Ramco Confectionery P. Ltd. vs Commissioner,Trade Tax U.P.

Sudhir Agarwal, J.—Heard Sri R.R Agrawal senior advocate, assisted by Sri Suyash Agrawal learned counsel for the revisionist and learned standing counsel for the Revenue. The only question of law, which is involved in this matter is:

"Whether it was open to the Commissioner, Trade Tax, to make any alteration/correction/change/amendment/modification in eligibility certificate dated December 18, 1996 issued by Divisional Level Committee with respect to grant of exemption to the revisionist-assessee with effect from August 9, 1993 after having lost the matter before the Trade Tax Tribunal in view of its judgment dated June 18, 1999 passed in Appeal No. 162 of 1998."

The brief facts given rise to the present question of law is as under:

The assessee established a new unit for manufacturing "toffee" on April 1, 1993. The first date of sale was August 9, 1993. The actual investment in the above establishment, as claimed by assessee, was 14,08 lakhs. He moved an application for grant of eligibility certificate u/s 4A of the Sales Tax Act, 1943 (hereinafter referred to as "the Act 1948"), which was considered by the Divisional Level Committee, Varanasi, vide its letter No- 3144-49 dated December 18, 1996. It granted exemption for a period of August 9, 1993 to August 6, 2001, or till the date of achievement of 125 per cent, of actual investment, i.e., Rs. 17,60,000 whichever may be earlier Paras 3 and 4 of said order read as under:

The Commissioner Trade Tax, U. P,, Lucknow, however, was of the view that the aforesaid eligibility certificate was not in accordance with, law, inasmuch as, manufacturing of toffee was within prohibited list in view of the judgment of this court in Pappu Sweets & Biscuits v. Commissioner, Trade Tax, U. P. Lucknow [1995] UPTC 1089, hence the said eligibility certificate was liable to be set aside. The Commissioner, accordingly, passed order dated September 14, 1998 exercising his power u/s 4A(3) of the Act 1948. This order of the Commissioner was assailed before Trade Tax Tribunal, U. P., Lucknow in appeal No. 162 of 1998.

By the time, the appeal came up for consideration before the Tribunal, judgment of this court in Pappu Sweets & Biscuits [1995] UPTC 1089 was considered by apex court also and it reversed this court''s decision reported in M/s. Pappu Sweets and Biscuits Vs. Commissioner of Trade Tax U.P Lucknow,

In view of the subsequent development, when the matter came before the Tribunal, it found that the Commissioner''s order dated September 14, 1994 was patently illegal, and hence, appeal was allowed, order of Commissioner was set aside and eligibility certificate issued by the Divisional level Committee, Varanasi, was restored. The relevant, part of the order of the Tribunal reads as under:

"Since the position has already been clarified by the honourable Supreme Court there remains nothing in the instant appeal which has to be allowed and the judgment of the Commissioner, Trade Tax, U.P., Lucknow, is to be set aside. The ''toffee'' is being exempted from the sales tax as held by the honourable Supreme Court being not covered within the prohibited list and the word ''sweetmeat'' and the words ''commodities of like nature'',.

The result is that the appeal is to be allowed,

ORDER

The appeal is hereby allowed. The impugned order is set aside and the grant of eligibility certificate as issued by the Divisional Level Committee, Varanasi vide letter No. 3144-49 dated December 18, 1996 is restored."

It is not disputed between the parties that this order of the Tribunal had not been challenged before this court in revision, and has attained finality.

However, thereafter the Commissioner, Trade Tax, U. P. Lucknow, on 9 his own, again issued notice dated October 5, 2000 u/s 4A(3) of the Act, 1948 stating that the date of commencement of exemption in eligibility certificate instead of August 9, 1993 ought to be May 23, 1994. The assessee-revisionist submitted objection to the said notice stating that after judgment of the Tribunal, restoring and confirming eligibility certificate, as was granted by the Divisional Level Committee, and the matter having attained finality, it was not open to the Commissioner to again exercise power u/s 4A(3) of the Act, 1948. The Commissioner, however, proceeded to pass the impugned order dated February 23, 2001 whereby he rejected objection of the revisionist and modified eligibility certificate by granting exemption from May 23, 3994 to August 8, 2001 instead of August 9, 1993 to August 8, 2001 whereagainst the assessee preferred Appeal No. 43 of 2001, which has been rejected by Tribunal vide judgment dated July 16, 2001 holding that the principle of res judicata or estoppel does not apply in the proceedings u/s 4A(3) and even if earlier order has become final, the Commissioner has power for making change in eligibility certificate dated December 18, 1996.

It is contended that once eligibility certificate as such has been restored and confirmed by the Tribunal, it was not open to the Commissioner to sit over the said certificate again and make any change.

The learned standing counsel contended that since the date of commencement of exemption was wrongly mentioned therefore, the Commissioner passed an order making change in the said date.

The power of the Commissioner to make any rectification, etc., u/s 4A(3) of the Act 1948 cannot be doubted but when a particular issue or order or document as such has been held to be legal by an adjudicatory forum higher in status than Commissioner, in such a case. Commissioner cannot sit in appeal over the said authority so as to pass an order, which has effect of altering position, as it has arrived at after decision of higher adjudicatory forum.

Here eligibility certificate granted by the Divisional Level Committee has been restored by the Tribunal after setting aside an order passed by the Commissioner u/s 4A(3) of the Act, 1948. Therefore, it is the order of the Tribunal, which has sustained order of the Divisional Level Committee and it seized to be an order of the Divisional Level Committee but its status is that of an order, correctness whereof has been adjudged by an authority, having superior power of adjudication over the Commissioner and the Commissioner has no jurisdiction whatsoever to say that consequences flowing after decision of the Tribunal are not correct and he still can pass an order making alteration in respect to something which has already been finalized by the Tribunal. If there is any error or mistake, etc., it was open to the Commissioner to seek rectification/clarification/modification from the Tribunal itself or order of the Tribunal could have been assailed before this court in revisional jurisdiction, but, having accepted the order of the Tribunal and surrendering to it, it is not open to the Commissioner to suo motu find out some error in respect to an order, which has been upheld by the Tribunal and again exercise his power making modification in such order, which has the effect of varying eligibility certificate of the Divisional Level Committee though it has been upheld by the Tribunal.

The learned standing counsel could not point out any authority to support that after a decision by the Tribunal or by this court, having certain consequences, the Commissioner still has power to make any change or alternation in the consequences, which may flow from such adjudication made by the Tribunal or by this court. Such power has neither been bestowed upon the Commissioner by section 4A(3) nor can be read therein nor a bare perusal thereof I find to exist. The order passed by Commissioner, therefore, is patently without jurisdiction.

In the result, the question, formulated above, is answered in favour of the assessee and against the Revenue. The revision is thus allowed. The impugned order dated July 16, 2001 16 passed by the Tribunal is set aside. The assessee is also entitled to cost which I quantify to Rs. 25,000.