M/S GODREJ SARA LEE LTD. VS. THE EXCISE AND TAXATION OFFICERCUM-ASSESSING AUTHORITY & ORS.

M/S GODREJ SARA LEE LTD. VS. THE EXCISE AND TAXATION OFFICERCUM-ASSESSING AUTHORITY & ORS.

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REPORTABLE

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.5393 OF 2010

M/S GODREJ SARA LEE LTD. ……APPELLANT(S)

VS.

THE EXCISE AND TAXATION OFFICERCUM-ASSESSING AUTHORITY & ORS. …..RESPONDENT(S)

J U D G M E N T

DIPANKAR DATTA, J.

This appeal, by special leave, registers a

challenge to an order dated 12th October, 2009 passed

by the High Court of Punjab and Haryana at Chandigarh

(hereafter ‘the High Court’, for short) dismissing

Civil Writ Petition No.9191 of 2009 presented by the

appellant and relegating it to the remedy of an

appeal under section 33 of the Haryana Value Added

Tax Act, 2003 (hereafter ‘the VAT Act’, for short).

2. Two questions emerge for decision on this

appeal. First, whether the High Court was justified

in declining interference on the ground of

availability of an alternative remedy of appeal to

the appellant under section 33 of the VAT Act, which

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it had not pursued. Should the answer to the first

question be in the negative, we would next be

required to decide whether to remit the writ petition

to the High Court for hearing it on merits or to

examine the correctness or otherwise of the orders

impugned before the High Court.

3. It appears on a perusal of the order under

challenge in this appeal that the appellant had

questioned the jurisdiction of the Deputy Excise and

Taxation Commissioner (ST)-cum-Revisional Authority,

Kurukshetra (hereafter ‘the Revisional Authority’,

for short) to reopen proceedings, in exercise of suo

motu revisional power conferred by section 34 of the

VAT Act, and to pass final orders holding that the

two assessment orders, both dated 28th February,

2007 passed by the ETO-cum-Assessing Authority,

Kurukshetra (hereafter ‘the Assessing Authority’, for

short) for the assessment years 2003-04 and 2004-05

suffered from illegality and impropriety as

delineated therein, viz. that the Assessing Authority

erred in levying tax on mosquito repellant (a product

manufactured by the appellant) @ 4% instead of 10%.

Keeping in view the objection raised by counsel for

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the respondents that without exhausting the remedy of

appeal provided by section 33 of the VAT Act “it

would not be permissible to entertain this petition”

and upon consideration of the decision of this Court

reported in (1975) 2 SCC 436 (Titagarh Paper Mills

vs. Orissa State Electricity Board & Anr.) based on

which it was contended on their behalf that where any

right or liberty arises under a particular Act then

the remedy available under that Act has to be

availed, the High Court was of the opinion that there

can be no presumption that the appellate authority

would not be able to grant relief sought in the writ

petition; hence, the writ petition was dismissed and

the appellants were relegated to the appellate

remedy.

4. Before answering the questions, we feel the urge

to say a few words on the exercise of writ powers

conferred by Article 226 of the Constitution having

come across certain orders passed by the high courts

holding writ petitions as “not maintainable” merely

because the alternative remedy provided by the

relevant statutes has not been pursued by the parties

desirous of invocation of the writ jurisdiction. The

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power to issue prerogative writs under Article 226 is

plenary in nature. Any limitation on the exercise of

such power must be traceable in the Constitution

itself. Profitable reference in this regard may be

made to Article 329 and ordainments of other

similarly worded articles in the Constitution.

Article 226 does not, in terms, impose any limitation

or restraint on the exercise of power to issue writs.

