PETITIONER: CALCUTTA JUTE MANUFACTURING CO & ANR. Vs. RESPONDENT: COMMERCIAL TAX OFFICER & ORS. DATE OF JUDGMENT: 08/07/1997 BENCH: S. C. SEN, K. T. THOMAS ACT: HEADNOTE: JUDGMENT:

WITH [Civil Appeal Nos. 15367/96, 4196/95, 4707/94, 15513/96, 15514/96, 2905/92, 15584-15591/96, 15583/96, 12638/96, 879/92, 11188/95,1904/90,1905/90, 1906//90, 1907/90,1908/90, 4989/91,15593/96,15594/96,15595/96] J U D G M E N T THOMAS, J The question raised in all these appeals is whether an assessee is liable to pay interest under section 10A of the Bengal finance (Sales Tax) Act 1941, on the turnover tax for the period during which recovery of the tax amount was stopped by orders of <ORG>. <ORG> answered the said question against the appellants and hence these appeals by special leave.

For dealing with the aforesaid question, only necessary e facts need be mentioned. A new provision ( section 6B ) was included in the Bengal Finance (Sales Tax) Act 1941, (hereinafter referred to as the `Act' for short) and an identical provision was included in the West Bengal Sales Tax Act 1954 as Section 4AAA . The effect of the new provision was that they imposed a tax on the turnover of a dealer whose annual aggregate gross turnover exceeded Rs. Fifty lakhs. The provisions came into force on 1.4.1979. These appellants were concerned with section 6B of the Act and hence, they filed writ petitions before <ORG> challenging the validity of the aforesaid provision. <ORG>, on admission of the writ petitions, granted interim relief by injuncting West Bengal Government from collecting such tax on the turnover, but ultimately the writ petitions were dismissed . thus, liability of the appellants to pay tax on the turnover became conclusive and appellants remitted the tax amount accordingly. But in the meanwhile, <ORG> yet another provision as Section 10A in the Act by which interest at the rate of 2% per month was charged on the tax amount payable by the dealer during the period of default. So demands were made on the appellants to pay interest on the tax amount.

Appellants disputed their liability to pay such interest mainly on two grounds. First is that since appellants have furnished the returns and paid full tax as per such returns they are not liable to pay interest under section 10A of the Act. Second is, even otherwise they are not liable to pay interest on the tax amount as its non- recovery was the effect of the injunction order granted by <ORG>.

<ORG>, before which the appellants challenged the demand for payment of interest, dismissed the petitions filed by the appellants. For considering the contention of the appellants a perusal of Section 10A is necessary. Section 10A of the Act reads thus:

"10A. Interest payable by dealer.-(1) Where a registered or certified dealer furnishes a return referred to in section 10 in respect of any period by the prescribed date or thereafter but fails to make full payment of tax payable in respect of such period by such prescribed date of thereafter. but fails to make full payment of tax payable in respect of such period by such prescribed date, he shall pay a simple interest at the rate of two per centum for each English calendar month of default from the first day of such month next following the prescribed date up to the month preceding the month of full payment of such tax or up to the month prior to the month of assessment under section 11 in respect of such period. whichever is earlier, upon so much of the amount of tax payable by him according to such return remains unpaid at the end of each such month of default. Provided that where such dealer admits in writing that the amount of tax payable in respect of such period is an amount which is either more or less than, what has been originally shown as payable in the return and where the Commissioner is satisfied on the point of such admission, the interest shall be payable upon so much admission, the interest shall be payable upon so much of the amount of tax payable according to such admission as remains unpaid at the end of each such month of default.

(2) Where a registered or certified dealer fails to furnish a return referred to in section 10 in respect of any period by the prescribed date or thereafter before the assessment under section 11 in respect of such period, and on such assessment full amount of tax payable for such period is found not to have been paid by him by such prescribed date, he shall pay a simple interest at the rate of two per centum for each English calendar month of default from the first day of the month next following the prescribed date up to the month preceding the month of full payment of tax for such period or up to the month prior to the month of assessment under section 11 in respect of such period, whichever is earlier, upon so much of the amount of tax payable by him according to such assessment as remains unpaid at the end of each such month of default.

