M/S Deepak AGR Foods.
Vs. State of Rajasthan and Ors. [2008] INSC 1092 (11 July 2008)
Judgment
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 4327-28 OF 2008
(Arising out of SLP (C) Nos.17346-47 OF 2005) M/S. DEEPAK AGRO FOODS --
APPELLANT VERSUS WITH
CIVIL APPEAL NO. 4329 OF 2008 (Arising out of SLP (C) No.5039 OF 2006)
D.K. JAIN, J.:
1.
Leave
granted.
2.
These
two sets of appeals, by special leave, are directed against the judgments and
orders dated 4th May, 2004 passed by the Division Bench of the High Court of
Judicature for Rajasthan at Jodhpur in D.B. Civil Special Appeal (Writs)
No.900/2002 and order dated 15th July, 2005 passed in Review Petition No.8/2005
in Civil Special Appeal No.900/2002. By the impugned main orders, the Division
Bench, while allowing the appeals, has set aside the assessment orders passed
under the Rajasthan Sales Tax Act, 1994 (for short `the Act') in respect of
assessment years 1995-96 and 1996-97 and has remanded the cases for fresh
assessments by a new Assessing Officer, to be nominated by the Commissioner of
Commercial Taxes, Rajasthan.
3.
Though
the appeals pertain to two assessment years but are inter-connected insofar as
the decision in appeal pertaining to the assessment year 1996-97 will depend
upon the decision in appeal for the year 1995-96 because in its order for the
latter year, the High Court has substantially relied on its order for the
earlier year. Therefore, we propose to dispose of both the appeals by this 2
common order. However, we shall refer to the facts emerging from the record for
the assessment year 1995-96.
4.
The
appellant, a proprietorship concern, is a dealer under the Act. For the
assessment year 1995-96, an ex-parte assessment was framed on 19th May, 1998.
On appeal, the order of assessment was set aside by the Deputy Commissioner
(Appeals) vide order dated 8th June, 2000 on the ground that proper opportunity
of hearing had not been granted to the appellant. In pursuance of the said
order, a fresh notice was issued to the appellant for appearance on 12th
February, 2002. On the said date at the request of the appellant, the case was
adjourned to 14th March, 2002 and then to 23rd March, 2002, when the appellant
again sought time for collecting the requisite details/ information and he was
granted three months' time for the said purpose. The case was fixed on 25th
June, 2002.
5.
According
to the appellant, he appeared before the Assessing Officer on 25th June, 2002
and requested for some more time to furnish the bank statements etc. and 3 the
case was accordingly kept for 29th June, 2002.
However, on 29th
June, 2002, when the appellant appeared before the Assessing Officer, he is
said to have been told that the assessment order had already been passed on 7th
June, 2002.
6.
Being
aggrieved, the appellant challenged the said order by preferring a writ
petition. In the writ petition, it was alleged that the assessment order was
anti-dated and in fact the same was passed on 29th June, 2002, by which date
the period of limitation was over. Interpolation in the order sheets dated 23rd
March, 2002 and 25th June, 2002 was alleged and it was also stated that the
appellant was coerced to countersign the cuttings and tempering in the order
sheets. However, the writ petition was dismissed by the learned Single Judge in
limine, inter alia, on the ground that if the writ petitioner had any grievance
that the proceedings had not been recorded correctly, he could have drawn the
attention of the Presiding Officer towards such errors while the matter was
still fresh to his mind. 4 Accordingly, the learned Single Judge directed the
appellant to bring the alleged anomalies to the notice of the Assessing Officer
and simultaneously, if so advised, he could challenge the assessment order by
filing appeal before the Appellate Authority.
7.
The
correctness of the order passed by the learned Single Judge was questioned by
the appellant before the Division Bench. On perusal of the original records,
particularly order sheets dated 23rd March, 2002 and 25th June, 2002, the
learned Judges felt convinced that some over-writings and interpolations in the
order sheets had taken place.
They observed thus:
"In these
circumstances, the assertions made by the assessee in his petition about
tempering with the record of the proceedings dated 23.3.2002 and 25.6.2002 is
apparent, which makes the assessment order as an outcome of these
mechanisations, by anti dating the proceedings and pass the order by anti
dating it and in the allegation of assessee cannot be reasonably ruled out. The
assertion of assessee stands fully corroborated by the record of the
proceedings which speaks eloquently 5 about its tempering with. Obviously, the
assessee would not be a party to it to suffer anti dated ex-parte order to his
detriment. It can reasonably be attributed to the Assessing Officer, who had
chosen this path for the reasons best known to him.
