" at the said notification shall be deemed to have come into force from January 16, 2009. Respondent No. 1 is a Senior Deputy Commissioner of Commercial Taxes posted in the Corporate Division. The appropriate assessing authority of the applicant is posted in the Corporate Division by virtue of Notification No. 2677 FR dated September 29, 2003 as amended by Notification No. 844 FT dated June 9, 2009. Respondent No. 1 is the designated authority in relation to any dealer. Appropriate assessing authority is posted in Corporate Division. Section 3 does not require the State Government to appoint any particular individual as the designated authority. The State Government is required only to specify the designation of the authority who would exercise the power. The Deputy Commissioner of Corporate Division who issued the certificate of settlement to the applicant, exercised power conferred by the Notification No. 2677 FR dated September 29, 2003 while the Senior Joint Commissioner of Commercial Taxes who revoked the same, exercised the power under Notification No. 2677 FR dated September 29, 2003 as amended by Notification No. 844 FT dated June 9, 2009. Having accepted the jurisdiction of the Deputy Commissioner, Corporate Division in the matter of settlement of dispute, the petitioner is estopped from challenging the jurisdiction of the Senior Joint Commissioner. The matter of institution of criminal case was not within the knowledge of the designated authority while scrutinizing the application of the applicant under section 8(1) of the Settlement of Dispute Act. The form 3A was obtained by the applicant by suppressing material information or furnishing a false declaration and hence the provision of section 5 of the Act does not apply. He prays for dismissal of the application. In reply to the supplementary affidavit filed by the applicant the contesting respondent submitted that section 15 of the Settlement of Dispute Act permits the State Government to make any rules with retrospective effect for carrying the purposes of the Act and as such the impugned notifications are supported by section 15 of the Act. By an office order dated September 18, 2008 of the Additional Commissioner of Commercial Taxes, Corporate Division, Shri Baidya was entrusted with the duty and disposing of all the pending settlement of dispute cases. A copy of the said order is annexed with the application and marked A. The appointment of Shri Sekhar Ch. Baidya as the designated authority can be upheld by the Notification No. 849 FT dated June 9, 2009. In the affidavit -in -reply, the applicant submits that he did not challenge the validity of appointment of Sri Baidya as designated authority but he only challenged the retrospectivity of the appointment and that in the impugned order respondent No. 1 did not find that the fraud was committed as asserted in the AO.
(3.) BY Memo No. 3568/SoD/CD dated April 30, 2009 the Senior Joint Commissioner of Commercial/Sales Tax, Corporate Division asked the applicant to appear and show cause on May 25, 2009 as to why the certificate of settlement granted to him for the period four quarters ending March 31, 2000 should not be revoked under section 12 of the West Bengal Sales Tax (Settlement of Dispute) Act, 1999 on the ground of suppressing material information of pendency of prosecution against him and furnishing a false verification by him. In reply hereto, the applicant submitted a representation before the Senior Joint Commissioner asserting that the designated authority with knowledge of the pendency of criminal prosecution, issued the settlement certificate. He challenged the jurisdiction of the Senior Joint Commissioner over the issue. He submitted that revocation was not permissible after long delay. In the same representation he also sought for two months' time for exhaustive reply. Under the impugned order the request for adjournment was considered and was rejected with the reasons that the sufficient time was given for showing cause and actually, the applicant showed the cause. The grounds of rejection of the request for adjournment are not improper and hence we do not accept the applicant's contention that the opportunity of being heard in the matter of rejection of the settlement certificate was denied to the applicant. Section 3 of the West Bengal Sales Tax (Settlement of Dispute) Act, 1999 provides that the State Government may by notification published in the official gazette, appoint one or more authorities referred to in section 3, 4 or section 5 of the West Bengal Sales Tax Act, 1994 to be the designated authority for earning the purpose of the West Bengal Sales Tax (Settlement of Dispute) Act, 1999. By Notification No. 71 FT dated January 15, 2009 sub -rule (1) of rule 5 of the West Bengal Sales Tax (Settlement of Dispute) Rules, 1999 was amended by substituting the words "Deputy Commissioner" with the words "Senior Joint Commissioner" but no notification to this effect was published. The post of the Deputy Commissioner has not also been abolished. The applicant therefore contended that as there was no notification published in the official gazette giving effect to the amendment in rule 5(1), the Senior Joint Commissioner could not usurp jurisdiction as designated authority within the meaning of section 3 of the West Bengal Sales Tax (Settlement of Dispute) Act, 1999 and the Deputy Commissioner continued to act as designated authority until the Notification No. 843 dated June 9, 2009 was published in the official gazette substituting the words "Deputy Commissioner of Commercial Taxes" with on "Senior Joint Commissioner of Commercial Taxes". Admittedly, this defect was cured by retrospective amendment by Notification Nos. 843 FT and 844 FT both dated June 9, 2009. The applicant challenges the retrospectivity of this amendment. The learned advocate Shri Sengupta submitted, "it is well -settled principle of administrative law that the subordinate legislation cannot be said to be valid unless it is within the scope of the provisions of the statute legislation. It has been settled by numerous judicial decisions that when no power has been given to issue notification with retrospective effect, the executive authority cannot make law can operate with retrospective effect ... In support of his contention he cited the decisions of the honourable Supreme Court reported in Income -tax Officer, Alleppey v. M.C. Ponnoose : (1970) 75 ITR 