High Court Of Calcutta
CIT vs. Tata Tea Ltd.
D.K. Seth & R.N. Sinha, JJ.
IT Appeal No. 233 of 2002
17th June, 2004
Sumit Chakraborty & S.N. Dutta, for the Appellants : J.P. Khaitan, as Amicus Curiae
D.K. Seth, J. :
In each of these two appeals, the assessments for the respective two previous years were challenged before the Tribunal. But in respect of both the years involved in each of the two appeals the question involved was identical. Therefore, in both these cases the two appeals filed before the Tribunal by the respective assessees for the relevant two years were disposed of by one consolidated order each. Against the respective consolidated order, one appeal each has since been preferred under s. 260A of the IT Act, 1961, before this High Court.
2. Now the question arises whether against one consolidated order disposing of several appeals by the learned Tribunal, one appeal under s. 260A of the IT Act, 1961, could be maintained ? Prevailing practice followed in Calcutta High Court
3. Before introduction of s. 260A, reference used to be preferred before the High Court under s. 256 of the IT Act,1961. The Honâble Mr. Justice Ajit Kumar Sengupta and Honâble Mr. Justice Shyamal Kumar Sen (as their Lordships then were) were pleased to issue a direction on 3rd Feb., 1992, that against one consolidated order of the Tribunal only one application for reference shall be filed covering all the assessment years involved and no separate application shall be filed. This was not a judicial order but an order passed administratively in procedural matters. This was being followed so long before this Court in respect of references preferred against a consolidated order. After s. 260A was introduced, the same procedure continued to be followed in appeals under s.260A as well, both by the assessee and by the Department. Accordingly, in each of these two appeals, one appeal under s. 260A has been filed by the Department against one consolidated order covering two or more appeals concerning two or more assessment years, as the case may be. Submission on behalf of the appellants
4. When this matter was brought to our notice, we found some difficulties in view of the change in law governing a reference and appeal under ss. 256 and 260A, respectively. We thought that this is a question, which calls for the Courtâs attention. Accordingly, we had requested Mr. Sailendra Dutta and Mr. Sumit Chakraborty, learned counsel appearing in the respective two appeals to address this Court on this point. Mr. Chakraborty and Mr. Dutta both had supported that one appeal is to be filed. But the Court pointed out that though one consolidated order was passed, but it had governed more than one appeal before the learned Tribunal. Each appeal gives rise to a separate cause of action even if the assessee is one. Therefore, even if one appeal is permitted then whether one or more Court fees are to be paid. Both Mr. Dutta and Mr. Chakraborty had submitted that one Court fee is to be paid. Both of them had drawn our attention to the expression used in ss. 256 and 260A and had also referred to the direction given by this Court on 3rd Feb., 1992, as well.
5. Mr. Chakraborty had cited the decision in Kusum Ansal vs. CIT (1991) 95 CTR (Del)(FB) 71 : (1991) 190 ITR 24 (Del)(FB), rendered by a Full Bench of the Delhi High Court to support his contention, which has taken the same view as sought to be propounded by Mr. Chakraborty, however, in connection with reference. He has also relied upon a decision in CIT vs. ITAT (1994) 116 CTR (MP) 558 : (1994) 210 ITR 464 (MP) by the Division Bench of the Madhya Pradesh High Court which had taken the same view that one application for reference would be maintainable. He had also cited the decision in Union of India vs. ITAT (1986) 57 CTR (MP) 320 : (1987) 164 ITR 600 (MP), again by the Madhya Pradesh High Court in Indore Bench which also had taken the same view in relation to reference.
