Maruti Udyog Ltd. vs State of Haryana

Hemant Gupta, J.—The present appeal u/s 36 of the Haryana Value Added Tax Act, 2003, raises the following substantial question of law:

Whether, in the facts and circumstances of the present case, the learned Chairman of the Tribunal was justified in constituting a new Bench even after two Members out of the three-Member Bench had already signed the order?

The appellant-manufacturer of petrol and diesel cars, is registered under the Haryana Value Added Tax Art, 2003 (for short, "the Act") and also under the Central Sales Tax Act, 1956. The appellant is filing quarterly returns and discharging tax obligations. The appellant moved an application u/s 56(3) of the Act seeking clarification in respect of entitlement of the appellant to claim input-tax credit of the tax paid on purchase of such petrol/diesel. The State Government clarified on October 13, 2008 vide order annexure A5 that the appellant is not entitled to claim input-tax credit on purchase of such petrol/diesel mainly for the reason that there is no specific mention of price of petrol/diesel in the sale invoices. The appellant filed an appeal against the said clarification before the Haryana Tax Tribunal (for short, "the Tribunal"). The said appeal was initially heard by the Tribunal of a Bench comprising of Ms. Amarjeet Sachdeva, Shri Yudhavir Singh and Shri Karamvir Saini. It is categorical assertion of the appellant that two Members accepted the appeal holding that the appellant is entitled to input-tax credit vide order dated April 4, 2011 (annexure A7), which was dictated, typed and signed by two Members, but the third Member, Shri Karamvir Saini, neither signed the order nor did he write a dissenting order before his retirement.

Thereafter, the appeal was fixed for rehearing before the Tribunal of a Bench comprising of Shri Yudhavir Singh, Ms. Amarjeet Sachdeva and Shri Subhash Kaushik. After hearing the arguments again on September 22, 2011, Shri Subhash Kaushik wrote and signed the judgment on December 19, 2011 (annexure A8), but two other Members did not sign the same. Unfortunately, Ms. Amarjeet Sachdeva died on January 19, 2012. Thereafter, the appeal was assigned to a new Bench of the Tribunal in which Shri Yudhavir Singh was not a Member. The new Bench dismissed the appeal on May 31, 2012, the order out of which the present appeal arises. The appellant has also attached the copy of the orders dated April 4, 2011; December 19, 2011 and May 31, 2012.

The learned counsel for the appellant points out that the order dated April 4, 2011, was not received by the assessee. The fact of a signed order by majority of Members came to the notice of the appellant on inspection of the record of the Tribunal after the decision of the appeal on May 31, 2012. The learned counsel for the appellant has also produced the documents from the record of the Tribunal to the effect that initially arguments were heard by the Tribunal on March 16, 2011 and the judgment was reserved. Learned counsel for the appellant has vehemently argued that once the arguments have been heard and the judgment is dictated and signed by majority Members and ordered to be released, the mere fact that the ministerial staff has not communicated the same to the appellant will not entitle reconstitution of the Bench subsequently. It is argued that subsequent hearing is without jurisdiction, as the majority has already decided the issue in favour of the assessee. Learned counsel for the appellant has also referred to section 57 of the Act as well as the Haryana Tax Tribunal Regulations, 2004, which deal with the procedure of the orders of the Tribunal and its communication. The relevant provisions read as under:

Haryana Value Added Tax Act, 2003

Tribunal.--(1) The State Government may constitute a Tribunal to be called the Haryana Tax Tribunal consisting of three or more odd number of members including the Chairman as the State Government may appoint for the purpose of performing such functions and exercising such powers as may be assigned to, or conferred on, the Tribunal by or under this Act.

(2) The functions of the Tribunal may be discharged by the members sitting in Benches of two or more members, as may be determined by the Chairman.

(3) If the Members of a Bench are divided over some matter, the decision shall be the decision of the majority of the Members, if there be a majority, but if the Members are equally divided they shall state the point or points on which they differ, and the case shall be heard by the full-Member Tribunal or by a larger Bench of three of other odd number of members of the Tribunal and such point or points shall be decided according to the decision of majority of the members of the Tribunal.