Provided that where an assessment under section 11 is made for more than one period and such assessment does not show separately the tax payable for the period in respect of which interest is payable under this subsection, the Commissioner shall estimate the tax payable for such period on the basis of such assessment after giving the dealer an opportunity of being heard.

(3) Where a dealer fails to make payment of any tax payable after assessment by the date specified in the notice issued under sub-section (3) of section 11 for payment thereof, he shall pay a simple interest at the rate of two per centum for each English calendar month of default from the first day f the month next following the date specified in such notice up to the month preceding the month of full payment of such tax or up to the month preceding the month of commencement of proceedings under sub-section (4) of section 11 , whichever is earlier, upon so much of the amount of tax payable by him according to such notice as remains unpaid at the end of each such month of default."

It must be pointed out at the outset itself that nobody has a case that appellants are liable to pay interest by virtue of sub-section (3) thereto. Learned counsel for the appellants however, contended that neither are they liable to pay interest under the other two sub-sections because the situation envisaged in either of them was non-existent. According to the counsel, since appellants have furnished returns and paid the tax, as per such returns, there is no ability to pay interest on the turnover tax because sub section (1) contemplates a situation where there was failure to pay tax in accordance with the returns furnished and sub section (2) contemplates a situation where no return has been furnished at all.

The requirement in Sub-section (1) is " to make full payment of the tax payable" after furnishing a return referred to in section 10 of the Act within the prescribed date. Two obligations are thus implied therein as for a dealer. First is that he should have furnished a return within the prescribed date in accordance with the terms referred to in Section 10 . Second is that he should make full payment of the tax payable under law. Sub-section (1) operates in the case of a dealer who had performed the first obligation but failed to perform the second obligation. On the other hand sub-section (2) would operate in a case where the dealer failed to discharge the first obligation mentioned above.

So the initial aspect to be considered is whether the first obligation has been discharged by the appellants If a dealer has furnished only a truncated return that cannot be regarded as furnishing the return referred to in Section 10 . It must be the full and accurate return. if a dealer makes just a statement by calling it a return it cannot be regarded as the return referred to in section 10 of the Act. It is a different matter if the dealer would have committed some marginal errors in the return or there were some mistakes of a minor nature.

Here it is admitted that the appellants have not mentioned the amount of turnover or the tax payable thereon in the return filed by them. if that be so the consequence is that they have failed to furnish a return which is "referred to in section 10 " The corollary is that there was failure to furnish the return as envisaged in sub-section (2). Thus, the liability to pay interest commenced under that sub-section at the very moment the assessing authority made the assessment under section 11 . Interest thereon would start accruing from the date prescribed for furnishing the correct return in accordance with section 10 .

Learned counsel for the appellant, however, contended that since the appellant had filed the return according to his own estimation of the tax liability he cannot be considered a defaulter in furnishing the return, In support therefore, learned counsel pleaded for an interpretation which is less onerous to the assessee.

The state is empowered by the legislature to raise revenue through the mode prescribed in the Act so the State should not be the sufferer on account of the delay caused by the taxpayer in payment of the tax due. The provision for charging interest would have been introduced in order to compensate the State (or the <ORG>) for the loss occasioned due to delay in paying the tax(vide <CITATION> [1985 (1) SCC 283] and Central provinces <ORG>. Vs. Commissioner of Income tax[1986 (3) SCC 461] When interpreting such a provision in a taxing statute a construction which would preserve the purpose of the provision must be adopted. It is well settled that in interpreting a taxing statute normally, there is no scope for consideration of principles of equity., It was so said by Rowlatt J. in <ORG> vs. Inland <ORG> Commissioners [1921 (1) KB 64 at pages 71].

"In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. one can only look fairly at the language use."

