Allowed

M/S Big Bags Bangalore Pvt. Ltd., v. State Representative by S R

Karnataka HC22 Jul 2024CRP/494/2024

Case brief

AI extract

What is this about?

An assessee's application under the first proviso to Section 14(5) of the Karnataka Tax on Entry of Goods Act for deferring Tribunal appeals pending resolution of a similar question in CRP No.15/2016 was rejected by the Tribunal. The High Court held 'may' should be read as mandatory where a public duty is enacted, quashed the order and remitted it for reconsideration after disposal of the Pepsi Co

What did the court decide?

Writ of certiorari quashing the Tribunal's order dated 23.04.2024; matter remitted to the Tribunal for afresh consideration after disposal of CRP No.15/2016.

M/S Big Bags Bangalore Pvt. Ltd., Vs State… — GST and Indirect Tax | Karnataka HC (2024)

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NC: 2024:KHC:28396-DB CRP No. 494 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 22^ND DAY OF JULY, 2024 R

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PRESENT

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THE HON'BLE MR JUSTICE KRISHNA S DIXIT

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AND

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THE HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR CIVIL REVISION PETITION NO. 494 OF 2024 (TAX)

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BETWEEN:

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M/S BIG BAGS BANGALORE PVT LTD., NOW KNOWN AS M/S TOP SACK PACKAGING PVT LTD.,)

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REPRESENTED BY ITS DIRECTOR SMT. SANJANA RITESH NAYAK AGED ABOUT 38 YEARS, PLOT NO.240 , 1^st STAGE, SOMAPUARA, INDUSTRIAL AREA, DOBASPET, BENGALURU 562 111

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…PETITIONER

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Digitally signed by SHAKAMBARI Location: HIGH COURT OF KARNATAKA

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(BY SRI. SHANKARE GOWDA M N., ADVOCATE)

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AND:

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STATE REPRESENTATIVE BY S.R., THE STATE OF KARNATAKA, KARNATAKA, APPELLATE TRIBUNAL (SALES TAX), M.S. BUILDING, AMBEDKAR VEEDI, BENGALURU 560 001

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DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT) -6.4 DVO-6, KIADB BUILDING, 3^rd FLOOR, 14^th CROSS,

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NC: 2024:KHC:28396-DB CRP No. 494 of 2024

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PEENYA, BENGALURU 560 058

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ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT) 6-6, DVO -6, KIADB BUILDING, 3^rd FLOOR, 14^th CROSS, PEENYA, BENGALURU 560 058

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JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS -6), 2^nd FLOOR, 'B' BLOCK, BMTC BUILDING, SHANTHINAGAR, BENGALURU 560 027

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…RESPONDENTS

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(BY SRI. ADITYA VIKRAM BHAT, AGA)

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THIS CRP IS FILED UNDER SECTION 15-A OF THE KARNATAKA TAX ON ENTRY OF GOOD ACT, AGAINST THE ORDER DATED 23.04.2024 PASSED ON I.A.NO.1 IN STA NOS. 350 AND 351/2016 AND STA NOS 57 AND 58/2019, ON THE FILE OF THE SALES TAX APPELLATE TRIBUNAL, REJECTING THE I.A.NO.1.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, KRISHNA S DIXIT J., MADE THE FOLLOWING:

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ORDER

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This Revision Petition by the Assessee calls in

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question the Sales Tax Appellate Tribunal's common order

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dated 23.04.2024 whereby his IA No.1 filed under Section

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14(5) of the Karnataka Tax on Entry of Goods Act, 1979, seeking deferment of hearing of the Appeals, has been rejected.

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2. At paragraph Nos.17 & 18 of the impugned

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order, the Tribunal has reasoned its decision as under:

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"17. Even if, the order in these appeals goes against the common appellant and if the common appellant won the case before the Hon'ble High Court, then the common appellant shall certainly get the benefit of it and no inconvenience or damage will be caused.

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18. keeping these appeals pending since long without deciding or disposing off the same will be meaning less and appeals pending before this bench are also less in numbers and hence, it is also hardly the appeals available for disposal and functioning of this bench and if these appeals are kept pending, it will also result in the no work to this bench."

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Learned Counsel appearing for the Petitioner-

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Assessee draws our attention to the first Proviso to Subsection (5) of Section 14 of the 1979 Act and submits that admittedly, this Court in CRP No.15/2016 between PEPSI CO INDIA HOLDINGS PVT. LTD. Vs. THE STATE OF KARNATAKA , is considering the very same question and therefore, the subject Application of his client ought to have been favoured deferring the hearing of the matter till after the said CRP is decided. That having not been done,

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there is an error apparent on the face of the impugned order warranting its invalidation. The Petitioner-Assessee

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in the Memorandum of Petition has framed the following three questions of law:

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”I. On the facts and in the circumstances of the case whether the Hon'ble Tribunal is right in not deferring the hearing of the appeals under 1^st proviso to Section 14(5) of the Entry Act when the question of law on which the Hon'ble Tribunal has previously given its decision in the case of M/s. Pepsico India Holdings Pvt. Ltd., which is pending before the Hon'ble High Court in CRP NO.15/2016 is on the same question of law which has been raised in the Petitioner's case also?

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II. On the facts and in the circumstances of the case whether the Hon'ble Tribunal is right in holding that there is no question of law at all in the appeals to be decided hence it is not coming under the purview of 1^st Proviso to Section 14(5) of the Entry Act?

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III. On the facts and in the circumstances of the case whether the Hon'ble Tribunal is right in holding that the discretion to defer the hearing of the appeals vest with the Tribunal despite 1^st proviso to Section 14(5) of the Entry Act?"