. . .

Haryana Tax Tribunal Regulations, 2004

Order

Every order of the Tribunal shall be in writing.

Communication of order

The Tribunal shall announce the order in the presence of the parties or communicate the order to the assessees, the State representative and the authority from whose order the appeal was preferred.

On the other hand, Ms. Talwar has argued that unless the order is communicated, the order passed by the majority Members of the Tribunal cannot be said to be a legally binding order, as such order was never put in the course of transmission. She relies upon a judgment of the Supreme Court reported as State of Punjab Vs. Amar Singh Harika, . It is also contended that the appellant is estopped to challenge the subsequent orders inasmuch as the appellant had the opportunity to dispute the hearing of the appeal by subsequent Bench, which was never raised.

Having heard learned counsel for the parties, we find that the Constitution of Bench after recording of reasons and signing of the order by the majority of Members is not tenable in law.

Admittedly the majority Members have signed the order on April 4, 2011 after hearing the arguments on March 16, 2011. The majority Members have not only signed the said order but also ordered the same to be released. Thereafter, the communication of the order to the parties was a ministerial act. If the ministerial staff has failed to put the order in the course of communication, it will not render the order passed by majority Members as nugatory. The inaction of the ministerial staff cannot override the majority opinion of the Members of the Tribunal. Similarly, non-signing of one of the Member or the failure to record dissent with the majority view will not render the majority opinion as nugatory or ineffective.

The Tribunal had become functus officio after signing of the order. Such order could not be interfered with by any other authority expect in appeal filed in accordance with law. The Supreme Court in a judgment reported as State Bank of India and Others Vs. S.N. Goyal, observed as under:

It is true that once an authority exercising quasi-judicial power takes a final decision, it cannot review its decision unless the relevant statute or rules permit such review. But the question is as to at what stage an authority becomes functus officio in regard to an order made by him. P. Ramanatha Aiyar''s Advanced Law Lexicon (Third Edition, Volume 2, pages 1946-47) gives the following illustrative definition of the term �functus officio'':

Thus a judge, when he has decided a question brought before him, is functus officio, and cannot review his own decision.

Black''s Law Dictionary (Sixth Edition, page 673) gives its meaning as follows:

Having fulfilled the function, discharged the office, or accomplished the purpose, and therefore of no further force or authority.

We may first refer to the position with reference to civil courts. Order 20 of the CPC deals with judgment and decree. Rule 1 explains when a judgment is pronounced. Sub-rule (1) provides that the court, after the case has been heard, shall pronounce judgment in an open court either at once, or as soon thereafter as may be practicable, and when the judgment is to be pronounced on some future day, the court shall fix a day for that purpose of which due notice shall be given to the parties or their pleaders. Sub-rule (3) provides that the judgment may be pronounced by dictation in an open court to a shorthand writer [if the Judge is specially empowered (sic by the High Court) in this behalf]. The proviso thereto provides that where the judgment is pronounced by dictation in open court, the transcript of the judgment so pronounced shall, after making such corrections as may be necessary, be signed by the judge, bear the date on which it was pronounced and form a part of the record. Rule 3 provides that the judgment shall be dated and signed by the Judge in open court at the time of pronouncing it and when once signed, shall not afterwards be altered or added to save as provided by section 152 or on review. Thus, where a judgment is reserved, mere dictation does not amount to pronouncement, but where the judgment is dictated in open court, that itself amounts to pronouncement. But even after such pronouncement by open court dictation, the judge can make corrections before signing and dating the judgment. Therefore, a judge becomes functus officio when he pronounces, signs and dates the judgment (subject to section 152 and power of review). The position is different with reference to quasi-judicial authorities. While some quasi-judicial tribunals fix a day for pronouncement and pronounce their orders on the day fixed, many quasi-judicial authorities do not pronounce their orders. Some publish or notify their orders. Some prepare and sign the orders and communicate the same to the party concerned. A quasi-judicial authority will become functus officio only when its order is pronounced, or published/notified or communicated (put in the course of transmission) to the party concerned. When an order is made in an office noting in a file but is not pronounced, published or communicated, nothing prevents the authority from correcting it or altering it for valid reasons. But once the order is pronounced or published or notified or communicated, the authority will become functus officio. The order dated January 18, 1995 made on an office note, was neither pronounced, nor published/notified nor communicated. Therefore, it cannot be said that the appointing authority became functus officio when it signed the note dated January 18, 1995.