The above observation has been quoted with approval by a Bench of three judges of this Court in <ORG> [55 STC 741]. In another decision rendered by a Bench of three Judges of this Court in The State of Tamil Nadu vs. MK Kandaswami and others [-36 STC 191] it has been observed thus:

"In interpreting such a provision, a construction which would defeat its purpose and, in effect, obliterate it from the statute book should be eschewed. If more than one construction is possible, that which preserves its workability and efficacy is to be preferred to the one which would render it otiose or sterile."

We are therefore, not adopting a construction which would upset or even impair the purpose in introducing section 10A in the Act. The return to be filed by the dealer is the full and correct return as referred to in section 10 and on failure to furnish such a return the liability to pay interest from the prescribed date would arise when assessment is completed.

Learned counsel next contended alternatively that in view of the decision of the Constitution Bench in <ORG> Vs Commercial Taxed Officer [1994 (4) SCC 276], the appellants cannot be mulcted with interest on the tax amount since they were bonafide contending and contesting the validity of section 6B of the Act. This contention warrants serious consideration.

The ration laid down in the aforesaid decision is that the provision in a taxing statute providing for levy of interest on failure of the dealer to pay tax due under the particular Act should not be strictly construed but should be so construed as to effectuate and not defeat the object and purpose of the Act, The constitution bench was called upon to decide the case on a reference necessitated in view of an apparent conflict between two earlier decision of this Court. Under Section 11B of the Rajasthan Sales Tax Act, 1954, a dealer was made to pay interest on the amount of tax "payable under sub-section (2) and sub-section (2a) of section 7 if it is not paid within the period allowed" <ORG> filed returns on the premise that the amount of freight (charged in respect of the sale of cement as per a Cement Control Order) did not form part of the sale price for the purpose of payment of sales tax. That contention was rejected by the court in <CITATION> . [1978(4) SCC 271. On the strength of the said decision M/S <ORG> was required to pay sales tax on the sale price inclusive of the freight. The dispute then arose whether the company should pay is interest from the date of filing of the returns or only from the date of determination of tax payable in the final assessment. Revenue then contended that interest became payable from the date on which the original return was filed under section 7(2) or 7(2 A) of the Rajasthan Sales Tax Act . The said contention was based on another earlier decision of a Bench of three Judges of this Court in <ORG> Vs. Commercial Tax Officer [1981 (48) STC 466]. A majority of judges held in that case that interest would run from the date of filing of returns. <NAME> (as His Lordship then was) speaking for the Constitution Bench in <ORG> held thus:

"When Section 11-B(a) uses the expression "tax payable under sub- sections (2) & (2-A) of Section 7 ', that must be understood in the context of the aforesaid expressions employed in the two sub-sections. Therefore, the expression' tax payable' under the said two sub-section is the full amount of tax due and 'tax due' is that amount which becomes due ex hypothesis on the turnover and taxable turnover' shown in or based on the return'. The word "payable" is a descriptive word, which ordinarily means' that which must be paid or is due, or any be paid' but its correct meaning can only be determined if the context in which it is used is kept in view. The word has been frequently understood to mean that which may, can or should be paid and is held equivalent to 'due'. Therefore, the conjoint reading of Sections 7(1) (2) & (2-A) and 11-b of the Act leaves no room for doubt that the expression "tax payable" in Section 11-B of the Act leaves no room for doubt that the expression 'tax payable' in Section 11-B can only mean the full amount of tax which becomes due under sub-section (2) and (2- A) of the Act when assessed on the basis of the information regarding turnover furnished or shown in the return. Therefore, so long as the assessee pays the tax which according to him is due on the basis of information supplied on the return filed by him, there would be no default on his part to meet his statutory obligation under Section 7 of the Act and, therefore, it would be difficult to hold that the 'tax payable' by him 'is not paid' to visit him with the liability to pay interest under clause(a) of Section 11-B , it would be a different matter if the return is not approved by the authority but that is not the case here. It is difficult on the plain language of the section to hold that the law envisages the assessee to predicate the final assessment and expect him to pay the tax on that basis to avoid the liability to pay interest. That would be asking him to do the mere impassable."

