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Ramesh Ranganathan, J.In this batch of writ petitions the petitioners seek to have the orders passed by the Appellate Deputy Commissioner rejecting their appeals, on the ground that that they had failed to comply with the statutory requirement of paying 12.5% of the disputed tax while filing the appeal within the prescribed time, set aside and to direct him to admit their appeals, and decide the matter in accordance with law.
Before examining the contentions urged, it is necessary to briefly note the facts, to the extent relevant, in each of the writ petitions.
W.P.No.18501 of 2010:
For the assessment years 2004-05 to 2008-09, the 2nd respondent completed assessment and, by order dated 5.10.2009, levied tax. For the assessment year 2004-05, the tax levied was Rs.3,20,760/-. Aggrieved thereby, the petitioner carried the matter in appeal to the Appellate Deputy Commissioner (1st respondent) who issued show cause notice dated 31.12.2009 directing the petitioner to furnish proof of payment, of 12.5% of the disputed tax, within seven days from the date of receipt of the notice. The petitioner claims that the notices were served on their authorized representative on 4.2.2010, they had filed a letter dated 9.2.2010 stating that they had paid 12.5% of the disputed tax for the assessment years 2004-05 and 2005-06 vide cheque dated 28.1.2010, for the assessment years 2006-07 by cheque dated 15.02.2010, for the assessment year 2007-08 vide cheque dated 7.2.2010, and for the assessment year 2008-09 vide cheque dated 2.2.2010. The 1st respondent, however, rejected the appeal by order dated 17.4.2010, a copy of which the petitioner claims to have received only on 2.6.2010.
W.P.No.27885 of 2010:
The relief sought for in this writ petition is to declare the proceedings of the Appellate Deputy Commissioner dated 23.6.2010 and 3.8.2010, rejecting the appeals filed by the petitioner on 14.5.2010, as arbitrary and illegal; to direct the Appellate Deputy Commissioner to consider the petitioner’s representation dated 30.7.2010 whereby proof of payment of 12.5% of the disputed tax was furnished; and for admission of the appeal, and its disposal on merits.
The petitioner was assessed to tax, by assessment order dated 29.3.2010, for the year 2006-07 under the Central Sales Tax Act, for Rs.47,08,526/-. Since they had been extended the benefit of tax deferment, the tax due was adjusted against the eligible amount as per their final eligibility certificate. Aggrieved thereby, the petitioner preferred an appeal to the Appellate Deputy Commissioner (2nd respondent) who issued notice dated 25.5.2010 calling upon them to furnish proof of payment of 12.5% of the disputed tax, (difference between the tax assessed and the tax admitted of Rs.22,49,514/-), and to show cause within 7 days. The petitioner submitted their reply thereto on 28.5.2010. Thereafter, by letter dated 30.7.2010, the petitioner forwarded a demand draft for Rs.2,81,189/- (D.D.No.311028 dated 30.7.2010) towards 12.5% of the disputed tax in the appeal filed before the Appellate Deputy Commissioner for the assessment year 2006-07. The Appellate Deputy Commissioner, in his proceedings dated 3.8.2010, observed that the appeal was already rejected on 23.6.2010 for failure to furnish proof of payment of 12.5% of the disputed tax at the time of filing of the appeal and, even if the appellant made good the lapses pointed out in the show cause notice for admission of the appeal subsequent to the rejection order, the same could not be considered. Aggrieved thereby the present writ petition.
W.P.No.16179 of 2010:
The relief sought for in this writ petition is to declare the action of the 1st respondent in rejecting the appeal, for non-payment of 12.5% of the disputed tax for maintenance of the appeal even though payment was made before the order of rejection was passed on 30.3.2010, as arbitrary and illegal. A consequential direction is sought to the 1st respondent to take the appeal on file, and to hear the same on merits.
The 2nd respondent passed an order of assessment on 19.01.2010 levying tax of Rs.10,64,877/- on the petitioner. Aggrieved thereby, the petitioner preferred an appeal before the Appellate Deputy Commissioner on 20.02.2010. They did not, however, pay 12.5% of the disputed tax by that date. The 1st respondent, by proceedings dated 30.3.2010, informed the petitioner that, when the appeal was posted for hearing on admission on 20.3.2010, their authorized representative had appeared and had stated that the petitioner was not in a position to pay 12.5% of the disputed tax and, since the petitioner did not comply with Section 31 of the A.P. VAT Act, 2005 read with Rule 38(2) of the A.P.VAT Rules, the appeal could not be admitted. The appeal was, therefore, rejected. The petitioner claims to have paid Rs.1,17,091/- at the time of filing the appeal, and to have paid Rs.16,091/- vide challan No.1798 dated 19.4.2010 towards 12.5% of the disputed tax. It is their case that their authorized representative had approached the 1st respondent on 21.4.2010; it is only then that they came to know that the appeal had been rejected on 30.3.2010; there was no willful neglect or fault on their part in not paying the entire 12.5% of the disputed tax at the time of filing the appeal; it was only because of financial constraints that they could not pay the amount; and, except for non payment of 12.5% of the disputed tax, there were no other laches on their part.
W.P.No.13735 of 2010:
The relief sought for in this writ petition is to declare the action of the 1st respondent in rejecting their appeal, for non-payment of the entire 12.5% of the disputed tax, despite payment being made before the order of rejection dated 30.3.2010 was passed, as arbitrary and illegal. The petitioner seeks a consequential direction to the 1st respondent to take the appeal on file.
The 2nd respondent passed an order of assessment dated 19.1.2010 levying tax of Rs.17,79,073/-. Aggrieved thereby the petitioner preferred an appeal to the 1st respondent, but did not pay 12.5% of the disputed tax. A notice of hearing was issued and, on 20.3.2010, the authorized representative of the petitioner appeared before the 1st respondent and explained that the petitioner was not in a position to pay the amount; Rs.1,30,627/- had been paid at the time of filing of the appeal; the balance Rs.91,758/- was paid vide challan No.1799 on 16.4.2010; and thereby 12.5% of the disputed tax, in its entirety, was paid. It is their case that their authorized representative had approached the office of the 1st respondent on 21.4.2010 and, while submitting the challan, came to know that the appeal had been rejected, for non-payment of 12.5% of the disputed tax, by order of the 1st respondent dated 30.3.2010. They would contend that failure to pay 12.5% of the disputed tax was only because of financial constrains; and there were no other laches on their part.
W.P.No.13470 of 2009:
The relief sought for in this writ petition is to declare the proceedings of the 1st respondent dated 9.1.2009, rejecting the appeal filed by the petitioner on 24.6.2008, as arbitrary and illegal; and to direct the 1st respondent to consider their representation dated 5.5.2009, enclosing thereto proof of payment of 12.5% of the disputed tax, for admission of the appeal.
The 2nd respondent passed an order of assessment on 28.5.2008 for the assessment year 2002-03 (CST) levying tax of Rs.43,808/-. Aggrieved thereby the petitioner preferred an appeal in Form I. They were informed by proceedings dated 9.1.2009 that, while they had preferred an appeal in Form I, they had not filed proof of payment of 12.5% of the disputed tax; a notice was issued on 27.6.2008 calling upon them to comply with the omissions pointed out therein; even though six months had elapsed they did not comply with the omissions; and, in the absence of proof of payment of 12.5% of the disputed tax and the remaining admitted tax, the 1st respondent had no other alternative but to reject the appeal at the admission stage. The petitioner claims to have received a copy of the said order on 31.3.2009; to have submitted a representation on 5.5.2009 (which is said to have been received by the respondents on 6.5.2009) enclosing thereto proof of payment of Rs.5000/- towards 12.5% of the disputed tax vide challan No.1315 dated 28.4.2009; and to have paid the admitted tax of Rs.3814/- on 28.11.2009. In their representation the petitioners contended that, since they had now fulfilled the condition of payment of 12.5% of the disputed tax, their appeal should be admitted.