The Supreme Court in a judgment reported as Surendra Singh and Others Vs. The State of Uttar Pradesh, has held that a judgment within the meaning of sections 99 and 108 of the CPC is the final decision of the court intimated to the parties and to the world at large by formal "pronouncement" or "deliver" in open court. Small irregularities in the manner of pronouncement or the mode of delivery do not matter. The court observed as under:

An important point therefore arises. It is evident that the decision which is so pronounced or intimated must be a declaration of the mind of the court as it is at the time of pronouncement. We lay no stress on the mode or manner of delivery, as that is not of the essence, except to say that it must be done in a judicial way in open court. But however it is done it must be an expression of the mind of the court at the time of delivery. We say this because that is the first judicial act touching the judgment which the court performs after the hearing. Everything else up till then is done out of court and is not intended to be the operative act which sets all the consequences which follow on the judgment in motion. Judges may, and often do, discuss the matter among themselves and reach a tentative conclusion. That is not their judgment. They may write and exchange drafts. Those are not the judgments either, however heavily and often they may have been signed. The final operative act is that which is formally declared in open court with the intention of making it the operative decision of the court. That is what constitutes the �judgment''.

. . .

As soon as the judgment is delivered, that becomes the operative pronouncement of the court. The law then provides for the manner in which it is to be authenticated and made certain. The rules regarding this differ but they do not form the essence of the matter and if there is irregularity in carrying them out it is curable. Thus, if a judgment happens not to be signed and is inadvertently acted on and executed, the proceedings consequent on it would be valid because the judgment, if it can be shown to have been validly delivered, would stand good despite defects in the mode of its subsequent authentication.

The judgment in State of Punjab Vs. Amar Singh Harika, , refers to an administrative order of dismissal of the services, which was not published and communicated to the officer concerned. An administrative order would stand on a different footing than an order passed by the judicial or quasi-judicial authorities, which became final and binding the moment it is signed. Since the order was reserved on March 16, 2011, it was the duty of the ministerial staff to communicate the same after the same was signed and ordered to be released on April 4, 2011. The order so signed was not a draft order. Nothing was required to be performed by the majority of the Members thereafter, as the Members have ordered the same to be released. The irregularity, if any, is in the matter of communication of the same by the ministerial staff of the Tribunal and not that anything else was required to be done by the majority of the Members. Therefore, the failure of the ministerial staff to communicate the same will not entitle the Chairman of the Tribunal to re-constitute another Bench to rehear the appeal. In terms of section 57(3) of the Act, the decision of the Tribunal is by majority of the Members. Since the majority of the Members have decided in a particular manner, the third Member even if he has not signed the same or had reservation with the view of the majority will not be of any consequence and shall not affect the opinion of the majority. The only consequence would be that in further appeal, the benefit of dissenting view may not be available to appreciate the counter view.

In view of the said fact, we find that the Tribunal having decided the appeal vide order dated April 4, 2011, the same could not have been posted for rehearing and decided vide order dated May 31, 2012. Such an order is not an order of review and is not tenable on any ground.

The argument that the appellant is estopped to challenge the said order is again not tenable. Though it is asserted that the appellant was not aware of the fact that the Members have signed the order, but the fact remains that the equitable principle of estoppel cannot be applied in a case where a conclusive order has been passed by a statutory authority. An order thus passed by subsequent Bench cannot be permitted to be upheld on the equitable doctrine of estoppel. Consequently, the question of law is answered in favour of the assessee and it is held that the order of the Tribunal dated April 4, 2011 could not be set aside, reviewed or recalled in any manner on administrative side by way of mechanism of constitution of fresh Tribunal. Consequent to our decision, it shall be open to the parties to take recourse to such remedy as is available to them against the order dated April 4, 2011 in accordance with law.