While it is true that exercise of writ powers despite

availability of a remedy under the very statute which

has been invoked and has given rise to the action

impugned in the writ petition ought not to be made in

a routine manner, yet, the mere fact that the

petitioner before the high court, in a given case,

has not pursued the alternative remedy available to

him/it cannot mechanically be construed as a ground

for its dismissal. It is axiomatic that the high

courts (bearing in mind the facts of each particular

case) have a discretion whether to entertain a writ

petition or not. One of the self-imposed restrictions

on the exercise of power under Article 226 that has

evolved through judicial precedents is that the high

courts should normally not entertain a writ petition,

where an effective and efficacious alternative remedy

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is available. At the same time, it must be remembered

that mere availability of an alternative remedy of

appeal or revision, which the party invoking the

jurisdiction of the high court under Article 226 has

not pursued, would not oust the jurisdiction of the

high court and render a writ petition “not

maintainable”. In a long line of decisions, this

Court has made it clear that availability of an

alternative remedy does not operate as an absolute

bar to the “maintainability” of a writ petition and

that the rule, which requires a party to pursue the

alternative remedy provided by a statute, is a rule

of policy, convenience and discretion rather than a

rule of law. Though elementary, it needs to be

restated that “entertainability” and

“maintainability” of a writ petition are distinct

concepts. The fine but real distinction between the

two ought not to be lost sight of. The objection as

to “maintainability” goes to the root of the matter

and if such objection were found to be of substance,

the courts would be rendered incapable of even

receiving the lis for adjudication. On the other

hand, the question of “entertainability” is entirely

within the realm of discretion of the high courts,

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writ remedy being discretionary. A writ petition

despite being maintainable may not be entertained by

a high court for very many reasons or relief could

even be refused to the petitioner, despite setting up

a sound legal point, if grant of the claimed relief

would not further public interest. Hence, dismissal

of a writ petition by a high court on the ground that

the petitioner has not availed the alternative remedy

without, however, examining whether an exceptional

case has been made out for such entertainment would

not be proper.

5. A little after the dawn of the Constitution, a

Constitution Bench of this Court in its decision

reported in 1958 SCR 595 (State of Uttar Pradesh vs.

Mohd. Nooh) had the occasion to observe as follows:

“10. In the next place it must be borne in mind

that there is no rule, with regard to certiorari as

there is with mandamus, that it will lie only where

there is no other equally effective remedy. It is

well established that, provided the requisite

grounds exist, certiorari will lie although a right

of appeal has been conferred by statute,

(Halsbury’s Laws of England, 3rd Edn., Vol. 11, p.

130 and the cases cited there). The fact that the

aggrieved party has another and adequate remedy may

be taken into consideration by the superior court

in arriving at a conclusion as to whether it

should, in exercise of its discretion, issue a writ

of certiorari to quash the proceedings and

decisions of inferior courts subordinate to it and

ordinarily the superior court will decline to

interfere until the aggrieved party has exhausted

his other statutory remedies, if any. But this rule

requiring the exhaustion of statutory remedies

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before the writ will be granted is a rule of

policy, convenience and discretion rather than a

rule of law and instances are numerous where a writ

of certiorari has been issued in spite of the fact

that the aggrieved party had other adequate legal

remedies. ***”

6. At the end of the last century, this Court in

paragraph 15 of the its decision reported in (1998) 8

SCC 1 (Whirlpool Corporation vs. Registrar of Trade

Marks, Mumbai and Others) carved out the exceptions

on the existence whereof a Writ Court would be

justified in entertaining a writ petition despite the

party approaching it not having availed the

alternative remedy provided by the statute. The same

read as under:

(i) where the writ petition seeks enforcement

of any of the fundamental rights;

(ii) where there is violation of principles of

natural justice;

(iii) where the order or the proceedings are

wholly without jurisdiction; or

(iv) where the vires of an Act is challenged.

7. Not too long ago, this Court in its decision

reported in 2021 SCC OnLine SC 884 (Assistant

Commissioner of State Tax vs. M/s. Commercial Steel

Limited) has reiterated the same principles in

paragraph 11.

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8. That apart, we may also usefully refer to the

decisions of this Court reported in (1977) 2 SCC 724

(State of Uttar Pradesh & ors. vs. Indian Hume Pipe

Co. Ltd.) and (2000) 10 SCC 482 (Union of India vs.

