Calcutta H.C : A preliminary objection was raised at the time of hearing of the revision application by Mr. Bose regarding the maintainability of the application under Art. 227

Counsel Appeared

A. K. Chakraborty, Mrs. Sudipa Roy, Prohlad Ghosh & Mrs. Supriya Mukherjee, for the Petitioner : S. Bose, for Opposite Parties Nos. 1 to 4 : Sakthinath Mukherjee, Amicus Curiae

NIRENDRA KRISHNA MITRA, J.:

A preliminary objection was raised at the time of hearing of the revision application by Mr. Bose regarding the maintainability of the application under Art. 227 of the Constitution of India on the ground that the Addl. CIT, Commercial Taxes, West Bengal, is not a Tribunal within the meaning of Art. 227 of the Constitution of India. Mr. Bose based his argument mainly on the interpretation of ss. 3, 3A and 3B of the Bengal Finance (ST) Act, 1941, and also on the decision of the Supreme Court in the case of Jagannath Prasad vs. State of Uttar Pradesh 1963) 14 STC 536. Since the preliminary objection so raised was of some importance, I requested Mr. Sakthinath Mukherjee, a senior counsel of this Court, to act as amicus curiae in the matter. Before I deal with the points at issue in the present case, I record my sincerest appreciation of the very valuable assistance rendered by Mr. Mukherjee as amicus curiae. Art. 227(1) of the Constitution of India runs as follows : “Every High Court shall have superintendence over all Courts and Tribunals throughout the territories in relation to which it exercises jurisdiction.”

Now, the question is, whether the Addl. CIT, Commerial Taxes, West Bengal, is a Tribunal within the meaning of the said article. Let us first of all see what are the functions of the said officer as stated in the Bengal Finance (ST) Act, 1941. Sub-s. (1) of s. 3 of the said Act states that for carrying out the purposes of the said Act, the State Government may appoint a person to be a Commissioner of Commercial Taxes, together with such other persons to assist him as it thinks fit and may specify the area or areas over which they shall exercise jurisdiction. Sub-s. (2) of the said s. 3 states that persons appointed under sub-s. (1) shall exercise such powers as may be conferred and perform such duties as may be required by or under the said Act. Sub-s. (1) of s. 3A of the said Act states that the State Government may appoint one or more persons to be the Addl. CIT or the Addl. Commissioners of Commercial Taxes. Sub-s. (2) of the said s. 3A states that the Addl. Commissioner of Commercial Taxes shall have such powers and shall be entitled to exercise such duties of the CIT as the State Government may, by notification in the Official Gazette, direct and amongst others, is empowered to exercise the powers conferred by s. 20 apart from other sections of the said Act. Sub-s. (1) of s. 3B of the said Act states, inter alia, that with effect from such date as may be notified by the State Government and subject to such rules as may be prescribed, the State Government may constitute a Tribunal to be called the West Bengal Commercial Taxes Tribunal. Clause (a) of Sub-s. (3) of s. 20 of the said Act states that subject to such rules as may be prescribed and for reasons to be recorded in writing, the CIT may, on his own motion, revise any assessment made or order passed by the person appointed under s. 3 to assist him and cl. (b) of the said sub-s. (3) of s. 20 states that subject to such rules as may be prescribed and for reasons to be recorded in writing, the CIT may, upon application, revise any order other than an order referred to in cl. (c) and an order against which an appeal lies under sub-s. (1), passed by a person appointed under s. 3 to assist him. In the Explanation to the said s. 20, it is stated that the word “assessment” as used in the said section includes assessment of tax, surcharge and additional surcharge and imposition of penalty under ss. 5A, 5B, 6A, 11 and 20A of the Act.

From the Notification No. 3 F. T. dt. 3rd Jan., 1952, issued by the State Government in exercise of the powers conferred by sub-s. (2) of s. 3A of the Bengal Finance (Sales Tax) Act, 1941, it would appear that the Governor was pleased to direct, inter alia, that the Addl. Commissioner of Commercial Taxes shall have such of the powers and shall be entitled to exercise such of the duties of the CIT, Commercial Taxes, as are vested in him under s. 20 of the said Act. Therefore, from a combined reading of the aforesaid sub-ss. (1) and (2) of s. 3A and the aforesaid notification issued under the aforesaid Act, it clearly appears that so far as the powers under s. 20 of the said Act are concerned, the Addl. Commissioner, Commercial Taxes, West Bengal, has been equated with the CIT, Commercial Taxes, West Bengal. The powers conferred under sub-s. (3) of s. 20 of the aforesaid Act give to the CIT or the Addl. Commissioner, as the case may be, the power to revise the assessment of tax either suo motu or on application made by the parties concerned and such officers are definitely taxing authorities. Article 265 of the Constitution of India, in clear terms, states that no tax should be levied or collected except by authority of law which means, inter alia, that the tax so imposed or levied must be authorised by a valid piece of legislation. The Bengal Finance (ST) Act, 1941, is no doubt a valid piece of legislation but the tax levied under the said Act must be in accordance with the provisions thereof. It can, therefore, be said that the taxing authority in order to levy tax must act according to the provisions of Art. 265 of the Constitution of India. Revision of assessment of tax by the Addl. CIT of Commercial Taxes also amounts to levying taxes afresh after revising the original tax so levied and in such view of the matter, the authority concerned having such power of revision must act according to the provisions of the aforesaid Act and also within his powers. Reference may be made to the decision of the Supreme Court in the case of Indo-China Steam Navigation Co. Ltd. vs. Jasjit Singh, Addl. Collector of Customs, (1964) 34 Comp Cas 435, wherein the Supreme Court has said, inter alia, dealing with the concept of “Tribunal” under Art. 136(1) of the Constitution of India, that the Customs Officer is not a Court or a Tribunal under the said article but the Central Board of Revenue exercising appellate power under s. 190 of the Sea Customs Act and the Central Government exercising revisional power under s. 191 thereof are “Tribunals” within the meaning of the said article, inasmuch as those authorities are constituted by the Legislature and they are vested with the judicial powers of the State and are required to act judicially while dealing with the disputes brought before them by the aggrieved persons which they are empowered to do under the statute. In the case of Sarpanch, Lonand Grampanchayat vs. Ramgiri Gosavi (1967-68) 33 FJR 83 SC), the order of the administrative authority appointed under s. 20(1) of the Minimum Wages Act, 1948, was challenged under Art. 227 of the Constitution of India. The Supreme Court did not dismiss the appeal on the ground that such an authority was not a “Tribunal” but observed that under Art. 227 of the Constitution of India, the High Court will not review the discretion of the authority judicially exercised, but it may interfere if the exercise of such discretion is capricious or perverse or ultra vires.

