M/S Godrej Sara Lee Ltd v. the Excise and Taxation Officer-cum-assessing Authority & Ors.
DIPANKAR DATTA, J.
1. This appeal, by special leave, registers a challenge to an order
dated 12 th October, 2009 passed by the High Court of Punjab and Haryana
at Chandigarh (hereafter ‘the High Court’, for short) dismiss ing Civil
Writ Petition No.9191 of 2009 presented by the appellant and relegating
it to the remedy of an appeal under section 33 of the Haryana Value
Added Tax Act, 2003 (hereafter ‘the VAT Act’, for short).
2. Two questions emerge for decision on this appeal. First, whether
the High Court was justified in declining interference on the ground of
availability of an alternative remedy of appeal to the appe llant under
section 33 of the VAT Act, which it had not pursued. Should the answer
to the first question be in the negative, we would next be requir ed to
decide whether to remit the writ petition to the High Court for hearing it
on merits or to examine the correctness or otherwise of the orders
impugned before the High Court.
3. It appears on a perusal of the order under challenge in t his
appeal that the appellant had questioned the jurisdiction of the Deputy
Excise and Taxation Commissioner (ST)-cum-Revisional Authori ty,
M/S GODREJ SARA LEE LTD. v. THE EXCISE AND TAXATION
OFFICER-CUM-ASSESSING AUTHORITY
Kurukshetra (hereafter ‘the Revisional Authority’, for short) to reopen
proceedings, in exercise of s uo motu revisional power conferred by
section 34 of the VAT Act, and to pass final orders holding that the two
assessment orders, both dated 28 th February, 2007 passed by the ETO-
cum-Assessing Authority, Kurukshetra (hereafter ‘th e Assessing
Authority’, for short) for the assessment years 2003-04 and 2004-05
suffered from illegality and impropriety as delineated therein, viz. that
the Assessing Authority erred in levying tax on mosquito repella nt (a
product manufactured by the appellant) @ 4% instead of 10%. Keeping
in view the objection raised by counsel for the respondents that without
exhausting the remedy of appeal provided by section 33 of the VAT Act
“it would not be permissible to entertain this petit ion ” and upon
consideration of the decision of this Court reported in (1975) 2 SCC 436
(Titagarh Paper Mills vs. Orissa State Electricity Board & Anr.) based
on which it was contended on their behalf that where any right or liberty
arises under a particular Act then the remedy available unde r that Act
has to be availed, the High Court was of the opinion that there can be no
presumption that the appellate authority would not be able to grant relief
sought in the writ petition; hence, the writ petition was dismissed and the
appellants were relegated to the appellate remedy.
4. Before answering the questions, we feel the urge to say a few
words on the exercise of writ powers conferred by Article 226 of the
Constitution having come across certain orders passed by the high courts
holding writ petitions as “not maintainable” merely because the alternative
remedy provided by the relevant statutes has not been pursue d by the
parties desirous of invocation of the writ jurisdiction. The power to issue
prerogative writs under Article 226 is plenary in nature. Any limitation
on the exercise of such power must be traceable in the Constitution
itself. Profitable reference in this regard may be made t o Article 329
and ordainments of other similarly worded articles in the Constitution.
Article 226 does not, in terms, impose any limitation or restraint on the
exercise of power to issue writs. While it is true that exercise of writ
powers despite availability of a remedy under the very statute which has
been invoked and has given rise to the action impugned in the writ petition
ought not to be made in a routine manner, yet, the mere fact tha t the
petitioner before the high court, in a given case, has not purs ued the
alternative remedy available to him/it cannot mechanically be construed
as a ground for its dismissal. It is axiomatic that the high courts (bearing
in mind the facts of each particular case) have a discret ion whether to
879
entertain a writ petition or not. One of the self-imposed restrictions on
the exercise of power under Article 226 that has evolved through judicial
precedents is that the high courts should normally not entertai n a writ
petition, where an effective and efficacious alternative remedy is available.
