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PETITIONER: M/S.  CHANDAJI KUBAJI & CO.

       Vs.

RESPONDENT: THE STATE OF ANDHRA PRADESH.

DATE OF JUDGMENT: 29/04/1960

BENCH: DAS, S.K. BENCH: DAS, S.K. KAPUR, J.L. HIDAYATULLAH, M.

CITATION:  1960 AIR  990

ACT: Review-Grounds  for-Whether allowable on Party’s  own  deli- berate  negligence and intentional withholding  of  evidence Madras  General Sales Tax Act, 1939 (Mad.  Act IX Of  1939), s. 12A(6) (a).

HEADNOTE: The appellant company was a dealer in ghee and groundnut oil etc.  The Deputy Commercial Tax Officer assessed it to sales tax for the year 1948-49 on a turnover of Rs. 28,69,151  and odd.   Similarly  for  the year 1949-50  the  appellant  was assessed  to  sales tax on a turnover of Rs.  28,72,o83  and odd.   The  appellant challenged these assessments  and  its appeal  before the Commercial Tax Officer having failed  the two  matters came up in second appeal before the  Sales  Tax Appellate  Tribunal.  In the Tribunal the appellant did  not place  any materials in support of its contentions  and  the two  appeals were disposed of by the Tribunal  holding  that the  appellant  was  correctly assessed to  sales  tax.   In respect  of  the  aforesaid  orders  of  the  Tribunal   the appellant  filed applications for review under S.  12A(6)(a) of  the Madras General Sales Tax Act, 1939 (Mad.  Act IX  Of 1939), taking the plea that in the first case the  materials could not be placed before the Tribunal as there was none to instruct the appellant’s advocate in English or Telegu,  and in the second case the relevant correspondence was mixed  up with other records.  The Tribunal rejected the  applications for  review  on  the ground that a failure  to  produce  the necessary  materials in support of a plea taken  before  it, due  either to gross negligence or  deliberate  withholding, did  not come within the reason of s. 12A(6)(a) of the  Act. The  High  Court upheld the decision of  the  Tribunal.   On appeal by special leave in one case and a certificate of the High Court in the other: Held,  that  the  provision in s. 12A(6)(a)  of  the  Madras General Sales Tax Act, 1939 (Mad.  Act IX Of 1939),  permits a  review when through some oversight, mistake or error  the necessary  facts,  basic or evidentiary,  were  not  present before  the  Court  when it passed the order  sought  to  be reviewed, but a party was not 805

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entitled  to  ask for a review when it had  deliberately  or intentionally  withheld evidence in support of a claim  made by it. State  of  Andhra  v. Sri Arisetty  Sriyamulu,  A.I.R.  1057 Andhra Pradesh 130, not approved.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 420 of 1957. Appeal  by special leave from the judgment and  order  dated August  8,  1955,  of the former Andhra High  Court  in  Tax Revision Case No. 2 of 1955.                             WITH                Civil Appeal No. 142 of 1958. Appeal  from the judgment and order dated July 28, 1955,  of the former Andhra High Court in T.R.C. No. 32 of 1954. N.Rajeswara  Rao and Sardar Bahadur, for the appellants  (in both the appeals). T.V. R. Tatachari and T. M. Sen, for the respondent (in both the appeals). 1960.  April 29.  The Judgment of the Court was delivered by S.K. DAS, J.-These two appeals, one with special leave  from this  Court  and the other on a certificate granted  by  the High  Court  of Andhra, have been heard  together  and  this judgment will govern them both. The facts are similar and the short question for decision is whether the appellant, Messrs.  Chandaji Kubaji and Company, Guntur,  was  entitled to apply under s.  12A(6)(a)  of  the Madras General Sales Tax Act, 1939 (Madras Act IX of  1939), as  applied  to  Andhra, for a review of  an  order  of  the Appellate  Tribunal made under suchs. (4) of s. 12A  of  the said Act.  The relevant facts are these.  The appellant is a dealer  in  ghee,  groundnut oil, chillies,  etc.,  and  was carrying on its business at Guntur.  In Civil Appeal No. 420 of 1957, the Deputy Commercial Tax Officer, Guntur, assessed the  appellant  to  sales  tax for the  year  1948-49  on  a turnover  of  Rs. 28,69,151 and odd.  The  appellant  having unsuccessfully  appealed  to  the  Commercial  Tax  Officer, Guntur,  made  a second appeal to the  Sales  Tax  Appellate Tribunal, hereinafter called 105 806 the  Tribunal.  Before the Tribunal the appellant  contended inter  alia  that  out of the total turnover a  sum  of  Rs. 10,45,156   and  odd  related  to  commission  purchase   of commodities  taxable  at  the stage of  sale  on  behalf  of principals resident outside the State of Andhra and was  not therefore  taxable by the respondent State.  In  respect  of this plea the Tribunal said: "  As regards the alleged commission agency business to  the tune  of  Rs.  10,45,156-4-9  the  appellants  have  neither advanced  arguments  nor placed before us any  materials  in support of the contention raised in this behalf ". In  the result the Tribunal dismissed the appeal on May  30, 1953. In  Civil Appeal No. 142 of 1958 the appellant was  assessed by  the  Deputy  Commercial Tax Officer, Guntur,  on  a  net turnover of Rs. 28,72,083 and odd for the year 1949-50.  The appellant  objected  to  the  inclusion  of  a  sum  of  Rs. 19,89,076  and  odd on the ground that  the  goods  relating thereto bad been consigned to self and despatched to  places outside  the  state and in fact were delivered  outside  the State.   "this plea was disallowed by the Sales  Tax  autho- rities, and the Tribunal said