Heard Sri S.R. Ashok, Learned Senior Counsel, Sri M.V.J. Kumar and Sri Kunuku Durga Prasad, Learned Counsel for the petitioners. Sri A.V. Krishna Koundinya and Sri P. Balaji Verma, Special Standing Counsel for Commercial Taxes, put forth their submissions on behalf of the respondents.
Before examining the rival contentions, it is useful to read Section 19(1), 21(1) and (2) of the APGST Act, 1957 in juxta-position with Section 31(1), 33(1) and (2) of the A.P.VAT Act, 2005.
| APGST Act, 1957 | A.P.VAT Act, 2005 |
| Section 19. Appeals:-(1) Any dealer objecting to any order passed or proceeding recorded by any authority under the provisions of the Act other than an order passed or proceeding recorded by a an Additional Commissioner or Joint Commissioner, Deputy Commissioner under sub section (4 C) of Section 14 may within thirty days from the date on which the order or proceeding was served on him, appeal to such authority as may be prescribed:
Provided that the appellate authority may within a further period of thirty days admit an appeal preferred after a period of thirty days if he is satisfied that the dealer had sufficient cause for not preferring the appeal within that period: Provided further that an appeal so preferred shall not be admitted by the appellate authority concerned unless the dealer produces proof of payment of tax admitted to be due, or of such instalments as have been granted, and the proof of payment of twelve and half per cent of the difference of the tax assessed by the assessing authority and the tax admitted by the appellant, for the relevant assessment year, in respect of which the appeal is preferred. 21 Appeal to the Appellate Tribunal:- (1) Any dealer objecting to an order passed or proceeding recorded - (a) by any prescribed authority on appeal under Section 19, or (b) by an Additional Commissioner or joint Commissioner or Deputy Commissioner suo motu under sub section (4-C) of Section 14 or under sub section (2) of section 20, may appeal to the Appellate Tribunal within sixty days from the date on which the order or proceeding was served on him. (2) The Appellate Tribunal may within a further period of sixty days admit an appeal preferred after the period of sixty days mentioned in sub section (1), if it is satisfied that the dealer had sufficient cause for not preferring the appeal within that period. Provided that no appeal against the order passed under Section 19 shall be admitted under sub-section (1) or sub-section (2), unless it is accompanied by satisfactory proof of the payment of fifty per cent of the tax as ordered by the appellate Deputy Commissioner under Section 19: Provided further that no appeal against the order passed under sub-section (2) of Section 20 shall be admitted under sub-section (1) or sub-section (2), unless it is accompanied by satisfactory proof of the payment of the tax admitted by the appellant to be due or in such instalments thereof as might have become payable as the case may be, and twenty five per cent of the difference of the tax ordered by the revisional authority under sub-section (2) of Section 20 and the tax admitted by the appellant: Provided also that the assessing authority shall refund the said amount of twelve and half per cent or twenty five per cent or fifty per cent of the difference of tax assessed by the assessing authority or revisional authority as the case may be and the tax admitted and paid by the appellant, with simple interest calculated at the rate of 18% per annum if the refund is not made within 60 days from the date of receipt of the order passed under Section 19 or Section 21. | 31 Appeal to Appellate authority:(1) Any VAT dealer or TOT dealer or any other dealer objecting to any order passed or proceeding recorded by any authority under the provisions of the Act other than an order passed or proceeding recorded by an Additional Commissioner or Joint Commissioner or Deputy Commissioner, may, within thirty days from the date on which the order or proceeding was served on him, appeal to such authority as may be prescribed:
Provided that the Appellate Authority may within a further period of thirty days admit the appeal preferred after a period of thirty days if he is satisfied that the VAT dealer or TOT dealer or any other dealer had sufficient cause for not preferring the appeal within that period: Provided further that an appeal so preferred shall not be admitted by the appellate authority concerned unless the dealer produces proof of payment of tax admitted to be due, or of such installments as have been granted, and the proof of payment of twelve and half per cent of the difference of the tax assessed by the authority prescribed and the tax admitted by the appellant, for the relevant tax period, in respect of which the appeal is preferred. 33 Appeal to the Appellate Tribunal: (1) Any dealer objecting to an order passed or proceeding recorded (a) by any authority prescribed, on appeal under Section 31, or (b) by the Additional Commissioner, or Joint Commissioner or Deputy Commissioner under Section 21 or 32 or 38; or (c) by any authority following the ruling or order passed under Section 67; may appeal to the Appellate Tribunal within sixty days from the date on which the order or proceeding was served on him. (2) The Appellate Tribunal may within a further period of sixty days admit the appeal preferred after the period of sixty days specified in sub-section (1), if it is satisfied that the dealer had sufficient cause for not preferring the appeal within that period: Provided that no appeal against the order passed under Section 31 shall be admitted under sub-section (1) or sub-section (2) of this Section unless it is accompanied by satisfactory proof of the payment of fifty percent of the tax, penalty, interest or any other amount as ordered by the Appellate authority under Section 31. |
I. DOES THE SECOND PROVISO PERMIT PAYMENT OF TAX, AND PRODUCTION OF ITS PROOF, WITHIN A REASONABLE TIME BEYOND SIXTY DAYS:
It is contended, on behalf of the petitioners, that the only embargo under the second proviso to Section 19(1) is against admission of the appeal without there being evidence of payment of the admitted tax/12.5% of the disputed tax; the initial period of 30 days prescribed in Section 19(1), or the extended period of 30 days stipulated in the first proviso thereto, operate only in the realm of preferring the appeal; these conditions do not control the act of production of proof of payment of tax referred to in the second proviso; as the Deputy Commissioner is empowered, under Section 16(2)(a) of the APGST Act, to grant extension of time for payment of tax, or permit payment in installments, there is no justification in construing the second proviso as stipulating a time limit of 30 or 60 days even for pre-deposit of the admitted tax/12.5% of the disputed tax as stipulated in the second proviso; admission of the appeal is only a ministerial act, and not a judicial or a quasi judicial act; and no time limit is stipulated for complying with such a requirement under the Act or the Rules. Reliance is placed on Sujana Metal Products Ltd v. State of A.P. (2006) 43 APSTJ 72; Shyam Kishore v. Municipal Corporation of Delhi AIR 1992 SC 2279, and other Orders of this Court wherein the appellate authority was directed to entertain the appeal after extending the period of limitation.
While the first proviso to Section 19(1) of the Act was substituted by A.P. Act 8 of 1997 with effect from 4.1.1997, the second proviso thereto and the first proviso to Section 21(2) were substituted by A.P. Act 3 of 2002 with retrospective effect from 20.11.2001. The twin conditions of a valid appeal under Section 19(1) of the Act are (1) in the appeal, the dealer should have objected to an order passed or proceeding recorded by an authority under the provisions of the Act, other than an order passed under Section 14(4)(c) thereof; and (2) the appeal should have been preferred by the dealer, to the prescribed authority, within 30 days from the date on which the order or proceeding was served on him. Under Rule 33(1) of the APGST Rules, and Rule 59 of the APVAT Rules, an appeal lies to the Appellate Deputy Commissioner against an order passed or proceeding recorded by an officer not above the rank of Assistant Commissioner. If an appeal is preferred within 30 days, from the date of receipt of an order passed or proceeding recorded by the authority, the appellate authority is required to hear and adjudicate the appeal on its merits, subject to fulfillment of the other conditions prescribed in the Act and the Rules.