Thus, the majority view expressed in <ORG> case was over-ruled and the minority view therein was upheld by the constitution Bench.

But the position here is explicitly distinguishable from the factual situation in <ORG>. Here, nobody had doubt that if section 6B of the Act was called the tax was payable on the turnover. It was the Constitutional Validity of Section 6B which was challenged by the appellants in the earlier writ petitions before <ORG> and which finally ended up in upholding of it s validity. Hence, there was no question of the assess waiting for the determination and the turnover as there was no dispute on that aspect. The fact that appellants questioned the constitutional validity of the charging provision cannot be equated with a dispute whether the freight paid would also form part of the sale amount. It was a highly debated dispute whether price amount would envelope the freight charges paid by the dealer and until the controversy was resolved by the <ORG> in <ORG> vs. The state of Rajasthan [1978 (4) SCC 271] the dealers were justified in excluding the freight charges from sale price. it was for that reason the constitution bench refrained from mulcting the tax payer with liability to pay interest additionally. Appellants in these cases have never disputed that they are liable to pay tax on the turnover under section 6B of the Act even while they focussed on the vires of that provision.

The tax amount which they should have paid as per section 6-B remained with the appellant during the entire period and they would have earned good profit with that amount. The <ORG>, to which the tax amount should necessarily have gone, was not bale to utilize it for public purposes. When appellants had the advantage of keeping the amount of tax without paying it to the <ORG> exchequer only because the High court granted orders restraining the <ORG> from recovering that amount from the assessee, no act of the <ORG> shall cause prejudice to any party. The prestine doctrine couched in the maxim "actus curiae neminem gravabit" has ever remained a salutary and guiding principle.

The contention that as the <ORG> granted injunction restraining the state from recovering the tax amount as per section 6B would raise a presumption that the court was then satisfied of the bona fides of the contention is too fragile for depriving the state of the statutory right of interest incorporated in section 10-A of the Act. Interim orders are passed by <ORG> on a variety of considerations, one among being the strained financial position of the person approaching the court. merely because the court granted interim orders it cannot be inferred that <ORG> was then satisfied of a strong prima facie case for the appellants. On the contrary, it is well neigh settled that there is always a presumption in favour of constitutionality of a legislative act. The presumption cannot be the other way around.

We, therefore, concur with the view taken by <ORG> and dismiss all these appeals.


JUDGMENT <NAME>, C.J.

1. This appeal adds another case to the long list of cases which have reference to the effect of Section 47 of the Code of Civil Procedure. The facts of the present case are of an unusual nature and there is no reported decision which directly covers it. In execution of a small cause decree passed by <ORG> the property which is the subject-matter of this appeal was purchased on the 17th September, 1917, by one <NAME> to whom was issued the usual sale certificate. On the 7th January, 1918, <NAME> conveyed the property to two persons, <NAME> and <NAME>, who by a deed dated the 3rd February, 1927, sold it to <NAME>, the present appellant. At the time of the sale the property was in the possession of <NAME>, a sister of <NAME>, the judgment-debtor. She held the property as a monthly tenant of her brother. In 1919 she surrendered the possession of the property to <NAME>, who thereupon granted a monthly tenancy of it to a person named <NAME>. In 1923 <NAME> assigned his rights to one <NAME> who remained in possession of the property as a monthly tenant of <NAME> until 1927 when he purchased the property from <NAME>. Neither <NAME> nor the appellant ever obtained actual or symbolical possession of the property. The suit out of which this appeal arises was filed by the appellant against <NAME> and <NAME> for possession. In his plaint the appellant treated the surrender of the property by <NAME> to <NAME> as an assignment to him of her tenancy and <NAME> and <NAME> as successive holders of the tenancy. One line of defence was that the appellant had acquired no interest in the property. It was said that the transfer by <NAME> to <NAME>and <NAME> was a benami transaction and that the real title remained with <NAME>. The main contention, however, was that Section 47 of the Code of Civil Procedure barred the suit. The District Munsif found against the plaintiff on both issues and dismissed the suit. On appeal to the Subordinate Judge of South Malabar the decree of the trial Court was reversed, the Subordinate Judge holding that the transaction was not benami and that Section 47 did not apply. A second appeal to this Court followed and was heard by <NAME>, J., who agreed with the District Munsif on the question of the application of Section 47, but granted him leave to file an appeal under Clause 15 of the Letters Patent. The decision of the Subordinate Judge was final on the question whether the transaction between <NAME> and <NAME> and <NAME> was of a benami nature.