State of Haryana). What appears on a plain reading of

the former decision is that whether a certain item

falls within an entry in a sales tax statute, raises

a pure question of law and if investigation into

facts is unnecessary, the high court could entertain

a writ petition in its discretion even though the

alternative remedy was not availed of; and, unless

exercise of discretion is shown to be unreasonable or

perverse, this Court would not interfere. In the

latter decision, this Court found the issue raised by

the appellant to be pristinely legal requiring

determination by the high court without putting the

appellant through the mill of statutory appeals in

the hierarchy. What follows from the said decisions

is that where the controversy is a purely legal one

and it does not involve disputed questions of fact

but only questions of law, then it should be decided

by the high court instead of dismissing the writ

petition on the ground of an alternative remedy being

available.

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9. Now, reverting to the facts of this appeal, we

find that the appellant had claimed before the High

Court that the suo motu revisional power could not

have been exercised by the Revisional Authority in

view of the existing facts and circumstances leading

to the only conclusion that the assessment orders

were legally correct and that the final orders

impugned in the writ petition were passed upon

assuming a jurisdiction which the Revisional

Authority did not possess. In fine, the orders

impugned were passed wholly without jurisdiction.

Since a jurisdictional issue was raised by the

appellant in the writ petition questioning the very

competence of the Revisional Authority to exercise

suo motu power, being a pure question of law, we are

of the considered view that the plea raised in the

writ petition did deserve a consideration on merits

and the appellant’s writ petition ought not to have

been thrown out at the threshold.

10. Reliance placed by the High Court on the

decision in Titagarh Paper Mills (supra), in our

view, was completely misplaced. The respondent

Electricity Board had levied coal surcharge on the

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appellant company in terms of an agreement. Such

agreement contained an arbitration agreement in

clause 23. Instead of pursuing its remedy in

arbitration, the appellant company unsuccessfully

invoked the writ jurisdiction. This Court was

approached whereupon it was held that in view of the

issues raised, there was no reason why the appellant

company should not pursue its remedy in arbitration,

having solemnly accepted clause 23 of the agreement,

and instead invoke the extraordinary jurisdiction of

the high court under Article 226 of the Constitution

to determine questions which really form the subject

matter of the arbitration agreement. This decision

could not have been of any relevance having regard to

the issue presented for resolution before the High

Court by the appellant, particularly when the

disputes inter se were not referable to arbitration.

11. We have reasons to believe, considering the

nature of objection raised by the respondents as

recorded by the High Court in the impugned order,

that the High Court had mistakenly referred to

Titagarh Paper Mills (supra) while intending to rely

on a different decision of this Court on an appeal

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preferred by the same party, reported in (1983) 2 SCC

433 (Titaghur Paper Mills Co. Ltd. vs. State of

Orissa). While upholding the impugned order of

dismissal of the writ petition, where an order passed

by the Sales Tax Officer was under challenge, this

Court in Titaghur Paper Mills Co. Ltd. (supra) held

that the challenge being confined to the regularity

of proceedings before the Sales Tax Officer and there

being no suggestion that the concerned officer had no

jurisdiction to make an assessment, the decision in

Mohd. Nooh (supra) was clearly distinguishable since

in that case there was total lack of jurisdiction.

This Court also held that under the scheme of the

relevant Act, there was a hierarchy of authorities

before which the petitioners can get adequate redress

against the wrongful acts complained of and that

since the authority of the concerned officer to make

an assessment was not in question, recourse ought to

be taken by initiating proceedings thereunder. As

noted above, the very jurisdiction of the Revisional

Authority having been questioned in the writ

petition, the impugned order of the High Court

dismissing the writ petition without examining the

merits of the challenge cannot be sustained even if

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the High Court were to rely on Titaghur Paper Mills

Co. Ltd. (supra) to support such order.

12. The High Court by dismissing the writ petition

committed a manifest error of law for which the order

under challenge is unsustainable. The same is,

accordingly, set aside.