The first proviso to Section 19(1) confers discretion on the appellate authority to admit an appeal preferred by a dealer beyond 30 days of receipt of the order passed by the authority. Exercise of such discretion is fettered by two conditions (1) the appeal ought to have been preferred within a further period of 30 days, after the period of 30 days from the date of receipt of the order passed by the authority; and (2) the appellate authority must be satisfied that the dealer had sufficient cause for not preferring the appeal within the original period of 30 days prescribed under Section 19(1) of the Act. It is only if the appeal is preferred between the 31st and 60th day from the date of receipt of a copy of the order passed by the authority, and the dealer has shown sufficient cause for not filing the appeal within the prescribed period of 30 days under Section 19(1) of the Act, can the appellate authority exercise discretion to admit the appeal. Such exercise of discretion to admit the appeal is neither ministerial nor a mere formality. If sufficient cause is not shown, the appellate authority is not obliged to condone the delay. The appellate authority does not have the discretion to admit an appeal filed after expiry of 60 days, from the date of receipt by the dealer of a copy of the order passed against him, or to decide such an appeal on its merits even if sufficient cause is shown by the dealer for not having preferred the appeal within the original period of 30 days.
When a special limitation for the purpose of appeal is prescribed, the power of the Court under Section 5 of the Limitation Act stands curtailed and excluded. It is not essential for the special or local law to, in terms, exclude the provisions of the Limitation Act. It is sufficient if, on a consideration of the language of its provisions relating to limitation, the intention to exclude can be implied. If, on an examination of the relevant provisions, it is clear that the provisions of the Limitation Act are, necessarily, excluded then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act. (Union Of India v. Popular Construction Co.. AIR 2001 SC 4010; Vidyacharan Shukla v. Khubchand baghel AIR 1964 SC 1099; Hukumdev Narain Yadav v. Lalit Narain Mishra (1974) 2 SCC 133;Manohar Lal Sharma v. Union of India 2009(6) ALD 315).
In M/s. Parson Tools and Plants v. CST (1975) 4 SCC 22, the Supreme Court held that if the legislature, in a special statute, prescribes a certain period of limitation for filing a particular application thereunder, and provides in clear terms that such a period, on sufficient cause being shown, may be extended in the maximum only upto a specified time limit and no further, then the tribunal concerned has no jurisdiction to treat as within limitation an application filed before it beyond such maximum time limit specified in the statute, by excluding the time spent in prosecuting in good faith and due diligence any prior proceeding on the analogy of Section 14(2) of the Limitation Act. It is true that, in Mukri Gopalan v. Cheppilat Puthanpurayil Aboobacker. AIR 1995 SC 2272, the Supreme Court distinguished its earlier judgment in Parson Tools and Plants7on the ground that the scope of Section 29(2) of the Limitation Act was not considered in the said decision and, as such, could not be held to be an authority for the proposition that, in revisional proceedings before the Sales Tax authorities functioning under the U.P. Sales Tax Act, Section 29(2) would apply. Both the judgments of the Supreme Court, in M/s.Parson Tools and Plants (supra) and Mukri Gopalan (supra), were considered by the Division Bench of this Court, in A.V.U. Engineers Private Limited v. Commissioner (CT), Hyderabad (2005) 142 STC 52, while interpreting the scope of the amended first proviso to Section 19(1) of the Act.
Prior to its amendment, by A.P. Act 8 of 1997, the first proviso to Section 19(1) enabled the appellate authority to admit an appeal, preferred after the period of thirty days prescribed in Section 19(1), if he was satisfied that the dealer had sufficient cause for not preferring the appeal within that period. The words “within a further period of thirty days” was inserted to the said proviso on its amendment by A.P. Act 8 of 1997. As a result the appellate authority could, within a further period of 30 days, admit the appeal preferred after the period of 30 days if he was satisfied that the dealer had sufficient cause for not preferring the appeal within that period.
While considering the scope of the amended first proviso to Section 19(1) of the Act the Division Bench of this Court, in A.V.U. Engineers (P) Ltd.,(supra)held that, even if the appellate authority was satisfied that the dealer was prevented for sufficient cause, it had no power to condone the delay beyond the period of thirty days; from the provisions existing prior to the enactment, and after the enactment of the Amendment Act, it was clear that the Legislature had intentionally brought the new provision so as to curtail the unlimited discretionary powers of the Appellate Authority to condone the delay; if the provisions of the Limitation Act were made applicable by virtue of Section 29(2), the result would be that the provisions of the Amendment Act would become otiose and the old position would be restored, restoring the unlimited discretionary powers of the Appellate Authority; and Courts were not empowered to create such a situation.
The APGST Act, 1957 was repealed by Section 80(1) of the A.P. VAT Act, 2005. However Section 31(1) of the A.P.VAT Act and its two provisos are a verbatim reproduction of Section 19(1) of the APGST Act and its two provisos. When a statute is repealed and re-enacted, and words in the repealed statute are reproduced in the new statute, they should be interpreted in the sense which had judicially been put on them under the repealed Act, as the legislature is presumed to be acquainted with the construction which the Courts have put upon the words and, when they repeat the same words, they must be taken to have accepted the interpretation put on them by the Court as correctly reflecting the legislative mind. (Bengal Immunity Co. Ltd. v. State of Bihar (1955) 2 SCR 603). Where a word or phrase has received clear judicial interpretation the subsequent statute, which incorporates the same word or the same phrase in a similar context, must be construed so that the word or phrase is interpreted according to the meaning that has been previously assigned to it. (Banarsi Debi v. ITO (1964) 7 SCR 539; Diwan Bros. v. Central Bank of India (1976) 3 SCC 800). If the Legislature, which is deemed to be aware of the declarations of law by the Court, did not alter the law it must be deemed to have accepted the interpretation of the Court. (Sakal Deep Sahai Srivastava v. Union of India (1974) 1 SCC 338). That the legislature, even after repeal of the APGST Act, has chosen to restrict the power of the appellate authority to condone the delay in preferring the appeal only to 30 days, under the first proviso to Section 31(1) of the VAT Act, (as was prescribed under the repealed first proviso to Section 19(1) of the APGST Act), would necessarily mean that the construction placed on the first proviso to Section 19(1) of the APGST Act by the Division Bench of this Court, in A.V.U. Engineers (P) Ltd. (supra), would equally apply in interpreting the first proviso to Section 31(1) of the VAT Act. Consequently, even under the first proviso to Section 31(1) of the VAT Act, the appellate authority would not have the power to condone the delay in preferring, or to admit, the appeal beyond a period of 60 days (30+30 days).
By use of the words “shall not…unless” in the second proviso, the Legislature has prohibited the appellate authority from admitting the appeal, preferred under Section 19(1) or the first proviso thereto, unless the dealer produces (a) proof of payment of tax admitted to be due, or of such installments as have been granted; and (b) proof of payment of 12.5% of the tax assessed by the assessing authority, and the tax admitted by the appellant for the relevant assessment year in respect of which the appeal is preferred. The legislature, while granting a right of appeal, can impose conditions for the exercise of such right. (Ananta Mills v. State of Gujarat AIR 1975 SC 1234). It is permissible to enact a law to the effect that no appeal shall lie against an order relating to an assessment to tax unless tax has been paid. The legislature, in its wisdom, may impose accompanying liability upon a party upon whom a legal right of appeal is conferred or to prescribe conditions for the exercise of the right. (Sujana Metal Products Ltd. (supra); Ananta Mills (supra)). Whenever such limitations are imposed, they are to be strictly followed. (Raj Kumar Shivhare v. Asst. Director, Directorate of Enforcement (2010) 253 ELT 3 (SC)).
