Best and Co., Ltd. vs State of Karnataka

K.V. Narayana Raju, M.-On 10-3-1981 Sri Varada Rao, Sales Tax Practitioner representing the appellant in STA. Apl. 160/78 which was allowed on 15th June, 1979 has filed an application for refund of Institution Fee. In that appeal it was held that the Assessing Authority could have granted some more time for production of ''C'' Forms under the Central Sales Tax Act. The Bench which disposed of the appeal of which I was a Member expressed.

"We are unable to agree with the learned Deputy Commissioner that the appellant had not availed itself of all the opportunities given and that there was no sufficient cause for permitting the appellant some more time."

Consequently the appeal was allowed and the Assessing Authority was asked to scrutinise the seven ''C'' Forms produced by the appellant before the learned Deputy Commissioner and pronounce upon the validity or otherwise of the same................ The Bench made no order as to the refund of the institution fee contemplated by Rule 30(3) of the Sales Tax Rules. The provision of law under which the application was filed was not mentioned and after the office raised objection, the learned Sales Tax Practitioner has filed a memo on 29-6-1981 stating that the application was under section 22(6-A) of the Sales Tax Act read with Rule 30(3) for rectification of the mistake apparent on the record. It is asserted in that memo that the mistake was apparent since there was no order regarding the refund of the institution fee.

There can be no doubt fee equal to 2 per cent of the amount of assessment objected to payable by an appellant is charged for the services which the Tribunal renders. In a way it can be compared to court fees payable on plaints, memorandum of appeal, cross objections etc...... filed in Civil Courts. Rule 30(3) reads:

"If the Appellate Tribunal allows on appeal or application for review preferred by an assessee under Sec. 22, it may. in its discretion, by order, refund either wholly or partly the fee paid by assessee under sub-section (3) or sub-section (6)(b) of Section 22."

It was contended that the Tribunal was under a duty to order refund of the institution fee either wholly or partly, and that the omission to do so is indeed an error apparent on the face of the record. It is not possible to accept such a contention. The words the Tribunal "may in its discretion by order refund" in Rule 30(3) make it abundantly clear that the Tribunal is given discretion to order refund. It is impossible to say that the Tribunal is bound to order refund, or is under an obligation to state reasons for not ordering refund of the fee wholly or partly. We are of the opinion that an order which implies giving of the reasons, is required to be passed if and when refund is to be made. It may not be necessary at all to give reasons for not ordering refund. The Rule does not say that the institution fee shall be refunded whenever an appeal or review is allowed. No guidelines are laid down for ordering refund either wholly or partly. The thing is left to the discretion, or sound judgment of the Tribunal, and if anything the Tribunal should find sufficient reasons for ordering refund of the institution fees.

Refund of institution fee under Rule 30(3) of the Sales Tax Rules we think can be ordered only when the Tribunal finds that but for gross and palpable errors committed by the authorities below, the appellant would not have been put to the need of preferring an appeal by paying the institution fee. Errors of judgment are bound to be there and all cannot be treated as gross and deliberate. We have already said that mere omission to state whether or not the appellant is entitled to refund of the institution fee is not an error apparent on the face of the record. Further we must say that in the case before us the petitioner himself was to a great extent responsible for the situation in that had it been diligent the ''C'' Forms could have been produced before the Assessing Officer. It may not be necessary for us to say that whatever is not granted by a court or Tribunal is deemed refused and in such a situation it is impossible to say that the order or judgment suffers from an error apparent on the face of the record.

If really the Legislature or Rule making authority desired that refund of institution fee should automatically follow an order allowing an appeal, the language used in Rule 30(3) would have been thoroughly different. The word ''shall'' should have been used in place of ''may'' and the words in its discretion'' need not have been introduced at all. It may not be out of place to mention here that Sections 63 to 67 of the Court Fees and Suit Valuation Act which provide for refund of Court Fees use the words ''may'' and ''shall'' at different places thereby leaving no doubt whatsoever when the court is bound to order refund, and when there is a mere power without a duty to order refund. Wherever the word ''may'' is used there is discretion which of course has to be used in a sound and judicial manner. The fact that both ''may'' and discretion are used in Rule 30(3) of the Sales Tax Rules indicates that the Court has to exercise judgment before ordering refund, and that the Tribunal need not give any kind of reason if it finds that there is no case at all for ordering refund.

For the foregoing reasons, we reject the application filed for refund of the institution fees.