Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 4327-28 OF 2008
(Arising out of SLP (C) Nos.17346-47 OF 2005)
M/S. DEEPAK AGRO FOODS — APPELLANT
VERSUS
STATE OF RAJASTHAN & ORS. — RESPONDENT
S
WITH
CIVIL APPEAL NO. 4329 OF 2008
(Arising out of SLP (C) No.5039 OF 2006)
J U D G M E N T
D.K. JAIN, J.:
Leave granted.
2. These two sets of appeals, by special leave, are directed
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against the judgments and orders dated 4 May, 2004
passed by the Division Bench of the High Court of
Judicature for Rajasthan at Jodhpur in D.B. Civil Special
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Appeal (Writs) No.900/2002 and order dated 15 July,
2005 passed in Review Petition No.8/2005 in Civil Special
Appeal No.900/2002. By the impugned main orders, the
Division Bench, while allowing the appeals, has set aside
the assessment orders passed under the Rajasthan Sales
Tax Act, 1994 (for short ‘the Act’) in respect of assessment
years 1995-96 and 1996-97 and has remanded the cases
for fresh assessments by a new Assessing Officer, to be
nominated by the Commissioner of Commercial Taxes,
Rajasthan.
3. Though the appeals pertain to two assessment years but
are inter-connected insofar as the decision in appeal
pertaining to the assessment year 1996-97 will depend
upon the decision in appeal for the year 1995-96 because
in its order for the latter year, the High Court has
substantially relied on its order for the earlier year.
Therefore, we propose to dispose of both the appeals by this
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common order. However, we shall refer to the facts
emerging from the record for the assessment year 1995-96.
4. The appellant, a proprietorship concern, is a dealer under
the Act. For the assessment year 1995-96, an ex-parte
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assessment was framed on 19 May, 1998. On appeal, the
order of assessment was set aside by the Deputy
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Commissioner (Appeals) vide order dated 8 June, 2000 on
the ground that proper opportunity of hearing had not been
granted to the appellant. In pursuance of the said order, a
fresh notice was issued to the appellant for appearance on
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12 February, 2002. On the said date at the request of the
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appellant, the case was adjourned to 14 March, 2002 and
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then to 23 March, 2002, when the appellant again sought
time for collecting the requisite details/ information and he
was granted three months’ time for the said purpose. The
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case was fixed on 25 June, 2002.
5. According to the appellant, he appeared before the
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Assessing Officer on 25 June, 2002 and requested for
some more time to furnish the bank statements etc. and
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the case was accordingly kept for 29 June, 2002.
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However, on 29 June, 2002, when the appellant appeared
before the Assessing Officer, he is said to have been told
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that the assessment order had already been passed on 7
June, 2002.
6. Being aggrieved, the appellant challenged the said order by
preferring a writ petition. In the writ petition, it was alleged
that the assessment order was anti-dated and in fact the
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same was passed on 29 June, 2002, by which date the
period of limitation was over. Interpolation in the order
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sheets dated 23 March, 2002 and 25 June, 2002 was
alleged and it was also stated that the appellant was
coerced to countersign the cuttings and tempering in the
order sheets. However, the writ petition was dismissed by
the learned Single Judge in limine, inter alia, on the ground
that if the writ petitioner had any grievance that the
proceedings had not been recorded correctly, he could have
drawn the attention of the Presiding Officer towards such
errors while the matter was still fresh to his mind.
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Accordingly, the learned Single Judge directed the
appellant to bring the alleged anomalies to the notice of the
Assessing Officer and simultaneously, if so advised, he
could challenge the assessment order by filing appeal
before the Appellate Authority.
7. The correctness of the order passed by the learned Single
Judge was questioned by the appellant before the Division
Bench. On perusal of the original records, particularly
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order sheets dated 23 March, 2002 and 25 June, 2002,
the learned Judges felt convinced that some over-writings
and interpolations in the order sheets had taken place.
They observed thus:
“In these circumstances, the
assertions made by the assessee in his
petition about tempering with the record
of the proceedings dated 23.3.2002 and
25.6.2002 is apparent, which makes the
assessment order as an outcome of these
mechanisations, by anti dating the
proceedings and pass the order by anti
dating it and in the allegation of assessee
cannot be reasonably ruled out. The
assertion of assessee stands fully
corroborated by the record of the
proceedings which speaks eloquently
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about its tempering with. Obviously, the
assessee would not be a party to it to
suffer anti dated ex-parte order to his
detriment. It can reasonably be
attributed to the Assessing Officer, who
had chosen this path for the reasons best
known to him.