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" In the grounds of appeal it has been urged with regard  to these sale transactions the ownership in the goods continued to  vest in the appellant till the sale price was  collected and the goods were delivered to the buyers at places outside the  State.  Beyond advancing a broad argument of this  type no  material has been placed before us or was placed  before the  assessing  authority or the Commercial Tax  Officer  to support  the  appellant’s version that the property  in  the goods passed to the buyer only at places outside the State". x                   x                  x It  is not denied that though contracts in writing were  not entered   into,  these  transactions  were  the  result   of correspondence  between  the appellant on the  one  hand  as seller  and various persons on the other as buyers.   It  is conceded that such correspondence exists but the  appellants have not chosen 807 to make this correspondence available either to us or to the officer  below.   When documents which would  establish  the nature  of  the transaction beyond doubt are  available  and have  been withheld by the appellant, the normal  result  is that an inference adverse to his contention has to be drawn. We  are  accordingly of the opinion that in this  case,  the sales  must be deemed to have taken place within this  State and  that  they have been rightly included  in  the  taxable turnover ". The  appeal  was  disposed  of on  this  finding  on  August 19,1952. In respect of both the aforesaid orders the appellant  filed applications for review under s. 12A(6)(a) of the Act.  That section,  in  so far as it is relevant  for  these  appeals, reads: "  12A(6)(a)-The Appellate Tribunal may, on the  application either of the assessee or of the Deputy Commissioner, review any order passed by it under sub-section (4) on the basis of facts which were not before it when it passed the order: Provided  that no such application shall be  preferred  more than once in respect of the same order ". The point taken on behalf of the appellant in Civil  Appeal- No.  420  of  1957 was that the  accounts  were  in  Gujrati language  and as there was none on behalf of  the  appellant who  could  give instructions to  the  appellant’s  advocate either in Telugu or English when the appeal was heard by the Tribunal, the appellant could hot place the materials before the  Tribunal.   In  the other appeal, the  point  taken  in support of the application for review was that the  relevant correspondence  was  mixed up with other records and  so  it could  not  be  placed before the  Tribunal.   The  Tribunal rejected  the applications for review on the ground  that  a failure  to produce the necessary materials in support of  a plea  taken  before it, due either to  gross  negligence  or deliberate withholding, did not come within the reason of s. 12A(6)(a)  as  stated in the expression " on  the  basis  of facts  which were not before it when it passed the order  ". The appellant then moved the High Court in revision under s. 12B of the Act and 808 contended   that  the  view  which  the  Tribunal  took   of s.12A(6)(a)  was  not  correct.   The  High  Court  drew   a distinction between what it called basic facts and  evidence in support thereof and said: "  There is an essential distinction between a fact and  the evidence to establish that fact x         x           x Section  12A(6)(a) in our view is not intended to  give  two