2. The question which falls for decision is in what capacity did <NAME> obtain possession of the property from his sister? If he obtained possession of the property in the same capacity as he held at the time of the sale in execution the appeal fails; but if he obtained it in another capacity the appeal succeeds. As <NAME>, J., has pointed out in his judgment, so far as this <ORG> is concerned, it is well settled that proceedings by a decree-holder who has become the auction-purchaser for delivery of possession must be deemed to relate to the execution or discharge or satisfaction of the decree within the meaning of Section 47 of the Code of Civil Procedure. It is considered that the section bars a suit by a decree-holder for possession of the property purchased by him in execution of his own decree not only against the judgment-debtor or any one claiming under him but the bar is equally applicable to a purchaser from the decree-holder. The learned Judge referred in this connection to the decisions of the <ORG> in <NAME> v. <NAME> (1904) 14 M.L.J. 474 : I.L.R. 28 Mad. 87 and <CITATION> (1926) 51 M.L.J. 126. <CITATION> (1919) 38 M.L.J. 32 : I.L.R. 43 Mad. 107 (F.B.), it was held by a Full Bench that a purchaser at a <ORG> auction who is a stranger to the suit comes within the purview of Section 47 as the representative of the judgment-debtor. There are numerous decisions which support the judgments in the cases just cited. The Calcutta High <ORG> shares the view of this <ORG>: <CITATION> (1926) I.L.R. 53 Cal. 781 (F.B.). Other High <ORG>s have, however, interpreted Section 47 in a different sense. The effect given to Section 47 by this <ORG> has not been accepted without criticism by all the learned Judges who have had to consider the question. <CITATION> (1902) 13 M.L.J. 237 : I.L.R. 26 Mad. 740, <NAME> and <NAME>, JJ., doubted whether proceedings taken by a decree-holder who had purchased property to obtain possession did relate to the execution, discharge or satisfaction of the decree, but in view of the earlier decisions they felt constrained to follow them. In <NAME> v. <NAME> (1904) 14 M.L.J. 474 : I.L.R. 28 Mad. 87, <NAME>, C.J., observed that if the matter were res Integra, he would be disposed to hold that the right to sue for possession was not a question relating to the execution, discharge or satisfaction of the decree, where the plaintiff represented a decree-holder who had purchased land in execution of the decree. It has, however, been the practice of this <ORG> for over 50 years to treat Section 47 as having the application which I have indicated and in my opinion it is now far too late in the day to re-open the question. This appeal must, therefore, be decided on the basis that a decree-holder who purchases property in execution cannot institute a suit to recover possession from the judgment-debtor or some one who stands in the shoes of the judgment-debtor and his remedy is confined to an application, where the period of limitation is only three years.

