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Judgment
Heard on admission.
Seeking an exception to the order dated 10-12-2018, passed by Commercial Tax Appellate Board, Bhopal, the present appeal is filed under Section 53
of the Madhya Pradesh Value Added Tax Act,2002(hereinafter referred to as the Act, 2002).
The facts lie in narrow compass are that the appellant is a private limited Company registered under the Act, 2002. According to the appellant, a
search was made on 03-09-2007 by Anti Evasion Bureau Bhopal on the residence and factory premises. On the basis of the said search and scrutiny
report, the Assessing Officer passed an Assessment order 30-06-2009 whereby liability was fastened for VAT at Rs. 21,74,403/- and for Entry Tax
Rs. 3,27,290/. Against the said order of Assessing Officer, the appellant preferred an appeal which was partly allowed to the extent of Rs. 10,67,810/-
under VAT Act and Rs.35,558/-under Entry Tax Act. The said order of the Appellate Authority was further challenged before the Commercial Tax
Appellate Board Bhopal unsuccessfully, hence present appeal before this court under Section 53 of Act,2002.
Learned counsel for the appellant submitted that the Appellate Board was not justified in affirming the order of assessment and Appellate Authority
regarding estimate and extrapolation of unrecorded sales of Seizure No.16 a diary.
Before adverting to the aforesaid contention, it is apt to consider the Scheme of Act providing an appeal to the High Court after two appeals
decided by the authorities under Tax Act. As per the scheme which is envisaged under Chapter-X of the Act, 2002, an appeal is provided under
Section 46(1) against an order of assessment of tax before the Appellate Authority. Against an order passed by the Appellate Authority in appeal
under Sub Section (1) of Section 46 an appeal lie to the Appellate Board. Thus, against an order of assessment, two appeals have been provided.
Thereafter, further an appeal shall lie before the High Court only when the High Court is satisfied that the case involves substantial question of law.
The provisions of Section 53 reads as under :
53 . Appeal to High Court
(1) An appeal shall lie to the High Court from every order passed by the Appellate Board, in appeal under sub-sections (2) and (3) of section 46 if the
High Court is satisfied that the case involves a substantial question of law.
(2)(a)The Commissioner aggrieved by any order referred to in sub-section (1) passed by the Appellate Board, may file an appeal to the High Court
and such appeal shall be filed within one hundred eighty days from the date of the communication to the Commissioner of the order appealed against,
in the form of a memorandum of appeal precisely stating therein the substantial question of law involved.
(b) A dealer aggrieved by any order referred to in sub-section (1) passed by the Appellate Board, may file an appeal to the High Court and such
appeal shall be filed within ninety days from the date of the communication to the dealer of the Commissioner of the order appealed against, in the
form of a memorandum of appeal precisely stating therein the substantial question of law involved.
(3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate the question.
(4) The appeal shall be heard only on the question so formulated and the respondents shall, at the hearing of the appeal, be allowed to argue that the
case does not involve such question;
Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the
appeal or any other question of law not formulated by it, if it is satisfied that the case involves such question.
(5) Where an appeal is filed under sub-section (2) by a dealer, such appeal shall not be admitted by the High Court unless [twenty five percent] of the
balance due from the dealer after the order passed by the Appellate Board is paid by him.
(6)(a)The High Court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decision
is founded and may award such costs as it deems fit.
(b) The High Court may determine any issue which:-
(i) has not been determined by the Appellate Board , or
(ii) has been wrongly determined by the Appellate Board , by reason of a decision on such question of law as is referred to in sub-section (1),
(c) On delivery of judgment by the High Court, effect shall be given to it by the Officer empowered to assess or re-assess the dealer under section 20,
on the basis of a certified copy of the judgment.
(7) The provisions of the Code of Civil Procedure, 1908 (5 of 1908) relating to appeals to High Court shall, as far as may be, apply in the case of
appeals under this section.
Thus the provisions of Section 53 provided an appeal to the High Court only in the case where the High Court is satisfied that the case involves a
substantial question of law and not otherwise.
The provisions of Section 53 of the Act, 2002 are akin to Section 100 of the Code of Civil Procedure. The word ‘substantial question of law’
was explained in the case of Santosh Hazari Vs. Purshottam Tiwari (Dead) by LRS (2001)3 SCC 17.9 Paras 12, 13 and 14 being relevant are quoted
as under :
“12. The phrase ‘substantial question of law’, as occurring in the amended Section 100 is not defined in the Code. The word substantial, as
qualifying ‘question of law’, means - of having substance, essential, real, of sound worth, important or considerable. It is to be understood as
something in contradistinction with - technical, of no substance or consequence, or academic merely. However, it is clear that the Legislature has
chosen not to qualify the scope of ‘substantial question of law’ by suffixing the words ‘of general importance’ as has been done in many
other provisions such as Section 109 of the Code or Article 133(1) (a) of the Constitution. The substantial question of law on which a second appeal
shall be heard need not necessarily be a substantial question of law of general importance. In Guran Ditta & Anr. Vs. T. Ram Ditta, AIR 1928 PC
172, the phrase ‘substantial question of law’ as it was employed in the last clause of the then existing Section 110 of the C.P.C. (since omitted
by the Amendment Act, 1973) came up for consideration and Their Lordships held that it did not mean a substantial question of general importance
but a substantial question of law which was involved in the case as between the parties. In Sir Chunilal Vs. Mehta & Sons Ltd. Vs. The Century
Spinning and Manufacuring Co., Ltd., (1962) Supp.3 SCR 549; (AIR 1962 SC 131,4 t)he Constitution Bench expressed agreement with the following
view taken by a Full Bench of Madras High Court in Rimmalapudi Subba Rao Vs. Noony Veeraju, ILR 1952 Madras 264; (AIR 1951 Madras 969)
(at p.1318; para 5 of AIR):-
“….....when a question of law is fairly arguable, where there is room for difference of opinion on it or where the Court thought it necessary to deal
with that question at some length and discuss alternative view, then the question would be a substantial question of law. On the other hand if the
question was practically covered by the decision of the highest Court or if the general principles to be applied in determining the question are well
settled and the only question was of applying those principles to the particular fact of the case it would not be a substantial question of law†and laid
down the following test as proper test, for determining whether a question of law raised in the case is substantial (at p. 1318, para 6 of AIR):-
“The proper test for determining whether a question of law raised in the case is substantial would, in our opinion, be whether it is of general public
importance or whether it directly and substantially affects the rights of the parties and if so whether it is either an open question in the sense that it is
not finally settled by this Court or by the Privy Council or by the Federal Court or is not free from difficulty or calls for discussion of alternative views.
