TaxTMI 
TaxTMI 
2011 (1) TMI 1604
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....in the appeal, in view of the default of the petitioner in depositing the penalty in view of Section 13B of the Act. The challenge is to the provisions of Section 13 of the Punjab Village Common Lands (Regulations) Act, 1961 (for short "the Act"). Initially, the Division Bench hearing the writ petition referred the matter to a Full Bench in view of conflict of opinion by two Division Benches of this Court. In CWP No.15930 of 2008, Satbir Singh and another v. The Collector, Jhajjar and others, decided on 8.9.2008, it was held that the provision of pre-deposit of entire penalty is a mandatory provision. In CWP No. 13468 of 2007, Sehaj Ram v. The Collector, Yamuna Nagar, decided on 28.8.2007, another Division Bench held that the pre-deposit is not a mandatory provision. When the matter came up for hearing before the Full Bench, the Additional Advocate General, Haryana placed reliance on a Full Bench judgment of this Court rendered in CWP No.5877 of 1992, Jai Singh and others v. State of Haryana and others, decided on 13.3.2003. In the said decision, the view taken in Satbir Singh and another's case (supra), was endorsed in the following terms :- " xx xx xx The....
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....ayat in possession thereof and for so doing the Assistant Collector of the first grade may exercise the powers of a revenue court in relation to the execution of a decree for possession of land under the Punjab Tenancy Act,1887: Provided that if in any such proceedings the question of title is raised and proved prima facie on the basis of documents that the question of title is really involved, the assistant Collector of the first grade shall record a finding to that effect and first decide the question of title in the manner laid down hereinafter. (2) The Assistant Collector of the first grade shall by an order, in writing, require any person to pay a penalty, in respect of the land or other immovable property which was or has been in his wrongful or unauthorised possession, at a rate not less than five thousand rupees and not more than ten thousand rupees per hectare per annum,having regard to the benefit which could be derived from the land or other immovable property. If the penalty is not paid within the period of thirty days from the date of the order,the same shall be recoverable as arrears of land revenue. (3) The procedure for deciding the questi....
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....lie unless the amount of penalty,if any,imposed under sub-section (2) of Section 7, is deposited with the Collector. (2) The Commissioner may. Suo moto {or on an application made to him by any person aggrieved by an order passed under the proviso to sub-section (1) of section 7 at anytime} call for the record of any proceedings pending before, or orders passed by, any authority subordinate to him for the purpose of satisfying himself as to the legality or propriety of the proceedings or order and pass such order in relation thereto as he may deem fit: Provided that no order adversely affecting any person shall be passed unless he has been afforded an opportunity of being heard." Section 13C lays down that the orders passed under the Act shall be final and Section 13D lays down that the provisions of the Act would override anything to the contrary contained in any law, agreement, instrument etc. Section 13E mandates that every officer or employee acting under the Act shall be deemed to be a public servant. Section 14 indemnifies the State Government or any person or authority for anything done or intended to be done in good faith in pursuance to the provisions o....
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.... Learned counsel for the petitioner has relied upon Shyam Kishore & Ors vs Municipal Corporation of Delhi and Anr, AIR 1992 SC 2279, Anant Mills Co. Ltd v. State of Gujarat, 1975 (3) SCR 220, Mardia Chemicals Ltd v. Union of India, 2004(4) SCC 311, Income Tax, Officer, Cannanore v. M.K.Mohammed Kunhi, AIR 1969 SC 430, and Sita Ram v. State of U.P, AIR 1979 SC 745. In Shyam Kishore's case (supra), the relevant provisions were Sections 169 and 170 of the Delhi Municipal Corporation Act, 1957, which read, thus :- 169. Appeal against assessment, etc. (1) An appeal against the levy of assessment of any tax under this Act shall lie to the court of the District Judge of Delhi. (2) to (6)................... 170. Conditions of right to appeal. No appeal shall be heard or determined under S. 169 unless - (a) the appeal is, in the case of a property tax, brought within thirty days next after the date of authentication of the assessment list under S. 124 (exclusive of the time requisite for obtaining a copy of the relevant entries therein) or, as the case may be, within thirty days of the date on which an amendment is finally made un....
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....rt and in appropriate cases, where a case of hardship is made out, the High Court has the undisputed powers to grant relief It is true that the High Court would not ordinarily entertain the petition under Art. 226 of the Constitution when the alternative remedy of appeal is available to the party but it must be said that the High Court has the jurisdiction to grant such a relief it thinks proper to do so in the circumstances of any case. Reference in this behalf is invited to the decision of this Court in Municipal Council, Khurai v. Kamal Kumar (1965) 2 SCR 653 : (AIR 1965 SC 1321), the relevant portion of which reads as under (para 7 of AIR):- "Before us it is contended by Mr. Setalvad on behalf of the Council that an appeal had already been preferred by the respondents against the assessment list and, therefore, they were not entitled to any relief under Art. 226 of the Constitution. It is true that the High Court would not ordinarily entertain a petition under Art. 226 of the Constitution where an alternative remedy is open to the aggrieved party. Though that is so the High Court has jurisdiction to grant relief to such a party if it thinks proper to do so in the circu....