More so the Assessing
Officer having been impleaded as party respondent by name has not chosen to
appeal and answer the assertions. It is a case in which it can very well be
said that the record speaks for itself. In the aforesaid circumstances, an
order alleged to have been passed on 7.6.2002 in the absence of the assessee by
tempering with the record of the proceedings dated 23.3.2002 and 25.6.2002
cannot be sustained."
The Division Bench
strongly felt that it was a fit case in which arm of the Court in exercise of
its extraordinary jurisdiction must reach to remedy the breach of principles of
natural justice, arising from breach of code of conduct, by officer acting
against all canons of fair play and transparency in discharging its duties as
statutory functionary. Accordingly, as stated supra, the appeal was allowed;
assessment order dated 7th June, 2002 was set aside and demands raised 6
consequent thereto were quashed, with a direction to the Commissioner of
Commercial Taxes, Rajasthan to nominate another Assessing Officer, not below
the rank of a Senior Commercial Taxes Officer, for making fresh assessment. The
Division Bench directed the appellant to appear before such nominated authority
on 1st of July, 2004 and also that the assessment period would be counted
thereafter by 31st August, 2004. As regards assessment year 1996-97, though
there was no specific allegation of interpolation in the records, like in the
previous year, yet the High Court felt that since the same officer had framed
the assessment and the proceedings for this year were being taken up
simultaneously, these also did not go out of the cloud of suspicion surrounding
the assessing officer. The learned Judges were also of the view that notice
fixing the hearing on 8th June, 2002 had not been properly served. Accordingly,
assessment order for this year as well was set aside with similar directions as
were given in respect of the assessment year 1995-96. Being dissatisfied with
the direction for fresh assessments, these appeals have been preferred by the
dealer.
8.
In
the counter affidavit filed on behalf of the respondents, pursuant to the issue
of notice, averments in the petition in regard to the interpolation of records
are denied. It is stated that the order passed by the Deputy Commissioner
(Appeals) on 8th June, 2000, setting aside the assessment order dated 19th
March, 1998 was received by the Assessing Officer only on 13th July, 2000 and,
therefore, the assessment order passed on 7th June, 2002 was within time. It is
pleaded that even if it is assumed that the assessment order had been actually
passed on 29th June, 2002, as alleged by the appellant, and had been anti-dated
as 7th June, 2002, to save limitation, still the same was within the period of
limitation, which was to expire on 12th July, 2002. Though a rejoinder
affidavit has been filed on behalf of the appellant but the said assertion has
not been controverted.
9.
Shri
Rajiv Dutta, learned senior counsel appearing on behalf of the appellant,
submitted that in the light of its afore-extracted observations and a clear
finding that the 8 assessment order for the assessment year 1995-96 had been
anti-dated, the order was null and void. It was urged that assessment
proceedings after the expiry of the period of limitation being a nullity in
law, the High Court should have annulled the assessment and there was no
question of a fresh assessment. Thus, the nub of the grievance of the appellant
is that in remanding the matter back to the Assessing Officer, the High Court
has not only extended the statutory period prescribed for completion of
assessment, it has also conferred jurisdiction upon the Assessing Officer,
which he otherwise lacked on the expiry of the said period.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Per
contra, Shri Sushil Kumar Jain, learned counsel appearing on behalf of the
respondents submitted that since assessments in respect of both the assessment
years had been completed within time, the impugned directions are in order.
Learned counsel also pointed out that pursuant to and in furtherance of the
orders passed by the High Court, fresh assessments in respect of both the
assessment years have already been completed.
11.
Having
given anxious consideration to the rival stands, we are satisfied that the
appeal is misconceived and is liable to be dismissed.
12.
Chapter
IV of the Act lays down the procedure for payment of tax, filing of returns and
assessments. Section 29 prescribes the procedure and time limits for completion
of assessment. Clause (b) of sub-section 8 of Section 29, relevant for our
purpose, reads as follows:
"(8)(b)
Notwithstanding anything contained in sub-clause (a), where an assessment order
is passed in consequence of or to give effect to, any order of an appellate
authority or the Tribunal or a competent court, it shall be completed within
two years of the communication of such order to the assessing authority;
however, the Commissioner may for reasons to be recorded in writing, extend in
any particular case, such time limit by a period not exceeding six months."