Section 16(1) of the APGST Act stipulates that the tax assessed, and the penalty levied, under the Act shall be paid by the dealer in such manner, and within such time, as may be specified. Section 16(2)(a) enables the Deputy Commissioner, on an application made by the assessee, by an order to grant extension of time for payment of tax, penalty or other amount due under the Act, or to permit payment thereof in such instalments, within such intervals and subject to such conditions as he may specify in the order. An appeal, under Section 19(1) of the Act, is preferred only if a dealer objects to an order passed by the authority, and not where he agrees to pay the tax and merely seeks extension of time for making such payment, or for payment thereof in instalments. The second proviso to Section 19(1) requires the dealer to produce either proof of payment of the tax admitted to be due, or of such instalments as have been granted. It would suffice as proof, in cases where the Deputy Commissioner has granted instalments under Section 16(2)(a), if the assessee produces the order of the Deputy Commissioner granting instalments, provided that he pays 12.5% of the disputed tax and produces proof thereof within 60 days from the date of receipt of a copy of the assessment order. Reliance placed on Section 16(2)(a) to contend that there is no justification in stipulating the time limit of 30 days, or 60 days, for pre-deposit of 12.5% of the disputed tax is, therefore, misplaced.
Though the second proviso to Section 19(1) does not specifically mention the time within which such proof of payment is to be produced, the use of words “appeal so preferred shall not be admitted……unless” in the second proviso makes it clear that admission of the appeal mentioned therein is with reference to admission of the appeal under the first proviso to Section 19(1) and, as such, the time limit specified in the first proviso, for the appellate authority to admit the appeal, would also apply for production of proof of payment of tax under the second proviso A dealer can, therefore, produce proof of payment of the admitted tax, and 12.5% of the disputed tax, at any time before the period within which the appeal may be admitted i.e., within 60 days from the date on which the dealer receives a copy of the order passed by the authority, and not thereafter.
II. IS THE DEFECT IN PAYMENT OF THE TAX, STIPULATED IN THE SECOND PROVISO, CURABLE?
It is contended that an appeal presented within the time specified under Section 19(1) or the first proviso thereto, even if it is not accompanied by evidence of payment of tax, is a valid appeal properly presented; the appellate authority does not have the power to reject the appeal, and can only direct the assessee to pay the amount, and rectify the defects within a reasonable time; the said amount can be paid subsequently, and the defect cured; and the Appellate Deputy Commissioner has the discretion to grant time beyond sixty days for complying with the defects, or for making up the deficiencies if any, in the appeals. Reliance is placed on Mannal Lal v. Mst.Chotka Bibi AIR 1971 SC 1374 in this regard.
In Mannan Lal (supra) the Supreme Court held that, if the deficiency is made good, no objection can be raised on the ground of the bar of limitation; the memorandum of appeal should be treated as one filed within the period fixed by the Limitation Act; and the appeal must be treated as pending from the date when the memorandum of appeal was presented in Court not only for the purpose of limitation, but also for the purpose of sufficiency of court fee.
The aforesaid observations, in Mannan Lal (supra), were made in the context of Section 582-A of the Code of Civil Procedure, 1882 and Section 28 of the Court Fees Act, 1870. Under Section 582-A of the Civil Procedure Code, 1882, if a memorandum of appeal is presented within the proper period of limitation, but is written upon paper insufficiently stamped and the insufficiency of the stamp was caused by a mistake on the part of the appellant as to the amount of the requisite stamp, the memorandum of appeal shall have the same effect and be as valid as if it has been properly stamped. Section 28 of the Court Fees Act, 1870 stipulates that, if any document is through mistake or inadvertence, received, filed or used in any Court or office without being properly stamped, the Presiding Judge or the head of the office, as the case may be, or in the case of a High Court, any Judge of such Court, if he thinks fit, order that such document be stamped as he may direct and, on such document being stamped accordingly, the same and every proceedings relative thereto shall be as valid as it had been properly stamped in the first instance.
Unlike Section 28 of the Court Fees Act, and Section 582-A of the CPC, 1882, there is no provision either under the APGST Act or the A.P.VAT Act permitting payment of the prescribed tax beyond 60 days, and to treat such belated payment as having been made at the time of filing of the appeal itself. Reliance placed on Mannam Lal (supra) is, therefore, misplaced, and the defect in belated payment of the admitted tax/12.5% of the disputed tax, beyond sixty days of receipt of a copy of the assessment order, can neither be cured nor be treated as having been paid at the time when the appeal was originally filed.
III. IS THE SECOND PROVISO A STAND ALONE PROVISION, INDEPENDENT OF SECTION 19(1) OF THE ACT, AND THE FIRST PROVISO THERETO?
It is contended on behalf of the petitioner that the second proviso is a stand alone provision, and does not operate in conjunction with Section 19(1) or the first proviso thereto; the time limit set out in Section 19(1) and the first proviso cannot be read into, or to operate vis- -vis, the second proviso; and, if the Legislature had intended to prescribe the same time limit of 30 days, with a maximum period of condonation of 30 days, as stipulated in the first proviso they would have amended the first proviso itself, and not inserted the second proviso separately.
Construing the second proviso as a stand alone provision, independent of and not connected with Section 19(1) and its first proviso, would not only require the words “appeal so preferred” used in the second proviso to be ignored but also to hold that Section 19(1) and its provisos provide for a two tier exercise of admission, the first to condone the delay in preferring the appeal, and the second for production of proof of payment of the admitted/12.5% of the disputed tax. Admission of an appeal arises only in a case falling within the ambit of the first proviso. The words “appeal so preferred shall not be admitted” used in the second proviso refer to admission of the appeal under the first proviso. Exercise of discretion by the appellate authority to admit an appeal is a one time exercise.
The second proviso to Section 19(1) is a proviso to the first proviso. The proper function of a proviso is to except, and to deal with a case which would otherwise fall within the general language of the provision, and its effect is confined to that case. It is a qualification of the preceding provision. A proviso is not interpreted as stating a general rule. (Haryana State Coop. Land Development Bank Ltd. v. Banks Employees Union (2004) 1 SCC 574; Shah Bhojraj Kuverji Oil Mills and Ginning Factory v. Subhash Chandra Yograj Sinha (1962) 2 SCR 159; Calcutta Tramways Co. Ltd. v. Corpn. of Calcutt AIR 1965 SC 1728; A.N. Sehgal v. Raje Ram Sheora AIR 1991 SC 1406; Tribhovandas Haribhai Tamboli v. Gujarat Revenue Tribunal AIR 1991 SC 1538andKerala State Housing Board v. Ramapriya Hotels (P) Ltd (1994)5 SCC 672). A proviso to a particular provision of a Statute only embraces the field which is covered by the said provision. It carves out an exception to the provision to which it has been enacted as a proviso, and to no other. (CIT v. Indo-Mercantile Bank Ltd., 1959 Supp (2) SCR 256;Ram Narain Sons Ltd. v. Assistant Commissioner of Sales Tax (1955) 2 SCR 483). A proviso cannot be torn apart from the main Section nor can it be used to nullify or set at naught the real object of the main Section. (S. Sundaram Pillai v. V.R. Pattabiraman (1985) 1 SCC 591; Craies in his book Statute Law (7th Edn.)It is a fundamental rule of construction that a proviso must be considered in relation to the principal matter to which it stands as a proviso. It is to be construed harmoniously with the main enactment. (Abdul Jabar Butt v. State of Jammu & Kashmir AIR 1957 SC 281; Indo-Mercantile Bank Ltd., (supra); Ram Narain Sons Ltd. (supra); andState of State Of Punjab v. Kailash Nath (1989) 1 SCC 321).