6. In his usual fairness, Mr. Chakraborty had also referred to the decision in Mani & Co. vs. CIT (1995) 123 CTR (Ker) 453 : (1995) 213 ITR 563 (Ker), passed by a Division Bench of the Kerala High Court which had taken the opposite view in such a situation. Mr. Chakraborty has also referred to a decision in Chandra Bhan Gosain vs. State of Orissa (1963) 50 ITR 195 (SC) by the Supreme Court and contended that even if the consolidated order disposes of assessments for several years by a consolidated order then only one appeal would lie. Submission by Amicus Curiae
7. In order to assist this Court, we had requested Mr. J.P. Khaitan to appear as amicus curiae. Mr. Khaitan had pointed out that because of the direction given by the Division Bench of this Court, one appeal against a consolidated order was being filed even if it related to more than one assessment year. At the same time, he, however, pointed out that the direction did not specify anything about the payment of Court fees. Our attention to s. 47 of the Court Fees Act has been drawn by Mr. Khaitan. From a reading of that section, it appears that it is only the State Government, which can remit or reduce the Court fees payable. On the other hand, it is the duty of the Court to ascertain the valuation and find out as to whether the suit has been correctly valued and sufficient Court fees have been paid. If on valuation it appears that excess Court fees have been paid, the Court has the power under s. 17 to pass an order of refund and if it appears that deficit Court fees are paid that may be recovered by extending time. Whereas s. 10 requires the Court to give a certificate that the Court fees paid are sufficient before signing the decree. Therefore, even if one appeal could be preferred there is no escape from payment of Court fees in respect of each appeal. When a consolidated order is passed, it disposes of several appeals giving rise to an independent cause of action for each assessment and each assessee.
8. Since the practice is being followed for a long time and several similar such appeals are pending and only one Court fee has been paid in view of the practice followed, therefore, if the Court decides that Court fees are to be paid in respect of each assessment year, in that event, the Court should protect the interest of each of the appellants and direct payment of Court fees in terms of s. 149 of the CPC r/w s. 10 or s. 17 of the Court Fees Act, as the case may be. Appeal under s. 260A vis-a-vis s. 253
9. We have heard learned counsel for the respective appellants as well as Mr. Khaitan, amicus curiae. The first question raised by Mr. Dutta is that there is a difference in language used in s. 253 and s. 260A. According to him, s. 253 sub-s. (3) refers to every appeal under sub-s. (1) or sub-s. (2) of s. 253 whereas s. 260A refers to an appeal from every order. He wanted to make a distinction with regard to the expression “an appeal from every order” passed in appeal by the Tribunal indicating that one appeal would lie against a consolidated order. He also contends that the direction given by this Court in connection with the reference by a Division Bench would equally apply in appeal and is being rightly followed for so long. A practice followed should not be discontinued unless it is in conflict with law and affects the right of any of the parties or someone else. Sec. 253 provides that an assessee aggrieved by any of the orders mentioned in sub-s. (1) may appeal to the Tribunal. Similarly, under sub-s. (2), the CIT may direct the AO to appeal to the Tribunal against an order to which he has objection. Sub-s. (3) provides that every appeal under sub-s. (1) and sub-s. (2) shall be filed within the stipulated time. Therefore, s. 253 requires the filing of a separate appeal in respect of each order before the Tribunal, if comes within the purview of s. 253. Whereas, according to Mr. Dutta, s. 260A provides for an appeal from every order passed in appeal. If only one consolidated order is passed, in that event, only one appeal would lie in view of the expression used in s. 260A.
