S. 55 of the BST Act, which contains provisions about
appeals, reads as under :
“(1) An appeal, from every original order, not being an
order mentioned in S. 56 passed under this Act or the rules made thereunder,
shall lie :
(a) if the order is made by the Sales Tax Officer, or any
other officer subordinate thereto, to the Assistant Commissioner;
(b) if the order is made by an Assistant Commissioner, to
the Commissioner;”
The revision order is passed by a superior authority u/s.57
of the BST Act, 1959. The said revision power is in the nature of supervision
power and the superior authority is entitled to call for records of order passed
by his subordinate authority and then to pass revision order as he may think
just and proper. Since commencement of the BST Act, 1959, such revision orders
were considered to be original orders for the purposes of S. 55 and appeal was
used to be maintained against the same, without any dispute.
However on 6-6-2006, the Bombay High Court, Nagpur Bench,
passed judgment in the case of Shiv Shyam Sales Enterprise. The said judgment
was in writ petition filed by the petitioner against the revision order passed
in his case. The argument of the Department was that the writ petition is not
maintainable as there is alternative remedy by way of appeal against the
revision order as per S. 55 of the BST Act, 1959. The High Court rejected this
prayer by making observations in para 6 as under :
“6. Perusal of S. 55 of the Bombay Sales Tax Act reveals
that it provides remedy of appeal from every original order. The orders
impugned in the present petition by the petitioner are passed in exercise of
revisional jurisdiction u/s.57 of the said Act, and therefore are not the
Original orders. It is therefore apparent that remedy of filing an appeal
u/s.55 is not available to the present petitioner. In such circumstances the
argument of alternative remedy holds no water. In any case the point as sought
to be raised ought to have been taken at the time of initial hearing when the
writ petition was entertained in the year 1989. In view of the law settled on
the point, such an argument cannot be allowed to be raised at the stage of
final hearing after expiry of long period. We therefore, find no merits in the
preliminary objection raised by the respondents.”
Based on the above observations, the authorities at the Sales
Tax Department felt that no appeal is maintainable against the revision order.
Thus, all the appeals against revision orders are kept pending by the Department
appellate authorities as well as by the Tribunal. The dealer community expected
that the Government would amend the law suitably on its own to mitigate the
hardships to dealers due to the above judgment. However, finding that no such
amendment is forthcoming, the matter was argued on the point of maintainability
before the Tribunal. The M.S.T. Tribunal has now decided this issue vide its
judgment in the case of Schenectady Beck (India) Ltd. (A. No. 98 & 99 of 2007)
and Others, dated 6-11-2009.
The Tribunal considered the issue from various angles.
Tribunal referred to the background of appeal provisions. The Tribunal also
referred to various judicial pronouncements about the binding nature of judgment
of jurisdictional Court as well as cases of mere observations, without binding
nature.
In particular, the Tribunal referred to judgments of the
Bombay High Court in cases of Swastik Oil Mills v. Mr. H. B. Munshi, (21
STC 383) and Mr. H. B. Munshi v. The Oriental Rubber Industries Pvt. Ltd.
(34 STC 113), wherein it is observed that the revision is fresh proceedings and
this judgment is confirmed by the Hon. Supreme Court as reported in 21 STC 394.
The Department tried to counter the situation relying upon the above
observations by the Bombay High Court in para 6 (reproduce above) and further
emphasised that the judgment being of the Bombay High Court cannot be brushed
aside, but has to be followed.
The Tribunal, however, after elaborate discussion and giving
sound reasoning, held that the above judgment of the Bombay High Court in Shiv
Shyam Sales Enterprise does not decide anything contrary to settled scheme of
the BST Act. The Tribunal summed up its observations in para 32, as under :
“32. To sum up, the two-line observation in the case of
M/s. Shiv Shyam Sales Enterprises (supra), which has given rise to the
present dispute is made without being apprised of the well-settled legal
position as laid down by the past judicial authorities including the Hon’ble
Bombay High Court’s judgments in the cases like M/s. Swastik Oil Mills (supra).
In these circumstances, we respectfully prefer to be bound by these past
authorities rather than by the said two-line observation in the case of M/s.
