THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN TAX REVISION CASE Nos.265, 266, 267 and 268 of 2010 Dated:25.10.2010 Between: M/s.Eva Dutt Automatic Systems. …Petitioner and State of Andhra Pradesh, Rep.by its State Representative, Before Sales Tax Appellate …Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN TAX REVISION CASE Nos.265, 266, 267 and 268 of 2010 COMMON ORDER: (per Hon’ble Sri Justice V.V.S.Rao) These four tax revision cases under Section 22(1) of the Andhra Pradesh General Sales Tax Act, 1957 (the Act), can be conveniently disposed of by a common order as they came to be filed with a similar background, and similar questions are involved. Besides, M/s. Eva Dutt Automatic Systems is the petitioner in all the revision cases. For the sake of convenience we may briefly notice the fact of the matter in Tax Revision Case No.265 of 2010. The petitioner is a dealer on the rolls of the Commercial Tax Officer, Vidyanagar Circle, Hyderabad (CTO). The CTO finalized the assessment for 1995-1996 (CST) on 25.03.1999. On the ground that certain sales turnover was suppressed, the CTO revised the assessment on 06.05.2002. It appears, in the second week of October 2004, the revenue, allegedly, initiated steps for enforcing the demand. The petitioner then applied for certified copies of the revised assessment orders and filed appeals before the jurisdictional Appellate Deputy Commissioner. By order dated 04.07.2005 the Appellate Deputy Commissioner dismissed the appeals as time barred. Being aggrieved, the petitioner then filed four separate appeals, being T.A.No.1169 of 2005 and three others. By four separate orders, the appeals were dismissed on 09.02.2010. The necessary particulars in respect of the four appeals are mentioned hereunder. Sl. No. Tax Revision Case No. Revised order of CTO Date of filing appeal before ADC Date of order of ADC Appeal before STAT Date of order of STAT 1 265 of 2010 06.05.2002 26.11.2004 04.07.2005 T.A.No.1169 of 2005 09.02.2010 2 266 of 2010 06.11.2002 26.11.2004 04.07.2005 T.A.No.1171 of 2005 09.02.2010 3 267 of 2010 07.02.2003 26.11.2004 04.07.2005 T.A.No.1170 of 2005 09.02.2010 4 268 of 2010 06.05.2002 26.11.2004 04.07.2005 T.A.No.1168 of 2005 09.02.2010 The Counsel for the petitioners made passionate and strenuous submissions which are as follows. The Tribunal failed to conduct enquiry as to whether the person who allegedly received the assessment order is one of those persons authorized by the petitioner under Rule 54(3) of the Andhra Pradesh General Sales Tax Rules, 1957 (the Rules). He would urge that Rule 58 of the Rules cannot be read independently and it has to be read along with Rule 54(3) of the Rules, as otherwise Rule 54(3) of the Rules and the declaration in Form XXIX of the Rules given by the petitioners would be rendered redundant. Per contra, the Special Counsel for Commercial Tax[1] submits that Rule 54(3) of the Rules read with Form XXIX declaration has nothing to do with the mode of service of any notice, summons, order or proceedings under Rule 58 of the Rules. Both operate in independent fields. In the background of the cases and the rival submissions, two points that arise for consideration are i) whether different modes of service of notice and/or order etc., under 58 of the Rules is in any way controlled by Rule 54(3) of the Rules? And ii) whether the petitioner made out any case for filing the appeals before the Appellate Deputy Commissioner with abnormal delay? In Re Point No.1: Indisputably, the petitioner filed appeals on 26.11.2004, whereas the revised assessment orders were passed more than two years prior to that date. In that view of the matter the orders passed by the Appellate Deputy Commissioner are unexceptionable. While dismissing the appeals, the Appellate Deputy Commissioner made the following observations. These (6) six appeals are filed by the appellant herein against the revised assessment proceedings of the Commercial Tax Officer, Vidyanagar Circle (herein after referred to as the assessing authority) passed for the year 1995-96 (CST) 96-97 (CST) 97-98 (CST) 95-96 (CST.Penalty), 96-97 (CST Penalty) and 97-98 (CST Penalty). As the point of consideration and decision is one and the same in all the three appeals they are disposed of in a common order. The particulars of the appeals are as under: Sl. No G.I. No. Assmt. Order No. & Dt. Disputed Turnover Disputed Tax 1. 715/04 6077/95-96 (CST) 20,58,556/- 2,05,858/- 2. 716/04 6077/96-97 (CST) 13,88,000/- 3,10,894/- 3. 717/04 6077/97-98 (CST) 1,90,06,581/- 13,02,599/- 4. 718/04 6077/95-96 (CST) 6,17,568/- (penalty) 5. 719/04 6077/96-97 (CST) 15,54,471/- (penalty) 6. 