The submission of Mr. Dutta seems to be fallacious. If several appeals are filed before the Tribunal and all the appeals are consolidated and one consolidated order is passed, even then that consolidated order would affect all the appeals and by fiction it shall be deemed to have been passed in each of the appeals. Therefore, the appeal would lie from every order that passed consolidatedly in each of the appeals. At the same time, each assessment order of each assessment year gives rise to an independent, distinct and separate cause of action to each assessee. Such consolidation may be made in respect of several or different assessees. There seems to be no bar in joining several assessees in one appeal if the order is a consolidated one. But then, each of the assessees would be vindicating his independent individual right or cause of action affecting him, which is subject to the practice and procedure. It would relate only to the appeal in respect of the assessment concerning him and not otherwise. If there are several causes of action, in that event, each one has a separate right to prefer an appeal. One of the assessees may not prefer an appeal against the consolidated order and the other may. Therefore, we are unable to accept the contention of Mr. Dutta that only one appeal is permitted by reason of the expression used under s. 260A against the consolidated order, whether it includes several years of assessment of the same assessee or one or more of different assessees. Practice and procedure vis-a-vis appeals under s. 260A
12. So far as the direction given by this Court by the Division Bench on 3rd Feb., 1992, referred to above is concerned, it is a practice and procedure followed over a long period of time in respect of reference. We are not dealing with reference now. The direction dt. 3rd Feb., 1992, definitely governed references. But as soon as s. 260A was introduced, whether the same direction or practice or procedure would be followed is a question which requires attention. We have examined the expression used in s. 256 and compared the same with s. 260A. We have also examined the scope of the jurisdiction exercised under the said two provisions. Admittedly, the jurisdiction under s. 256 is that of an advisory one. In a reference the Tribunal seeks the opinion of the High Court on the basis whereof the appeals are to be disposed of by the Tribunal. Such opinion can be obtained by the Tribunal either of its own motion or at the instance of the assessee. Therefore, in case of a reference the main appeal before the Tribunal is not placed before this Court. In a reference the High Court gives its opinion; it does not decide the appeal; the order passed on a reference does not dispose of the appeal before the Tribunal. It is only the opinion in respect of a particular question of law that is sought for. It is the Tribunal which would dispose of the appeal on the basis of such opinion. Therefore, the appeal is not before this Court. As such one reference can be maintained. However, the said direction did not specify anything with regard to the payment of Court fees. Even if assessees are different, assessment years can be consolidated in one reference; but whether one Court fee would be required or more than one Court fee would be required was not specified in the said direction. However, since this was an advisory jurisdiction and only the opinion is sought for on a particular question of law and it does not deal with the appeal or appeals pending before the learned Tribunal, the question of payment of one or more Court fees becomes irrelevant. Therefore, in our view, one Court fee on one application for reference out of one consolidated order has developed into a system and the practice is followed over a period of time, both by the assessee and the Department. We do not think that the same should be deviated from. The same practice and procedure may be followed as was and is being followed so long in respect of reference under s. 256 of the IT Act.
But when it comes to the question under s. 260A, then the appeal is preferred to this Court against the order disposing of the appeal by the learned Tribunal. Even though it is one consolidated order, it deals with several appeals in respect of each assessment year and each assessee involving one identical or same question. Before the learned Tribunal there were several appeals though one common judgment was given but it has to be taken to have been delivered in each of the different appeals pending before the learned Tribunal, whether it relates to the same assessee or different assessees or for different assessment years of the same or different assessee or assessees.
The Kerala High Court, however, took a dissenting view in the decision in Mani & Co. (supra), which the Calcutta High Court did not follow in respect of a reference. We need not go into that question since we will be dealing with the cases covered under s. 260A and not under s. 256. Therefore, we need not express any opinion with regard to the decision in Mani & Co. (supra) by the Kerala High Court. Whereas the Delhi High Court in its Full Bench in Kusum Ansal (supra) had held that one reference would be maintainable against a consolidated order passed by the Tribunal. Since we have observed that the Calcutta High Court has been following the practice an procedure in terms of the direction dt. 3rd Feb., 1992, by the Division Bench with regard to the above, we need not deal with the same as well and we need express no opinion with regard thereto. Similarly, we may not express any opinion with regard to the decision of the Madhya Pradesh High Court, Indore Bench, in Union of India vs. ITAT (supra). This was taken into consideration by the Full Bench of the Delhi High Court in Kusum Ansal (supra). This decision supported one reference out of one consolidated order covering several assessees or assessment years. In the same manner, we may deal with the decision in CIT vs. ITAT (supra) by the Madhya Pradesh High Court which also dealt with consolidated orders passed in reference supporting the Delhi view.
