REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. ................ OF 2010 (@ SLP (C) No. 11103 of 2009)

Assistant Commercial Tax Officer  …Appellant

Versus

M/s. Rijhumal Jeevandas           …Respondent

WITH

CIVIL APPEAL ……… OF 2010  (@ SLP (C) NO. 12891 OF 2009)

Assistant Commercial Taxes Officer  …Appellant

Versus

M/s. Ajit Singh Chandra Prakash …Respondent

CIVIL APPEAL ……… OF 2010  (@ SLP (C) NO. 12893 OF 2009)

Assistant Commercial Taxes Officer  …Appellant

Versus

M/s. Raj Timber Mart …Respondent

CIVIL APPEAL ……… OF 2010  (@ SLP (C) NO. 12896 OF 2009)

Assistant Commercial Taxes Officer  …Appellant

Versus

M/s. Ashok Timber Merchant …Respondent

CIVIL APPEAL ……… OF 2010  (@ SLP (C) NO. 12897 OF 2009)

Assistant Commercial Taxes Officer  …Appellant  

Versus

M/s. Narayan Das Aadu Mal …Respondent

CIVIL APPEAL ……… OF 2010  (@ SLP (C) NO. 12899 OF 2009)

Assistant Commercial Taxes Officer  …Appellant

Versus

M/s. Mahadev Timber & Furniture …Respondent

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CIVIL APPEAL ……… OF 2010  (@ SLP (C) NO. 12902 OF 2009)

Assistant Commercial Taxes Officer  …Appellant

Versus

M/s. Mahadev Timber & Furniture …Respondent

CIVIL APPEAL ……… OF 2010  (@ SLP (C) NO. 12903 OF 2009)

Assistant Commercial Taxes Officer  …Appellant

Versus

M/s. Mahadev Timber & Furniture …Respondent

CIVIL APPEAL ……… OF 2010  (@ SLP (C) NO. 12906 OF 2009)

Assistant Commercial Taxes Officer  …Appellant  

Versus

M/s. Mahadev Timber & Furniture …Respondent

CIVIL APPEAL ……… OF 2010  (@ SLP (C) NO. 12909 OF 2009)

Assistant Commercial Taxes Officer  …Appellant

Versus

M/s. Mahaveer Timber Merchant …Respondent

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CIVIL APPEAL ……… OF 2010  (@ SLP (C) NO. 12912 OF 2009)

Assistant Commercial Taxes Officer  …Appellant

Versus

M/s. Mahaveer Timber Merchant         …

Respondent

JUDGMENT

Swatanter Kumar, J.

1.      Leave granted.

2. With the consent of counsel appearing for the parties, the matters  

are heard for final disposal.  By this judgment we will dispose of  

all  the  aforenoticed  appeals  as  common  question  of  law  on  

somewhat similar facts arises for consideration of this Court in all  

these appeals.  However, for the purpose of brevity and to avoid  

repetition of facts, we would be referring to the facts of SLP (C)  

No. 11103 of 2009.

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3. All  these  aforenoticed  appeals,  though  refer  to  different  

respondents, all being timber merchants but the principal question  

raised in all these appeals is identical, whether the  ‘ballies’  can  

fall under the expression ‘timber’ so as to justify levying of higher  

sales tax.

4. M/s. Rijhumal Jeevandas (hereinafter referred to as ‘the assessee’)  

is  a  concern,  trading  in  ‘timber’  and  its  allied  products.   The  

Assessing  Officer  vide  his  Order  dated  17th November,  2000,  

passed  an  order  of  assessment  against  the  assessee  wherein  he  

levied tax at the rate of 8% i.e.  Rs. 5,75,580/- on the  ‘ballies’   

which, according to the Department, comes within the category of  

‘timber’ and thus, the tax ought to have been levied at the rate of  

12%.  On this premise, a notice was issued by the authority for  

amending the assessing order under Section 37 of the Rajasthan  

Sales  Tax  Act,  1994  (for  short  `the  Act’).   Despite  service  of  

notice,  none  had  appeared  on  behalf  of  the  assessee  and  the  

differential  tax  at  the  rate  of  4%  was  levied  totaling  to  Rs.  

23,023/-.   Further,  the  authorities  imposed  surcharge  of  Rs.  

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2,763/-  and  interest  of  Rs.  26,302/-,  and  raised  a  total  further  

demand of Rs. 52,088/-.   

5. Against the aforesaid order of assessment, the assessee preferred  

an  appeal  before  the  Deputy  Commissioner  (Appeals),  

Commercial  Tax Department,  Kota.  The main argument raised  

was that the order was beyond the purview and scope of Section  

37 of the Act.  The  ‘ballies’   could not be treated to be covered  

under  the  head  ‘timber’  and,  as  such,  the  entire  demand  was  

vitiated in law.   