More so the Assessing Officer
having been impleaded as party
respondent by name has not chosen to
appeal and answer the assertions. It is a
case in which it can very well be said that
the record speaks for itself. In the
aforesaid circumstances, an order alleged
to have been passed on 7.6.2002 in the
absence of the assessee by tempering
with the record of the proceedings dated
23.3.2002 and 25.6.2002 cannot be
sustained.”
The Division Bench strongly felt that it was a fit case in which
arm of the Court in exercise of its extraordinary jurisdiction
must reach to remedy the breach of principles of natural
justice, arising from breach of code of conduct, by officer
acting against all canons of fair play and transparency in
discharging its duties as statutory functionary. Accordingly,
as stated supra, the appeal was allowed; assessment order
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dated 7 June, 2002 was set aside and demands raised
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consequent thereto were quashed, with a direction to the
Commissioner of Commercial Taxes, Rajasthan to nominate
another Assessing Officer, not below the rank of a Senior
Commercial Taxes Officer, for making fresh assessment. The
Division Bench directed the appellant to appear before such
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nominated authority on 1 of July, 2004 and also that the
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assessment period would be counted thereafter by 31
August, 2004. As regards assessment year 1996-97, though
there was no specific allegation of interpolation in the records,
like in the previous year, yet the High Court felt that since the
same officer had framed the assessment and the proceedings
for this year were being taken up simultaneously, these also
did not go out of the cloud of suspicion surrounding the
assessing officer. The learned Judges were also of the view
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that notice fixing the hearing on 8 June, 2002 had not been
properly served. Accordingly, assessment order for this year
as well was set aside with similar directions as were given in
respect of the assessment year 1995-96. Being dissatisfied
with the direction for fresh assessments, these appeals have
been preferred by the dealer.
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8. In the counter affidavit filed on behalf of the respondents,
pursuant to the issue of notice, averments in the petition in
regard to the interpolation of records are denied. It is
stated that the order passed by the Deputy Commissioner
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(Appeals) on 8 June, 2000, setting aside the assessment
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order dated 19 March, 1998 was received by the Assessing
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Officer only on 13 July, 2000 and, therefore, the
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assessment order passed on 7 June, 2002 was within
time. It is pleaded that even if it is assumed that the
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assessment order had been actually passed on 29 June,
2002, as alleged by the appellant, and had been anti-dated
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as 7 June, 2002, to save limitation, still the same was
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within the period of limitation, which was to expire on 12
July, 2002. Though a rejoinder affidavit has been filed on
behalf of the appellant but the said assertion has not been
controverted.
9. Shri Rajiv Dutta, learned senior counsel appearing on
behalf of the appellant, submitted that in the light of its
afore-extracted observations and a clear finding that the
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assessment order for the assessment year 1995-96 had
been anti-dated, the order was null and void. It was urged
that assessment proceedings after the expiry of the period
of limitation being a nullity in law, the High Court should
have annulled the assessment and there was no question of
a fresh assessment. Thus, the nub of the grievance of the
appellant is that in remanding the matter back to the
Assessing Officer, the High Court has not only extended the
statutory period prescribed for completion of assessment, it
has also conferred jurisdiction upon the Assessing Officer,
which he otherwise lacked on the expiry of the said period.
10. Per contra , Shri Sushil Kumar Jain, learned counsel
appearing on behalf of the respondents submitted that
since assessments in respect of both the assessment years
had been completed within time, the impugned directions
are in order. Learned counsel also pointed out that
pursuant to and in furtherance of the orders passed by the
High Court, fresh assessments in respect of both the
assessment years have already been completed.
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11. Having given anxious consideration to the rival stands, we
are satisfied that the appeal is misconceived and is liable to
be dismissed.
12. Chapter IV of the Act lays down the procedure for payment
of tax, filing of returns and assessments. Section 29
prescribes the procedure and time limits for completion of
assessment. Clause (b) of sub-section 8 of Section 29,
relevant for our purpose, reads as follows:
“(8)(b) Notwithstanding anything
contained in sub-clause (a), where an
assessment order is passed in
consequence of or to give effect to, any
order of an appellate authority or the
Tribunal or a competent court, it shall be
completed within two years of the
communication of such order to the
assessing authority; however, the
Commissioner may for reasons to be
recorded in writing, extend in any
particular case, such time limit by a
period not exceeding six months.”
