COMMISSIONER OF SALES TAX Vs. KOLHAPUR ELECTRIC SUPPLY CO

JUDGEMENT

(1.) This is a reference under section 34(3) of the Bombay Sales Tax Act, 1953 (hereinafter referred to as "the said Act"), made at the instance of the Commissioner of Sales Tax.

(2.) The facts giving rise to this reference are as follows : In respect of the assessment period from 1st April, 1954, to 31st March, 1955, the assessees (respondents) claimed a set-off in respect of an amount of Rs. 2,761-4-9, which included, inter alia, an amount of Rs. 437-8-6, being the amount of general sales tax paid by the assessees on the purchase of certain electric meters, which were given by the assessees on rent to the consumers to whom the electricity produced by the assessees was supplied. It may be mentioned that the assessees were registered dealers under the said Act and were engaged in the generation and distribution of electricity. The claim of the assessees for set-off in respect of the said amount of Rs. 437-8-6 (hereinafter referred to as "the said amount") was disallowed by the sales tax authorities on the ground that such a set-off was not admissible under rule 11(2)(c) of the Bombay Sales Tax (Exemptions, Set-off and Composition) Rules, 1954 (hereinafter referred to as "the said Rules"). The assessee then approached the Sales Tax Tribunal. The Tribunal took the view that electric meters were undoubtedly machinery or tools or equipment and that the electrical energy generated or sold by the assessees could not have been supplied to the consumers without such meters. The Tribunal held that the phraseology of clause (c) of sub-rule (2) of rule 11 of the said Rules was wide enough to include within its scope electric meters purchased by the assessees and used as aforesaid in respect of which a set-off was claimed by the assessees. On the basis of these conclusions, the Tribunal set aside the orders passed by the sales tax authorities and allowed the set-off as claimed by the assessees. The applicant, the Commissioner of Sales Tax, filed an application under section 34(1) of the said Act before the Tribunal to state a case and refer certain questions of law as arising from the judgment and order of the Tribunal. The Tribunal by its order dated 29th April, 1966, held that no question of law arose out of their order and declined to state a case and refer any question of law to this court. The applicant then made a reference application, being Sales Tax Application No. 16 of 1966, in this court under section 34(2) of the said Act for directing the Tribunal to state a case and refer to this court certain questions of law, which, according to the applicant, arose from the judgment and order of the Tribunal. A Division Bench of this Court consisting of Kotval, C.J., and V. S. Desai, J., by an order dated 31st August, 1967, directed the Tribunal to draw up a statement of the case and raise and refer to this court for its determination three questions of law, which are as follows :

(3.) Pursuant to this order, a statement of case was prepared and submitted by the Tribunal but no questions were framed or referred to this court. The Commissioner, therefore, made an application to the Tribunal to incorporate in the statement of case the questions framed by this court as aforesaid and refer the same to this court. This application along with certain other similar applications came up for hearing before a Bench of the Tribunal consisting of Shri K. R. Gohokar and Shri. S. R. Deshpande, Members. The course adopted by this Bench of the Tribunal appears to us to be nothing short of astounding. After setting out the facts and after referring to the order passed by this court on 31st August, 1967, the Tribunal went on to say that they were of the view that it was not at all necessary to resubmit the statement of case in this case, and in certain other cases incorporating therein the three questions of law that were formulated by this court. The Tribunal observed that as these questions were framed by this court, these questions would be easily available to this court when the references would come before it for hearing. In this connection, we may point out that the provisions of section 34(3) of the said Act clearly provide that if the High Court is not satisfied that the refusal of the Tribunal to refer a question of law was justified, it may require the Tribunal to state a case and refer it to the High Court and on receipt of such requisition the Tribunal shall state and refer the case accordingly. A plain reading of this provision should have enabled the members of the Tribunal to realise that once this court had directed them to state a case and to refer certain questions of law to this court, the Tribunal was bound to do so, and the refusal of the Tribunal to do this is nothing other than judicial indiscipline, and we are all the more surprised that such a course was adopted by a Bench of the Tribunal, one of whose members, we are informed, was a District Judge. In fact, we were considering whether to keep back this reference and direct the Tribunal to incorporate in the statement of case the questions of law as directed by this court, but we have refrained from doing so, because adopting this course would have led to delay and inconvenience for the parties, who appear to be blameless in this matter. We, therefore, proceed with the consideration of the aforesaid questions as having been referred to us in this reference.