3. As I have already pointed but, the appellant's case is based on the assumption that <NAME> got possession of the property in 1919 as the assignee of the tenancy. It is common ground that a suit for possession will lie if this was the position, as a tenant cannot be regarded as a representative within the meaning of Section 47 where as in this case, the tenancy had commenced before the attachment. In the plaint it was alleged that <NAME> fraudulently colluded with <NAME> in surrendering the property to him, but no attempt was made to prove this and for the purposes of this appeal it must be taken that her action was bona fide. The appellant contends that a tenant can only surrender his tenancy to the landlord or if the landlord has parted with his rights in the property to the person who has acquired the landlord's rights and as by reason of the provisions of Section 65 of the Code of Civil Procedure the property in suit vested in <NAME> from the time he bought it at the. <ORG> auction, <NAME> could not in law surrender the tenancy to her brother. At the time she purported to do so he had no interest in the property. It is said that at the most her action put <NAME> in the position of an assignee of the tenancy. There is substance in the argument, but it is not necessary for the purpose of deciding this appeal to pause to inquire whether there is any flaw, because if <NAME> cannot in law be deemed to have entered into possession of the property in 1919 as the assignee of the tenancy entered into possession without right and was, therefore, in the eyes of the law a trespasser. A trespasser clearly cannot rely on Section 47 to support his possession. The fact that <NAME> did not apply for and obtain symbolical possession of the property under the provisions of Order 21, Rule 96 of the Code of Civil Procedure could not affect his right to the property. The property vested in him absolutely, with or without symbolical possession, as soon as he became the auction purchaser. Rule 96 is there to assist an auction purchaser to secure recognition of rights already acquired. <NAME>, J., considered that it was obligatory on the part of the appellant to obtain symbolical possession, and that <NAME> was bound in law to surrender the property to the person who had granted her tenancy, but the learned Judge overlooked the provisions of Section 65. The fact that <NAME> was unaware of the <ORG> auction would excuse her from liability in surrendering possession of the property to her brother, but the surrender could not put him in any better position. It must be remembered that there is a the freehold, that imports that such person is seised of the estate of freehold. At the time of the auction sale <NAME> was seised of the property but was not in possession of it and the auction sale took away from him his seisin and gave it to the auction purchaser. The moment the sale took place his rights in the property ceased, and when his sister put him in possession in 1919 he went into possession without any rights unless in the circumstances he could be deemed to be assignee of the tenancy. So far as the property was concerned the execution was complete and he was no longer the judgment-debtor.

4. For the reasons indicated I am firmly of the opinion that the case does not fall within the purview of Section 47 of the Code of Civil Procedure and I would allow the appeal with costs throughout.

Wadsworth, J.

5. I agree.

<NAME>, J.

6. I also agree.


JUDGMENT <NAME>, J.

1. These two sales tax revision petitions are presented under section 23(1) of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as the "Act"), by a registered dealer against the orders of <ORG> confirming the orders of the appellate and assessing authorities. The only question of law that arises for consideration in these two revision petitions is as follows :

"Whether the notification issued under section 8A of the Act exempting the purchase turnover of old gold and silver articles from the levy of sales tax under section 6 of the Act became invalid with effect from 1st July, 1972, with effect from which date sub-section (1) of section 5 was amended enhancing the rate of tax payable on general goods from 3 to 3 1/2 per cent ?"

2. The petitioner is engaged in purchasing of old gold and silver articles and manufacturing gold and silver jewellery out of it and selling them. For the assessment years 1973-74 and 1974-75 the petitioner furnished his returns. During the relevant years he had purchased old gold and silver articles from individuals who were not liable to pay sales tax under the act. Thereafter the assessee prepared gold and silver jewellery out of the gold articles so purchased and had sold the said jewel. According to the assessee he was exempt from payment of sales tax under section 6 of the Act by virtue of a notification issued under section 8A of the Act. The Commercial Tax Officer assessed the assessee both under sections 5(1) and 6 of the Act at 3 1/2 per cent which was the rate prevailing during the relevant period. Aggrieved by the said orders the assessee preferred appeals to the Assistant Commissioner of Commercial Taxes (Appeals), Mangalore. His appeals were dismissed. Aggrieved by the said order the assessee preferred second appeals before <ORG>. By common order dated 7th August, 1978, the <ORG> confirmed the assessment made by the assessing authority both under sections 5(1) and 6 of the Act. However, the <ORG> reduced the purchase tax from 3 1/2 per cent to 1 per cent on the ground that the old gold and silver articles purchased by the assessee constituted bullion.