13. Moving on to decide the second question,

ordering a remand is an available option for us.

However, having regard to the lapse of time (almost a

life term of fourteen years) since the orders

impugned in the writ petition were made, we feel that

it would not be in the best interests of justice to

remit the matter to the High Court. Since prior to

reserving judgment on this appeal we had heard the

parties on the merits of the jurisdictional issue

that the appellant had raised before the High Court,

it is time to rule on the jurisdiction of the

Revisional Authority.

14. The appellant is engaged in the business of

manufacturing, marketing and sales of household

insecticide products in various forms, viz. mosquito

coils, mats, refills, aerosols, baits and

chalks under the popular brand name “Good Knight” and

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“Hit” from, inter alia, its sales office at

Kurukshetra, and is an ‘assessee’ under the VAT Act.

15. In terms of section 7 of the VAT Act, the

taxable goods have been classified under Schedules A,

B and C. It is found from Schedule C (as originally

enacted) that pesticides, weedicides and insecticides

were included in Entry 1 and taxable @ 4%.

16. Returns were filed by the appellant for the

Assessment Years 2003-04 and 2004-05 declaring its

gross turnover from manufacturing and sales of

insecticides and pesticides, besides other consumer

goods. Such returns were duly accepted. However, in

view of an amendment in Entry 67 of Schedule C

introduced by a notification dated 30th June, 2005,

notices were issued by the Assessing Authority as to

why tax liability @ 10% instead of 4% should not be

imposed. Upon hearing the representative of the

appellant, orders dated 28th February, 2007 and 28th

March, 2008 were passed by the Assessing Authority

for the Assessment Years 2003-04 and 2004-05,

respectively, accepting the classification of goods

and the rate of tax as stated by the appellant in its

returns, i.e. 4%.

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17. Subsequently, the Revisional Authority called

for the assessment records of the appellant for the

Assessment Years 2003-04 and 2004-05 for revision of

the assessment on classifying the household

insecticide products of the appellant as mosquito

repellants and taxable at the higher rate of tax,

i.e. 10%, instead of 4%. Initially, show-cause

notices seeking to revise the assessments made for

the Assessment Years 2003-04 and 2004-05 were issued,

and such exercise was followed up by identically

worded final orders, both dated 2nd March, 2009.

18. Several legal questions including validity of

certain notifications were raised by the appellant

before the High Court in its writ petition. Apart

from the question as to whether mosquito repellants

are goods classifiable as insecticides, pesticides,

weedicides, etc., one other question which the

appellant sought to raise was whether an amendment in

the schedule of classification/rates of tax could be

applied to completed assessments for the assessment

years prior to the amendment coming into effect.

However, before us, the only limited question which

the appellant raised was, whether the orders of the

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Revisional Authority, both dated 2nd March, 2009,

seeking to revise the orders of the Assessing

Authority dated 28th February, 2007 and 28th March,

2008 pertaining to the Assessment Years 2003-04 and

2004-05, have been issued in exercise of jurisdiction

conferred by law.

19. For facility of understanding, it would be

convenient at this stage to reproduce the

material part from the revisional order passed in

respect of the Assessment Year 2004-05, below:

“I, xxxxxxx, Dy. Excise & Taxation Commissioner-cumRevisional Authority, Kurukshetra called for the

assessment record of M/s Godrej Sara Lee Ltd., Pipli

holding TIN xxxxxxx for the assessment year 2004-05.

Shri xxxxxxx, ETO-cum-Assessing Authority

Kurukshetra passed this assessment order on

28.3.2008. On examination of the assessment record,

I was prima facie of the view that the said

assessment order suffered from the following

illegalities and impropriates (sic, improprieties):