While dealing with this case in relation to s. 260A, we may be benefited from the observation made by the apex Court in Chandra Bhan Gosain vs. State of Orissa (supra) while allowing one appeal against the order passed by the High Court in a single writ petition covering several assessment years of one assessee. It had distinguished the decision in Lajwanti Sialâs case (petition for SLP No. 673 of 1959) and Kishinchand Chellaram vs. CIT (1962) 46 ITR 640 (SC). In the said decision in Chellaram (supra), the apex Court had made a distinction that though several appeals or references are disposed of by a single order, it disposes of different cases and therefore, even if the order is a consolidated one, it would be separate causes of action for each assessment year and each assessee. Therefore, a single appeal would not be allowed. This reasoning supports the view we have taken in respect of appeals under s. 260A. The apex Court had made a distinction between an appeal under the IT Act and that from an order passed in a writ petition. It had approved one appeal from an order passed in one writ petition covering several assessment years on the ground that the writ petition was one. It was not a case of consolidation of several appeals. The ratio laid down in this case supports the view we are taking.
The 1922 Act did not prescribe any rules for reference under s. 66 thereof. In 1935, Rules under the Indian IT Act were framed by the High Court in exercise of its inherent rule-making power as then contained in Chapter XXX-A of the Original Side Rules following the judgment of Lord Willaims and Jack, JJ. in CIT vs. Hungerford Investment Trust Ltd. (1935) 3 ITR 188 (Cal), citing the decision in Smith vs. Williams (1922) 1 KB 158 (Sankey, J.) which had held that “when apt procedure is not provided by statute, the Judge must himself mould a convenient form of procedure as did the English Common Pleas in Hemming vs. Williams (1871) L.R. 6 C.P. 480.” These Rules have undergone several amendments and now stand as we find incorporated in Appendix No. 14 of Appendices (Part II) of the Original Side Rules, Vol. II. These Rules were adapted to include and cover all corresponding proceedings under the IT Act, 1961, viz., s. 259 of the 1961 Act (inserted vide Calcutta Gazette, dt. 9th July, 1984). Therefore, the practice and procedure followed so long by reason of the direction dt. 3rd Feb., 1992, by their Lordships, the Honâble Mr. Ajit Kr. Sengupta and the Honâble Mr. Shyamal Kr. Sen, JJ. (as their Lordships then were) is to be treated as an addition to the said Rules in Appendix No. 14 and cannot be questioned.
But, this practice and procedure in terms of the direction dt. 3rd Feb., 1992, by the Honâble Mr. A.K. Sengupta and Honâble Mr. S.K. Sen, JJ., cannot be followed ipso facto in the case of appeals under s. 260A of the 1961 Act for the reasons stated hereafter. How far the practice and procedure for reference can be followed in appeal under s. 260A
18. There is a basic difference in the jurisdiction exercised by the High Court on a reference under s. 256 and those on appeal under s. 260A. The jurisdiction conferred on the High Court under s. 66 of the Indian IT Act, 1922, now s. 256 of the 1961 Act, is a special jurisdiction and forms no part of the Courtâs original jurisdiction. Its functions are confined strictly to the disposal of a reference on points of law [CIT vs. Hungerford Investment Trust Ltd. (supra)]. The High Court exercises a special jurisdiction different from its ordinary jurisdiction of a civil Court. It does not exercise any appellate or revisional or supervisory jurisdiction over the Tribunal. It acts purely in an advisory capacity on a reference. It gives the Tribunal advice but ultimately it is for the Tribunal to give effect to that advice [CIT vs. Scindia Steam Navigation Co. Ltd. (1961) 42 ITR 589 (SC)]. On a reference, the High Court does not exercise any jurisdiction conferred upon it by the CPC or by the Charter or by the Acts establishing it. The High Courtâs jurisdiction on a reference is of separate, special and limited nature conferred by the IT Act only for the purpose of obtaining the High Courtâs opinion on questions of law [CIT vs. Bansi Dhar & Sons (1986) 50 CTR (SC) 250 : (1986) 157 ITR 665 (SC)].
