1980 (6) TMI 113 - HC - VAT and Sales Tax

Court dismisses writ petitions due to lack of standing in Sales Tax Appeals

India Tyre and Rubber Co. (India) Pvt. Ltd. Versus Commercial Tax Officer II, Central Assessment Circle, Madras and Others

The court dismissed the writ petitions, ruling that the petitioner lacked standing to be included in the appeals before the Sales Tax Appellate Tribunal. ... - Issues Involved:1. Locus Standi of the petitioner to be impleaded in the appeals before the Sales Tax Appellate Tribunal.2. Jurisdiction and inherent powers of the Tribunal to implead third parties.3. Interpretation of the term 'any person' under Section 36 of the Tamil Nadu General Sales Tax Act.4. Applicability of principles of natural justice.Detailed Analysis:1. Locus Standi of the Petitioner:The petitioner, India Tyre and Rubber Co. (India) Private Limited, sought to be impleaded in the appeals filed by Dunlop India Limited before the Sales Tax Appellate Tribunal. The Tribunal returned the petitions on the ground that they did not fall under Section 36(1) of the Tamil Nadu General Sales Tax Act. The petitioner argued that the nature of the transaction between it and Dunlop was a works contract, and thus, it was directly affected by the assessment orders treating the transactions as sales. The court, however, held that the assessment of sales tax is a matter exclusively between the dealer (Dunlop) and the commercial tax authorities. The petitioner was not a party to the original assessment proceedings and thus had no locus standi to be impleaded in the appeals.2. Jurisdiction and Inherent Powers of the Tribunal:The petitioner contended that the Tribunal had inherent powers to implead necessary or proper parties in the appeals pending before it. The court examined the statutory framework and held that the Tribunal, being a creature of statute, has no inherent powers beyond what is explicitly conferred by the statute. The appellate power under Section 36(1) does not include the power to implead third parties who are neither necessary nor proper for the effective disposal of the appeals. The court emphasized that the implied or incidental powers of a statutory authority must be necessary for the effective exercise of its jurisdiction, which was not the case here.3. Interpretation of 'Any Person' under Section 36:The petitioner argued that the term 'any person' in Section 36 should be interpreted broadly to include any person aggrieved by the order of the Appellate Assistant Commissioner or the Deputy Commissioner. The court rejected this argument, stating that the term 'any person' must be read in the context of the statutory scheme, which primarily concerns the dealer or other persons directly subjected to liabilities under the Act. The court clarified that the right of appeal under Section 36 is intended for those against whom an order has been passed, and not for third parties like the petitioner who are indirectly affected.4. Applicability of Principles of Natural Justice:The petitioner initially contended that the impugned order violated principles of natural justice as it was not heard before the order was passed. The court noted that this contention was not pursued further by the petitioner's counsel. The court held that the principles of natural justice did not require the petitioner to be heard in the appeals filed by Dunlop, as the assessment proceedings were exclusively between the dealer and the tax authorities. The court further observed that any finding in the assessment proceedings would not be binding on the petitioner in any separate civil proceedings that may arise between the petitioner and Dunlop.Conclusion:The court dismissed the writ petitions, holding that the petitioner had no locus standi to be impleaded in the appeals before the Tribunal. It further held that the Tribunal had no jurisdiction to implead third parties who are neither necessary nor proper for the effective disposal of the appeals. The interpretation of 'any person' under Section 36 was confined to those directly subjected to liabilities under the Act, and the principles of natural justice did not require the petitioner to be heard in the appeals. The appeals filed by the petitioner were thus dismissed with costs.