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....e conditions for the exercise of such right so long as the conditions are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory". The court in those cases had no occasion to consider what the position would be if the conditions placed on the right of appeal were unduly onerous or such as to render the right of appeal totally illusory.......... Para 41. It seems to us the words of S. 170(b) are capable of a broader interpretation. A perusal of S. 170 shows that the section uses three different expressions "heard or determined", "brought" and "admitted" in relation to an appeal and some significance is to be attached to the use of the expression "heard and determined". In like situations, other statutes such as the one considered by this Court in Lakshmi Rattan Engineering Works Ltd. v. Assistant Commr. of Sales Tax (AIR 1968 SC 488) and those contained in certain other enactments like the Bombay and Calcutta Municipal Acts specifically prohibit the very entertainment of the appeal if the tax is not paid. When the DMC Act has carefully avoided the use of that word, we must give full effect to the differential wording. Also, the absence ....
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.... where the case merits it, so long as it does not unduly interfere with the appellate Court's calendar of hearings. His powers, however, should stop short of staying the recovery of the tax till the disposal of the appeal. We say this because it is one thing for the judge to adjourn the hearing leaving it to the assessee to pay up the tax before the adjourned date or permitting the assessee to pay up the tax, if he can, in accordance with his directions before the appeal is heard. In doing so, he does not and cannot injunct the department from recovering the tax, if they wish to do so. He is only giving a chance to the assessee to pay up the tax if he wants the 'appeal to he heard. It is, however, a totally different thing for the judge to stay the recovery till the disposal of the appeal; that would result in modifying the language of the proviso to read: "no appeal shall be disposed of until the tax is paid". Short of this, however, there is no reason to restrict the powers unduly; all he has to do is to ensure that the entire tax in dispute is paid up by the time the appeal is actually heard on its merits. We would, therefore, read Cl. (b) of S. 170 only as a bar to the ....
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.... (supra), the statutory provision in question was Section 406 of the Bombay Provincial Municipal Corporations Act, 1949. Section 406 of the said Act reads as follows :- "406(1). Subject to the provisions hereinafter contained appeals against any rateable value or tax fixed or charged under this Act shall be heard and determined by the Judge. (2) No such appeal shall be entertained unless - (a) it is brought within fifteen days after the accrual of the cause of complaint; (b) in the case of an appeal against a rateable value a complaint has previously been made to the Commissioner as provided under this Act and such complaint has been disposed of; (c) in the case of an appeal against any tax in respect of which provision exists under this Act for a complaint to be made to the Commissioner against the demand, such complaint has previously been made and disposed of; (d) in the case of an appeal against any amendment made in the assessment book for property taxes during the official year, a complaint has been made by the person aggrieved within fifteen days after he first received notice of such amendment and his complaint has been ....
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....llenge the imposition or the quantum of that tax, in our opinion, has not the effect of nullifying the right of appeal, especially when we keep in view the fact that discretion is vested in the appellate Judge to dispense with the compliance of the above requirement. All that the statutory provision seeks to do is to regulate the exercise of the right of appeal. The object of the above provision is to keep in balance the right of appeal, which is conferred upon a person who is aggrieved against with the demand of tax made from him, and the right of the Corporation to speedy recovery of the tax. The impugned provision accordingly confers a right of appeal and at the same time prevents the delay in the payment of the tax. We find ourselves unable to accede to the argument that the impugned provision has the effect of creating a discrimination as is offensive to the principle of equality enshrined in Article 14 of the Constitution. It is significant that the right of appeal is conferred upon all persons who are aggrieved against the determination of tax or rateable value. The bar created by Section 406 (2) (e) to the entertainment of the appeal by a person who has not deposited the am....
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....annot be taken to be tantamount to the creation of two classes offensive to Article 14 of the Constitution, especially when that disability or disadvantage operates upon all persons who make the default or omission." In Mardia Chemicals Ltd's case (supra), the Hon'ble Supreme Court held as follows :- 55. We may then turn to the arguments raised on behalf of the petitioners that the remedy before the Debt Recovery Tribunal under Section 17 of the Act, is illusory burdened with onerous and oppressive condition of deposit of 75% of the amount of the demand notice before an appeal can be entertained by the Tribunal. We feel that it would be difficult to brush aside the challenge made to the condition of such a deposit. Sub-section (2) of Section 17 itself says that no appeal shall be entertainable unless the borrower has deposited the aforesaid sum of amount claimed. Much stress has been given in reply to the proviso to sub-section (2) of Section 17, according to which the Tribunal has power to waive or reduce the amount. While waiving the condition of deposit the amount or reducing it, the Tribunal is required to record reasons for the same. It is submitted for the....
