SINGH BRICKFIELD Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) These are three connected sales tax revisions and have been filed by M/s. Singh Brickfield, a partnership firm (hereinafter referred to as "the assessee"), and are directed against a common order dated October 29, 1992 passed by the Sales Tax Tribunal, Bench, Gorakhpur. These revisions relate to the assessment years 1984-85, 1985-86 and 1986-87 and arise out of common facts and common questions, have been raised for decision of this Court. It would be convenient to dispose of these revisions by a common order. In the years in dispute the assessee was engaged in the business of manufacture and sale of bricks. It did not file any return of its turnover for any of these years. The assessment for each of the three years proceeded ex parte on best judgment. Aggrieved by the assessments the assessee preferred three appeals before the Assistant Commissioner, Sales Tax (Judicial), Gorakhpur. Each appeal was accompanied by an application under the proviso attached to section 9 (1-B) (b) of the U. P. Sales Tax Act for dispensing with the condition of pre-deposit of twenty per cent of the assessed tax as a pre-condition to the entertainment of an appeal under the said provision. Those applications were rejected by the appellate authority and its order was confirmed by the Sales Tax Tribunal giving rise to these revisions. I have heard learned counsel for the parties. Section 9 (1-B) (b) in so far as it is relevant for these cases reads as under : " 9. (1-B) No appeal against an assessment order under this Act shall be entertained unless the appellant has furnished satisfactory proof of the payment of not less than - (a ). . . . . . . . . . . . . . . . . (b) the amount of tax or fee due under this Act on the turnover of sales or purchases, as the case may be, admitted by the appellant in the returns, if any, filed by him or at any stage in any proceedings under this Act, or twenty per cent of the amount of tax or fee assessed, whichever is greater, where some of the returns for the assessment year have not been filed or no return has been filed for such year : Provided that the appellate authority may, for special and adequate reasons to be recorded in writing, waive or relax the requirement of clause (b) of this sub-section in so far as it relates to deposit of twenty per cent of the amount of tax or fee assessed. " It is evident from the above provisions that the deposit of twenty per cent of the assessed tax, unless waived or relaxed, is sine qua non for maintaining an appeal under section 9 of the Act. Under the proviso the appellate authority is conferred with the discretion to 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. The object of the provision embodied in the proviso is to minimize the rigour of law in deserving cases. In other words the proviso contains an exception to the z. It may be stated that the assessee-firm consisted of two partners. The waiver/relaxation of the requisite deposit of twenty per cent of the assessed tax was sought on the ground that the assessee had suffered losses in its business in the three years under dispute, which resulted in the closure of business. It was asserted that the assessee possessed no assets from which the requisite amount could be deposited as required by the provisions referred earlier. Each of two partners also filed their personal affidavits stating therein that none of them had any money, property or other assets from which the required deposit could be made. One of the partner stated that he owned only three bighas of agricultural land on which he was doing cultivation and the earning therefrom was the only source of livelihood for his family. The other partner stated that he was practising in medicine as a homoeopath and out of the meagre earning from his profession, he was hardly able to manage his family expenses. The correctness of the averments asserted in the two affidavits were not disputed by the Sales Tax Tribunal. However, the Tribunal rejected the appeals saying that it was not satisfied that the assessee could not make the deposit of the required amount. The order of the Sales Tax Tribunal is bereft of reasons. No effort was made to ascertain the extent of earning of the two partners. It is pertinent to mention that the tax assessed for the three years in question aggregated to the tune of Rs. 76,500 which cannot be said to be a small amount by any standard and on this liability the assessee was required to make a deposit of Rs. 25,200 under the provisions referred earlier, before its appeal could be entertained. Considering the financial state of affairs asserted in the two affidavits filed by the partners the amount to be deposited was itself a substantial amount. At one place the Tribunal has observed that in the application seeking registration under the Act it had been stated that one of its partners had a share of Rs. 50,000 in joint family and had a bank account. While taking note of these facts, the Tribunal, it seems, lost sight of the averments contained in the affidavits filed by the partners where it was categorically stated that none of the partners at the relevant time owned any bank accounts. No attempt was made to ascertain the correctness of the assertions made by the partners. There is nothing in the order of the Tribunal to indicate as to what was the nature of the assets of the joint family in which one of the partners is said to have share of Rs. 50,000 and whether the amount of that share was readily available to the partner concerned. Ordinarily, in the matter like the one under consideration, this Court may not interfere with the view taken by the Sales Tax Tribunal as essentially it concerned with a question of fact. In the instant case, the Tribunal had arrived at an abrupt conclusion and has left relevant materials uninvestigated. In Prem Chand Suresh Chand v. Sales Tax Tribunal [1992] 84 STC 214 this Court had an occasion to consider the provisions with which are concerned. It was held that "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 concerned 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. " In Abdul Sajid v. Commissioner of Sales Tax 1987 UPTC 1054, it was held : " Upon perusal of the order of the Tribunal, it appears that no reason was given to reject the ground of financial stringency. The Tribunal ought to have given the reasons in detail as to why it disagreed with the contention of the applicant that he faced financial stringency and, therefore, was not in a position to deposit 20 per cent of the assessed tax before filing the appeal. . . " The matter in that case was remanded to the Sales Tax Tribunal for its reconsideration as no convincing reasons were given by the Tribunal in rejecting the application for waiver/relaxation and the Tribunal was directed to give reasons for not having agreed with the contention of the assessee in that case in regard to financial stringency. It is evident from the aforesaid authorities that the discretion allowed by the statute to the appellate authority is to be exercised reasonably, objectively and equitably. It must show application of mind that the matter is dealt with fairly, rationally and not arbitrarily or vaguely. As in the instant case the Sales Tax Tribunal has not dealt with the question in its correct perspective, there is no option but to set aside the order of the Sales Tax Tribunal for its fresh consideration. Consequently, the impugned order of the Sales Tax Tribunal is set aside with a direction to the Tribunal that it shall restore the appeals giving rise to these revisions to their original number and shall decide the same again in accordance with law and in the light of the observations made above. In the result, the revisions succeed and are allowed in part. There shall be no order as to costs. Petitions partly allowed. .