REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.     4327-28              OF 2008 (Arising out of SLP (C) Nos.17346-47 OF 2005)

M/S. DEEPAK AGRO FOODS — APPELLANT

VERSUS

STATE OF RAJASTHAN & ORS. — RESPONDENT S

WITH

CIVIL APPEAL NO.  4329             OF 2008 (Arising out of SLP (C) No.5039 OF 2006)

J U D G M E N T

D.K. JAIN, J.:  

Leave granted.

2. These  two sets  of  appeals,  by  special  leave,  are  directed

against  the  judgments  and  orders  dated  4th May,  2004

passed  by  the  Division  Bench  of  the  High  Court  of

Judicature for Rajasthan at Jodhpur in D.B. Civil Special

Appeal  (Writs)  No.900/2002  and  order  dated  15th July,

2005 passed in Review Petition No.8/2005 in Civil Special

Appeal No.900/2002.  By the impugned main orders, the

Division Bench, while allowing the appeals, has set aside

the assessment orders passed under the Rajasthan Sales

Tax Act, 1994 (for short ‘the Act’) in respect of assessment

years 1995-96 and 1996-97 and has remanded the cases

for  fresh  assessments  by  a  new  Assessing  Officer,  to  be

nominated  by  the  Commissioner  of  Commercial  Taxes,

Rajasthan.

3. Though the appeals pertain to two assessment years but

are  inter-connected  insofar  as  the  decision  in  appeal

pertaining  to  the  assessment  year  1996-97  will  depend

upon the decision in appeal for the year 1995-96 because

in  its  order  for  the  latter  year,  the  High  Court  has

substantially  relied  on  its  order  for  the  earlier  year.

Therefore, we propose to dispose of both the appeals by this

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common  order.   However,  we  shall  refer  to  the  facts

emerging from the record for the assessment year 1995-96.

4. The appellant, a proprietorship concern, is a dealer under

the  Act.   For  the  assessment  year  1995-96,  an ex-parte

assessment was framed on 19th May, 1998.  On appeal, the

order  of  assessment  was  set  aside  by  the  Deputy

Commissioner (Appeals) vide order dated 8th June, 2000 on

the ground that proper opportunity of hearing had not been

granted to the appellant.  In pursuance of the said order, a

fresh notice was issued to the appellant for appearance on

12th February, 2002.  On the said date at the request of the

appellant, the case was adjourned to 14th March, 2002 and

then to 23rd March, 2002, when the appellant again sought

time for collecting the requisite details/ information and he

was granted three months’ time for the said purpose.  The

case was fixed on 25th June, 2002.

5. According  to  the  appellant,  he  appeared  before  the

Assessing  Officer  on  25th June,  2002  and  requested  for

some more time to furnish the bank statements etc.  and

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the  case  was  accordingly  kept  for  29th June,  2002.

However, on 29th June, 2002, when the appellant appeared

before the Assessing Officer, he is said to have been told

that the assessment order had already been passed on 7th

June, 2002.

6. Being aggrieved, the appellant challenged the said order by

preferring a writ petition.  In the writ petition, it was alleged

that the assessment order was anti-dated and in fact the

same was passed on 29th June, 2002, by which date the

period  of  limitation  was over.   Interpolation  in the  order

sheets dated 23rd March, 2002 and 25th June,  2002 was

alleged  and  it  was  also  stated  that  the  appellant  was

coerced to countersign the cuttings and tempering in the

order sheets.  However, the writ petition was dismissed by

the learned Single Judge in limine, inter alia, on the ground

that  if  the  writ  petitioner  had  any  grievance  that  the

proceedings had not been recorded correctly, he could have

drawn the attention of the Presiding Officer towards such

errors  while  the  matter  was  still  fresh  to  his  mind.

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Accordingly,  the  learned  Single  Judge  directed  the

appellant to bring the alleged anomalies to the notice of the

Assessing  Officer  and  simultaneously,  if  so  advised,  he

could  challenge  the  assessment  order  by  filing  appeal

before the Appellate Authority.

7. The correctness of the order passed by the learned Single

Judge was questioned by the appellant before the Division

Bench.   On  perusal  of  the  original  records,  particularly

order sheets dated 23rd March, 2002 and 25th June, 2002,

the learned Judges felt convinced that some over-writings

and  interpolations  in  the  order  sheets  had  taken  place.

They observed thus:

“In  these  circumstances,  the assertions  made  by  the  assessee  in his petition about tempering with the record of the proceedings dated 23.3.2002 and 25.6.2002 is apparent, which makes the assessment order as an outcome of these mechanisations,  by  anti  dating  the proceedings  and pass  the  order  by anti dating it and in the allegation of assessee cannot  be  reasonably  ruled  out.   The assertion  of  assessee  stands  fully corroborated  by  the  record  of  the proceedings  which  speaks  eloquently

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about its tempering with.  Obviously, the assessee  would  not  be  a  party  to  it  to suffer  anti  dated  ex-parte  order  to  his detriment.   It  can  reasonably  be attributed to the  Assessing  Officer,  who had chosen this path for the reasons best known to him.