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....ovision for a waiver or reduction of amount of pre-deposit, it is submitted, even that the provision was held to be valid as the purpose was to prevent frivolous appeals and revisions which impedes the implementation of the ceiling policy. Referring to yet another decision, reported in 1988 (4) SCC 402, Vijay Prakash D. Mehta and another v. Collector of Customs (Prevention), Bombay, it is submitted that right to appeal is neither an absolute right nor an ingredient of natural justice which principles are to be followed in judicial and quasijudicial proceedings. A right of appeal is a statutory right and it can be circumscribed by the conditions. We also find that there are further observations to the effect that the condition is for the purpose to act in terrorem to make the people comply with the provisions of the law. 1993 (1) SCC 22, Shyam Kishore and others v. Municipal Corporation of Delhi, has been referred to submit that a similar provision was upheld without there being any provision for waiver of the condition. The submission is that such a provision as that of pre-deposit before maintaining an appeal is not unknown to law and there are several other statutes containing si....
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....e condition at the first instance itself before start of adjudication of the dispute. Merely giving power to the Tribunal to waive or reduce the amount, does not cure the inherent infirmity leaning one-sidedly in favour of the party, who, so far has alone been the party to decide the amount and the fact of default and classifying the dues as NPAs without participation/association of the borrower in the process. Such an onerous and oppressive condition should not be left operative in expectation of reasonable exercise of discretion by the concerned authority. Placed in a situation as indicated above, where it may not be possible for the borrower to raise any amount to make the deposit, his secured assets having already been taken possession of or sold, such a rider to approach the Tribunal at the first instance of proceedings, captioned as appeal, renders the remedy illusory and nugatory. 61. In the case of Seth Nandlal (supra), while considering the question of validity of pre-deposit before availing the right of appeal the Court held ". . . . . . . . . . right of appeal is a creature of the statute and while granting the right the Legislature can impose conditions for the....
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....ount due as yet (iii) the secured assets or its management with transferable interest is already taken over and under control of the secured creditor (iv) no special reason for double security in respect of an amount yet to be determined and settled (v) 75% of the amount claimed by no means would be a meagre amount (vi) it will leave the borrower in a position where it would not be possible for him to raise any funds to make deposit of 75% of the undetermined demand. Such conditions are not alone onerous and oppressive but also unreasonable and arbitrary. Therefore, in our view, sub-section (2) of Section 17 of the Act is unreasonable, arbitrary and violative of Art. 14 of the Constitution." In Income Tax Officer, Cannanore's case (supra), the Hon'ble Supreme Court held as follows :- "3. The relevant provisions of the Act may be first noticed. Section 156 provides that when any tax interest, penalty, fine or any other sum is payable in consequence of any order passed under the Act, the Income tax Officer shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable. Under Section 220 (1) any amount specified in the notice ....
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....he Appellate Tribunal shall have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings. (6) The Appellate Tribunal shall for the purpose of discharging its functions, have all the powers which are vested in the Income-tax authoritites referred to in Section 131, and any proceeding before the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 and for the purpose of Section 196 of the Indian Penal Code (XLV of 1860) and the Appellate Tribunal shall be deemed to be a civil court for all the purposes of Section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898 (V of 1898).' Section 131 may at this stage be referred to. It gives to the Income-tax Officer, the Appellate Assistant Commissioner and the Commissioner the same powers as are vested in the court under the Code of Civil Procedure when trying a suit in repeat of the matters specified in the section. But these powers relate to discovery and inspection; enforcing the....
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.... Section 254 (1) for it may pass such orders as it thinks fit after giving full hearing to both the parties to the appeal. If the Incometax Officer and the Appellate Assistant Commissioner have made assessments or imposed penalties raising very large demands and if the appellate tribunal is entirely helpless in the matter of stay of recovery the entire purpose of the appeal can be defeated if ultimately the orders of the departmental authorities are set aside. It is difficult to conceive that the legislature should have left the entire matter to the administrative authorities to make such orders as they choose to pass in exercise of unfettered discretion. The assessee, as has been pointed out before, has no right to even move an application when an appeal is pending before the appellate tribunal under Section 220 (6) and it is only at the earlier stage of appeal before the Appellate Assistant Commissioner that the statute provides for such a matter being dealt with by the Income-tax Officer. It is a firmly established rule that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective (Southla....
