Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

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
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
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
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
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
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,
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
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.
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
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
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
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
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
“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%.
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
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
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
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
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
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
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
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
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
(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
Rate of sales
Rate of purchase
129 Mosquito
Twelve paise in
the rupee
Twelve Paise in
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.
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
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
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
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
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
Assessment Years 2003-04 and 2004-05. It is ordered
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.
NEW DELHI; ………………………………………J


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