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opportunities to every assessee to establish his case before a  Tribunal.  It is really conceived in the interests  of  ; the  assessee, who was not able to place some  facts  before the  Tribunal at the first instance which would have made  a difference in its decision ". In  the view which the High Court took of s.  12A(6)(a),  it held that the applications for review were rightly rejected. In the two appeals before us the argument has been that  the Tribunal  as also the High Court took an erroneous  view  of the true scope and effect of s. 12A (6)(a) of the Act.   Our attention has been drawn to a Subsequent Full Bench decision of  the  same  High  Court in The State  of  Andhra  v.  Sri Arisetty  Sriramulu (1) and it has been submitted  that  the view  expressed  therein  is  the  correct  view.   In  that decision,  it  was  held  that the word  "  facts  "  in  s. 12A(6)(a)  may  be taken to have been used in the  sense  in which it is used in the law of evidence, that is to say,  as including  the factum probandum or the principal fact to  be proved and the factum probans or the evidentiary facts  from which   the  principal  fact  follows  immediately   or   by inference;  facts may be either ,facts in issue " which  are the principal matters in dispute or relevant facts which are evidentiary  and  which directly or by inference,  prove  or disprove the " facts in issue ". In the view which we have taken of these two appeals, it  is not  necessary  to discuss at great   length  the  divergent views taken in the High Court of Andhra as to the true scope and  effect  of s. 12A(6)(a) of the Act.  A  Division  Bench expressed  the  view that facts " in the  sub-section  meant basic facts, that is, (1)  A.I.R. 1957 Andhra Pradesh 130. 809 facts  necessary to sustain a claim, and drew a  distinction between  such facts and the evidence required  to  establish them; it further expressed the view that under s.  12A(6)(a) the Tribunal may review its order if any of the basic  facts were not present before it when it passed the order, but the sub-section was not meant to give a second opportunity to  a party  to  produce fresh evidence.  The Full  Bench  took  a wider  view of the sub-section and said that facts  referred to  in  the  sub-section  might be "facts  in  issue"  or  " evidentiary  facts ". We think that in an  appropriate  case evidentiary  facts may be so interlinked with the  facts  in issue  that  they may also fall within the  purview  of  the subsection.   The Full Bench, however, went a  step  further and  said  that  even if  relevant  evidentiary  facts  were intentionally  or deliberately withheld or  suppressed,  the party guilty of such suppression or withholding would  still be entitled to ask for a review under s. 12A(6)(a).  We  say this  with  great respect, but this is  precisely  what  the section does not permit.  The Full Bench said: "  The language of section 12A(6)(a) is so wide and  general that it might possibly lead to inconvenient results in  that it  might  enable  an assessee to get a  further  chance  of hearing  before  the Appellate Tribunal on the  strength  of evidence  which  he  negligently  or  designedly  failed  to produce  at  the first ,hearing.  As the  language  used  in section  12A(6)(a)  is  clear and unequivocal  and,  in  our opinion, capable only of one interpretation, we are bound to give effect to it in spite of the possibility of any  incon- venience resulting therefrom.  The inconvenience, if any, is not  to  the  assessee for whose benefit  the  provision  is intended.  In any case, the remedy is with the Legislature". It  is,  we think, doing great violence to language  to  say that an intentional or deliberate withholding or suppression

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of  evidence in support of a plea or contention or  a  basic fact  urged before the Tribunal, is comprehended within  the expression " facts which were not before it (Tribunal)  when it passed the order ". To so construe the section is to  put a premium 810 on deliberate negligence and fraud and amounts to allowing a party  to profit from its own wrong.  We do not  think  that such a construction follows from the language used, which is more  consistent  with  the view that the  provision  in  s. 12A(6)(a)  permits  a review when  through  some  oversight, mistake or error the necessary facts, basic or  evidentiary, were  not present before the Court when it passed the  order sought  to be reviewed.  It is entirely wrong to think  that the subsection permits a party to play hide and seek with  a judicial  Tribunal; that is to say to raise a fact in  issue or  evidentiary fact as a plea in support of a claim and  at the same time deliberately withhold the evidence in  support thereof.   Such a situation cannot be said to be one  within the meaning of the expression " facts not present before the Tribunal ". In  the appeals before us there was intentional  withholding or suppression of evidence.  In the case, the materials were not  produced on the plea that they were written in  Gujrati and  nobody was available to instruct counsel in English  or Telugu  and in the other, on an equally specious  plea  that the correspondence was mixed up with other records for about two  years.   These two appeals can be disposed of  on  this short ground that the appellant was not entitled to ask  for review  under s. 12A(6)(a) by reason of his  own  deliberate negligence and intentional withholding of evidence. We  see  no  merit in these appeals and  dismiss  them  with costs.                                      Appeals dismissed.