PREM CHAND SURESH CHAND Vs. SALES TAX TRIBUNAL

JUDGEMENT

(1.) This is a writ petition under article 226 of the Constitution of India and is directed against an order dated 31st August, 1990, passed by the Sales Tax Tribunal, Bench, Aligarh, refusing to interfere with the appellate order by which the waiver application filed by the assessee under the proviso attached to sub-section (1-B) of section 9 of the U. P. Sales Tax Act, 1948, was rejected. By an ex parte assessment order, the petitioner was assessed to sales tax for the assessment year 1985-86 which resulted in the tax liability of Rs. 4,85,760, As against that order the petitioner preferred an appeal before the Assistant Commissioner (Judicial), Sales Tax, along with an application for waiver or relaxation of deposit of 20 per cent of the tax assessed, required to be deposited before the appeal could be entertained. Sub-section (1-B) (b) of section 9 of the aforesaid Act, inter alia, provides that no appeal against the assessment order shall be entertained unless the applicant has furnished satisfactory proof of the payment of not less than 20 per cent of the amount of tax or fee assessed where some of the returns for the assessment year have not been filed or no return has been filed for such year. The proviso appended to the above provision says : "provided that the appellate authority may, for special and adequate reasons to be recorded in writing, waive or relax the requirement of clause (b) in so far as it relates to deposit of twenty per cent of the amount of tax or fee assessed". As against the rejection order the petitioner appealed to the Sales Tax Tribunal which was also dismissed by the impugned order. The Tribunal refused to interfere on the ground that the petitioner had been assessed to the turnover in dispute on the basis of certain information regarding transactions on which the petitioner had paid mandi fee and there was no justification for the petitioner to have not paid the tax on those transactions. In passing, the Tribunal also observed that the petitioner has carried on business in the subsequent years and the assertion that the financial position was weak in the year in question was not proved. It also held that the exercise of power under the proviso aforesaid by the appellate authority was discretionary and the appellate authority was well within its limits when it refused to grant the discretion. After hearing the learned counsel for the parties, I find it difficult to sustain the impugned order. It is true that the power given under the proviso to the appellate authority is discretionary but at the same time, the discretion is to be governed by judicious and no other consideration. The discretion must be exercised on relevant material, honestly, bona fide, and objectively. It cannot be exercised arbitrarily nor the discretion can be exercised at the whim of the authority or on its private opinion. The object in conferring the discretion on the appellate authority to waive or relax the condition of deposit, is to minimize the rigour of clause (b) aforesaid in hard and suitable cases to the extent that the ends of justice may demand. In every case, where an application is made in that behalf, the appellate authority is expected to apply its mind objectively and to decide on judicial consideration whether a case for waiver or relaxation has been made out or not. The provision is for the benefit of the tax-payer and if a case is made out, the relief cannot be denied only because the power conferred is discretionary. The authority is expected to take a decision keeping in view the relevant considerations which may include amongst other things, the quantum of disputed tax and the capacity of the assessee to pay the amount. From the Tribunal's order it is evident that it took into account the assessee's liability, that there was nothing to indicate that in the year in question the financial position of the assessee was not good and the petitioner carried on the business in the subsequent year. In the application for waiver as well as in the memorandum of appeal filed before the Tribunal the petitioner had clearly stated that as on the date waiver was being applied, the business of the petitioner had already come to an end and he bad no means whatsoever to make the requisite deposit required under the provisions already referred. The petitioner also stated that his financial position was so precarious that it was not even possible to make both ends meet. It may be observed that the tax assessed was to the tune of Rs. 4,85,760 which by no standard was a small amount. Under clause (b) of sub-section (1-B) the petitioner was required to deposit more than Rs. 97,000 before his appeal could be entertained. In view of the serious assertions made in the waiver application, in my opinion, the Tribunal should have gone into the matter a little deeper to find out whether there was any truth in the case put up about the poor financial condition. The consideration that the appeal filed by the petitioner against the assessment order had no merit or the petitioner was rightly assessed to tax, was not a relevant consideration which should have governed the matter in denying the relief for waiver or relaxation. The Tribunal misdirected itself in getting influenced by those considerations. There is nothing in the impugned order to indicate the financial condition of the petitioner and whether the petitioner was in a position to make the deposit required of him. It is well-established that when an authority or court arrives at a decision by considering material which is irrelevant to the enquiry, or taking into account the matters which are partly relevant and partly irrelevant to the question for consideration, then in such a situation the decision as a whole is vitiated for it is impossible to say as to what extent the mind of the court or authority was affected by the irrelevant considerations. As the Tribunal has failed to consider the matter in its proper perspective, the impugned order cannot be sustained. Accordingly, the writ petition is allowed. The order passed by the Sales Tax Tribunal, rejecting the appeal, is quashed. The Tribunal is directed to restore the petitioner's appeal to its original number and to decide it afresh in accordance with law, keeping in view the observations made in this order. Writ petition allowed. .