720/04 6077/97-98 (CST) 40,27,797/- (penalty) These appeals were filed on certified copy of the assessment order. Therefore the assessing authority was asked to clarify, as the issue of certified copy, in response to which the Assessing authority vide his reference No.C/8/2005 dated 11.05.2005 has clarified that the assessment orders were duly served by the assessing authority on the authorized person of the appellant and obtained acknowledgement. Therefore, in the light of the above findings the admission of the above appeals are liable for rejection. Therefore the admission of the above appeals is rejected. In effect the admission of the appeals are rejected. Sd/- Appellate Deputy Commissioner (CT), Secunderabad Divn : : Hyderabad. A perusal of the same would show that the CTO served the assessment orders on authorized person of the appellant and proper acknowledgement was obtained. It is a question of fact. It is neither perverse, nor it is pleaded before us that it is not a finding recorded after verification of record. The Appellate Deputy Commissioner obtained the information from the CTO and came to the conclusion. The Counsel for the petitioner, however, made attempt to draw support from an observation made by the learned Tribunal to the effect that a perusal of the stamped record would show that “the firm’s (petitioner’s) stamp is affixed and somebody received the order on 27.05.2002 on behalf of the firm”. It is contended with vehemence that, unless it is shown as to who that “somebody” is by the Department, they cannot be said to have discharged the burden which lies on them to show that the notice is served on the proper person. The submission made is wholly misconceived. Rule 54 of the Rules essentially deals with the modalities to be complied with while a dealer gets himself registered under the Act and Rules. It is nothing to do with the mode of service under Rule 58 of the Rules. For the sake of ready reference, we quote Rule 54 of the Rules as below. 54. (1) Every dealer liable for registration under Section 12, including a Hindu undivided family, association, club, society, firm or company and any person carrying on business on behalf of another as guardian, trustee or otherwise, shall within thirty days from the date of coming into force of these rules send to the registering or assessing authority a declaration in Form XII, stating the name or names of the person or persons who are authorized to sign returns under the Act on their behalf or to make statements in any enquiry under the Act. All returns signed and statements so made by such person or persons shall be binding on the dealer, Hindu undivided family, etc., concerned and the declaration furnished may be revised from time to time. (2) Every dealer liable for registration under Section 12 and who is Hindu undivided family, association, club, society, firm or company and any person carrying on business on behalf of another as guardian, trustee or otherwise shall send to the registering or assessing authority a declaration in Form XXV specifying the name or names of the member or members of the Hindu undivided family, Association, Club or Society or partner or partners of the firm or company responsible for the maintenance of the accounts of the business, their production before the sales tax authorities and their preservations. (3) Every dealer liable to tax under the Act including a Hindu undivided family, Association, Club, Society, Firm or Company and any person carrying on business on behalf of another as guardian, trustee or otherwise shall send to the assessing authority a declaration in Form XXIX specifying the name or names of the person or persons who are authorized to receive notices, orders etc., on their behalf under the Act. All the notices, orders etc. received by such person or persons shall be binding on the dealer, Hindu undivided family, Association, Club, Society, Firm, or Company concerned. The declaration furnished may be revised from time to time. It may be mentioned that Section 12 of the Act obliges every dealer whose turnover is not less than Rs.50,000/- to get registered under the Act. In that context, Rule 54(1) of the Rules requires every dealer, liable for registration under Section 12 of the Act, to send a declaration in Form XII stating the name or names or person or persons who are authorized to sign returns under the Act on behalf of the dealer or make statements in any enquiry under the Act. Under sub rule (2) thereof, every dealer shall send a declaration in Form XXV specifying the name or names of persons responsible for the maintenance of the accounts of the business, and under sub rule (3) of Rule 54 of the Rules, every dealer shall send a declaration in Form XXIX specifying the name or names of the person authorized to receive notices, orders etc., on their behalf under the Act. At this stage, we may turn to Rule 58 of the Rules, which reads as below. 