On a bare reading of the provision, it becomes abundantly
clear that if an assessment order is set aside by an Appellate
Authority, fresh assessment has to be completed within a
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period of two years from the date of communication of the order
in appeal to the Assessing Authority and not from the date of
order in appeal; as is pleaded by the appellant.
13. As afore-stated, in the counter-affidavit as well as in the
written submissions filed on behalf of the respondents, it is
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stated that the order of the Appellate Authority, dated 8
June, 2000, was received by the Assessing Authority on
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13 July, 2000 and, therefore, fresh assessment, pursuant
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to the said order, could be completed by 12 July, 2002
(ignoring further period of six months, which could be
extended by the Commissioner). That being so, even if it is
assumed that the assessment order, for the assessment
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year 1995-96, had, in fact, been passed on 29 June,
2002, as alleged by the appellant, it was still very much
within the time limit prescribed under the afore-noted
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provision i.e. 12 July, 2002. We are, therefore, unable to
accept the stand of the appellant that the assessment
having been made after the expiry of the time limit, it was
null and void and should have been annulled.
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14. Having come to the above conclusion, the next question
which requires consideration is whether in the light of the
observations of the Division Bench in the afore-extracted
paragraph on the irregularities as also the conduct of the
assessing officer, the assessment orders could be said to be
null and void, as pleaded on behalf of the appellants?
15. All irregular or erroneous or even illegal orders cannot be
held to be null and void as there is a fine distinction
between the orders which are null and void and orders
which are irregular, wrong or illegal. Where an authority
making order lacks inherent jurisdiction, such order would
be without jurisdiction, null, non est and void ab initio as
defect of jurisdiction of an authority goes to the root of the
matter and strikes at its very authority to pass any order
and such a defect cannot be cured even by consent of the
parties. (See: Kiran Singh & Ors. Vs. Chaman Paswan
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& Ors. ). However, exercise of jurisdiction in a wrongful
manner cannot result in a nullity – it is an illegality,
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AIR 1954 SC 340
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capable of being cured in a duly constituted legal
proceedings.
16. Proceedings for assessment under a fiscal statute are not
in the nature of judicial proceedings, like proceedings in a
suit inasmuch as the assessing officer does not adjudicate
on a lis between an assessee and the State and, therefore,
the law on the issue laid down under the civil law may not
stricto sensu apply to assessment proceedings.
Nevertheless, in order to appreciate the distinction between
a “null and void” order and an “illegal or irregular” order, it
would be profitable to notice a few decisions of this Court
on the point.
17. In Rafique Bibi (Dead) By LRs. Vs. Sayed Waliuddin
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(Dead) By LRs. & Ors. , explaining the distinction between
“null and void decree ” and “ illegal decree” , this Court has
said that a decree can be said to be without jurisdiction,
and hence a nullity, if the Court passing the decree has
usurped a jurisdiction which it did not have; a mere wrong
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(2004) 1 SCC 287
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exercise of jurisdiction does not result in a nullity. The
lack of jurisdiction in the court passing the decree must be
patent on its face in order to enable the executing court to
take cognisance of such a nullity based on want of
jurisdiction. The Court further held that a distinction
exists between a decree passed by a court having no
jurisdiction and consequently being a nullity and not
executable and a decree of the court which is merely illegal
or not passed in accordance with the procedure laid down
by law. A decree suffering from illegality or irregularity of
procedure, cannot be termed inexecutable.
18. In view of the above, in the present case, apart from the
fact that on a plain reading of Section 29(8)(b) of the Act, it
is manifestly clear that fresh assessment for the
assessment year 1995-96, framed pursuant to the order
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passed by the appellate authority on 8 June, 2000, was
well within the prescribed time, even otherwise, in the light
of the afore-stated settled law, the assessments orders in
question could not be held to be null and void on account
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of the stated irregularities committed by the assessing
officer during the course of assessment proceedings. In our
opinion, therefore, despite scathing observations by the
Division Bench on the conduct of the assessing officer, it
was a case of an irregularity in assessment proceedings by
the officer, who was not bereft of authority to assess the
appellant. At best, it was an illegality, which defect was
capable of and has been cured by the High Court by setting
aside the orders and by granting consequential relief.
19. In the conspectus of the circumstances aforesaid, we do
not find any infirmity in the impugned directions given by
the Division Bench of the High Court warranting
interference in the exercise of our jurisdiction under Article
136 of the Constitution. The appeals are devoid of any
merit and are dismissed accordingly with costs throughout.
………………………………………….J.
(C.K. THAKKER)
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..….…………………………………….J.
(D.K. JAIN)
NEW DELHI;
JULY 11, 2008.
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