Proviso to s.39(5) applied; appellate refusals set aside, first-instance appeals restored and to be decided on merits

SC set aside the appellate authorities' orders refusing the benefit of the proviso to s.39(5) and directed that the respondents' first-instance appeals be restored and decided on the merits. The Court declined to remit the matter to the HC and, as a practical measure, imposed conditions for relief: each respondent must deposit Rs.5,000 toward assessed tax and furnish security for the balance to the satisfaction of the first appellate authority within two months.

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Issues:
- Challenge to the order of assessment under the Haryana General Sales Tax Act, 1973, regarding the turnover of sales of articles of food by respondent-restaurants.
- Discretion of appellate authority under section 39(5) to waive payment of tax as a precondition for appeal.
- High Court's jurisdiction under article 226 of the Constitution to reassess the evidence and determine if transactions were sales or services.
- Judicial review of the correctness of findings by High Court.
- Legal validity of appellate authority's refusal to exempt respondents from depositing assessed tax for appeal.

Analysis:

1. The appeals were directed against the order of assessment under the Haryana General Sales Tax Act, 1973, regarding the turnover of sales of food by respondent-restaurants. The appellate authority had declined to waive the payment of tax as a precondition for appeal, leading to further challenges by the respondents.

2. The respondents approached the High Court under article 226 of the Constitution, challenging not only the refusal to exempt them from tax payment but also the nature of the transactions assessed. The High Court reevaluated the evidence and held that the transactions were services, not sales, which raised questions about the High Court's jurisdiction to reassess evidence during appeal proceedings.

3. The Supreme Court emphasized that judicial review is not an appeal from a decision but a review of the decision-making process. The High Court erred in reevaluating primary facts that were within the domain of the fact-finding authority under the statute. The correctness of findings, not the decision itself, was challenged, which exceeded the scope of judicial review.

4. The Court allowed the appeals, setting aside the judgments of the Division Bench and the orders of the single judge in the High Court. The legality of the appellate authority's refusal to exempt respondents from depositing assessed tax was also raised. The Court determined conditions for granting relief under the proviso to section 39(5) and directed the appeals to be restored and proceeded with on the merits.

5. Considering the circumstances and the lapse of time, the Court decided not to remit the matter to the High Court. Instead, it allowed the respondents to appeal by depositing a specified sum towards the assessed tax and providing security. The appeals were to be considered on their merits and disposed of accordingly.

6. In conclusion, the appeals were allowed, and no costs were awarded. The Court addressed the issues of exemption from tax payment for appeal, the nature of transactions, and the scope of judicial review, providing clarity on the legal proceedings and conditions for appeal in tax assessment matters.

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