58. The service on a dealer of any notice, summons, order or proceedings under the Act or under these rules may be effected in any of the following ways, namely:- (a) by giving or tendering it to such dealer or his manager or his agent; or (b) if such dealer or his manager or agent is not found by leaving it at his last known place of business or residence or by giving or tendering it to adult member of the family; or (c) if the address of such dealer is known to the assessing authority, by sending it to him, by registered post; or and if it is returned unserved, it shall be put on notice board of the office of the assessing authority or the notice board in the office of the local chamber of commerce or Traders Association, and it shall be deemed that the said notice or summons or proceedings are served on the dealer and action shall be taken in pursuance thereof accordingly. (d) if any or all of the modes aforesaid is not practicable, by affixing it in some conspicuous place at his last known place of business or residence. In simplest terms, Rule 58 of the Rules deals with the method and manner of effecting service on the dealer of every notice, summons or order or proceedings under the Act or Rules. A perusal of clauses (a) to (d) of Rule 58 of the Rules would reveal that a notice or order may be served i) by giving or tendering it to the dealer or his manager or agent; or ii) if the dealer or his manager or agent is not found, either by giving or tendering it to an adult member of his family or by leaving it at his last known place of business or residence; or iii) by sending it by registered post if the address of such dealer is known to the assessing authority; or iv) by affixing it in some conspicuous place at his last known place of business or residence. Be it also noted that if the notice sent by registered post is returned unserved, it shall be put on notice board of the office of the assessing authority or the notice board in the office of the local chamber of commerce or Traders Association, in which case it shall be deemed to have been served. Be it also noted that if any of the modes of service referred to in (i) to (iii) are not practicable, then only the service shall be effected by the mode as in (iv). A reading of Rule 54(3) of the Rules, and the different modes of service of notice/order by the assessing authority under Rule 58 of the Rules, would reveal that only when the notice is tendered or given under Rule 58(a), Rule 54(3) of the Rules would be relevant. In case the mode of service, as in 58(a) of the Rules, is not possible, and the alternate modes of service in Rule 58(b) and (c) are resorted to, Rule 54(3) of the Rules has nothing to do. Rule 54(3) of the Rules has no application nor it regulates or controls the method and manner of effecting service under Rule 58(b), (c) and (d) of the Rules. To that extent, learned Counsel is not correct, and the learned Tribunal was right in observing that there is necessity for any assessing Officer to switch to Rule 58 of the Rules only when the mode of service under Rule 54(3) of the Rules fails. Rule 54(3) of the Rules does not in any manner deal with the service of notice/order and it only speaks of a dealer sending a declaration in Form XXIX authorized to receive notices/orders which only means, notices sent in accordance with Rule 58(a) of the Rules. It is useful to refer to a decision of the Full Bench of this Court in K.Sujatha v Government of Andhra Pradesh[2], which considered almost similar rules as that of Rule 58 of the Rules. In K.Sujatha this Court considered the scope and purport of Rule 3 of the Rules Relating to Motion of No-Confidence against Upa-Sarpanch of the Gram Panchayat, or President or Vice-President of Mandal Parishad, or Chairperson or Vice-Chairperson of the Zilla Parishad (G.O.Ms.No.200, dated 28.04.1998) promulgated under Section 245 (1) and (2) of the Andhra Pradesh Panchayat Raj Act, 1994, read with Section 268 (1) of the Andhra Pradesh Panchayat Raj Act, which regulate the proceedings for Gram Panchayat for considering a motion expressing want of confidence in the Upa Sarpanch of Gram Panchayat. Rule 3 thereof reads as under. The concerned officer specified in Rule 2 (hereafter in this rule referred to as said officer) shall then convene and preside over a meeting for the consideration of the motion at the Office of a Gram Panchayat, or at the Mandal Parishad or at the Zilla Parishad, as the case may be, on a date appointed by him which shall not be later than thirty days from the date on which the notice under Rule 2 was delivered to him. He shall give to every member of Gram Panchayat, Mandal Parishad or Zilla Parishad, as the case may be, the notice of not less than fifteen clear days excluding the date of the notice and the date of the proposed meeting of such meeting in Form IV, or in Form V or in Form VI annexed to these rules either in English or in Telugu or in Urdu language, whichever is applicable. Every such notice shall be delivered as specified below, namely: (a) by giving or tendering such notice to such member, or (b) if such member is not found, by leaving such notice at his last known place of residence or business or by giving or tendering the same to some adult member