At the same time, it must be remembered that mere avail ability of an
alternative remedy of appeal or revision, which the party invoking the
jurisdiction of the high court under Article 226 has not pursued, would
not oust the jurisdiction of the high court and render a writ petition “not
maintainable”. In a long line of decisions, this Court has made it clea r
that availability of an alternative remedy does not operate as an absolute
bar to the “maintainability” of a writ petition and that the rule, which
requires a party to pursue the alternative remedy provided by a statute,
is a rule of policy, convenience and discretion rather than a rule of law.
Though elementary, it needs to be restated that “entertainab ility” and
“maintainability” of a writ petition are distinct concepts. The fine but
real distinction between the two ought not to be lost sight of. The objection
as to “maintainability” goes to the root of the matter and if such objection
were found to be of substance, the courts would be rendered incapable
of even receiving the lis for adjudication. On the other hand, the question
of “entertainability” is entirely within the realm of discretion of the high
courts, writ remedy being discretionary. A writ petition desp ite being
maintainable may not be entertained by a high court for very many reasons
or relief could even be refused to the petitioner, despite setting up a
sound legal point, if grant of the claimed relief would not further public
interest. Hence, dismissal of a writ petition by a high court on the ground
that the petitioner has not availed the alternative remedy without, however,
examining whether an exceptional case has been made out for such
entertainment would not be proper.
5. A little after the dawn of the Constitution, a Constitution Bench
of this Court in its decision reported in 1958 SCR 595 (State of Uttar
Pradesh vs. Mohd. Nooh) had the occasion to observe as follows:
“10. In the next place it must be borne in mind that there is no
rule, with regard to certiorari as there is with mandamus , that it
will lie only where there is no other equally effective remedy. It is
well established that, provided the requisite grounds exist, certiorari
will lie although a right of appeal has been conferred by stat ute,
(Halsbury’s Laws of England , 3rd Edn., Vol. 11, p. 130 and the
cases cited there). The fact that the aggrieved party has anot her
and adequate remedy may be taken into consideration by the
M/S GODREJ SARA LEE LTD. v. THE EXCISE AND TAXATION
OFFICER-CUM-ASSESSING AUTHORITY [DIPANKAR DATTA, J.]
superior court in arriving at a conclusion as to whether it should,
in exercise of its discretion, issue a writ of certiorari to quash the
proceedings and decisions of inferior courts subordinate to it and
ordinarily the superior court will decline to interfere until the
aggrieved party has exhausted his other statutory remedies , if
any. But this rule requiring the exhaustion of statutory remedies
before the writ will be granted is a rule of policy, convenience and
discretion rather than a rule of law and instances are numer ous
where a writ of certiorari has been issued in spite of the fact that
the aggrieved party had other adequate legal remedies. ***”
6. At the end of the last century, this Court in paragraph 15 of the
its decision reported in (1998) 8 SCC 1 (Whirlpool Corporation vs.
Registrar of Trade Marks, Mumbai and Others) carved out the
exceptions on the existence whereof a Writ Court would be justified in
entertaining a writ petition despite the party approaching i t not having
availed the alternative remedy provided by the statute. The sa me read
as under:
(i) where the writ petition seeks enforcement of any of the
fundamental rights;
(ii) where there is violation of principles of natural just ice;
(iii) where the order or the proceedings are wholly without
jurisdiction; or
(iv) where the vires of an Act is challenged.
7. Not too long ago, this Court in its decision reported in 2021
SCC OnLine SC 884 (Assistant Commissioner of State Tax vs. M/s.
Commercial Steel Limited) has reiterated the same principles in paragraph
11.
8. That apart, we may also usefully refer to the decisions of this
Court reported in (1977) 2 SCC 724 (State of Uttar Pradesh & ors. vs.