19. Whereas the jurisdiction under s. 260A is an appellate jurisdiction in respect of which, by reason of sub-s. (7) thereof, the provisions of the CPC relating to appeals to the High Court, except otherwise provided in the Act, as far as may be, may apply. In exercise of the appellate jurisdiction, the High Court decides the case involved in the appeal. Therefore, the practice and procedure for reference cannot be inducted in respect of appeals. As soon the CPC applies, the appeal against a consolidated order will relate to each individual case though the order might dispose of more cases than one.
20. There is no specific provision in the CPC for consolidation of suits. It is under the inherent powers that suits are consolidated by the Court. The whole object behind consolidation is to avoid multiplicity of proceedings, unnecessary delay and expenses. Where it appears that there is sufficient unity or similarity in the matter in issue in the suits or that the determination of the suits rests mainly on a common question, it is open to the Court to try them as analogous cases. The question to be considered also is as to whether or not the non-consideration of the two or more suits may lead, apart from multiplicity of suits, to leaving the door open to conflicting decisions and the issues common to the two or more suits ought to be consolidated. When consolidated for the purpose of trial, the primary consideration is convenience and for avoiding conflicting decisions involving identical questions. It is a matter of procedure to hear different suits/appeals comprising several causes of action or assessments personal to each individual party or the assessee in respect of each individual assessment year. Therefore, the consolidated order is a common order passed in all the cases analogously tried and treated or decided. It is not one order but a common order which governs all the suits/appeals and by fiction the same order is passed in each individual suit or appeal. It governs all the suits or appeals separately though one common order may have been passed. The distinction between decree and order that has been raised by Mr. Dutta does not seem to be of any assistance for our present purpose, the appeal is preferred not against the consolidated judgment. The appeal is preferred against the order or every order passed in the appeal. When more than one appeal or suit are disposed of by one common judgment, the order pursuant to the common judgment affects each individual case/appeal. Therefore, there cannot be one appeal against a consolidated order.
21. On this principle, for the sake of convenience, one appeal may be filed in which different assessees may join to espouse their respective cases in respect of the respective assessment years of each of the respective assessees. Therefore, an appeal remains to be preferred in each of the orders passed in each of the assessments or appeals even if one memorandum of appeal is filed, the same represent or relate to the causes of action or assessments of different assessees and also allow such different assessees to espouse their respective causes in the respective appeal, though decided by a common judgment. The utility of consolidation is not disputed. Consolidated appeal : Court fees payable
22. It is rightly pointed out by Mr. Khaitan, relying upon order 33 of the CPC, that the Court in certain exceptional circumstances may permit filing of suits without payment of Court fee by indigent persons but even then if the suit fails or otherwise, the Court fees are still collected. At the same time, he referred to s. 149 of the CPC. True it is that the Court can extend time for payment of deficit Court fees. Similar provisions are also provided for in the Court Fees Act, where the Court has been empowered to extend the time for putting in the deficit Court fees. Sec. 10 requires that the Court has to record a finding before proceeding to deliver judgment that sufficient Court fee has been paid. If the Court records the finding that insufficient Court fees have been paid, in that event, further proceeding is to be stayed until proper amount of Court fee is paid. Sec. 14 empowers the Court to enquire as to the valuation in order to ascertain that proper Court fee has been paid. In case after an enquiry in the procedure laid down in the Act, it appears to the Court that the valuation is insufficient, in that event, the deficit Court fee is to be recovered within the time to be specified by the Court, or in other words, the Court can extend the time to make good the deficit Court fees. In case the valuation is found to be less and the Court fee is found to have been paid in excess, in that event, the Court is empowered to pass an order for refund or recovery of the Court fee, as the case may be. Thus, it appears that the Court has a duty to ascertain that proper Court fees have been paid. In other words, the Court has a duty to protect the interest of the State in collecting revenue through payment of Court fees. Sec. 17 provides for the mode by which the deficit Court fees in certain cases are to be recovered. While s. 47 of the Court Fees Act, as rightly pointed out by Mr. Khaitan, restricts the power to remit or reduce Court fees only to the State Government and that too on certain restricted conditions and by notification in the Official Gazette, it would deal with the question of payment of Court fees by an individual person for the purpose of remitting or reducing the rate. Once the Court fee is payable, it has to be paid in accordance with the provisions contained in the Court Fees Act and not otherwise. When a procedure is undertaken within the State of West Bengal, it is the West Bengal Court Fees Act, 1970, to the provisions of which we have referred, which will govern the same.