If the question is settled by the highest Court or the general principles to be applied in determining the question are well settled and there is a mere
question of applying those principles or that the plea raised is palpably absurd the question would not be a substantial question of law.â€
In Deputy Commr., Hardoi, in charge Court of Wards, Bharawan Estate Vs. Rama Krishna Narain & Ors., AIR 1953 SC 52, 1also it was held
that a question of law of importance to the parties was a substantial question of law entitling the appellant to certificate under (the then) Section 110 of
the Code.
A point of law which admits of no two opinions may be a proposition of law but cannot be a substantial question of law. To be substantial, a
question of law must be debatable, not previously settled by law of the land or a binding precedent, and must have a material bearing on the decision of
the case, if answered either way, in so far as the rights of the parties before it are concerned. To be a question of law involving in the case there must
be first a foundation for it laid in the pleadings and the question should emerge from the sustainable findings of fact arrived at by court of facts and it
must be necessary to decide that question of law for a just and proper decision of the case. An entirely new point raised for the first time before the
High Court is not a question involved in the case unless it goes to the root of the matter. It will, therefore, depend on the facts and circumstance of
each case whether a question of law is a substantial one and involved in the case, or not; the paramount overall consideration being the need for
striking a judicious balance between the indispensable obligation to do justice at all stages and impelling necessity of avoiding prolongation in the life of
any lis.
In the case of State Bank of India and others Vs. S.N.Goyal (2008) 8 SCC 9 2the Apex Court again explained the meaning and scope of the
expression substantial question of law.
Second appeals would lie in cases which involve substantial questions of law. The word 'substantial' prefixed to 'question of law' does not refer to the
stakes involved in the case, nor intended to refer only to questions of law of general importance, but refers to impact or effect of the question of law
on the decision in the lis between the parties. 'Substantial questions of law' means not only substantial questions of law of general importance, but also
substantial question of law arising in a case as between the parties. In the context of section 100 CPC, any question of law which affects the final
decision in a case is a substantial question of law as between the parties. A question of law which arises incidentally or collaterally, having no bearing
on the final outcome, will not be a substantial question of law. Where there is a clear and settled enunciation on a question of law, by this Court or by
the High Court concerned, it cannot be said that the case involves a substantial question of law. It is said that a substantial question of law arises when
a question of law, which is not finally settled by this court (or by the concerned High Court so far as the State is concerned), arises for consideration in
the case. But this statement has to be understood in the correct perspective. Where there is a clear enunciation of law and the lower court has
followed or rightly applied such clear enunciation of law, obviously the case will not be considered as giving rise to a substantial question of law, even
if the question of law may be one of general importance. On the other hand, if there is a clear enunciation of law by this Court (or by the concerned
High Court), but the lower court had ignored or misinterpreted or misapplied the same, and correct application of the law as declared or enunciated by
this Court (or the concerned High Court) would have led to a different decision, the appeal would involve a substantial question of law as between the
parties. Even where there is an enunciation of law by this court (or the concerned High Court) and the same has been followed by the lower court, if
the appellant is able to persuade the High Court that the enunciated legal position needs reconsideration, alteration, modification or clarification or that
there is a need to resolve an apparent conflict between two view points, it can be said that a substantial question of law arises for consideration. There
cannot, therefore, be a strait-jacket definition as to when a substantial question of law arises in a case. Be that as it may.
In the light of the aforesaid enunciation of law, we have examined the order impugned passed by the Commercial Tax Appellate Board and the
facts of the present case, we do not find that the facts and arguments raised in the present case give rise to any substantial question of law for
admitting the present appeal. The arguments in respect of the Seizure No.16 a diary which was recovered from the residence of appellant’s
employee Mool Chand Mehar is pure question of fact. The Appellate Board has elaborately discussed the facts and findings of the Assessing Officer
and the Appellate Authority.
In view of the aforesaid we are of the considered opinion that the order of the Assessing Officer, Appellate Authority affirmed by the Appellate
Board are based upon the findings of facts besides no substantial question of law is involved in the instant appeal , hence the appeal is dismissed.