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Secretary To Government Of … vs Straw Products Limited on 27 April, 1987

Orissa High Court
Secretary To Government Of … vs Straw Products Limited on 27 April, 1987
Equivalent citations: 1987 67 STC 284 Orissa
Author: L Rath
Bench: L Rath

JUDGMENT

L. Rath, J.

1. The defendants, who are respectively the Secretary of the Finance Department of the Government of Orissa, the Collector, Koraput, the Commissioner of Sales Tax, Orissa and the Sales Tax Officer, Koraput II Circle, Rayagada, are in appeal against the plaintiff’s suit for claim of Rs. 36,762.12 and interest thereon at 6 per cent for a sum of Rs. 5,414.62 totalling an amount of Rs. 42,176.74 which has been decreed. The plaintiff claimed the amount as due to it as rebate under the provisions of Section 9(3) of the Central Sales Tax Act, 1956 read with Section 13(8) of the Orissa Sales Tax Act, 1947 as it stood at the relevant time. The provision in the State Act provided that if tax is paid by a dealer on or before the due date of payment, he shall be entitled to rebate of 1 per cent of the tax payable. Under Section 9(3) of the Central Act, the tax payable under the Act is assessed and collected in the same manner and in accordance with the same provisions as relate to a tax of the State Act. The facts pleaded by the plaintiff, which are not in dispute, are that they had paid the tax due from it regularly in due time for the financial years 1963-64 to 1968-69 the last such payment being made on 30th April, 1969, for the month ending 31st March, 1969. The respondent made an application for refund on 11th November, 1969 which was rejected by the Assistant Commissioner on 28th January, 1970. A decision of the Supreme Court in the identical case of Orissa Cement Ltd. was delivered on 22nd April, 1970 reported in AIR 1970 SC 1672 (Orissa Cement Ltd. v. State of Orissa) declaring that the rebate payable under Section 13(8) of the State Act is applicable also to the tax paid under the Central Act by virtue of Section 9(3) thereof. The respondent thereafter carried a revision before the Commissioner of Commercial Taxes, Orissa under Rule 22 of the Central Sales Tax (Orissa) Rules, 1967 read with Section 23(4) of the State Act as against the order of assessment passed by the Sales Tax Officer but no revision was made against the order of Assistant Commissioner refusing to allow the rebate. The Commissioner rejected the revision against the assessment as not admissible since he held that proceedings of assessment under the Act are appealable after which a reference lies to this Court and hence the revision was not entertainable. The respondent thereafter served a notice under Section 80, Civil Procedure Code, on 26th January, 1972 and filed the suit on 4th February, 1972. The suit was contested by the appellants contending that the respondent had for some years preferred appeals against the assessments, but had never raised the question of rebate nor had availed the remedy of second appeal against the assessments. It was contended that the civil court had no jurisdiction to entertain the suit in view of the provisions of Section 22 of the State Act read with Rule 22 under the Central Act and Section 9 of the Orissa Sales Tax Act (sic), and that the suit was also barred by limitation. The learned Subordinate Judge who tried the suit held on both points against the appellants and finding that the respondent was entitled to the rebate, decreed the suit in part for Rs. 34,862.64 against the respondent No. 6. In appeal the learned Advocate-General appearing for the appellants has raised the same two questions that the suit was not maintainable in view of the provisions of Section 22 of the State Act read with Section 9(3) of the Central Act and that the suit was also barred by limitation.

2. To appreciate the contention of the learned Advocate-General regarding the bar to the jurisdiction of the civil courts, it is of profit to refer to the provisions of Sections 13(8) and 22 of the State Act and Section 9(3) of the Central Act as they stood at the relevant time :

Orissa Sales Tax Act :

Section 13. (8) A rebate of one per centum on the amount of tax payable by a dealer shall be allowed, if such tax is paid by the dealer on or before the due date of payment.”

Section 22. Bar to certain proceedings.-Save as is provided in Section 24 no assessment made or purporting to have been made and no order passed or purporting to have been passed under the provisions of this Act and the rules made thereunder by the Commissioner, Tribunal or Additional Tribunal, as the case may be, or any person appointed under Section 3 to assist the Commissioner shall be called in question in any court and save as is provided in Section 23, no appeal or application for revision shall lie against any such assessment or order as the case may be.