Shiv Shyam Sales Enterprises (supra). We have also traced the origin of
the words ‘original orders’ in S. 55(1). The origin thereof is found in the
departure on 1-1-1960 from a ‘single appeal’ as obtaining in the 1953 Act to
‘two appeals’ as introduced in the Bombay Act. While providing the ‘two
appeals’ the Legislature has described all the orders other than the appeal
orders to be ‘original orders’ and has provided appeals thereagainst
u/s.55(1), if they are not specified as ‘non-appealable orders’ in S. 56. The
suo motu revision orders u/s.57 are neither specified in the list of
non-appealable order u/s.56, nor are they orders passed in appeals. In view of
this position, the revision orders are ‘original orders’ for the purposes of
S. 55 and hence appeals thereagainst lie u/s. 55(1).”
Accordingly, the Tribunal held that the revision in the
original order for S. 55 and appeal is maintainable against the same. The
judgment has given a much required relief to dealers/litigants in Maharashtra
and will go a long way to preserve one of the fundamental rights of dealer.
[Schenectady Beck (India) Ltd. (S.A. No. 98 & 99 of
2007) & Others, dated 6-11-2009]
Date of effect for registration in case of Amalgamation of Companies :
An interesting issue arose before the Bombay High Court in relation to the date of effect of registration. The facts are that transferor company amalgamated with transferee company vide an order of the Bombay High Court, dated 24-7-2003, under the Companies Act, 1956, in which the scheme of amalgamation was approved. As per the amalgamation scheme, the amalgamation was to be effective from 1-4-2002. The transferee company was not registered under BST Act, 1959, hence, applied for new registration on 19-8-2003. The transferee company requested to grant Registration Certificate effective from 1-4-2002. However, the registration authority considered the change in the Constitution from 1-4-2002 and finding that there is delay in making application (in case of change in the Constitution the application for new registration is required to be made within sixty days), granted R’C. effective from 19-8-2003 i.e., the date of application. The mean period from 1-4-2002 to 18-8-2003 became unregistered period. The prayer of the petitioner to grant administrative relief for giving retrospective effect to R. C. from 1-4-2002 was also rejected.
Hence the writ petition was filed in the Bombay High Court, The High Court analysed the situation and amongst others, observed that in case of retrspective effect to amalgamation, the party cannot be expected to apply within sixty days from such retrospective date. The 60 days’ time should be considered from the date of order of amalgamation by the High Court and if so applied within 60 days, then the registration should be granted from the effective date of amalgamation i.e., in this case from 1-4-2002. The High Court observed as under about this aspect :
“12. It is in these circumstances that this Court must consider the date for the purpose of moving an application and the starting point of limitation under Rule 7(1)(a-1). As earlier noted insofar as amalgamating company Floatglass India Limited, is concerned, considering the provisions, its certificate of registration was cancelled from 1-4-2002. In other words, M/s. Floatglass India Limited ceases to be company from that date and that must be the date to give effect to S. 19(6) and Rule 7(1)(a-1). There is therefore, an omission on account of the failure by the delegates to provide a corresponding rule to Rule 7(1)(a-1). In the absence of the Legislature providing and taking note of the fact that in such cases, the amalgamating company is not at fault, it will have to be construed that the time for making an application for registration will be 60 days from the date of the Court passing the order. On such application being made, the certificate of registration will have to be made effective from the anterior date given by the Company Court. This is only a procedural requirement. This would avoid hardship and give true effect to the mandate of the Legislature both under the BST and CST Act. No order of a Court should visit a party with liabilities and or undesirable conse-quences in the matter of tax. The rule must be so read to give effect to the legislative mandate. The date for applying for registration u/s.19(6) for a company, can only be the date of the Company Court’s order. If within 60 days of such order an application is made, then the expression succession to business in Rule 7(1)(1a)will also be so read. Under Rule 8(8)(a)(iii) then it will be the date the Company Court has ordered or the date provided in the scheme which will be the date of succession to business. This would obviate any difficulty to a party till such time the delegate makes a specific provision in Rule 8.”
[Asahi India Glass Ltd. v. State of Maharashtra, (25 VST 31)(Bom.)]