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....ery right, carving the kernel out, it violates the provision creating the right. Appeal is a remedial right and if the remedy is reduced to a husk by procedural excess, the right became a casualty. That cannot be." Learned counsel for the petitioner has also relied upon the findings of the earlier Full Bench of this Court in Jai Singh v. State of Haryana, 1995(1) PLR 614, wherein it was held as follows :- " 78. In order to appropriate the contention of the counsel that right of appeal is illusory, it would be expedient to notice the impugned provisions regarding appeal provided by the Act of 1992 which runs as under:- `(1) Any person aggrieved by an order of Assistant Collector of the First Grade may, within a period of thirty days from the date of order passed under sub-section (1) or sub-section (2) of Section 7 prefer an appeal to the Collector in such form and manner, as may be prescribed, and the Collector, may, after hearing the appeal, confirm, vary or reverse the order as he deems fit : Provided that no such appeal shall lie unless the amount of penalty, if any, imposed under subsection (2) of Section 7 is deposited with the Collector'. ....
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....an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant." In Seth Nand Lal's case (supra), the Hon'ble Supreme Court held as follows :- " 19. The next provision challenged as unconstitutional is the one contained in s. 18(7) imposing a condition of making a deposit of a sum equal to 30 times the land holdings tax payable in respect of the disputed area before any appeal or revision is entertained by the appellate or revisional authority-a provision inserted in the Act by Amending Act 40 of 1976. Section 18(1) and (2) provide for an appeal, review and revision of the orders of the prescribed authority and the position was that prior to 1976 there was no fetter placed on the appellate/revisional remedy by the statute. However, by the amendments made by Haryana Act No. 40 of 1976, sub-ss. (7) and (8) were added and the newly inserted sub-s. (7) for the first time imposed a condition that all appeals under sub-s. (1) or sub-s. (2) and revisions under sub-s. (4) would be entertain....
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....e restrictions rendering the right almost illusory (vide the latest decision in Anant Mills Ltd. v. State of Gujarat(1) Counsel for the appellants, however, urged that the conditions imposed should be regarded as unreasonably onerous especially when no discretion has been left with the appellate or revisional authority to relax or waive the condition or grant exemption in respect thereof in fit and proper cases and, therefore, the fetter imposed must be regarded as unconstitutional and struck down. It is not possible to accept this contention for more than one reason. In the first place, the object of imposing the condition is obviously to prevent frivolous appeals and 1208 revision that impede the implementation of the ceiling policy; secondly, having regard to sub-ss. (8) and (9) it is clear that the cash deposit or bank guarantee is not by way of any exaction but in the nature of securing mesne profits from the person who is ultimately found to be in unlawful possession of the land; thirdly, the deposit or the guarantee is co-related to the land holdings tax (30 times the tax) which, we are informed, varies in the State of Haryana around a paltry amount of Rs. 8/- per acre annua....
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....upra) dealt with property tax, Vijay Prakash D.Mehta and Jawahar D.Mehta's case (supra) dealt with a case under the Customs Act, while only Seth Nand Lal's case (supra) related to pre-deposit of penalty by an agriculturist. Seth Nand Lal's case (supra) may be the closest case in point. The Additional Advocate General, Haryana has strenously argued that in the said case, the Hon'ble Supreme Court had specifically upheld the validity of pre appeal deposit. In the said judgment what weighed with the Hon'ble Supreme Court was the following passage :- "Para 20...............In the first place, the object of imposing the condition is obviously to prevent frivolous appeals and 1208 revision that impede the implementation of the ceiling policy; secondly, having regard to sub-ss. (8) and (9) it is clear that the cash deposit or bank guarantee is not by way of any exaction but in the nature of securing mesne profits from the person who is ultimately found to be in unlawful possession of the land; thirdly, the deposit or the guarantee is co-related to the land holdings tax (30 times the tax) which, we are informed, varies in the State of Haryana around a paltry am....
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.... that if certain provisions of law construed in one way will be consistent with the Constitution, and if another interpretation would render them unconstitutional, the Court would lean in favour of the former construction. 218. If sub-section (2) of Section 30 enables the prison authority to impose solitary confinement on a prisoner under sentence of death not as a consequence of violation of prison discipline but on the sole and solitary ground that the prisoner is a prisoner under sentence of death, the provision contained in sub-section (2) would offend Article 20 in the first place as also Articles 14 and 19. If by imposing solitary confinement there is total deprivation of camaraderie amongst co-prisoners, comingling and talking and being talked to, it would offend Article 21. The learned Additional Solicitor General while not adopting any dogmatic position, urged that it is not the contention of the respondents that sub-section (2) empowers the authority to impose solitary confinement, but it merely permits statutory segregation for safety of the prisoner in prisoners' own interest and instead of striking down the provision we should adopt the course of so readin....