Central Sales Tax Act:

Section 9(3) The authorities for the time being empowered to assess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of the Government of India, and subject to any rules made under this Act, assess, collect and enforce payment of any tax, including any penalty payable by a dealer under this Act, in the same manner as the tax on the sale or purchase of goods under the general sales tax law of the State is assessed, paid and collected; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law including the provisions relating to returns, appeals, reviews, revisions, references, penalties and compounding of offences, shall apply accordingly.

Section 9(3) of the Central Act was however substituted on 30th August, 1969 retrospectively from the commencement of the parent Act by Section 9(2) as follows:

9. (1) …

(2) Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time being empowered to assess, reassess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, reassess, collect and enforce payment of tax, including any penalty, payable by a dealer under this Act as if the tax or penalty payable by such a dealer under this Act is a tax or penalty payable under the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references, refunds, penalties, compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly :

Provided that if in any State or part thereof there is no general sales tax law in force the Central Government may, by rules made in this behalf make necessary provision for all or any of the matters specified in this sub-section.

It would be seen that the substituted provision was more wider in scope.

3. It is urged by the appellants that notwithstanding the fact that a rebate was due to the respondent because of its having paid the tax in due time, yet the grant of rebate being a part of the assessment process and the respondent having not moved under the provisions of the Act before the hierarchy of the Tribunals provided thereunder to challenge the assessment so as to claim the rebate, and further there being a specific provision under the Act to claim refund which application was made much beyond the time, the civil court’s jurisdiction to entertain the suit to challenge such assessment and to claim refund are barred in view of the provisions of Section 22 of the State Act.

4. It is well-settled in law that Section 9 of the Civil Procedure Code confers jurisdiction on civil courts to try all suits of civil nature unless their jurisdiction is either expressly or impliedly barred. A claim for refund due to a person on whatsoever account is doubtless a civil claim and is ordinarily within the cognizance of the civil court and hence the suit brought by the respondent would be maintainable unless it is found that such a suit is barred either under the express provisions of any statute or is impliedly barred under the provisions thereof.

5. Before however such question of jurisdiction is considered, it is necessary to find out as to whether a claim of rebate is part of the assessment process and further whether the refund of the rebate due to the respondent had been provided for under the statute. The matter was considered in AIR 1965 SC 1942 (Kamala Mills Ltd. v. State of Bombay), wherein on elaborate discussion of the provisions of the Bombay Sales Tax Act it was held in para 21 thereof that whether or not a return is correct; whether or not transactions which are not mentioned in the return, but about which the appropriate authority has knowledge, fall within the mischief of the charging section; what is the true and real extent of the transactions which are assessable; all these and other allied questions have to be determined by the appropriate authorities under the statute themselves; and that this is correct not only of the Bombay Sales Tax Act but also of similar Sales Tax Acts or the Income-tax Act. Undoubtedly the question of rebate is one relating to the assessment process itself. A rebate is to be allowed on the basis of the return submitted by the dealer and if not so allowed, it is open to challenge in two appeals and thereafter in reference to the High Court. Admittedly the respondent did not pursue such remedies. In the very Orissa Cement case AIR 1970 SC 1672 in which the rebate was held to be available also under the Central Act, it was held that rebate is a matter relating to the process of collection.