More  so  the  Assessing  Officer having  been  impleaded  as  party respondent  by name has not  chosen  to appeal and answer the assertions.  It is a case in which it can very well be said that the  record  speaks  for  itself.   In  the aforesaid circumstances, an order alleged to have been passed on 7.6.2002 in the absence  of  the  assessee  by  tempering with the record of the proceedings dated 23.3.2002  and  25.6.2002  cannot  be sustained.”

The Division Bench strongly felt that it was a fit case in which

arm of the Court in exercise of its extraordinary jurisdiction

must  reach  to  remedy  the  breach  of  principles  of  natural

justice,  arising  from  breach  of  code  of  conduct,  by  officer

acting  against  all  canons  of  fair  play  and  transparency  in

discharging its duties as statutory functionary.  Accordingly,

as stated supra,  the appeal  was allowed;  assessment  order

dated  7th June,  2002  was  set  aside  and  demands  raised

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consequent  thereto  were  quashed,  with  a  direction  to  the

Commissioner  of Commercial  Taxes,  Rajasthan to nominate

another  Assessing  Officer,  not  below  the  rank  of  a  Senior

Commercial Taxes Officer, for making fresh assessment.  The

Division Bench directed the appellant to appear before such

nominated authority on 1st of  July,  2004 and also that the

assessment  period  would  be  counted  thereafter  by  31st

August, 2004.  As regards assessment year 1996-97, though

there was no specific allegation of interpolation in the records,

like in the previous year, yet the High Court felt that since the

same officer had framed the assessment and the proceedings

for this year were being taken up simultaneously, these also

did  not  go  out  of  the  cloud  of  suspicion  surrounding  the

assessing officer.  The learned Judges were also of the view

that notice fixing the hearing on 8th June, 2002 had not been

properly served.  Accordingly, assessment order for this year

as well was set aside with similar directions as were given in

respect  of the assessment year 1995-96.  Being dissatisfied

with the direction for fresh assessments, these appeals have

been preferred by the dealer.

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8. In the counter affidavit filed on behalf of the respondents,

pursuant to the issue of notice, averments in the petition in

regard  to  the  interpolation  of  records  are  denied.   It  is

stated that the order passed by the Deputy Commissioner

(Appeals) on 8th June, 2000, setting aside the assessment

order dated 19th March, 1998 was received by the Assessing

Officer  only  on  13th July,  2000  and,  therefore,  the

assessment  order  passed  on  7th June,  2002  was  within

time.   It  is  pleaded  that  even  if  it  is  assumed  that  the

assessment order had been actually passed on 29th June,

2002, as alleged by the appellant, and had been anti-dated

as 7th June,  2002,  to save  limitation,  still  the  same was

within the period of limitation, which was to expire on 12th

July, 2002.  Though a rejoinder affidavit has been filed on

behalf of the appellant but the said assertion has not been

controverted.

9. Shri  Rajiv  Dutta,  learned  senior  counsel  appearing  on

behalf  of  the appellant,  submitted that in the light of its

afore-extracted  observations  and a  clear  finding  that  the

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assessment  order  for  the  assessment  year  1995-96  had

been anti-dated, the order was null and void.  It was urged

that assessment proceedings after the expiry of the period

of limitation being a nullity in law, the High Court should

have annulled the assessment and there was no question of

a fresh assessment.  Thus, the nub of the grievance of the

appellant  is  that  in  remanding  the  matter  back  to  the

Assessing Officer, the High Court has not only extended the

statutory period prescribed for completion of assessment, it

has also conferred jurisdiction upon the Assessing Officer,

which he otherwise lacked on the expiry of the said period.

10.Per  contra,  Shri  Sushil  Kumar  Jain,  learned  counsel

appearing  on  behalf  of  the  respondents  submitted  that

since assessments in respect of both the assessment years

had been completed within time, the impugned directions

are  in  order.   Learned  counsel  also  pointed  out  that

pursuant to and in furtherance of the orders passed by the

High  Court,  fresh  assessments  in  respect  of  both  the

assessment years have already been completed.

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11.Having given anxious consideration to the rival stands, we

are satisfied that the appeal is misconceived and is liable to

be dismissed.

12.Chapter IV of the Act lays down the procedure for payment

of  tax,  filing  of  returns  and  assessments.   Section  29

prescribes the procedure and time limits for completion of

assessment.   Clause  (b)  of  sub-section  8  of  Section  29,

relevant for our purpose, reads as follows:

“(8)(b)  Notwithstanding  anything contained  in  sub-clause  (a),  where  an assessment  order  is  passed  in consequence  of  or to give  effect  to,  any order  of  an  appellate  authority  or  the Tribunal or a competent court, it shall be completed  within  two  years  of  the communication  of  such  order  to  the assessing  authority;  however,  the Commissioner  may  for  reasons  to  be recorded  in  writing,  extend  in  any particular  case,  such  time  limit  by  a period not exceeding six months.”