The assessing authority erred in levying tax on

Mosquito Repellant @ 4% Instead of 10%

Accordingly, a show cause notice was issued for

2.3.2009. On 2.3.2009 Shri Ajay Goel, Advocate of

the firm appeared along with application for

adjournment on the plea that due to closing month of

March, 2009 the dealer is unable to get the case

decided. The application for adjournment is rejected

as the dealer has not to produce any account books

or is not to prepare any documents only law point is

involved in the case. The dealer has sold mosquito

repellant and deposited tax @ 4%. The Hon'ble

Supreme Court of India in the case of M/s Sonic

Electrochem and another vs. STO and other (1998) 12-

PHT-215 (SC) held that Jet Mat Mosquito Repellant is

not pesticides/insecticides. Therefore, these goods

are general goods and liable to tax at general rate

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of tax. Hence, a notice was issued to the dealer to

explain as to why tax should not be levied at

general rate of tax on the sale of mosquito

repellants. The counsel of the firm has not offered

any arguments on the issue. In view of the decision

of the Hon'ble Apex Court in the case of M/s Sonic

Electrochem and another vs. STO and other (1998) 12-

PHT-215 (SC), it is unarguable clear that mosquito

repellant mats being unscheduled goods are taxable

at general rate of tax. Confusion was also cleared

with the amendment to entry 67 vide notification

dated 1.7.2005.

In view of the above facts, it is clear that

assessing authority while framing assessment has

erred in levying tax @ 4% on mosquito repellants.

Hence the assessment order dated 28.3.2008 is

revised u/s 34 of the Act ibid as under:

TTO @ 10% Rs.5,28,89,282 Rs.52,88,928

(Mosquito Repellants) Tax already assessed

 By the AA in original

Order Rs.21,15,571

Due Rs.31,73,357

Issue Tax Demand Notice Challan for Rs.31,73,357

along with a copy of the order to the dealer.”

20. The assessment order dated 28th March, 2008 of

the Assessing Authority under section 15 of the VAT

Act pertaining to Assessment Year 2004-05, which was

sought to be revised by the Revisional Authority, had

taken into consideration the decision of this Court

reported in (1998) 6 SCC 397 (Sonic Electrochem vs.

S.T.O.). The appellant therein having sold ‘Jet Mat’,

a mosquito repellent, it was ruled by this Court that

the same was liable to tax @ 10%. Considering such

decision, a notice was issued to the appellant to

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explain as to why tax should not be levied @ 10% on

the sale of ‘Godrej Mat’. Put to notice, it was inter

alia argued on behalf of the appellant before the

Assessing Authority that the Haryana Tax Tribunal

(hereafter ‘the Tribunal’, for short), constituted

under section 57 of the VAT Act, by its order dated

21st November, 2001 had the occasion to dismiss a

petition filed by the department seeking review of an

earlier order dated 22nd March, 2000. The Assessing

Authority extracted the relevant part of the order

21st November, 2001 of the Tribunal passed on the

review petition in its order dated 28th March, 2008,

reading as follows:

“The only limited question to be addressed is

whether the ratio of the judgment of the Hon'ble

Apex Court delivered in the above mentioned case of

M/s Sonic Electrochem and others is applicable in

the present case? This judgment of the Hon'ble

Supreme Court is clearly distinguishable from the

facts of the present case as the said judgment was

delivered in special circumstances were there was

specific an entry 129 dealing with mosquito

repellants and hence the Court held that judgment

would be covered under entry 129. However, there is

no such corresponding entry in the Haryana General

Sales Tax Act and therefore the issue would be

whether mosquito repellant would fall within the

entry dealing with insecticide etc. or not? The

Hon'ble Madras High Court, the Tribunal in the case

of Transelektra Domestic Products Pvt. Ltd., and

others vs. Commercial Tax Officer, Porur Assessment

Circle Madras and others has clearly held that

mosquito repellants containing 4% Alethrin' was an

insecticide and relying on the judgment of the

Hon'ble Madras High Court, the Tribunal in the case

of M/s Balsara Hygiene Products Ltd. Kundli

(Sonepat) vs State of Haryana has also held that

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Mosquito Repellants is an insecticide and hence

liable to concessional rate of tax. The same view

has been taken by the Hon'ble Tribunal in the

impugned order and I do not find any infirmity in

this order. It has not been contested that Jet Mats

does contain 'Allethrin' which is an insecticide.