23. In the circumstances, in our opinion, against a consolidated order involving several or one assessment year concerning one assessee or more than one assessee, one appeal can be permitted and one or more assessees can join together in one consolidated appeal against such consolidated order governing several assessment years. It would be convenient for the Court as well as for the parties to hear one appeal against one consolidated order if permitted. Even if several appeals are filed, the Court has power to consolidate all the appeals together and hear them simultaneously and pass one consolidated order. Therefore, it is only a question of matter of procedure and convenience of the Court.
24. But, however, when one appeal is preferred against one consolidated order, such appeal would be treated to represent the cause of action of each assessment year concerning one assessee or different assessees, as the case may be. As soon as it comes to separate causes of action, the Court fee would become payable in respect of each cause of action concerning same assessee or different assessees involving one or more assessment years, as the case may be, and such Court fees are to be paid on the memorandum of appeal, so consolidated, against a consolidated order passed by the learned Tribunal. Conclusion
25. Since the direction has been given by this Court in respect of dealing with one consolidated order put in one single application for the purpose of convenience, we may not deviate from the practice and procedure followed in reference; and we may permit filing of one consolidated appeal against one consolidated order involving several assessment years or different assessees, as the case may be. Even though one consolidated appeal is permitted yet it would amount to consolidation of several appeals and several causes of action concerning one assessee covering more than one assessment year or one or more assessment years concerning different assessees. Therefore, the appeal being preferred in respect of each cause of action separately but in a consolidated form since there is no bar in joining several assessment years and several assessees in one appeal with the leave of the Court or otherwise when the question is identical within the meaning of order 1, r. 1, CPC. But, we feel that the Court has no power to remit or reduce the Court fees payable thereon.
26. As rightly pointed out by Mr. Khaitan, several such appeals have been admitted and are pending, therefore, the Court may protect the interests of the parties and provide for extending time. Sec. 149 of the CPC empowers the Court to extend such time. At the same time, s. 10 r/w s. 17 empowers the Court to recover Court fees by extending time. Order
27. Since the consolidated appeal represents different causes of action giving rise to separate appeals since consolidated into one, therefore, Court fee would be payable in respect of each appeal under s. 260A of the IT Act, 1961, against each assessment year and concerning each assessee, since consolidated.
28. Therefore, in such a case, viz., in an appeal under s. 260A of the IT Act, 1961, against one consolidated order, it would be open to the respective parties to make good the deficit Court fees, as may be directed by the Court or before the ultimate order is passed. In the event deficit Court fees are not paid, then the order passed on such consolidated appeal would not be effective so far as the defaulting party is concerned. The deficit Court fees may be paid within six months or at the time of disposal of the appeal, as the case may be, or within such time as the Court may extend.
29. This order shall be operative prospectively and shall apply only in the pending cases and shall not apply to any appeal disposed of before this date.
30. This question is thus answered.
31. The Registrar, Original Side, shall notify the stamp reporters and the taxing officer accordingly and the Bar Association/Bar Library Club.
32. The Registrar, Original Side, shall put up a note before the Honâble Acting Chief Justice proposingappropriate amendment in the Original Side Rules relating to reference and appeals to the High Court under the IT Act, 1961.
33. Before we part with, we must record our appreciation of the assistance rendered by Mr. J.P. Khaitan in particular and also by Mr. Chakraborty and Mr. Dutta.
R.N. sinha, J. :
[Citation : 272 ITR 42]