or servant of his family; or (c) if such member does not reside in the Gram Panchayat area or Mandal Parishad area, or within the District and if his address is known to the District Panchayat Officer/Chief Executive Authority/Collector or the Sarpanch of the Gram Panchayat to be elsewhere, by sending the same to him through registered post with acknowledgement due; or (d) if none of the means aforesaid is available or if the persons referred to in clause (a) and (b) refuse to receive the notice, by affixing the same at some conspicuous part of his place of residence or business; Provided that where the holding of such meeting is stayed by an order of a Court, it shall be adjourned, and the said officer shall hold the adjourned meeting on a date not later than thirty days from the date on which he received the intimation about the vacation of stay and after giving to the members, a notice of not less than fifteen clear days excluding the date of the notice and the date of the proposed meeting of such adjourned meeting. The Full Bench in K.Sujatha considered the above rule in the following manner. The first mode of delivery is personal delivery to the member by tendering notice to him. The second mode being that in case such member is not found by the person who has been deputed to deliver the notice, the said person is required to leave that notice at his last known place of residence or business or even by giving or tendering it to some adult member or servant of the family. The third mode of delivery of notice is by sending it by registered post with acknowledgement due. Such mode can be resorted to only when the member does not reside in the Gram Panchayat area or Mandal Parishad or within the district and if his address is known to District Panchayat Officer or Chief Executive Authority/Collector or Sarpanch of the Gram Panchayat. In case service by the first two modes is not permissible and third mode of service by post can also not be resorted to, there is the mode of serving the notice by affixing it at some conspicuous part of his place of residence. This mode of affixation can be resorted to only if the member or any adult member or servant of the family of the member though available at the time of tendering notice but refuses to receive the notice. The notice can be affixed as indicated above. This mode need not be adopted in case member is not residing in the concerned area. …Delivery of notice in the present case would be by various modes as provided in Rule 3. But there is neither any authority nor any principle for the proposition that insofar as the modes provided in clauses (a), (b) and (d) are concerned that as soon as the person with a legal duty to give the notice dispatches the notice to the address of the person to whom it has to be given, the giving is complete. Notice is required to be given in the mode and manner provided in the rule. The date of dispatch when either of the modes provided in clauses (a), (b) and (d) is resorted to would not be relevant. The date of dispatch would be relevant only in case of mode as provided in clause (c) of Rule 3 is resorted to. Clause (c) authorizes the Officer concerned to “send” the notice through registered post, if such member does not reside in the Gram Panchayat area or Mandal Parishad area or within the district and his address is known… Therefore, we hold against the petitioner on point No.1. In Re Point No.2: The petitioner’s counsel relies on the following allegations in support of his plea that the notice on “somebody” is not a proper service under Rule 58 of the Rules. These are as follows. The petitioner has submitted Form XXIX giving the names of persons authorized to receive notices or orders; the petitioner came to know about the tax recovery proceedings in October 2004, and the assessment order was not served on the assessee. These are all certainly questions of fact. The petitioner has not placed any material before the learned Tribunal or before us in support of the plea that they came to know only when the demand was set in motion. In so far as the service of notice is concerned, as we have already noticed, the Appellate Deputy Commissioner obtained information from the assessing authority and recorded a finding of fact that the order was served on the person authorized by the petitioner. On both these counts, therefore, the petitions must fail. We hasten to add that in any view of the matter, these are questions of fact which cannot be permitted to be agitated in a revision under Section 22(1) of the Act. This point also is held against the petitioner. In the result, for the above reasons, the tax revision cases fail, and are accordingly dismissed in limine. _______________ (V.V.S.RAO, J) _____________________________ (RAMESH RANGANATHAN, J) 25.10.2010 vs [1] Though the appeals are disposed of in limine, at our request, the Special Counsel for Commercial Tax made submissions. [2] 2004 (3) ALT 682 (FB)