6. The aforesaid appeal was allowed.  The appellate authority found  

that, the  ‘ballies’   comes under the category of ‘goods’ and not  

under the category of ‘building goods’.    Thus, the differential tax  

levied by the Tax Assessment Officer, assuming  ‘ballies’   to be  

‘timber’ was not justified.  Consequently, the entire demand itself  

was set aside.   

7. The order of the appellate authority dated 18th October, 2006 was  

challenged by the Assistant Commercial Taxes Officer, Ward -III,  

Circle-B, Kota, before Rajasthan Tax Board, Ajmer which vide its  

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judgment dated 11th June, 2007 found that the  ‘ballies’   are not  

‘timber’  and  upheld  the  view  taken  by  the  First  Appellate  

Authority and dismissed the appeals preferred by the Department.

8. Aggrieved by the Order of the Rajasthan Tax Board, Ajmer the  

Department preferred a revision under Section 86 of the Act and  

besides referring to the facts, the following questions of law were  

framed for consideration of the High Court :  

“(i) Whether in the facts and circumstances of the matter  the order passed by the assessing authority was in any  manner inappropriate for the purpose of interference by  the appellate authorities ?

(ii) Whether  the  Appellate  Authorities  were  justified  in  interfering  with  the  orders  passed  by  the  assessing  authority which related to appreciation of entire record  and facts ?

(iii) Whether the appellate  authorities  justifies in drawing  the  wrong  conclusion  while  misinterpreting  the  provisions of the Section 37 of the Act of 1994 which  relates to rectification of an order ?

(iv) Whether  the  goods/good used and dealt  with  by  the  respondent assesses could be classified as not timber so  as to enable the respondent assesses to pay tax @ 8%  while bally comes in the category of timber wood and  upon which the tax is payable @ 12%?”

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9.  This revision petition came to be dismissed by the High Court  

vide its Order dated 7th July, 2008.  The said Order reads as under  

:  

“After  having  carefully  gone  through  material on record, since after due consideration proper  discretion  has  already  been  used  by  the  Deputy  Commissioner  (Appeals)  as  also  the  Rajasthan  Tax  Board,  in  the  facts  and  circumstances,  no  further  interference is called for by this Court.

The  revision  petition  is  dismissed  accordingly as having no merits.”

10. The present appeals had been preferred by the Department against  

the  order  dated 7th July,  2008 passed  by  the  High Court.   The  

primary challenge, to the legality and correctness of the order, is  

that there is no discussion either on the facts or on the questions of  

law raised in the revision petition before the High Court and in the  

argument  addressed  during  the  time  of  hearing  of  the  revision  

petition.

11. With some regret,  we are constrained to notice that the cryptic  

orders like the above, have not only been passed in the present  

appeals,  but identical  orders had even been passed by the High  

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Court in large number of cases from which the appeals have been  

preferred before this Court.  Identical orders, though in different  

revision  petitions  dealing  with  different  facts,  parties  and  

questions of law, running into 4 lines, like the present one, have  

been passed, even without variation of a coma or a full stop.  It  

also needs to be noticed that the grounds raised by the Department  

before  us  cannot  be  said  to  be  frivolous  or  untenable  which  

required discussion by the High Court.  The orders, besides being  

cryptic, suffer from basic infirmity of non application of mind and  

non-speaking orders in law.  This ground need not detain us any  

further as even in other cases where identical orders were passed,  

this Court had the occasion to consider the same grounds at some  

length.  Reference, in this regard, can be made to the judgment of  

the date, the Bench, in the case of Assistant Commissioner v. M/s  

Shukla & Brothers (SLP (C) No. 16466 of 2009) decided on the  

same day, where after discussing the law at some length, the order  

passed  by  the  High  Court  was  set  aside  and  the  case  was  

remanded  to  the  High Court  for  hearing  the  case  de  novo and  

passing of an order in accordance with law afresh.

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  12. In view of the ratio of the case of M/s. Shukla & Brothers (supra),  

which is  squarely applicable on the fact  and law to the present  

case, we are constrained to set aside the order passed by the High  

Court and remand the matter to the High Court for hearing the  

case de novo.  We are compelled to make this direction as it was  

expected of the High Court to consider the question of law raised  

before it and express its own opinion/reasons.   

13. For the reasons stated above and the reasons recorded in the case  

of  M/s.  Shukla  &  Brothers  (supra),  we  hereby  set  aside  the  

impugned orders  of  the  High  Court and remand the matters to  

the High Court for hearing the same de novo and pass orders in  

accordance with law.  However, in the facts and circumstances of  

the case, there shall be no order as to costs.  

                  To that extent the appeals are allowed.

........................................J.  [ S.H. KAPADIA ]

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........................................J.       [ SWATANTER KUMAR ]

New Delhi April 15, 2010

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