Indian Hume Pipe Co. Ltd.) and (2000) 10 SCC 482 (Union of India
vs. State of Haryana) . What appears on a plain reading of the former
decision is that whether a certain item falls within an entry in a sales tax
statute, raises a pure question of law and if investigation i nto facts is
unnecessary, the high court could entertain a writ petition in its discretion
even though the alternative remedy was not availed of; a nd, unless
exercise of discretion is shown to be unreasonable or perverse, this Court
would not interfere. In the latter decision, this Court found the i ssue
881
raised by the appellant to be pristinely legal requiring determination by
the high court without putting the appellant through the mill of statutory
appeals in the hierarchy. What follows from the said deci sions is that
where the controversy is a purely legal one and it does not involve disputed
questions of fact but only questions of law, then it should be decided by
the high court instead of dismissing the writ petition on the ground of an
alternative remedy being available.
9. Now, reverting to the facts of this appeal, we find th at the
appellant had claimed before the High Court that the suo motu revisional
power could not have been exercised by the Revisional Authority in
view of the existing facts and circumstances leading to the only conclusion
that the assessment orders were legally correct and that the final orders
impugned in the writ petition were passed upon assuming a jurisdiction
which the Revisional Authority did not possess. In fine, t he orders
impugned were passed wholly without jurisdiction. Since a jurisdictional
issue was raised by the appellant in the writ petition questioning the very
competence of the Revisional Authority to exercise suo motu power,
being a pure question of law, we are of the considered view that the plea
raised in the writ petition did deserve a consideration on merits and the
appellant’s writ petition ought not to have been thrown out at the threshold.
10. Reliance placed by the High Court on the decision in Titagarh
Paper Mills (supra), in our view, was completely misplaced. The
respondent Electricity Board had levied coal surcharge on the appellant
company in terms of an agreement. Such agreement cont ained an
arbitration agreement in clause 23. Instead of pursuing its remedy in
arbitration, the appellant company unsuccessfully invoked th e writ
jurisdiction. This Court was approached whereupon it was held that in
view of the issues raised, there was no reason why the appellant company
should not pursue its remedy in arbitration, having solemnly ac cepted
clause 23 of the agreement, and instead invoke the e xtraordinary
jurisdiction of the high court under Article 226 of the Const itution to
determine questions which really form the subject matter of the arbitration
agreement. This decision could not have been of any relevance having
regard to the issue presented for resolution before the High Court by the
appellant, particularly when the disputes inter se were not referable to
arbitration.
11. We have reasons to believe, considering the nature of objection
raised by the respondents as recorded by the High Court in the impugned
order, that the High Court had mistakenly referred to Titagarh Paper
M/S GODREJ SARA LEE LTD. v. THE EXCISE AND TAXATION
OFFICER-CUM-ASSESSING AUTHORITY [DIPANKAR DATTA, J.]
Mills (supra) while intending to rely on a different decision of this Court
on an appeal preferred by the same party, reported in (1983) 2 SCC 433
(Titaghur Paper Mills Co. Ltd. vs. State of Orissa) . While upholding
the impugned order of dismissal of the writ petition, where a n order
passed by the Sales Tax Officer was under challenge, thi s Court in
Titaghur Paper Mills Co. Ltd. (supra) held that the challenge being
confined to the regularity of proceedings before the Sales Tax Officer
and there being no suggestion that the concerned officer had no jurisdiction
to make an assessment, the decision in Mohd. Nooh (supra) was clearly
distinguishable since in that case there was total lack of jurisdiction. This
Court also held that under the scheme of the relevant Act, there wa s a
hierarchy of authorities before which the petitioners can get adequate
redress against the wrongful acts complained of and th at since the
authority of the concerned officer to make an assessment was not in
question, recourse ought to be taken by initiating proceedings thereunder.
As noted above, the very jurisdiction of the Revisional Authority having
been questioned in the writ petition, the impugned order of the High
Court dismissing the writ petition without examining the merits of the
challenge cannot be sustained even if the High Court were to re ly on
Titaghur Paper Mills Co. Ltd. (supra) to support such order.
12. The High Court by dismissing the writ petition committed a
manifest error of law for which the order under challenge is unsustainable.
The same is, accordingly, set aside.
13. Moving on to decide the second question, ordering a remand
is an available option for us. However, having regard to the lapse of time
(almost a life term of fourteen years) since the orders impugned in the
writ petition were made, we feel that it would not be in the best interests
of justice to remit the matter to the High Court. Since prior to reserving
judgment on this appeal we had heard the parties on the merits of the
jurisdictional issue that the appellant had raised before the High Court, it
is time to rule on the jurisdiction of the Revisional Authority.
