Hononourable Dr. KOTHARI, J. - (1.) THIS revision petition has been filed by the assessee apparently against the order of the Tax Board dated 14.1.2010 passed in appeal No. 1773/2007/Jodhpur.
(2.) THE learned Tax Board has rejected the assessee's appeal on the ground that with the amendment of Central Sales Tax Act, 1956 with effect from 11.5.2002 whereby Section 8(2A) of the said Act was deleted and sub- sec. (4) was substituted by the Central Government, therefore, the assessee could not have availed concessional rate of tax on the sale of DEPB licence by him in the course of inter-state trade or commerce without supporting such sales against the prescribed declaration form "C/D" as prescribed in the Central Sales Tax (Registration and Turn-over) Rules, 1956. The learned counsel for the petitioner assessee Mr. Dinesh Mehta at the outset fairly submitted that in view of amendment in law w.e.f. 11.5.2002 making furnishing of declaration in forrn "C/D" mandatory, since assessment period in question admittedly falls after such amendment, therefore, he cannot assail the order of the Tax board validly. However, one contention which is sought to be raised by the learned counsel for the petitioner on the strength of an administrative order passed by the Secretary (Revenue) of the Finance Department of the Government of Rajasthan, a copy of which is placed on record as Annex. 7 and which is reproduced hereunder, is that since the inter state tax liability under the said Act for the period between 13.5.2002 to 25.9.2005 was written off by the State Government, therefore, the Central Sales Tax recovered from the petitioner - assessee for such inter state sales made by him but not supported by the declaration form "C/D" deserves to be refunded back to him and notwithstanding no challenge to the order of the Tax Board, the said Tax recovered from the petitioner - assessee deserves to be refunded back to him. The learned counsel for the Revenue Mr. Mathur strenuously opposed the said submission and urged that by the administrative order, the amendment in the CST Act w.e.f. 11.5.2002 by Act No. 20 of 2002 could not have been undone. He submitted that unrecovered tax liability on account of said amendment in law could only be written off by the said administrative order of the State Government and there is no question of refunding back the tax already so recovered from the assessee on the anvil of the said administrative order. The said administrative order Annex. 7 is reproduced hereunder: JUDGEMENT_1191_RAJLW2_2011Image1.jpg A bare perusal of the said administrative order reveals the contradiction in terms of said order. What could be written off as unrecoverable by the State Government could only be what stood as tax viz., CST still recoverable from the assessee. There is no question of writing off the tax liability itself as it is. Therefore, the use of words "......" in juxta-position is contradiction in terms. The English translation of these words are "liability" or "obligation" and "write off or "waiver" respectively. The meaning of words "Bad Debt" as given in Black's Law Dictionary is as under: "a debt which is uncollectible; a permissible deduction for tax purposes in arriving at taxable income. Different tax treatment is afforded business and non-business bad debts. A business debt is defined by the Internal Revenue Code as a debt created or acquired in connection with a trade or business of the taxpayer, or a debt which becomes worthless in the taxpayer's trade or business. Loans between related parties (family members) generally are classified as non- business." The meaning of word "liability" as given in Black's Law Dictionary is as under: "an obligation which may or may not ripen into a debt; any kind of debt or liability, either absolute or contingent, express or implied; penalty for failure to pay tax when due, State vs. Fischl, 94 Mont. 92, 20 P.2d 1057, 1059; present, current, future, fixed or contingent debts, Erickson vs. Grande Ronde Lumber Cop., 162 Or. 56, 92 P. 2d 170, 174; punishment, Holliman vs. Cole, 168 Okl. 473, 34, P.2d 597, 599; responsibility for torts, Italiani v. Metro-Goldwyn-Mayer Corporation, 45 Cal.App.2D, 464, 114 P.2d, 922, 924; that which one is under obligation to pay, or for which one is liable."
(3.) THE word "waiver" has been defined in Black's Law Dictionary is as under: "THE intentional or voluntary relinquishment of a known right, or such conduct as warrants an inference of the relinquishment of such right, or when one dispenses with the performance of something he is entitled to exact or when one in possession of any right, whether conferred by law or by contract, with full knowledge of the material facts, does not forbears to do something the doing of which or the failure of forbearance to do which is inconsistent with the right, or his intention to rely upon it. THE renunciation, repudiation, abandonment, or surrender of some claim, right, privilege, or of the opportunity to take advantage of some defect, irregularity or wrong. An express or implied relinquishment of a legal right. A doctrine resiting upon an equitable principle, which courts of law will recognize. Atlas Life Ins. Co. vs. Schrimsher, 179, Okl. 643, P.2d 944, 948. Waiver is essentially unilateral, resulting as legal consequence from some act or conduct of party against whom it operates, and no act of party in whose favour it is made is necessary to complete it." It appears that the concerned Secretary while issuing this administrative order with the approval of Governor has remained oblivious of this contradiction in his administrative order. While it is the choice of the State Government to write off the tax outstanding which remains unrecovered from the assessee for any reason, even though the relevant law makes that liability as enforceable liability and recoverable tax, having the sanction of law under Article 265 of the Constitution of India read with relevant provision of such enactment, what cannot be written off is 'liability' to pay the tax itself. It is well known accounting policy to write of bad debts i.e. the debt which cannot be recovered for any reason, similarly unrecovered outstanding tax from assessee can also be written off by the State, but liability to pay tax itself cannot be written off, unless statute is amended or and power to exempt such tax liability is exercised by the State. A Secretary of Finance Department to the State by administrative order even with the approval of the Governor cannot exercise the power to exempt the tax liability. It is the legislative function to be exercised by the State Government as an subordinate legislative function. ;