The High Court may refuse to interfere under Art. 227 unless there is grave miscarriage of justice. In the case of CIT vs. B. N. Bhattacharjee (1979) 10 CTR (SC) 354 : (1979) 118 ITR 461 (SC), the Supreme Court held in clear terms that the Settlement Commission under the IT Act, as amended by, the Taxation Laws (Amendment) Act, 1975, are Tribunals within the meaning of Art. 136(1) of the Constitution of India. Even the initial authority, namely, the Commercial Tax Officer, was held to be a Tribunal under Art. 227 of the Constitution of India in the case of Srinivasa & Co. vs. Commercial Tax Officer (1979) 44 STC 309 (AP), as he was found to be exercising quasi-judicial functions and determining the rights of the parties in making the assessment under the sales tax laws. The Gujarat High Court in the case of Saurashtra Cement and Chemical Industries Ltd. vs. CIT 1978 CTR (Guj) 443 : (1978) 115 ITR 27 (Guj), clearly held, inter alia, that it is obvious that the different authorities like the ITO, the AAC, the CIT and the Tribunal functioning under the provisions of the IT Act are all quasi-judicial Tribunals. In the case of Sreemany Optician vs. Commercial Tax Officer (1977-79) Sales Tax Digest l79, Mrs. Jyotirmoyee Nag J. also interfered under Art. 227 of the Constitution of India with the order passed by the Asstt. Commissioner of Commercial Taxes, Calcutta. Lastly, reference may also be made to the case of CIT vs. Bansi Dhar & Sons (1986) 50 CTR (SC) 250 : (1986) 157 ITR 665 (SC), to show that taxing authorities are Tribunals. The decision of the Supreme Court cited by Mr. Bose in the case of Jagannath Prasad vs. State of Uttar Pradesh (1963) 14 STC 536 is clearly distinguishable on the point as, in that case, the question was whether the Sales Tax Officer was a “Court” within the meaning of s. 195 of the CrPC but whether such officer was a Tribunal or not did not come up for consideration before the Supreme Court in the said case. Moreover, s. 3B of the Bengal Finance (ST) Act, 1941, also has no manner of application in the present case as that section speaks of the Government’s power to set up Tribunals under the said Act invested with the powers of the State and are definitely Tribunals being set up by the Legislature, but this does not mean that apart from statutory Tribunals, authorities set up under the statute who perform quasi-judicial functions cannot be termed as “Tribunals” under the provisions of the Constitution of India including Art. 227 thereof, even if such authorities are not statutory Tribunals. From the overall conspectus of the aforesaid judgments and also upon a plain reading of Art. 265 of the Constitution of India, it clearly appears that every taxing officer and/or authority must levy tax according to the provisions of the particular taxing statute as the case may be and in order to levy or assess such tax, the taxing officers are to act judicially thereby performing quasi-judicial functions and, therefore, no doubt, are “Tribunals” within the meaning of Art. 227 of the Constitution of India and the High Court can definitely interfere under the said article in order to keep such Tribunals within the bounds of their authority and to see that they do what their duty requires and that they do it in a legal manner. The Addl. Commissioner, Commercial Taxes, West Bengal, while revising an assessment order under s. 20 of the Bengal Finance (ST) Act, 1941, is, therefore, required to act judicially and in a legal manner in exercising such functions when the disputes come to his notice or are brought before him by the parties and thereby performs quasi-judicial functions and is thus definitely a “Tribunal” within the meaning of Art. 227 of the Constitution of India, subject to the superintending powers of the High Courts under the said article. The preliminary objection is, therefore, overruled.

So far as the merits of the case are concerned, it clearly appears that the Addl. Commissioner, Commercial Taxes, was wrong in refusing to grant eligibility certificates and the declaration forms to the petitioner-firm for the disputed period as there is nothing on record to show that the condition of economic viability as provided under r. 3(66) of the Bengal Sales Tax Rules, 1941, had been violated by the petitioner, as he had to close down his factory for a particular period not with any mala fide intention but under circumstances over which he had no control. The impugned order is, therefore, set aside and opposite parties Nos. 1 to 4 are directed to issue the necessary eligibility certificates and the declaration forms under the said rule to the petitioner. The revisional application, therefore, succeeds and is allowed without, however, any order as to costs. Let this order be communicated to the office of opposite parties Nos.1 to 4 forthwith. Prayer for stay as made is refused.

[Citation : 175 ITR 422]