14. The appellant is engaged in the business of manufacturing,
marketing and sales of household insecticide products in various forms,
viz. mosquito coils, mats, refills, aerosols, baits and chal ks under the
popular brand name “Good Knight” and “Hit” from, inter alia , its sales
office at Kurukshetra, and is an ‘assessee’ under the VAT Ac t.
15. In terms of section 7 of the VAT Act, the taxable goods have
been classified under Schedules A, B and C. It is found from Schedule
883
C (as originally enacted) that pesticides, weedicides a nd insecticides
were included in Entry 1 and taxable @ 4%.
16. Returns were filed by the appellant for the Assessment Years
2003-04 and 2004-05 declaring its gross turnover from manufacturing
and sales of insecticides and pesticides, besides other consumer goods.
Such returns were duly accepted. However, in view of an amendm ent
in Entry 67 of Schedule C introduced by a notification dated 30 th June,
2005, notices were issued by the Assessing Authority as to why ta x
liability @ 10% instead of 4% should not be imposed. Upon hearing the
representative of the appellant, orders dated 28 th February, 2007 and
28 th March, 2008 were passed by the Assessing Authority for the
Assessment Years 2003-04 and 2004-05, respectively, accepting the
classification of goods and the rate of tax as stated by the appellant in its
returns, i.e. 4%.
17. Subsequently, the Revisional Authority called f or the
assessment records of the appellant for the Assessment Years 2003-04
and 2004-05 for revision of the assessment on classifying the household
insecticide products of the appellant as mosquito repellants and taxable
at the higher rate of tax, i.e. 10%, instead of 4%. Initially, show- cause
notices seeking to revise the assessments made for the As sessment
Years 2003-04 and 2004-05 were issued, and such exercise was followed
up by identically worded final orders, both dated 2 nd March, 2009.
18. Several legal questions including validity of certain notifications
were raised by the appellant before the High Court in its writ petition.
Apart from the question as to whether mosquito repellants are goods
classifiable as insecticides, pesticides, weedicides, etc., one other question
which the appellant sought to raise was whether an amendment in the
schedule of classification/rates of tax could be applied t o completed
assessments for the assessment years prior to the amendment coming
into effect. However, before us, the only limited question whi ch the
appellant raised was, whether the orders of the Revisional Authority,
both dated 2 nd March, 2009, seeking to revise the orders of the Assessing
Authority dated 28 th February, 2007 and 28 th March, 2008 pertaining to
the Assessment Years 2003-04 and 2004-05, have been issued in exercise
of jurisdiction conferred by law.
19. For facility of understanding, it would be convenient at thi s
stage to reproduce the material part from the revisional order passed in
respect of the Assessment Year 2004-05, below:
M/S GODREJ SARA LEE LTD. v. THE EXCISE AND TAXATION
OFFICER-CUM-ASSESSING AUTHORITY [DIPANKAR DATTA, J.]
“I, xxxxxxx, Dy. Excise & Taxation Commissioner-cum- Revisional
Authority, Kurukshetra called for the assessment record of M/ s
Godrej Sara Lee Ltd., Pipli holding TIN xxxxxxx for the
assessment year 2004-05. Shri xxxxxxx, ETO-cum-Assessing
Authority Kurukshetra passed this assessment order on 28.3.2008.
On examination of the assessment record, I was prima fac ie of
the view that the said assessment order suffered from the following
illegalities and impropriates (sic, improprieties):
The assessing authority erred in levying tax on Mosquito Repellant
@ 4% Instead of 10%
Accordingly, a show cause notice was issued for 2.3.2009. On
2.3.2009 Shri Ajay Goel, Advocate of the firm appeared along
with application for adjournment on the plea that due to closing
month of March, 2009 the dealer is unable to get the case decided.