On a bare reading of
the provision, it becomes abundantly clear that if an assessment order is set
aside by an Appellate Authority, fresh assessment has to be completed within a
10 period of two years from the date of communication of the order in appeal to
the Assessing Authority and not from the date of order in appeal; as is pleased
by the appellant.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
As
afore-stated, in the counter-affidavit as well as in the written submissions
filed on behalf of the respondents, it is stated that the order of the
Appellate Authority, dated 8th June, 2000, was received by the Assessing
Authority on 13th July, 2000 and, therefore, fresh assessment, pursuant to the
said order, could be completed by 12th July, 2002 (ignoring further period of
six months, which could be extended by the Commissioner). That being so, even
if it is assumed that the assessment order, for the assessment year 1995-96,
had, in fact, been passed on 29th June, 2002, as alleged by the appellant, it
was still very much within the time limit prescribed under the afore-noted
provision i.e. 12th July, 2002. We are, therefore, unable to accept the stand
of the appellant that the assessment having been made after the expiry of the
time limit, it was null and void and should have been annulled.
14.
Having
come to the above conclusion, the next question which requires consideration is
whether in the light of the observations of the Division Bench in the
afore-extracted paragraph on the irregularities as also the conduct of the
assessing officer, the assessment orders could be said to be null and void, as
pleaded on behalf of the appellants?
15.
All
irregular or erroneous or even illegal orders cannot be held to be null and
void as there is a fine distinction between the orders which are null and void
and orders which are irregular, wrong or illegal. Where an authority making
order lacks inherent jurisdiction, such order would be without jurisdiction,
null, non est and void ab initio as defect of jurisdiction of an authority goes
to the root of the matter and strikes at its very authority to pass any order
and such a defect cannot be cured even by consent of the & Ors.1). However,
exercise of jurisdiction in a wrongful manner cannot result in a nullity - it
is an illegality, 1 AIR 1954 SC 340 12 capable of being cured in a duly
constituted legal proceedings.
16.
Proceedings
for assessment under a fiscal statute are not in the nature of judicial
proceedings, like proceedings in a suit inasmuch as the assessing officer does
not adjudicate on a lis between an assessee and the State and, therefore, the
law on the issue laid down under the civil law may not stricto sensu apply to
assessment proceedings.
Nevertheless, in
order to appreciate the distinction between a "null and void" order
and an "illegal or irregular" order, it would be profitable to notice
a few decisions of this Court on the point.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
(Dead)
By LRs. & Ors.2, explaining the distinction between "null and void
decree" and "illegal decree", this Court has said that a decree
can be said to be without jurisdiction, and hence a nullity, if the Court
passing the decree has usurped a jurisdiction which it did not have; a mere
wrong 2 (2004) 1 SCC 287 13 exercise of jurisdiction does not result in a
nullity. The lack of jurisdiction in the court passing the decree must be
patent on its face in order to enable the executing court to take cognisance of
such a nullity based on want of jurisdiction. The Court further held that a
distinction exists between a decree passed by a court having no jurisdiction
and consequently being a nullity and not executable and a decree of the court
which is merely illegal or not passed in accordance with the procedure laid
down by law. A decree suffering from illegality or irregularity of procedure,
cannot be termed inexecutable.
18.
In
view of the above, in the present case, apart from the fact that on a plain reading
of Section 29(8)(b) of the Act, it is manifestly clear that fresh assessment
for the assessment year 1995-96, framed pursuant to the order passed by the
appellate authority on 8th June, 2000, was well within the prescribed time,
even otherwise, in the light of the afore-stated settled law, the assessments
orders in question could not be held to be null and void on account 14 of the
stated irregularities committed by the assessing officer during the course of
assessment proceedings. In our opinion, therefore, despite scathing
observations by the Division Bench on the conduct of the assessing officer, it
was a case of an irregularity in assessment proceedings by the officer, who was
not bereft of authority to assess the appellant. At best, it was an illegality,
which defect was capable of and has been cured by the High Court by setting
aside the orders and by granting consequential relief.
19.
In
the conspectus of the circumstances aforesaid, we do not find any infirmity in
the impugned directions given by the Division Bench of the High Court
warranting interference in the exercise of our jurisdiction under Article 136
of the Constitution. The appeals are devoid of any merit and are dismissed
accordingly with costs throughout.
.................................................J.
(C.K. THAKKER)
.................................................J.
(D.K. JAIN)
NEW
DELHI;
JULY
11, 2008.
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