In Sujana Metal Products Ltd, Hyderabad (supra) a Division bench of this Court held that a fair reading of the second proviso to Section 19(1) of the APGST Act makes it clear that deposit of the difference of tax assessed by the assessing authority, and the tax admitted by the appellant, as a pre-condition as provided for under the second proviso is an integral part of Section 19.
A proviso cannot be read as divorced from its context. The proper course is to apply the broad general rule of construction which is that a Section must be construed as a whole, each portion throwing light, if need be, on the rest. (Tahsildar Singh & Another. v. State Of U.P., 1959 Supp (2) SCR 875;Dwarka Prasad v. Dwarka Das Saraf (1976) 1 SCC 128;Commissioner of Income-tax, Kerala and Coimbatore v. P. Krishna Warriar AIR 1965 SC 59Maxwell on Interpretation of Statutes, 10th Edn., p. 162).The second proviso prohibits exercise of discretion by the appellate authority to admit an appeal if the conditions stipulated therein are not complied with. The words “appeal so preferred” in the second proviso refers to the appeal preferred under Section 19(1) or the first proviso and, as such, is integrally connected therewith, and is an integral part thereof.
Whether a separate proviso should be inserted, or the existing proviso should be amended, to provide for a time frame within which the admitted tax/12.5% of the disputed tax should be paid, is a matter of legislative choice. It matters little that the legislature has, instead of amending the first proviso to Section 19(1), chosen to insert the second proviso thereto.
IV. TIME LIMIT FOR PAYMENT OF ADMITTED TAX/12.5% OF DISPUTED TAX UNDER THE SECOND PROVISO – IS IT MANDATORY OR DIRECTORY?
1. It is contended on behalf of the petitioner that Section 19 of the APGST Act must be read in two parts, the first part relates to filing/preferring an appeal within the prescribed time (i.e., within 30 plus 30 days), and the appellate authority does not have the power to admit the appeal filed beyond the period stipulated thereunder; the second part is the second proviso which contains the word “unless” and, to the extent it relates to payment of 12.5% of the disputed tax, the provision is mandatory; however the period prescribed for payment thereof is merely directory as the very purpose of providing a statutory right of appeal would be frustrated if it can be rejected for non-compliance of pre-deposit within the time prescribed; the second proviso does not lay down consequences for non-compliance thereof; as no time limit is prescribed therein for payment of 12.5% of the disputed tax, pre-deposit is directory in so far as the period, within which the amount is to be paid, is concerned; the assessee can, therefore, comply with the second proviso at any time before rejection of the appeal by the Appellate Deputy Commissioner; the Court, when called upon to interpret a provision, must keep in view the entire context in which the provision came to be enacted in order to determine whether it is directory or mandatory; and what is mandatory and directory is to be understood in the context of the provisions of the Statute. Reliance is placed on Salem Bar Association v. Union of India (2005) 6 SCC 344; Sk. Salim Haji Abdul Khayumsab v. Kumar (2006) 1 SCC 46; and Raza Buland Sugar Co. Ltd. v. Municipal Board (1965) 1 SCR 970].
In Salem Bar Association (supra), the Supreme Court held that the use of the word 'shall' is, ordinarily, indicative of the mandatory nature of the provision but, having regard to the context in which it is used, or having regard to the intention of the legislation, the same can be construed as directory. In Sk. Salim Haji Abdul Khayumsab (supra) the Supreme Court held that merely because a provision of law is couched in a negative language, implying mandatory character, the same is not without exceptions; and Courts, when called upon to interpret the nature of the provision, may, keeping in view the entire context in which the provision came to be enacted, hold it to be directory though worded in a negative form. In Raza Buland Sugar Co. Ltd. (supra) the Supreme Court held that the question whether a particular provision of a statute which on the face of it appears mandatory, inasmuch as it uses the word “shall”, is merely directory cannot be resolved by laying down any general rule, and depends upon the facts of each case; for that purpose the object of the Statute, in making the provision, is the determining factor; and the purpose for which the provision has been made and its nature, the intention of the legislature in making the provision, the serious general inconvenience or injustice to persons resulting from whether the provision is read one way or the other, the relation of the particular provision to other provisions dealing with the same subject, and other considerations which may arise on the facts of a particular case including the language of the provision, have all to be taken into account in arriving at the conclusion whether a particular provision is mandatory or directory.
While the first proviso to Section 19(1) of the Act uses the word “may”, the second proviso uses the word “shall”. The first proviso enables the appellate authority to admit an appeal preferred within a further period of thirty days, if sufficient cause is shown for not preferring the appeal within the 30 days period prescribed in Section 19(1) of the Act. The term ‘shall’, used in the second proviso, in its ordinary significance is obligatory or mandatory and the court shall, ordinarily, give that interpretation to that term unless such an interpretation leads to some absurd or inconvenient consequence, or be at variance with the intent of the Legislature. (Govindlal Chhaganlal Patel v. Agricultural Produce Market Committee (1975) 2 SCC 482; Khub Chand v. State of Rajasthan AIR 1967 SC 1074; State of U.P. v. Babu Ram Upadhya (1961) 2 SCR 679). The second proviso, in using the word “shallnot”, prohibits the appellate authority from admitting the appeal unless proof of payment of admitted tax, or 12.5% of the disputed tax, is produced by the dealer. Prohibitive or negative words can rarely be directory, and are indicative of the intent that the provision is to be mandatory (Haridwar Singh v. Bagun Sumbrui (1973) 3 SCC 889). The circumstance that the Legislature has used a language of compulsive force is always of great relevance and, in the absence of anything contrary in the context indicating that a permissive interpretation is permissible, the provision ought to be construed as peremptory. (Govindlal Chhaganlal Patel (supra)). If the words of a statute are themselves precise and unambiguous, no more is necessary than to expound those words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the legislature. (Govindlal Chhaganlal Patel (supra)).
Employment of the said two monosyllables “may” and “shall” in the same provision must have two different imports. (Mahaluxmi Rice Mills v. State of U.P., (1998) 6 SCC 590). The use of the word ‘may’ in the first proviso, and of the word ‘shall’ in the second proviso to Section 19(1) of the Act, establishes the difference that the first proviso gives a discretionary power, but the second proviso is mandatory. (Jamatraj Kewalji Govani v. State Of Maharashtra (1967) 3 SCR 415; T.R. Sharma v. Prithvi Singh (1976) 1 SCC 226). The word “unless” has been defined in The Concise Oxford Dictionary to mean “if not”, “except”. It is evident, therefore, that except on production of proof of admitted/12.5% of the disputed tax an appeal, preferred under Section 19 of the Act, cannot be admitted by the appellate authority. Payment of the admitted/12.5% of the disputed tax, and production of proof of such payment, are conditions precedent for admission of the appeal. Prohibition of admission of the appeal unless the admitted tax/12.5% of disputed tax is paid within sixty days of receipt of a copy of the order would suffice to establish that the time limit, under the second proviso, is mandatory and not merely directory.