The application for adjournment is rejected as the dealer has not
to produce any account books or is not to prepare any documents
only law point is involved in the case. The dealer has sold mosquito
repellant and deposited tax @ 4%. The Hon’ble Supreme Court
of India in the case of M/s Sonic Electrochem and another vs .
STO and other (1998) 12- PHT-215 (SC) held that Jet Ma t
Mosquito Repellant is not pesticides/insecticides. Therefore, these
goods are general goods and liable to tax at general rate of tax.
Hence, a notice was issued to the dealer to explain as to why tax
should not be levied at general rate of tax on the sale of mosquito
repellants. The counsel of the firm has not offered any arguments
on the issue. In view of the decision of the Hon’ble Apex Court in
the case of M/s Sonic Electrochem and another vs. STO and
other (1998) 12- PHT-215 (SC), it is unarguable clear that mosquito
repellant mats being unscheduled goods are taxable at general
rate of tax. Confusion was also cleared with the amendment to
entry 67 vide notification dated 1.7.2005.
In view of the above facts, it is clear that assessing aut hority
while framing assessment has erred in levying tax @ 4% o n
mosquito repellants. Hence the assessment order dated 28.3.2008
is revised u/s 34 of the Act ibid as under:
TTO @ 10% Rs.5,28,89,282 Rs.52,88,928
(Mosquito Repellants) Tax already assessed
885
By the AA in original
Order Rs.21,15,571
Due Rs.31,73,357
Issue Tax Demand Notice Challan for Rs.31,73,357 along with a
copy of the order to the dealer.”
20. The assessment order dated 28 th March, 2008 of the Assessing
Authority under section 15 of the VAT Act pertaining to Assessm ent
Year 2004-05, which was sought to be revised by the Revisional Authority,
had taken into consideration the decision of this Court reported in (1998)
6 SCC 397 (Sonic Electrochem vs. S.T.O.). The appellant therein having
sold ‘Jet Mat’, a mosquito repellent, it was ruled by this Court that the
same was liable to tax @ 10%. Considering such decision, a notice was
issued to the appellant to explain as to why tax should not be levied @
10% on the sale of ‘Godrej Mat’. Put to notice, it was inter alia argued
on behalf of the appellant before the Assessing Autho rity that the
Haryana Tax Tribunal (hereafter ‘the Tribunal’, for short), constituted
under section 57 of the VAT Act, by its order dated 21 st November, 2001
had the occasion to dismiss a petition filed by the depart ment seeking
review of an earlier order dated 22 nd March, 2000. The Assessing
Authority extracted the relevant part of the order 21 st November, 2001
of the Tribunal passed on the review petition in its order dated 28 th March,
2008, reading as follows:
“The only limited question to be addressed is whether the ratio of
the judgment of the Hon’ble Apex Court delivered in the above
mentioned case of M/s Sonic Electrochem and others is applicable
in the present case? This judgment of the Hon’ble Supreme Court
is clearly distinguishable from the facts of the present case as the
said judgment was delivered in special circumstances were there
was specific an entry 129 dealing with mosquito repellants and
hence the Court held that judgment would be covered under entry
129. However, there is no such corresponding entry in the Haryana
General Sales Tax Act and therefore the issue would be whether
mosquito repellant would fall within the entry deal ing with
insecticide etc. or not? The Hon’ble Madras High Court, t he
Tribunal in the case of Transelektra Domestic Products Pvt. Ltd.,
and others vs. Commercial Tax Officer, Porur Assessment Circle
Madras and others has clearly held that mosquito repell ants
M/S GODREJ SARA LEE LTD. v. THE EXCISE AND TAXATION
OFFICER-CUM-ASSESSING AUTHORITY [DIPANKAR DATTA, J.]
containing 4% Alethrin’ was an insecticide and relying on the
judgment of the Hon’ble Madras High Court, the Tribunal in the
case of M/s Balsara Hygiene Products Ltd. Kundli (Sonepat) vs
State of Haryana has also held that Mosquito Repellants is an
insecticide and hence liable to concessional rate of tax. The same
view has been taken by the Hon’ble Tribunal in the impugne d
order and I do not find any infirmity in this order. It has not been
contested that Jet Mats does contain ‘Allethrin’ whic h is an
insecticide. Hence, in these circumstances, the present revi ew
petition is dismissed.”
