MAHAVIR TRADING CO Vs. STATE OF HARYANA

JUDGEMENT

(1.) THIS is a petition for issue of a writ to quash the orders annexures P4 and P5 and to stay the recovery of tax from the petitioner.

(2.) IT appears from the record that assessment for the year 1983-84 in respect of the petitioner-firm was finalised by the Assessing Authority on December 27, 1984. Subsequently, a notice was issued to the petitioner as to why best judgment assessment be not made and penalty be not imposed upon it for suppression of facts. After holding further proceedings, the Assessing Authority added Rs. 13,09,204 to the already declared turnover under the Central Sales Tax Act, 1956 and imposed penalty vide order dated March 25, 1988. The petitioner filed an appeal before the Joint Excise and Taxation Commissioner (Appeals) and at the same time, applied for exemption from payment of the amount of tax and penalty. The Appellate Authority directed the payment of additional liability in ten equal instalments as a condition to the hearing of the appeal. Aggrieved by this decision, the petitioner filed an appeal before the Sales Tax Tribunal, Haryana. The Tribunal passed order dated September 20, 1988 whereby it directed the Appellate Authority to hear the appeal without prior deposit of the additional amount. However, at the same time the Tribunal imposed a condition of furnishing surety bond. The petitioner complied with the aforesaid condition. Thereafter, the appeal was heard by the Joint Excise and Taxation Commissioner (Appeals), who dismissed the same vide order annexure P3 dated April 30, 1992. Aggrieved by the order of the Appellate Authority, the petitioner preferred appeal before the Tribunal and once again applied for entertaining the appeal without prior deposit of the additional amount. This time, the Tribunal passed order dated January 6, 1993 and directed the payment of 50 per cent of the additional demand as a condition to the hearing of the appeal. The petitioner did not comply with this direction and, therefore, its appeal came to be dismissed by the Tribunal vide order annexure P5 dated May 22, 1995.

(3.) WE have given our thoughtful consideration to the rival contentions and have gone through the impugned orders. In view of the fact that the Tribunal had itself directed the hearing of the appeal by the Joint Excise and Taxation Commissioner (Appeals) without requiring the petitioner to deposit the amount of additional liability, prima facie there appears some substance in the contention of the learned counsel that while passing order annexure P4 the Tribunal has not applied its mind to the relevant factors and has mechanically declined the request of the petitioner for hearing of the appeal without deposit of the additional demand. In the decision of this Court dated December 1, 1994 a similar issue has been examined and it has been held that the Tribunal must record reasons for rejecting the application filed by the appellant for hearing of the appeal without insisting on the deposit of the amount of tax, etc. This Court will not enter into the merits of the grievance made by the appellant, but, when law itself contemplates the consideration of the factors like the inability of the applicant-appellant to pay tax, etc. , the Tribunal is under a duty to examine the record and then decide whether the prayer of the appellant should be granted or not. This necessarily implies recording of reasons by the Tribunal while arriving at a particular decision. If the Tribunal does not record reasons and communicate the same to the affected party, the order passed by it is liable to be quashed only on the ground of violation of principles of natural justice.