V. SHOULD PROOF OF PAYMENT OF TAX ACCOMPANY THE APPEAL?
As noted hereinabove, both the second proviso to Section 19(1) and the first proviso to Section 21(2) were substituted by Act 3 of 2002 with retrospective effect from 20.11.2001. While the first proviso to Section 21(2) requires satisfactory proof of payment of tax to “accompany” the appeal, the word “accompany” does not find mention in the second proviso to Section 19(1) of the Act. The general rule is that when two different words are used by the same statute, one has to construe these different words as carrying different meanings. (Kailash Nayth Agarwal (supra)). It would be difficult to maintain that they are used in the same sense, and the conclusion must follow that the expressions have different connotations. (The Member, The Member, Board Of Revenue v. Arthur Paul Benthall AIR 1956 SC 35; M/s. B.R. Enterprises v. State of U.P AIR 1999 SC 1867). When the situation has been differently expressed, the Legislature must be taken to have intended to express a different intention. (Commissioner of Income-tax, New Delhi v. M/s. East West Import & Export (P) Ltd, Jaipur AIR 1989 SC 836;The Oriental Insurance Co. Ltd. v. Hansrajbhai V. Kodala AIR 2001 SC 1832). As the second proviso to Section 19(1), unlike the first proviso to Section 21(2), of the Act does not use the words “accompanied by”, proof of payment of the admitted tax, or 12.5% of the disputed tax, need not “accompany” the appeal filed either under Section 19(1) of the Act or under the first proviso thereto, and it would suffice if such proof is produced before the last date on which an appeal may be admitted i.e., within 60 days of receipt of a copy of the order, provided of course that the other conditions in the first proviso to Section 19(1) are satisfied.
VI. RULES MADE UNDER THE ACT MUST BE IN ACCORDANCE WITH THE PROVISIONS OF THE STATUTE, AND NOT CONTRARY THERETO:
Rule 38(2)(d) of the A.P. VAT Rules, 2005 requires the appeal to be in Form APP 400, and to be accompanied by a declaration in Form APP 400-A stating that the amount, specified in the second proviso to Section 31(1), has been paid and proof of payment of the disputed tax is enclosed. Form 400-A requires the dealer to declare that the admitted tax, and 12.5% of the disputed tax, has been paid. In case of conflict between the provisions of the Act and the Rules, the former will prevail. The Rules should be interpreted in a manner so as to be in conformity with the provisions of the Act. (Ispat Industries Ltd. v. Commissioner Of Customs, Mumbai. (2006) 12 SCC 583, and not the other way round. A rule has to be read as supplemental to the provisions of the parent Act. It cannot be interpreted in a way as to come into conflict with the parent Act, in which case the Act will prevail. (STO v. H. Farid Ahmed & Sons (1976) 1 SCC 245). A piece of subordinate legislation should be read in the light of the statutory scheme of the Act. (Bombay Dyeing & Mfg. Co. Ltd. v. Bombay Environmental Action Group (2006) 3 SCC 434).Rules made for carrying out the purposes of the Act cannot be so framed as not to carry out the purpose of the Act, and cannot be in conflict therewith. (Laghu Udyog Bharati v. Union of India (1999) 6 SCC 418). It is a recognised canon of construction that an expression used in a rule made in exercise of the power conferred by a statute must, unless there is anything repugnant in the subject or context, have the same meaning as is assigned to it under the Statute. (Onkarlal Nandlal v. State of Rajasthan (1985) 4 SCC 404). Rules should be consistent with the provisions of the Act. (Babu Ram Upadhya (supra)). A statutory rule cannot enlarge or restrict the meaning of a Section. If a rule goes beyond, or is contrary to, what the Section contemplates, the rule must yield to the Central Bank Of India & Others v. Workmen, Etc (1960) 1 SCR 200). As such, Rule 38(2)(d) of the A.P. VAT Rules, 2005, and Form APP 400 and APP 400-A, must be read in conformity with the second proviso to Section 31(1) of the VAT Act, and as requiring production of proof of payment of tax only before the last date on which an appeal may be admitted i.e., within sixty days from the date of receipt of a copy of the assessment order by the dealer-appellant.
While the appellate authority may, within the aforesaid period of 60 days, grant time to the assessee to rectify the defects in the appeal, and to pay the admitted/disputed tax, he can neither admit the appeal filed beyond 60 days nor permit payment of tax after 60 days of receipt by the assessee of the order of the assessing authority.
VII. PRACTISE PREVALENT IN THE DEPARTMENT IS OF NO GUIDANCE IN CONSTRUING STATUTORY PROVISIONS:
It is contended on behalf of the petitioners that the practice obtaining in the Commercial Tax Department is that, only after securing confirmation from the department official, (assessing authority), as regards payment of tax, the first appellate authority admits the appeal; and the use of the word “admit” in the second proviso can only mean that the appellate authority can exercise its judicial discretion to grant time to pay 12.5% of the disputed tax before the appeal is taken up for hearing.
The appellate authority, in exercising jurisdiction under Section 19(1) of the Act and 31(1) of the VAT Act, is a creature of the said Acts and must function within the four corners of these enactments. The quasi-judicial authorities, under the Act, being creatures of the Statute have limited jurisdiction and have to function within the four-corners of the Statute creating them. (O.P. Gupta v. Rattan Singh (1964) 1 SCR 259). It is not open to them to travel beyond the provisions of the Statute. (D. Ramakrishna Reddy v. Addl. Revenue Divisional Officers (2000) 7 SCC 12). It is neither open to the appellate authority to act contrary to the provisions of these Statutes on the basis of practices prevalent in the commercial tax department, nor would such practices weigh with the Court in construing statutory provisions. Where the meaning of an enactment is obscure, the Court may resort to contemporary construction, that is the construction which the authorities have put upon it by their usage and conduct for a long period of time. (National & Grindlays Bank Ltd. v. Municipal Corpn. of Greater Bombay AIR 1969 SC 1048).This doctrine applies only to the construction of ambiguous language in old statutes, (Baktawar Singh Bal Kishan v. Union of India (1988) 2 SCC 293), but not to interpreting Acts which are comparatively modern.(Senior Electric Inspector v. Laxmi Narayan Chopra AIR 1962 SC 159; J.K. Cotton Spg. & Wvg. Mills Ltd. v. Union of India, (1987) Supp SCC 350).Even if persons who dealt with the Statute have understood its provisions in another sense, such mistaken construction of the Statute does not bind the Court so as to prevent it from giving it its true construction. (National & Grindlays Bank Ltd. (supra)).The rule of construction, by reference to contemporanea expositio, must give way where the language of the Statute is plain and unambiguous. (K.P. Varghese v. ITO (1981) 4 SCC 173). A view of law, or a legal provision, expressed by a Government officer cannot afford a reliable basis or even guidance in the matter of construction of a legislative measure. It is the function of the Court to construe statutory provisions and, in reaching its correct meaning, the opinion of the executive branch is hardly relevant. Nor can the court abdicate in favour of such an opinion. (Babaji Kondaji Garad v. Nasik Merchants Coop. Bank Ltd., (1984) 2 SCC 50).