Being bound by the decision of the Tribunal, the Assessing Authority
formed an opinion and returned a finding that he had no other alternative
but to vacate the notice issued by him proposing to levy t ax @ 10%
instead of 4% and proceeded to do so.
21. Appearing in support of the appeal, Mr. V. Lakshmikumaran,
learned counsel, contended that the Assessing Authority having passed
the order dated 28 th March, 2008 taking into consideration the decision
of the Tribunal, which in turn distinguished the decis ion in Sonic
Electrochem (supra), and such decision having attained finality, the
Revisional Authority could not have assumed a jurisdiction to suo motu
issue the impugned show-cause notices as well as the final revisional
orders under section 34 of the VAT Act holding that mosquito repellent
mats being unscheduled goods, are taxable at the general ra te of tax.
According to him, the Revisional Authority was as much bound by the
order of the Tribunal as the Assessing Authority was having reg ard to
the similarity of issues involved and it was not open to such authority to
take a view different from the one expressed by the Tribunal.
22. Our attention was drawn by Mr. Lakshmikumaran to the
decision of this Court reported in 1992 SUPP (1) SCC 443 (Union of
India and Ors. Vs. Kamlakshi Finance Corporation Ltd.) in support
of the proposition that in disposing of quasi-judicial issues before them,
the Revenue Officers are bound by the decisions of th e appellate
authorities and that the principle of judicial discipline requires that the
orders of the higher appellate authorities are followed unreservedly by
the subordinate authorities.
23. Mr. Lakshmikumaran, accordingly, prayed that upon t he
revisional orders being set aside, the orders of the Assessing Authority
be restored.
887
24. Per contra , Mr. Alok Sangwan, learned counsel appearing
for the respondents, contended that the Revisional Authority did not
exceed its jurisdiction in exercising suo motu powers under section 34
of the VAT Act. By referring to notifications issued at or about the relevant
time amending Schedule C and the decision in Sonic Electrochem (supra),
he sought to argue on the merits of the determination ma de by the
Revisional Authority and how she was right in her findings tha t the
mosquito repellants manufactured by the appellant were liable to be taxed
@ 10% in terms of the decision in Sonic Electrochem (supra), and not
4% as assessed by the Assessing Authority in the orders under revision.
He also submitted that the orders of the Revisional Author ity do not
merit interference, and the appeal ought to be dismissed.
25. At the hearing, we made it clear that the issue as to whet her
the impugned orders of the Revisional Authority were sustain able on
merits would not be examined unless the Court was persuaded by Mr.
Sangwan to accept that the Revisional Authority did have the authority,
competence and jurisdiction to issue the impugned show-cause notices
and pass the consequential final revisional orders impugned in the writ
petition enhancing the liability of the appellant to tax @ 10% instead of
4%.
26. Since section 34 of the VAT Act appears to have been the
source of power exercised by the Revisional Authority, we sha ll first
notice its contents as it stood on the date of the impugned orders, i.e. 2 nd
March, 2009. Prior to its amendment with effect from 20 th March, 2009,
section 34 read as follows:
“Section 34. Revision. : - (1) The Commissioner may, on his own
motion, call for the record of any case pending before, or disposed
of by, any taxing authority for the purposes of satisfying himself
as to the legality or to the propriety of any proceeding or of any
order made therein which is prejudicial to the interests of the State
and may, after giving the persons concerned a reaso nable
opportunity of being heard, pass such order in relation thereto, as
he may think fit:
Provided that no order passed by a taxing authority shall be revised
on an issue, which on appeal or in any other proceeding from
such order is pending before, or has been settled by, an appellate
authority or the High Court or the Supreme Court, as the case
may be:
M/S GODREJ SARA LEE LTD. v. THE EXCISE AND TAXATION
OFFICER-CUM-ASSESSING AUTHORITY [DIPANKAR DATTA, J.]
