STATE OF HARYANA Vs. FREE WHEELS INDIA LTD

JUDGEMENT

(1.) THE question that has been referred to by Shri A. Banerjee, Member, Sales Tax Tribunal, Haryana in S. T. M. No. 109 of 1986-87 reads thus :

(2.) BRIEF facts giving rise to the question formulated by the Tribunal for our opinion need a necessary mention. M/s. Free Wheels (India) Limited, Faridabad, was subjected to tax to the tune of Rs. 5,79,211. 00 for the year 1970-71 on the transaction which was treated as inter-State sales by the Assessing Authority. It challenged the aforesaid assessment by way of an appeal before the Deputy Excise and Taxation Commissioner who vide his order dated 5th of January, 1979, held that the transactions involved were exempt from payment of tax in terms of rule 29 (v) of the Punjab General Sales Tax Rules, 1949 by relying upon the judgment of the Tribunal dated November 21, 1977, in case of M/s. Liberty Footwear Co. , Karnal. The Additional Excise and Taxation Commissioner-II, Haryana, by invoking the provisions of section 40 of the Haryana General Sales Tax Act, 1973 read with section 9 (2) of the Central Sales Tax Act, 1956, in suo motu proceedings initiated by him set aside the order of the Deputy Excise and Taxation Commissioner (Appeals) dated January 5, 1979 and held that the said orders to be illegal in view of the subsequent judgments of the Tribunal dated April 21, 1980 and March 17, 1980 in M/s. Steel Kraft, Panipat, and M/s. Nefa Exports (P) Limited, Faridabad. It was also held by the Additional Excise and Taxation Commissioner that such transactions did not amount to exports. The case was remitted back to Deputy Excise and Taxation Commissioner with the direction to decide the appeals on merits after giving opportunity to M/s. Free Wheels (India) Limited to prove whether its exports outside India were direct exports or indirect exports through export house. M/s. Free Wheels (India) Limited being aggrieved by the order aforesaid filed appeal before the Sales Tax Tribunal which was accepted vide orders dated December 21, 1984. The impugned orders passed by the revisional authority were set aside. The State of Haryana then filed an application under section 42 of the Haryana General Sales Tax Act, 1973, for reference to the High Court the question of law arising out of the orders passed by the Sales Tax Tribunal. However, the Tribunal vide order dated October 15, 1985, declined to refer the question of law. Still aggrieved the State of Haryana filed a petition under section 42 (2) of the Haryana General Sales Tax Act in this Court with the prayer that the Tribunal may be directed to refer the question of law to the High Court along with the statement of the case enabling the court to give its opinion thereon. This petition was allowed vide orders dated October 15, 1986 and the Tribunal was directed to refer the question of law together with the statement of the case for its opinion. It is in these circumstances that the question as has been reproduced in the earlier part of the judgment has been referred for our opinion.

(3.) FROM the perusal of section 40 as reproduced above, it would be apparent that the Commissioner can call for the record of any case pending before or disposed of by any Assessing Authority or appellate authority to satisfy himself as to the legality or propriety of any proceedings or any order and pass such order in relation thereto as he may think fit. The scope of revisional powers is, thus, only to examine legality or propriety of any proceedings or any order. That being the scope of the revision, the only question that, thus, needs determination is as to whether the appellate authority while accepting the appeals preferred by M/s. Free Wheels (India) Limited as on the day when the appeals were decided had committed any illegality or the orders suffered from any impropriety. All that is stated on behalf of the counsel representing the State of Haryana is that the appellate authority had based its decision on the decision of the Tribunal in M/s. Liberty Footwear Co. , Karnal, which decision could not be held to be laying down the correct law in view of the later decision rendered by the Tribunal in M/s. Steel Kraft, Panipat. We do not find any merit in the contention of the learned counsel as on the day when the appellate authority decided the appeals preferred by Free Wheels (India) Ltd. , the decision rendered by the Tribunal in M/s. Liberty Footwear Co. , held the field. If on a subsequent decision the Tribunal has taken a contrary view it would not make the proceedings that have been finalised far earlier and are based upon an earlier decision of the Tribunal either illegal or improper. If the contention of the learned State counsel is upheld, it would result into endless litigation as all matters finalised earlier on the basis of law then in existence and holding the field would need reconsideration if law changes in succeeding years. All matters that have been finalised shall be then reopened, thus, unsettling the settled matters, in any case, as mentioned above, the order passed by the appellate authority which was based upon the law then holding the field could not possibly be styled as illegal or improper. That apart, the Commissioner by powers vested in him by virtue of section 40 on his own motion can call for the record of any case pending or disposed of by any Assessing Authority or appellate authority other than the Tribunal. The decision of the appellate authority that was set aside by the revisional authority as mentioned above was based upon the decision of the Tribunal, even though, therefore, the revisional authority was not reopening the case decided by the Tribunal, it virtually amounts to upsetting an order that is based upon the decision of the Tribunal.