VIII. PROCEDURAL/MACHINERY PROVISIONS IN A TAX STATUTE – CONSTRUCTION TO BE PLACED THEREON:
It is contended on behalf of the petitioners that the second proviso, which requires 12.5% of the disputed tax to be paid, is more in the nature of a procedural provision, and a workable interpretation should be placed thereupon; procedural rules are hand- maids of justice; such procedural and machinery provisions are not be given strict construction; they should be interpreted liberally so as to effectuate the purpose of the relevant provision i.e, providing a quasi-judicial remedy of appeal to the aggrieved assessee; and any construction which scuttles pursuit of the statutory remedy of appeal should be eschewed. Reliance is placed on Shaik Saleem Haji Abdul Qayum Saheb32; and Salem Bar Association (supra).
InSk. Salim Haji Abdul Khayumsab (supra), the Supreme Court held that all rules of procedure are handmaids of justice; in an adversarial system no party should, ordinarily, be denied the opportunity of participating in the process of justice dispensation; and, unless compelled by express and specific language of the Statute, a procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extraordinary situations in the ends of justice. In Salem Bar Association (supra), the Supreme Court held that rules of procedure are made to advance the cause of justice and not to defeat it; construction of a rule of procedure which promotes justice and prevents miscarriage has to be preferred; and rules of procedure are the handmaid of justice, and not its mistress.
A distinction has to be made by the Court, while interpreting the provisions of a taxing statute, between charging provisions which impose the charge to tax and machinery provisions which provide the machinery for the quantification of the tax, the levy, collection of the tax imposed etc. The rule of strict construction of a taxing statute does not apply to a machinery provision. (ITC Ltd. v. Commissioner of Central Excise, New Delhi (2004)7 SCC 591; Gursahai Saigal v. CIT, Punjab (1963) 3 SCR 893). While charging provisions are construed strictly, machinery sections are not generally subject to a rigorous construction, (Associated Cement Co. Ltd. v. Commercial Tax Officer, Kota AIR 1981 SC 1887; Whitney v. Commr of Inland Revenue 1926 AC 37; CIT v, Mahaliram Ramjidas (1940) 9 ITR 442; India United Mills Ltd. v. Commr. of Excess Profits Tax, Bombay (1955) 1 SCR 810and Gursahai Saigal (supra), and are to be construed like in any other J.K Synthetics Limited v. Commercial Taxes Officer. AIR 1994 SC 2393; Whitney62; Mahaliram Ramjidas (supra); India United Mills Ltd. (supra) and Gursahai Saigal (supra)). Apart from the emphasis on the letter of the law, the fundamental rule of construction of a taxing statute is not different from that of any other Statute. The duty of the Court is to give effect to the intention of the legislature, and that intention is to be gathered from the language employed having regard to the context in connection with which it is employed. (Banarsi Debi11; Attorney-General v. Carlton Bank (1899)2 QB 158. The primary rule of construction is that the intention of the Legislation must be found in the words used by the Legislature itself. (Unique Butyle Tube Industries Pvt. Ltd., v. Uttar Pradesh Financial Corporation 2003 (2) SCC 455). The legislature is deemed to intend and mean what it says. The need for interpretation arises only when the words used in the Statute are, on their own terms, ambivalent and do not manifest the intention of the legislature. (ITC Ltd. (supra)). A Statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. (Raghunath Rai Bareja v. Punjab National Bank (2007) 2 SCC 230; Shiv Shakti Coop. Housing Society v. Swaraj Developers AIR 2003 SC 2434). Statutory language must always be given presumptively the most natural and ordinary meaning which is appropriate in the circumstances,(Chertsey Urban District Council v Mixnam's Properties Ltd (1964) 2 All ER 627), and must be construed according to the rules of grammar. In construing a statutory provision, the first and foremost rule of construction is the literal construction. If the provision is unambiguous and, if from that provision, the legislative intent is clear, the Court need not call into aid other rules of construction of statutes. (Raghunath Rai Bareja (supra); Hiralal Ratanlalv. STO (1973) 1 SCC 216). A provision is not ambiguous merely because it contains a word which, in different contexts, is capable of different meanings. It would be hard to find anywhere a sentence of any length which does not contain such a word. A provision is ambiguous only if it contains a word or phrase which, in that particular context, is capable of having more than one meaning. (Kirkness (Inspector of Taxes) Vs. John Hudson & Co., Ltd. (1955) AC 696 (HL).
A procedural/machinery provision must also be given a literal construction, and the most natural meaning which is appropriate. As noted hereinabove, the Legislature may impose accompanying liability on a party upon whom a statutory right of appeal is conferred, or to prescribe conditions for the exercise of that right. Such limitations, as may be imposed, necessitate strict compliance. The statutory remedy of an appeal to the Appellate Deputy Commissioner, under Section 19(1) of the Act, is conditioned by the stipulations in the first and second proviso thereto and, it is only on compliance therewith, can such a right of appeal be exercised. Reliance placed by the petitioners on Shaik Saleem Haji Abdul Qayum Sab (supra) and Salem Bar Association (supra) is, therefore, misplaced.
IX. PRESCRIPTION OF A TIME LIMIT FOR PAYMENT OF ADMITTED TAX/12.5% OF THE DISPUTED TAX – WOULD SUCH A CONSTRUCTION RENDER THE SECOND PROVISO UNREASONABLE AND ARBITRARY?
It is contended on behalf of the petitioners that, if the second proviso is read in conjunction with the first proviso, it would lead to anomalous and arbitrary consequences; the appellate authority would become functus officio after expiry of 30 or 60 days as the case may be, and would be incapacitated from admitting the appeals thereafter; that was not the intention of the legislature; the language employed in the second proviso must be interpreted in a reasonable manner; and accepting the construction sought to be placed by the respondents would amount to rewriting the second proviso which is impermissible.
As noted hereinabove, the discretion conferred on the appellate authority to admit an appeal, on proof of payment of the admitted/12.5% of the disputed tax, is only within 60 days, and not beyond. The contention that the appellate authority can exercise its judicial discretion, to grant time to pay 12.5% of the disputed tax before the appeal is taken up for hearing, does not merit acceptance as it runs contrary to the plain language of the second proviso to Section 19(1) of the Act. Section 31(4) of the VAT Act enables the appellate authority to finally decide the appeal within a period of two years from the date of admission of the appeal. A distinction is made under the first and second provisos to Section 31(1) on the one hand, and Section 31(4) on the other. While the former relates to admission of the appeal, the latter prescribes a time limit for its final disposal. On a conjoint reading of Section 31(1) and (4) of the VAT Act and its provisos, it is evident that the time limit prescribed for admission of an appeal cannot be extended till the hearing of the appeal itself as the time limit fixed therefor under Section 31(4) of the VAT Act, is two years from the admission of the appeal. Admission of an appeal precedes its final disposal, and both are seldom co-terminus. It is no doubt true that the appellate authority would cease to have the power to admit an appeal after expiry of thirty or sixty days as specified in Section 19(1), and its first proviso. That, by itself, does not render the said provision anomalous or arbitrary.
The contention that such a construction would render the provision unreasonable does not merit acceptance. It is, normally, not the concern of Courts to examine the reasonableness of a statutory provision or consider its consequences. Lord Halsbury as early as 1901, in Cooke v. Charles A. Vogeler Co. 1901 AC 102, stated the law:-
“court of law, has nothing to do with the reasonableness or unreasonableness of a provision of a statute except so far as it may help it in interpreting what the legislature has said. If the language of a statute be plain, admitting of only one meaning, the legislature must be taken to have meant and intended what it has plainly expressed, and whatever it has in clear terms enacted must be enforced though it should lead to absurd or mischievous results. If the language of this sub-section be not controlled by some of the other provisions of the statute, it must, since its language is plain and unambiguous, be enforced, and your Lordships’ House sitting judicially is not concerned with the question whether the policy it embodies is wise or unwise, or whether it leads to consequences just or unjust, beneficial or mischievous.”