Hence, in these circumstances, the present review

petition is dismissed.”

Being bound by the decision of the Tribunal, the

Assessing Authority formed an opinion and returned a

finding that he had no other alternative but to

vacate the notice issued by him proposing to levy tax

@ 10% instead of 4% and proceeded to do so.

21. Appearing in support of the appeal, Mr. V.

Lakshmikumaran, learned counsel, contended that the

Assessing Authority having passed the order dated 28th

March, 2008 taking into consideration the decision of

the Tribunal, which in turn distinguished the

decision in Sonic Electrochem (supra), and such

decision having attained finality, the Revisional

Authority could not have assumed a jurisdiction to

suo motu issue the impugned show-cause notices as

well as the final revisional orders under section 34

of the VAT Act holding that mosquito repellent mats

being unscheduled goods, are taxable at the general

rate of tax. According to him, the Revisional

Authority was as much bound by the order of the

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Tribunal as the Assessing Authority was having regard

to the similarity of issues involved and it was not

open to such authority to take a view different from

the one expressed by the Tribunal.

22. Our attention was drawn by Mr. Lakshmikumaran to

the decision of this Court reported in 1992 SUPP (1)

SCC 443 (Union of India and Ors. Vs. Kamlakshi

Finance Corporation Ltd.) in support of the

proposition that in disposing of quasi-judicial

issues before them, the Revenue Officers are bound by

the decisions of the appellate authorities and that

the principle of judicial discipline requires that

the orders of the higher appellate authorities are

followed unreservedly by the subordinate authorities.

23. Mr. Lakshmikumaran, accordingly, prayed that

upon the revisional orders being set aside, the

orders of the Assessing Authority be restored.

24. Per contra, Mr. Alok Sangwan, learned counsel

appearing for the respondents, contended that the

Revisional Authority did not exceed its jurisdiction

in exercising suo motu powers under section 34 of the

VAT Act. By referring to notifications issued at or

about the relevant time amending Schedule C and the

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decision in Sonic Electrochem (supra), he sought to

argue on the merits of the determination made by the

Revisional Authority and how she was right in her

findings that the mosquito repellants manufactured by

the appellant were liable to be taxed @ 10% in terms

of the decision in Sonic Electrochem (supra), and

not 4% as assessed by the Assessing Authority in the

orders under revision. He also submitted that the

orders of the Revisional Authority do not merit

interference, and the appeal ought to be dismissed.

25. At the hearing, we made it clear that the issue

as to whether the impugned orders of the Revisional

Authority were sustainable on merits would not be

examined unless the Court was persuaded by Mr.

Sangwan to accept that the Revisional Authority did

have the authority, competence and jurisdiction to

issue the impugned show-cause notices and pass the

consequential final revisional orders impugned in the

writ petition enhancing the liability of the

appellant to tax @ 10% instead of 4%.

26. Since section 34 of the VAT Act appears to have

been the source of power exercised by the Revisional

Authority, we shall first notice its contents as it

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stood on the date of the impugned orders, i.e. 2nd

March, 2009. Prior to its amendment with effect from

20th March, 2009, section 34 read as follows:

“Section 34. Revision. : - (1) The Commissioner may,

on his own motion, call for the record of any case

pending before, or disposed of by, any taxing

authority for the purposes of satisfying himself as

to the legality or to the propriety of any

proceeding or of any order made therein which is

prejudicial to the interests of the State and may,

after giving the persons concerned a reasonable

opportunity of being heard, pass such order in

relation thereto, as he may think fit:

Provided that no order passed by a taxing authority

shall be revised on an issue, which on appeal or in

any other proceeding from such order is pending

before, or has been settled by, an appellate

authority or the High Court or the Supreme Court, as

the case may be:

Provided further that no order shall be revised

after the expiry of a period of three years from the

date of the supply of the copy of such order to the

assessee except where the order is revised as a

result of retrospective change in law or on the

basis of a decision of the Tribunal in a similar

case or on the basis of law declared by the High

Court or the Supreme Court.”