Provided further that no order shall be revised after the expiry
of a period of three years from the date of the supply of the copy
of such order to the assessee except where the order is re vised
as a result of retrospective change in law or on the basis of a
decision of the Tribunal in a similar case or on the basis of law
declared by the High Court or the Supreme Court.”
(2) The State Government may, by notification in the Off icial
Gazette, confer on any officer not below the rank of Deputy Excise
and Taxation Commissioner, the powers of the Commissioner
under sub-section (1) to be exercised subject to such exceptions,
conditions and restrictions as may be specified in the notification
and where an officer on whom such power have been conferred
passes an order under this section, such order shall be deemed to
have been passed by the Commissioner under sub-section (1).”
27. To the extent relevant for the present decision, suo motu power
of revision could be exercised by the Revisional Authority for the purposes
of satisfying himself as to the legality or propriety of any order made in
any proceeding which is prejudicial to the interests of the State. The first
proviso, however, imposed a restriction on exercise of such suo motu
power, if an issue had been settled, inter alia , by an appellate authority.
Thus, the sine qua non for exercise of power under section 34 is the
satisfaction of the Revisional Authority that an order has been made by
a taxing authority in any proceeding prejudicial to the inte rests of the
State, the legality or propriety of which appears to him to be prima facie
vulnerable. Nevertheless, such power cannot be exercised if the issue
involved is pending before or has been settled by an appellate authority.
It cannot be disputed that the Tribunal is comprehended wit hin the
meaning of ‘appellate authority’ as defined in section 2(b) of the VAT
Act.
28. These being the contours of section 34, as it then stood, it
needs to be seen how far the Revisional Authority was justified in drawing
power from such provision and exercising it.
29. A bare perusal of the impugned revisional orders reveals that
the decision in Sonic Electrochem (supra) formed the plinth for the
satisfaction that the orders of assessment are liable t o be revised. The
decision in Sonic Electrochem (supra) was rendered upon consideration
of the Gujarat Sales Tax Act, 1969 (hereafter ‘the Sales T ax Act’, for
short). The short question that arose for a decision was, wh ether ‘Jet
889
Mat’ produced by the appellant therein would come within Entry 129 of
Schedule II Part A of the Sales Tax Act, issued under section 49 thereof.
Entry 129, at the relevant point of time, read thus:
30. Having regard to the specific entry, i.e. Entry 129, deal ing
with mosquito repellents, this Court overruled the contention of the
appellant therein that ‘Jet Mat’ would not come within the ambit of Entry
129 since one of its constituents happens to be an insecticide . It was
also held that the product manufactured by the appellant therein, viz.
‘Jet Mat’, which was commercially known as “Mosquito Repellent Mat”
is a mosquito repellant notwithstanding the fact that it not only repels
mosquitoes but is also capable of killing mosquitoes. For th e reasons
assigned in the decision, it was held that ‘Jet Mat’ is not an insecticide
which would be entitled for partial exemption under Entry 98 of the
Sales Tax Act.
31. It is, therefore, clear that because of the specific entry dealing
with mosquito repellents, this Court held ‘Jet Mat’ to be covered under
Entry 129.
32. As the Tribunal in its order dated 21 st November, 2001 found,
there was no such corresponding entry in the VAT Act. Bearing in mind
the same as well as on consideration of a decision of the Madras High
Court and other decisions, the Tribunal had proceeded to hold that mosquito
repellents containing 4% ‘Alethrin’ was an insecticide and hence, liable
to concessional rate of tax.
33. While deciding the present appeal, we are primarily concerned
with the issue of assumption of jurisdiction by the Revisional Authority
on the face of the unchallenged order of the Tribunal dated 21 st November,
2001, and not with the merits of the decision either given by the Tribunal
or by the Revisional Authority. What stares at the face of the respondents
is that the aforesaid decision of the Tribunal, quoted in the order of the
Assessing Authority, has attained finality. Once the issue stands finally
concluded, the decision binds the State, a fortiori, the Revisional Authority.