The intention of the legislature is best gathered from the plain language of the provision. The contention that the construction placed by the respondents would amount to rewriting the second proviso is also without basis. On the other hand, it is the construction sought to be placed by the petitioners, on the second proviso to Section 19(1), which requires the words “appeal so preferred shall not……..unless”, used in the second proviso, to be ignored. Such a construction, whereby words in a statute are rendered nugatory, or treated as inapposite supplasage, must be rejected. Effort should be made to give meaning to each and every word used by the Legislature, and it is not a sound principle of construction to brush aside words in a statute, as being inapposite surplussage, if they can have a proper application in circumstances conceivable within the contemplation of the Statute. (Gurudevdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, Manohar Lal Vs. Vinesh Anand (2001) 5 SCC 407. When the legislative intent is found specific mention and expression in the provisions of the Act itself, the same cannot be whittled down or curtailed and rendered nugatory. (Bharathidasan University Vs. All India Council for Technical Education (2001)8 SCC 676. Effect should be given to all the provisions, and a construction that reduces one of the provisions to a “dead letter” must be avoided. (Anwar Hasan Khan Vs. Mohd. Shafi (2001) 8 SCC 540). Proof of payment of the admitted tax/12.5 of the disputed tax can, therefore, be produced by the appellant only before admission of the appeal i.e., within sixty day from the date of receipt of a copy of the order, and not thereafter.
Reliance placed by the petitioners on Shyam Kishore2 is misplaced. InShyam Kishore2 an appeal, against the levy of assessment of tax, was provided for under Section 169 of the Delhi Municipal Corporation Act. Section 170 of the said Act qualified this right of appeal and provided that no appeal “shall be heard or determined” under Section 169 unless (a) the appeal is made within thirty days; and (b) the amount, if any, in dispute in the appeal has been deposited by the appellant in the office of the Corporation. The proviso to clause (a) of Section 170 provided that an appeal may be admitted, after expiration of the period prescribed, if the appellant satisfied the Court that he had sufficient cause for not preferring the appeal within that period. The Supreme Court held that, in the statutory context, it was a plausible construction that, while such an appeal could be admitted or entertained, it could not be heard or disposed of without pre-deposit of the disputed tax. Unlike Section 170 of the Delhi Municipal Corporation Act, the second proviso to Section 19(1) uses the words “shall not be admitted……unless” which would go to show that payment of the admitted tax/12.5% of the disputed tax is a condition precedent for admission of the appeal. Reliance placed on Shyam Kishore2 is, therefore, misplaced.
X. ENUNCIATION OF A PRINCIPLE, ON WHICH A QUESTION BEFORE A COURT IS DECIDED, IS ALONE BINDING AS A PRECEDENT:
It is no doubt true that in several orders of this Court, including some in which one of us (RRJ) was a member, the Appellate Deputy Commissioner was directed to accept payment of the admitted tax/12.5% of the disputed tax though the period of 30/60 days had already expired. The said orders were passed without examining the scope of Section 19(1) of the Act, or Section 31(1) of the VAT Act. It is only the ratio laid down in a judgment of a coordinate bench of this Court which is binding on another coordinate bench, and not every stray observations or directions issued therein. A decision which is not founded on reasons, nor it proceeds on a consideration of an issue, cannot be deemed to be a law declared to have binding effect. That which escapes in the judgment, without any occasion, is not the ratio decidendi. A decision is binding not because of its conclusions, but in regard to its ratio and the principles laid down therein. Any declaration or conclusion arrived without application of mind, or preceded without any reason, cannot be deemed to be the declaration of law or authority of a general nature binding as a precedent. (State of U.P. v. Synthetics and Chemicals Ltd., (1991) 4 SCC 139;B. Shama Rao v. Union Territory Of Pondicherry AIR 1967 SC 1480). It is not everything said by a Judge, while giving judgment, that constitutes a precedent. The only thing in a Judge’s decision binding a party is the principle upon which the case is decided. A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio, and not every observation found therein nor what logically follows from the various observations made in the judgment. The enunciation of the reason or principle on which a question before a court has been decided is alone binding as a precedent. A deliberate judicial decision arrived at after hearing an argument on a question which arises in the case, or is put in issue, would constitute a precedent. It is the rule deductible from the application of law to the facts and circumstances of the case which constitutes its ratio decidendi. (Union of India v. Dhanwanti Devi (1996) 6 SCC 44; State of Orissa v. Mohd. Illiyas (2006) 1 SCC 275; ICICI Bank v. Municipal Corpn. of Greater Bombay (2005) 6 SCC 404).What is binding is the ratio of the decision, and not any finding of fact. It is the principle found out upon a reading of a judgment as a whole, in the light of the questions before the Court, that forms the ratio and not any particular word or sentence. (Director of Settlements, A.P. v. M.R. Apparao (2002) 4 SCC 638).
XI. IS A HARMONIOUS CONSTRUCTION OF THE SECOND PROVISO TO AVOID HARDSHIP NECESSARY?
It is contended on behalf of the petitioners that the real intention of the Legislature must be ascertained; the object and purpose of substituting the second proviso to Section 19(1) of the Act, with effect from 20.11.2001, must be taken into consideration; a harmonious construction of the first and second provisos would show that the time limit for payment of 12.5% of the disputed tax is directory in nature; and such a construction would remove the hardship faced by the assessee in complying with the requirement of payment of 12.5% of the disputed tax within the time limit specified in Section 19(1), or the first proviso thereto.
A harmonious construction of a provision, which subserves the object and purpose for which the provision is intended to serve, is permissible provided it does not cause violence to the language of the provision, (Oxford University Press v. Commissioner Of Income Tax AIR 2001 SC 886;Administrator, Municipal Corporation, Bilaspur v. Dattatraya Dahankar AIR 1992 SC 1846),and when a literal meaning may result in absurdity. Courts must, however, keep in mind that an interpretation which reduces one of the provisions to a “dead letter’’ or “useless lumber’’ is not harmonious construction. To harmonise is not to destroy any statutory provision or to render it otiose. (Sultana Begum v. Prem Chand Jain (1997) 1 SCC 373). In construing enacted words Courts are not concerned with the policy involved or with the results, injurious or otherwise, which may follow from giving effect to the language used.Even if the literal interpretation results in hardship, or inconvenience, it has to be followed. (Raghunath Rai Bareja (supra); King Emperor v. Benoari Lal Sarma AIR 1945 PC 48). On a literal construction of Section 19(1) of the Act, and its provisos, it is evident that payment of admitted tax/12.5% of the disputed tax must be made, and proof thereof must be produced, before admission of the appeal i.e., within sixty days from the date of receipt by the dealer of a copy of the assessment order. While this requirement under the APGST/AP VAT Acts, when compared with the much longer period prescribed in other tax statutes, does appear harsh, these are matters for the Legislature to consider, and not for Courts to relax its rigour.
As a result it must be held that payment of the admitted tax/12.5% of the disputed beyond the period of 60 days, from the date of receipt of a copy of the order of the assessing authority, would disable the appellate authority from admitting the appeal. As in all the cases, which form part of this batch, payment of the admitted tax/12.5% of the disputed tax is beyond the aforesaid time limit, all the Writ Petitions must fail.
The Writ Petitions are, accordingly, dismissed. However, in the circumstances, without costs.
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