174 (SC) and of some honourable High Courts reported in Bhauram Jodhraj & Co. v. State of Assam, (1989) 75 STC 23 (Gauhati), Ananda Soap Factory v. State of Karnataka : (1978) 42 STC 356 (Karn), Titaghur Paper Mills Company Ltd. v. State of Orissa : (1980) 45 STC 170 (Orissa), Mahesh Chand Goyal v. State of Rajasthan : (1990) 78 STC 51 (Raj), Honest Corporation v. State of Tamil Nadu : (1999) 113 STC 26 (Mad), Ranbir Singh Ram Gopal v. State of Haryana : (2002) 125 STC 326 (P&H), Rathi Bhatta Company v. State of Haryana : (2004) 134 STC 51 (P&H). In the case of Income -tax Officer, Alleppey v. M.C. Ponnoose : (1970) 75 ITR 174 (SC) before the honourable Supreme Court, the fact was that the Income -tax Officer took steps to recover the arrears through the tahsildar and tahsildar effected the attachment of the shares of the assessee when he had no authority as tax recovery officer under the provisions of the Income -tax Act. This authority was given by a notification dated August 14, 1963 published in Kerala Gazette dated August 20, 1963 with retrospective effect from April 1, 1962. The attachment by the tahsildar was effected subsequent to April 1, 1962 to prior to August 14, 1963. This retrospectivity was challenged. In this case the honourable Supreme Court observed, "the courts will not, therefore, ascribe retrospectivity to new laws affecting rights unless by express words or necessary implication it appears that such was the intention of the Legislature. Parliament can delegate its legislative power within the recognized limits. Where any rule or regulation is made by any person or authority to whom such powers have been delegated by the Legislature it may or may not be possible to make the same so as to give retrospective operation. It will depend on the language employed in the statutory provision which may in express terms or by necessary implication empower the authority concerned to make a rule or regulation with retrospective effect. But where no such language is to be found it has been held by the courts that the person or authority exercising subordinate legislative functions cannot make a rule, regulation or bye -law which can operate with retrospective effect. It can hardly be said that the impugned notification promulgates any rule, regulation or bye -law all of which have a definite signification. The exercise of the power under sub -clause (ii) of clause (44) of section 2 of the Act is more of an executive than a legislative act. It becomes, therefore, all the more necessary to consider how such an act which has retrospective operation can be valid in the absence of any power conferred by the aforesaid provision to so perform it as to give it retrospective operation. In Strawboard Manufacturing Co. Ltd. v. Gutta Mill Workers' Union : (1953) SCR 439 an industrial dispute had been referred by the Governor to the Labour Commissioner or a person nominated by him with the direction that the award should be submitted not later than April 5,1950. The award, however, was made on April 13, 1950. On April 26, 1950, the Governor issued a notification extending the time up to April 30. It was held that, in the absence of a provision authorizing the State Government to extend from time to time the period within which the Tribunal or the adjudicator could pronounce the decision, the State Government had no authority to extend the time and the award was, therefore, one made without jurisdiction and a nullity. This decision is, quite apposite and it is difficult to hold in the present case that the taluka tahsildar could be authorized by the impugned notification to exercise powers of a tax recovery officer with effect from a date prior to the date of the notification. It may next be considered whether by saying that the new definition of 'tax recovery officer' substituted by section 4 of the Finance Act, 1963, 'shall be and shall be deemed always to have been substituted', it could be said that by necessary implication or intendment the State Government had been authorized to invest the officers mentioned in the notification with the powers of a tax recovery officer with retrospective effect. The only effect of the substitution made by the Finance Act was to make the new definition a part of the Act from the date it was enacted. The legal fiction could not be extended beyond its legitimate field and the aforesaid words occurring in section 4 of the Finance Act, 1963, could not be construed to embody conferment of a power for a retrospective authorization by the State in the absence of any express provision in section 2(44) of the Act itself. It may be noticed that in a recent decision of the Constitution Bench of this court in B.S. Vadera v. Union of India : AIR 1969 SC 118 it has been observed with reference to rules framed under the proviso to article 309 of the Constitution that these rules can be made with retrospective operation. This view was, however, expressed owing to the language employed in the proviso to article 309 that any rules so made shall have effect subject to the provisions of any such Act'. As has been pointed out the clear and unambiguous expressions used in the Constitution, must be given their full and unrestricted meaning unless hedged in by any limitations. Moreover, when the language employed in the main part of article 309 is compared with that of the proviso it becomes clear that the power given to the Legislature for laying down the conditions is identical with the power given to the President or the Governor, as the case may be, in the matter of regulating the recruitment of Government servants and their conditions of service. The Legislature, however, can regulate the recruitment and conditions of service for all times whereas the President and the Governor can do so only till a provision in that behalf is made by or under an Act of the appropriate Legislature. As the Legislature can legislate prospectively as well as retrospectively there can be hardly any justification for saying that the President or the Governor should not be able to make rules in the same manner so as to give them prospective as well as retrospective operation. For these reasons the ambit and content of the rule -making power under article 309 can furnish no analogy or parallel to the present case. The High Court was consequently right in coming to the conclusion that the action taken by the tahsildar in attaching the shares was unsustainable.;