(2) The State Government may, by notification in the

Official Gazette, confer on any officer not below

the rank of Deputy Excise and Taxation Commissioner,

the powers of the Commissioner under sub-section (1)

to be exercised subject to such exceptions,

conditions and restrictions as may be specified in

the notification and where an officer on whom such

power have been conferred passes an order under this

section, such order shall be deemed to have been

passed by the Commissioner under sub-section (1).”

27. To the extent relevant for the present decision,

suo motu power of revision could be exercised by the

Revisional Authority for the purposes of satisfying

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himself as to the legality or propriety of any order

made in any proceeding which is prejudicial to the

interests of the State. The first proviso, however,

imposed a restriction on exercise of such suo motu

power, if an issue had been settled, inter alia, by

an appellate authority. Thus, the sine qua non for

exercise of power under section 34 is the

satisfaction of the Revisional Authority that an

order has been made by a taxing authority in any

proceeding prejudicial to the interests of the State,

the legality or propriety of which appears to him to

be prima facie vulnerable. Nevertheless, such power

cannot be exercised if the issue involved is pending

before or has been settled by an appellate authority.

It cannot be disputed that the Tribunal is

comprehended within the meaning of ‘appellate

authority’ as defined in section 2(b) of the VAT Act.

28. These being the contours of section 34, as it

then stood, it needs to be seen how far the

Revisional Authority was justified in drawing power

from such provision and exercising it.

29. A bare perusal of the impugned revisional orders

reveals that the decision in Sonic Electrochem

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(supra) formed the plinth for the satisfaction that

the orders of assessment are liable to be revised.

The decision in Sonic Electrochem (supra) was

rendered upon consideration of the Gujarat Sales Tax

Act, 1969 (hereafter ‘the Sales Tax Act’, for short).

The short question that arose for a decision was,

whether ‘Jet Mat’ produced by the appellant therein

would come within Entry 129 of Schedule II Part A of

the Sales Tax Act, issued under section 49 thereof.

Entry 129, at the relevant point of time, read thus:

Sl. No. Description of

goods

Rate of sales

tax

Rate of purchase

tax

129 Mosquito

repellents

Twelve paise in

the rupee

Twelve Paise in

the

30. Having regard to the specific entry, i.e.

Entry 129, dealing with mosquito repellents, this

Court overruled the contention of the appellant

therein that ‘Jet Mat’ would not come within the

ambit of Entry 129 since one of its constituents

happens to be an insecticide. It was also held that

the product manufactured by the appellant therein,

viz. ‘Jet Mat’, which was commercially known as

“Mosquito Repellent Mat” is a mosquito repellant

notwithstanding the fact that it not only repels

mosquitoes but is also capable of killing mosquitoes.

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For the reasons assigned in the decision, it was held

that ‘Jet Mat’ is not an insecticide which would be

entitled for partial exemption under Entry 98 of the

Sales Tax Act.

31. It is, therefore, clear that because of the

specific entry dealing with mosquito repellents, this

Court held ‘Jet Mat’ to be covered under Entry 129.

32. As the Tribunal in its order dated 21st

November, 2001 found, there was no such corresponding

entry in the VAT Act. Bearing in mind the same as

well as on consideration of a decision of the Madras

High Court and other decisions, the Tribunal had

proceeded to hold that mosquito repellents containing

4% ‘Alethrin’ was an insecticide and hence, liable to

concessional rate of tax.

33. While deciding the present appeal, we are

primarily concerned with the issue of assumption of

jurisdiction by the Revisional Authority on the face

of the unchallenged order of the Tribunal dated 21st

November, 2001, and not with the merits of the

decision either given by the Tribunal or by the

Revisional Authority. What stares at the face of the

respondents is that the aforesaid decision of the

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Tribunal, quoted in the order of the Assessing

Authority, has attained finality. Once the issue

stands finally concluded, the decision binds the

State, a fortiori, the Revisional Authority. The

decision of the Tribunal may not be acceptable to the

Revisional Authority, but that cannot furnish any

ground to such authority to perceive that it is

either not bound by the same or that it need not be

followed. The first proviso, in such a case, gets

activated and would operate as a bar to the exercise

of powers by the Revisional Authority.