The decision of the Tribunal may not be acceptable to the Re visional
Authority, but that cannot furnish any ground to such authority to perceive
M/S GODREJ SARA LEE LTD. v. THE EXCISE AND TAXATION
OFFICER-CUM-ASSESSING AUTHORITY [DIPANKAR DATTA, J.]
that it is either not bound by the same or that it need not be followed.
The first proviso, in such a case, gets activated and would operate as a
bar to the exercise of powers by the Revisional Authority.
34. In our view, the Revisional Authority might have been justified
in exercising suo motu power to revise the order of the Assessing
Authority had the decision of the Tribunal been set aside or its operation
stayed by a competent Court. So long it is not disputed that the Tribunal’s
decision, having regard to the framework of classification of products/
tax liability then existing, continues to remain operative and such
framework too continues to remain operative when the impugned
revisional orders were made, the Revisional Authority was left with no
other choice but to follow the decision of the Tribunal without any
reservation. Unless the discipline of adhering to decisions made by the
higher authorities is maintained, there would be utter chaos in administration
of tax laws apart from undue harassment to assesses. We share the
view expressed in Kamlakshi Finance Corporation Ltd. (supra).
35. In the midst of hearing, we had enquired from Mr. Sangwan
whether there has been any decision of any other competent Tribunal or
High Court taking a view different from the one taken by the Tribunal in
its order dated 21 st November, 2001, which was considered by the
Assessing Authority. Fairly, he answered in the negative. If on ly Mr.
Sangwan could have invited our attention to any such decision, which
were acceptable to us, the issue decided by the Tribunal could have
been reopened on the ground that it is a debatable issue and interference
with the final orders passed by the Revisional Authority may not have
been resorted to, leaving the appellant to pursue the appellat e remedy
under the VAT Act.
36. There is also substance in the contention of Mr .
Lakshmikumaran that s uo motu power of revision, on the terms of section
34, could have been exercised only if the orders sought to be rev ised
suffered from any illegality or impropriety.
37. A decision may be questioned as suffering from an illegality if
its maker fails to understand the law that regulates his decision making
power correctly or if he fails to give effect to any law that holds the field
and binds the parties. On the other hand, having regard to the purpos e
section 34 seeks to serve, to take exception to a decision on the ground
of lack of propriety of any proceedings or order pa ssed in such
891
proceedings, it essentially ought to relate to a procedural impropriety. It
is incumbent for the accuser to show that the decision maker has failed
to observe the standard procedures applicable in case of exercise of his
power. Additionally, to impeach an order on the gro und of moral
impropriety, it has to be shown that the weight of facts together with the
applicable law overwhelmingly points to one course of action b ut the
decision has surprisingly gone the other way, giving reason to suspect
misbehaviour or misconduct in the sphere of activity of the decision
maker warranting a revision.
38. There is nothing on record to justify either ille gality or
(procedural/moral) impropriety in the proceedings before the Assessing
Authority or the orders passed by him, as such. As noted above, the
Assessing Authority was bound by the order of the Tribunal and elected
to follow it having no other option. Such decision of the Tribunal was
even binding on the Revisional Authority. In such circumstances, to brand
the orders of the Assessing Authority as suffering from illegal ity and
impropriety appears to us to be not only unjustified but also demonstrates
thorough lack of understanding of the principle regulating exerc ise of
suo motu revisional power by a quasi-judicial authority apart from being
in breach of the principle of judicial discipline, while confronte d with
orders passed by a superior Tribunal/Court. We are inclined to the view
that it is not the Assessing Authority’s orders but those passed by the
Revisional Authority, which suffer from a patent illegality.
39. For the foregoing reasons, we have no other option but to
invalidate the impugned final revisional orders dated 2 nd March, 2009 for
the Assessment Years 2003-04 and 2004-05. It is ordered accordingly.
40. The interim order dated 18 th January, 2010 is made absolute.
41. The appeal stands allowed. However, the parties are l eft to
bear their own costs.
Nidhi Jain Appeal allowed.
(Assisted by : Tamana, LCRA)
M/S GODREJ SARA LEE LTD. v. THE EXCISE AND TAXATION
OFFICER-CUM-ASSESSING AUTHORITY [DIPANKAR DATTA, J.]