6. It was also pointed out in AIR 1965 SC 1942 (Kamala Mitts Ltd. v. State of Bombay) that an assessment made under the Act would also include an assessment wrongly made. If the provisions of the special statute are intended to protect actions taken by the officers under the Act, then as soon as it is shown that the officer was purporting to exercise jurisdiction and authority under the Act in making the order of assessment, then the assessment clearly falls within that Act. An officer purporting to assess a dealer for the Central Sales Tax Act exercise all powers available under the Orissa Sales Tax Act by virtue of Section 9(3) of the Central Act and hence it must be held that the question of granting or refusing to grant rebate was a function of the assessing officer in making the assessment which the dealer was liable to have been challenged in accordance with the provisions available under the State Act read with the provisions of the Central Act. Besides even if there was an erroneous order of assessment which was not challenged in appeal by the respondent, yet a separate remedy by way of an application for refund under Section 14 of the State Act was also available to the respondent. By the time the application for refund was made, i.e., 11th November, 1969, the provisions of Section 9(3), as it stood then, had been substituted by Section 9(2) which expressly incorporated the provisions relating to refund. The application for refund was rejected by the Assistant Commissioner on 29th January, 1970 vide exhibit 6 expressly advising that the matter should be taken to higher statutory authorities according to the law. It was open for the appellant to have moved the Commissioner in revision against such order refusing the refund. Even if the revision would have been dismissed, the respondent could have invoked the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India though no opinion can be expressed as to whether such jurisdiction would have been exercised in favour of the respondent in view of the limitation which had set in. The fact remains that the remedies available under the statute were not pursued.

7. It may now be examined as to how far the jurisdiction of the civil court has been ousted in entertaining the suit. I am not in a position to agree with the submissions of the learned Advocate-General that Section 22 of the State Act would be ipso facto applicable to assessments of Central sales tax and hence the express bar under that provision excluding the jurisdiction of the civil courts would also be applicable to such assessments. Section 9(3) as it then was, or Section 9(2) by which it was substituted, of the Central Act as referred to above merely authorised that a tax to be assessed and collected under the Central Act was to be made in the same process, by the same authorities, and exercising the same powers as are available to them under the State Act. The charging section, however, is under the Central Act and the rate of tax to be collected is also under the Central Act. It is only as if the provisions of the State Act are, for the purpose of assessment, collection and penalty, etc., drafted to the body of the Central Act by a deeming provision and however the assessment made is not under the State Act but always remains as one under the Central Act. The tax assessed and collected does not become Orissa sales tax but all throughout remains only the Central sales tax. Section 22 of the State Act only provides that actions taken under the State Act are to be protected from the scrutiny of the civil court, but however the express bar stipulated there would not and cannot be called an express bar so far as the Central Act is concerned. As has been held in the very decision of the Supreme Court in AIR 1965 SC 1942 (Kamala Mills Ltd. v. State of Bombay) the jurisdiction of the civil court may be ousted either expressly or impliedly. In the very nature of the provision of Section 22, it cannot be said as constituting an express bar to an action taken under the Central Act since Section 9(3) of the Central Act never incorporates Section 22 into the Central Act and hence it must be held that there is no express bar for civil courts for entertaining a suit of the nature filed by the respondent.

8. Even if it is, however, held that the suit is not expressly barred, yet the difficulties of the respondent are not over. In so far as the question of allowing a rebate or claim a refund are matters expressly covered under the Central Act read with the State Act, it is clear that these are special rights created in favour of the respondent for which special Tribunals have been constituted in those statutes to adjudicate it. Claiming rebate is an express right provided under Section 13(8) of the State Act. Similarly, claiming a refund is an express right conferred under Section 14 of the State Act. Both these rights, as has been noticed earlier, are under the jurisdiction of a series of Tribunals to be adjudicated upon. It is now a matter of a fundamental principle of law that where a special statute creates a liability not existing at common law and at the same time gives a special and particular remedy for enforcing it, the remedy so provided by the statute must be followed and the civil court’s jurisdiction is ousted. The scheme of the particular Act is to be examined to see if the remedies normally associated with actions in civil suits are prescribed by the statute vide paragraph 20 of AIR 1975 Orissa 219 [FB] (Magulu Jal v. Bhagaban Rai). It is indisputable that so far as the Central Sales Tax Act read with the Orissa Sales Tax Act is concerned, it provides enough remedies which are normally associated with actions in the civil court within the statute itself and hence the jurisdiction of the civil court to entertain such a suit has to be held as being impliedly barred.

9. In view of such conclusion, the suit brought by the respondent was not maintainable and hence has to be dismissed. Further, because of the decision on the question of maintainability, it is also not necessary to decide the other question regarding limitation raised by the appellant.

10. In the result, the appeal is allowed. The judgment and decree passed by the Subordinate Judge are set aside and the suit is dismissed as not entertainable. There shall be no order as to costs.

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