2025 (9) TMI 474 - AT - VAT / Sales Tax

Appellate deputy commissioner lacked jurisdiction under Section 18A(1) CST Act; appeal held unmaintainable and set aside

CESTAT New Delhi-AT held the appellate deputy commissioner lacked jurisdiction to hear the respondent's appeal under Section 18A(1) CST Act because the ... Jurisdiction of Appellate Deputy Commissioner to hear the appeal filed by the respondent against the assessment order - HELD THAT:- It would be seen from a perusal of Section 18A (1) of the Central Sales Tax Act that any person aggrieved by an order made by the assessing authority can prefer an appeal to the highest appellate authority of the State. The Explanation to section 18A of the Central Sales Tax Act provides that “highest appellate authority of a State” means any authority or tribunal or court, except the High Court, established or constituted under the general sales tax law of a State, by whatever name called. Though the appellant has not produced the relevant notification constituting the Appellate Tribunal, but learned counsel for the appellant has placed the provisions of the Tamil Nadu Value Added Tax Act, 2006 [Tamil Nadu Value Added Tax Act] which came into force on 01.01.2007. Section 88 of this Act repeals the Tamil Nadu General Sales Tax Act, 1959. However, sub section 3(e) of section 88 provides that notwithstanding the repeal, the Chairman or any Member of the Appellate Tribunal appointed under section 30 of the Tamil Nadu General Sales Tax Act and continuing in office as such immediately before the commencement of Tamil Nadu Value Added Tax Act, shall be deemed to have been appointed as Chairman and Members of the Appellate Tribunal under the Tamil Nadu Value Added Tax Act and shall continue in office as such till they cease to be such Chairman or Member - It is, therefore, clear that when the Tamil Nadu Value Added Tax Act, 2006 was enacted, the Appellate Tribunal constituted under section 30 of the Tamil Nadu General Sales Tax Act had been constituted. In Kiran Singh [1954 (4) TMI 48 - SUPREME COURT], the Supreme Court held that it is a fundamental principle well established that a decree passed without jurisdiction is a nullity, and that it invalidity can be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. The Supreme Court emphasized that a defective jurisdiction strikes at the very authority of the court to pass any decree. In the present case, as the appeal itself was not maintainable, the order passed by the Appellate Deputy Commissioner would be without jurisdiction. The Sales Tax Appellate Tribunal should have examined this issue as it goes to the root of the matter. The Sales Tax Appellate Tribunal, therefore, committed an error in dismissing the appeal filed by the State of Tamil Nadu - the order dated 12.12.2012 passed by the Appellate Deputy Commissioner are set aside and the appeal is allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether an appeal against an assessing authority's order under sub-section (2) of section 6A of the Central Sales Tax Act, as inserted by section 18A (w.e.f. 08.05.2010), lies exclusively to the 'highest appellate authority of the State' and is therefore not maintainable before an Appellate Deputy Commissioner. 2. Whether an appellate order rendered by an authority lacking jurisdiction (here, the Appellate Deputy Commissioner) is a nullity and may be set aside notwithstanding that the jurisdiction point was not determined by the intermediate appellate forum. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Jurisdictional forum for appeals under section 18A of the Central Sales Tax Act Legal framework: Section 18A (Chapter VA) of the Central Sales Tax Act, inserted with effect from 08.05.2010, provides that any person aggrieved by an order made by the assessing authority under sub-section (2) of section 6A may, notwithstanding anything contained in the general sales tax law of the State, prefer an appeal to the 'highest appellate authority of the State.' The Explanation to section 18A defines 'highest appellate authority of a State' as any authority, tribunal or court (except the High Court) established or constituted under the general sales tax law of a State, by whatever name called. Precedent treatment: The Court relied on the established principle that statutory language specifying the forum of appeal is determinative of the proper appellate channel; no contrary precedent in the text required distinguishing other cases on point. The decision applied the statutory text to the facts rather than following or distinguishing competing authorities on forum selection. Interpretation and reasoning: The Court examined the Tamil Nadu statutory scheme. Section 30 of the Tamil Nadu General Sales Tax Act (and continuity under the Tamil Nadu Value Added Tax Act) manifests that a constituted Appellate Tribunal existed as the State's appellate forum and, by statutory definition, falls within the Explanation's description of 'highest appellate authority of a State.' The Court reasoned that section 18A operates notwithstanding State law and therefore divests first-level or subordinate appellate authorities (such as an Appellate Deputy Commissioner) of jurisdiction to entertain appeals contemplated by section 18A. Because the assessing officer's order was passed on 30.06.2011 (after section 18A came into force), the statutory route for an aggrieved person was an appeal to the State's highest appellate authority (the Sales Tax Appellate Tribunal), not to the Appellate Deputy Commissioner. Ratio vs. Obiter: Ratio - the construction of section 18A and its Explanation, applied to the State statute, yields the legal conclusion that appeals under section 18A must be filed before the highest appellate authority of the State and not before the Appellate Deputy Commissioner. Obiter - ancillary observations about the existence of the Appellate Tribunal through repeal and savings provisions of the Value Added Tax Act are explanatory of the statutory context but not essential beyond confirming the Tribunal's existence. Conclusions: The appeal filed before the Appellate Deputy Commissioner against the assessing officer's order of 30.06.2011 was not maintainable because section 18A conferred exclusive jurisdiction on the highest appellate authority of the State (the Sales Tax Appellate Tribunal). Accordingly, the Appellate Deputy Commissioner's order was rendered without jurisdiction. Issue 2 - Consequences of lack of jurisdiction; nullity of orders passed without jurisdiction and appellate reviewability Legal framework: Fundamental principles of jurisdictional competence govern the validity of judicial and quasi-judicial orders. A decree or order passed without jurisdiction is void and may be impugned whenever it is sought to be enforced or relied upon. Precedent treatment: The Court invoked the long-standing principle (as articulated in the cited authority) that a defective jurisdiction goes to the root of the authority to pass any decree or order and that lack of jurisdiction renders the order a nullity, capable of being set aside at any stage. Interpretation and reasoning: Applying this principle, the Court observed that because the appeal itself was not maintainable before the Appellate Deputy Commissioner, the resultant appellate order suffers from a jurisdictional defect. The Court further reasoned that the Sales Tax Appellate Tribunal should have examined the jurisdictional issue, as it goes to the root of the matter; the Tribunal's failure to consider and decide the jurisdictional objection was an error of law. Given the centrality of jurisdiction to the validity of adjudicatory acts, the earlier appellate order could not stand. Ratio vs. Obiter: Ratio - an order passed by an authority lacking jurisdiction under the relevant statutory scheme is a nullity and may be set aside; the Sales Tax Appellate Tribunal erred in not addressing the jurisdictional objection which is fundamental and goes to the root of the matter. Obiter - procedural admonitions about when the Tribunal should have considered the issue are ancillary to the main holding. Conclusions: The appellate order of the Appellate Deputy Commissioner was without jurisdiction and therefore null; the Sales Tax Appellate Tribunal erred in dismissing the State's appeal without adjudicating the jurisdictional point. The appellate orders under challenge are set aside and the appeal is allowed. Cross-references 1. Issue 1 and Issue 2 are interlinked: the statutory construction of section 18A (Issue 1) establishes lack of jurisdiction in the Appellate Deputy Commissioner, which in turn triggers the nullity principle (Issue 2) and mandates setting aside of orders issued by that officer. 2. The Court's holding rests on statutory text and the jurisdictional nullity principle; reliance on the precedent concerning nullity of decrees for lack of jurisdiction is applied as ratio to invalidate the impugned appellate order.