On a bare  reading  of  the  provision,  it  becomes  abundantly

clear that if an assessment order is set aside by an Appellate

Authority,  fresh  assessment  has  to  be  completed  within  a

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period of two years from the date of communication of the order

in appeal to the Assessing Authority and not from the date of

order in appeal; as is pleaded by the appellant.   

13.As afore-stated, in the counter-affidavit as well as in the

written submissions filed on behalf of the respondents, it is

stated that the order of the Appellate Authority, dated 8th

June,  2000,  was received  by the  Assessing  Authority  on

13th July, 2000 and, therefore, fresh assessment, pursuant

to the said order, could be completed by 12th July, 2002

(ignoring  further  period  of  six  months,  which  could  be

extended by the Commissioner).  That being so, even if it is

assumed  that  the  assessment  order,  for  the  assessment

year  1995-96,  had,  in  fact,  been  passed  on  29th June,

2002,  as alleged by the appellant,  it was still  very much

within  the  time  limit  prescribed  under  the  afore-noted

provision i.e. 12th July, 2002.  We are, therefore, unable to

accept  the  stand  of  the  appellant  that  the  assessment

having been made after the expiry of the time limit, it was

null and void and should have been annulled.   

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14.Having come to the above conclusion,  the next question

which requires consideration is whether in the light of the

observations of the Division Bench in the afore-extracted

paragraph on the irregularities as also the conduct of the

assessing officer, the assessment orders could be said to be

null and void, as pleaded on behalf of the appellants?

15.All irregular or erroneous or even illegal orders cannot be

held  to  be  null  and  void  as  there  is  a  fine  distinction

between  the  orders  which  are  null  and  void  and  orders

which are irregular, wrong or illegal.  Where an authority

making order lacks inherent jurisdiction, such order would

be without jurisdiction, null,  non est and  void ab initio  as

defect of jurisdiction of an authority goes to the root of the

matter and strikes at its very authority to pass any order

and such a defect cannot be cured even by consent of the

parties.  (See:  Kiran Singh & Ors.  Vs.  Chaman Paswan

& Ors.1).   However,  exercise of jurisdiction in a wrongful

manner  cannot  result  in  a  nullity  –  it  is  an  illegality,

1 AIR 1954 SC 340

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capable  of  being  cured  in  a  duly  constituted  legal

proceedings.

16.Proceedings for assessment under a fiscal statute are not

in the nature of judicial proceedings, like proceedings in a

suit inasmuch as the assessing officer does not adjudicate

on a lis between an assessee and the State and, therefore,

the law on the issue laid down under the civil law may not

stricto  sensu  apply  to  assessment  proceedings.

Nevertheless, in order to appreciate the distinction between

a “null and void” order and an “illegal or irregular” order, it

would be profitable to notice a few decisions of this Court

on the point.

17.In  Rafique  Bibi  (Dead)  By LRs.  Vs.  Sayed Waliuddin

(Dead) By LRs. & Ors.2, explaining the distinction between

“null and void decree” and “illegal decree”, this Court has

said that a decree can be said to be without jurisdiction,

and hence a nullity,  if  the Court  passing the decree  has

usurped a jurisdiction which it did not have; a mere wrong

2 (2004) 1 SCC 287

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exercise  of  jurisdiction does  not result  in a nullity.   The

lack of jurisdiction in the court passing the decree must be

patent on its face in order to enable the executing court to

take  cognisance  of  such  a  nullity  based  on  want  of

jurisdiction.   The  Court  further  held  that  a  distinction

exists  between  a  decree  passed  by  a  court  having  no

jurisdiction  and  consequently  being  a  nullity  and  not

executable and a decree of the court which is merely illegal

or not passed in accordance with the procedure laid down

by law.  A decree suffering from illegality or irregularity of

procedure, cannot be termed inexecutable.

18.In view of the above, in the present case, apart from the

fact that on a plain reading of Section 29(8)(b) of the Act, it

is  manifestly  clear  that  fresh  assessment  for  the

assessment  year  1995-96,  framed  pursuant  to  the  order

passed by the appellate authority on 8th June, 2000, was

well within the prescribed time, even otherwise, in the light

of the afore-stated settled law, the assessments orders in

question could not be held to be null and void on account

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of  the  stated  irregularities  committed  by  the  assessing

officer during the course of assessment proceedings.  In our

opinion,  therefore,  despite  scathing  observations  by  the

Division Bench on the conduct of the assessing officer, it

was a case of an irregularity in assessment proceedings by

the officer, who was not bereft  of authority to assess the

appellant.   At best,  it was an illegality, which defect  was

capable of and has been cured by the High Court by setting

aside the orders and by granting consequential relief.

19.In the conspectus of the circumstances aforesaid, we do

not find any infirmity in the impugned directions given by

the  Division  Bench  of  the  High  Court  warranting

interference in the exercise of our jurisdiction under Article

136  of  the  Constitution.   The  appeals  are  devoid  of  any

merit and are dismissed accordingly with costs throughout.

………………………………………….J.  (C.K. THAKKER)

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                              ..….…………………………………….J.  (D.K. JAIN)

NEW DELHI; JULY 11, 2008.

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