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4. Learned AGA appearing for the Respondent –

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Revenue vehemently opposes the Petition contending that

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what has been enacted in the first Proviso to Sub-Section

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(5) of section 14 cannot be construed as a Thumb Rule inasmuch as, the employment of the word ‘may’ vests discretion in the Tribunal; the impugned order is a product of exercise of discretion and therefore, its invalidation cannot be sought for as a matter of course in the limited revisional jurisdiction. However, in all fairness he submits that a decision this way or that way be rendered expeditiously so that the Tribunal shall adopt a uniform procedure in matters of the kind.

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Having heard the learned counsel appearing for

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the parties and having perused the Petition Papers, we are inclined to grant indulgence in the matter as under and for the following reasons:

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a) Section 14 of the 1979 Act provides for Appeal

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to the Appellate Tribunal in certain circumstances and subject to certain conditions; sub-Section (5) mandates that the Tribunal shall give an opportunity of hearing to the parties and then pass orders on the Appeal. Its

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substantive provision along with the first Proviso being relevant, is reproduced below:

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“(1) Any officer [empowered by the State Government or the Commissioner] in this behalf or any other person objecting to an order passed by the appellate authority [under section 13 or an order passed by a revisional authority under [subsection (3)] of section 15] may appeal to the Appellate Tribunal within a period of sixty days from the date on which the order was communicated to him.”

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b) There is force in the submission of learned

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counsel for the Petitioner that when a Tribunal has already decided an Appeal involving substantially similar question of law already and the same is put in challenge before this Court in a Revision Petition or before the Apex Court in Appeal which is pending, the Tribunal as a matter of course should defer hearing of Appeal till after this Court or the Apex Court, as the case may be, decides the said question. True it is, as pointed out by the learned AGA that the Proviso in question employs the term “appellate tribunal may defer the hearing… ”. Ordinarily the use of word ‘shall’ raises a presumption that a particular

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provision is imperative whereas the word ‘may’ means discretion. After all, sages of law have said that law is not

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a slave of dictionary. What one has to see is the true intent & content of the provision of law. There is a lot of legal literature as to when the word ‘may’ can be construed as being mandatory and similarly, the word ‘shall’ may be construed as being directory. Where the statute enacts a public duty as distinguished from the private ones, there is scope for construing the word 'may' employed in its provision as 'shall'. It cannot be much disputed that the functions of the Appellate Tribunal have abundant public character that repels the argument of discretion. The impugned order having been structured on a contra inarticulate premise, suffers from an error apparent on its face.

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c) In Maxwell's “Interpretation of Statutes", 12^th

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Edition, pages 234 & 235, it is said as under:

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"In ordinary usage, “may” is permissive and “must” is imperative, and, in accordance with such usage, the word “may” in a statute

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will not generally be held to be mandatory¹ , . In some cases, however, it has been held that expressions such as “may,” or “shall have power,” or “shall be lawful,” have to say the least-a compulsory force² , and so their meaning has been modified by judicial exposition…³ By Section 56 of the Corrupt and Illegal Practices Prevention Act 1883, jurisdiction conferred by the Act “may” be exercised by one of the judges for the time being on the rota for the trial of election petitions. “May” was read as equivalent to “must” so that the jurisdiction could not be exercised by any other judge.⁴ "

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Even otherwise, discretion arguably arising because of employment of the word 'may' in the subject provision, has to be exercised in accordance with the rules of reason & justice, as said by Lord Halsbury in SHARP v. WAKEFIELD, 1891 AC 173. The outcome of exercise of discretion should comply with a set of standards. Discretionary decisions should not run counter to the broad notions of rationality & fairness obtaining in the field. The reasons given by the Tribunal in Paragraph Nos.17 & 18 reproduced above are not germane to the

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1 NICHOLL Vs. ALLEN (1862) 31 LJ.Q.B.28

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2 R V TITHE COMMISSIONERS (1850) 14 Q.B 474

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3 Re Shuter (1960) 1 Q.B.142.

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4 SHAW v. RECKITT (1893) 1 Q.B. 779.

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issue since they do not fit into the broad policy content of the first Proviso to sub-Section (5) of Section 14 of the 1979 Act. If the Legislature intended vesting of discretion in the circumstances mentioned by the Tribunal, it would have employed a different language internalizing the same. However, in the legislative wisdom, it has not been done, which aspect has not been adverted to by the Tribunal. Thus, there is accumulated infirmity in the impugned order.

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d) It is not uncommon that in the hierarchy, courts

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in the lower rung ordinarily defer the hearing of cases that involve questions of law that are being debated at the hands of the courts at the higher rung. This may eventually result into higher level of pendency till after the higher court takes the call in the matter pending on its file. However, once the higher court decides the question, all cases pending in the courts below can be disposed off in a wholesale way and in a brief time. Otherwise, the pendency level in the higher courts would increase, to the

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greater detriment to the public interest. Even private litigants also would be put to prejudice inasmuch as they have to carry the matter to the higher courts in appeal or revision, as the case may be, which otherwise could be avoided. There should be no pendency is only an ideal of speedier justice, but there are pragmatics which one cannot conveniently ignore. What applies to courts in hierarchy would apply to Tribunals in the hierarchy, the Sales Tax Appellate Tribunal being one such. It is also desirable that the higher court/forum should dispose off the pending matters of the kind before long so that bunch of similar matters pending in the lower court/forum can be disposed off expeditiously. More is not necessary to specify.

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In the above circumstances, this Petition is allowed in part; a Writ of Certiorari issues quashing the impugned order and matter is remitted to the Tribunal for consideration afresh after the disposal of the case in PEPSI CO, supra .

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