34. In our view, the Revisional Authority might have

been justified in exercising suo motu power to revise

the order of the Assessing Authority had the decision

of the Tribunal been set aside or its operation

stayed by a competent Court. So long it is not

disputed that the Tribunal’s decision, having regard

to the framework of classification of products/tax

liability then existing, continues to remain

operative and such framework too continues to remain

operative when the impugned revisional orders were

made, the Revisional Authority was left with no other

choice but to follow the decision of the Tribunal

26

without any reservation. Unless the discipline of

adhering to decisions made by the higher authorities

is maintained, there would be utter chaos in

administration of tax laws apart from undue

harassment to assesses. We share the view expressed

in Kamlakshi Finance Corporation Ltd. (supra).

35. In the midst of hearing, we had enquired from

Mr. Sangwan whether there has been any decision of

any other competent Tribunal or High Court taking a

view different from the one taken by the Tribunal in

its order dated 21st November, 2001, which was

considered by the Assessing Authority. Fairly, he

answered in the negative. If only Mr. Sangwan could

have invited our attention to any such decision,

which were acceptable to us, the issue decided by the

Tribunal could have been reopened on the ground that

it is a debatable issue and interference with the

final orders passed by the Revisional Authority may

not have been resorted to, leaving the appellant to

pursue the appellate remedy under the VAT Act.

36. There is also substance in the contention of Mr.

Lakshmikumaran that suo motu power of revision, on

the terms of section 34, could have been exercised

27

only if the orders sought to be revised suffered from

any illegality or impropriety.

37. A decision may be questioned as suffering from

an illegality if its maker fails to understand the

law that regulates his decision making power

correctly or if he fails to give effect to any law

that holds the field and binds the parties. On the

other hand, having regard to the purpose section 34

seeks to serve, to take exception to a decision on

the ground of lack of propriety of any proceedings or

order passed in such proceedings, it essentially

ought to relate to a procedural impropriety. It is

incumbent for the accuser to show that the decision

maker has failed to observe the standard procedures

applicable in case of exercise of his power.

Additionally, to impeach an order on the ground of

moral impropriety, it has to be shown that the weight

of facts together with the applicable law

overwhelmingly points to one course of action but the

decision has surprisingly gone the other way, giving

reason to suspect misbehaviour or misconduct in the

sphere of activity of the decision maker warranting a

revision.

28

38. There is nothing on record to justify either

illegality or (procedural/moral) impropriety in the

proceedings before the Assessing Authority or the

orders passed by him, as such. As noted above, the

Assessing Authority was bound by the order of the

Tribunal and elected to follow it having no other

option. Such decision of the Tribunal was even

binding on the Revisional Authority. In such

circumstances, to brand the orders of the Assessing

Authority as suffering from illegality and

impropriety appears to us to be not only unjustified

but also demonstrates thorough lack of understanding

of the principle regulating exercise of suo motu

revisional power by a quasi-judicial authority apart

from being in breach of the principle of judicial

discipline, while confronted with orders passed by a

superior Tribunal/Court. We are inclined to the view

that it is not the Assessing Authority’s orders but

those passed by the Revisional Authority, which

suffer from a patent illegality.

39. For the foregoing reasons, we have no other

option but to invalidate the impugned final

revisional orders dated 2nd March, 2009 for the

29

Assessment Years 2003-04 and 2004-05. It is ordered

accordingly.

40. The interim order dated 18th January, 2010 is

made absolute.

41. The appeal stands allowed. However, the parties

are left to bear their own costs.

…………………………………………….J

(S. RAVINDRA BHAT)

NEW DELHI; ………………………………………J

1

st FEBRUARY, 2023. (DIPANKAR DATTA)