3. <NAME>, the learned counsel for the assessee, contended that in view of the notification issued by <ORG> under section 8A of the Act on 10th September, 1970, the assessee was not liable to pay tax under section 6 of the Act on the purchase turnover of articles of gold and silver. The said notification reads :

"In exercise of the powers conferred by section 8A of the Karnataka Sales Tax Act, 1957 (Karnataka Act 25 of 1957), the Government of Karnataka hereby exempts with effect from the 1st day of October, 1970, the tax payable under section 6 of the said Act on the purchases of articles of gold and/or silver (whether set with precious stones or not) by a manufactures of such articles subject to the condition that the said manufacturer proves to the satisfaction of the assessing authority that he has paid the tax payable either under sub-section (1) or clause (a) of sub-section (3) section 5 of the said Act on articles of gold and silver (whether set with precious stones or not) manufactured of the said articles so purchased by him."

4. Section 8A of the Act confers power on <ORG> to reduce or exempt the tax payable under the Act by issue of a notification. The learned counsel for the assessee therefore contended that in view of the above notification the orders of the assessing authority as well as the appellate authority holding that the assessee was liable to tax under section 6 of the Act was unsustainable.

5. As can be seen from the order of the <ORG>, in coming to the conclusion that the aforesaid notification issued under section 8A of the Act was not available to the assessee, the <ORG> relied on the judgment of this <ORG> in <CITATION> ([1975 36 S.T.C. 223]. The view taken by the <ORG> is in conformity with the ratio of the said decision.

6. The learned counsel for the assessee however contended that the view taken by a single Judge of this Court in the said case is erroneous. In the said case, the question for consideration was whether the reduced rate at 4 per cent in respect of dyes fixed by virtue of a notification issue by <ORG> under section 8A of the Act continued to be in force after the amendment of the Act raising the sales tax payable on dyes from 6 per cent to 8 per cent. From the facts set out in the judgment it is seen that prior to 10th September, 1970, the sales tax payable on the turnover pertaining to dyes was 6 per cent, vide entry 97 of the Second Schedule to the Act. The State Government issued a notification dated 10th September, 1970, under section 8A of the Act by which the sales tax payable on the turnover relating to dyes was reduced to 4 per cent. By the Karnataka Sales Tax (Amendment) Act, 1974, which came into force with effect from 1st April, 1974, the sales tax payable on the turnover relating to dyes was enhanced from 6 per cent to 8 per cent. Thereafter <ORG> issued another notification dated 7th June, 1974, under section 8A of the Act purporting to reduce the tax payable on the turnover relating to dyes to 4 per cent with effect from 1st July, 1974. Rejecting the claim of the assessee therein that the reduced rate of 4 per cent was available even during the period from 1st April, 1974, to 1st July, 1974, it was held that as the legislature, which was the highest legislative body, amended the Act and declared that on and after 1st April, 1974, the turnover relating to dyes would be subjected to a tax at a higher rate at 8 per cent instead of the pre-existing rate at 6 per cent, the notification issued by <ORG> under section 8A of Act became ineffective with effect from 1st April, 1974, on the ground that it was inconsistent with the amending Act. Applying the ratio of the said decision the <ORG> held that the notification dated 10th September, 1970, exempting the tax on the purchase turnover of old gold and silver articles, issued under section 8A of the Act also became ineffective with effect from 1st July, 1972.

7. In our opinion, the learned counsel for the assessee is right in his submission that the view taken in the <NAME>'s case ([1975] 36 S.T.C. 223) is erroneous. Sub-section (1) Of section 8A of the Act confers power on <ORG> either to reduce the rate of tax payable on any goods under the Act or to exempt the tax payable on any specified goods under the Act by the issue of a notification to that effect. Sub-section (3) of section 8A confers power on <ORG> to cancel or vary a notification issued under sub-section (1) by the issue of a notification. Therefore a notification issued under section 8A(1) of the Act either reducing the rate of tax or exempting the tax payable on any specified goods continues to be a in force until it is modified or cancelled by <ORG> by a notification issued under sub-section (3) of section 8A. We are unable to agree with the view taken by the single Judge in the <NAME>'s case ([1975] 36 S.T.C. 223) that notification issued under section 8A(1) becomes invalid by the enhancement of rate of tax on the goods specified in the notification by any subsequent amending Act on the ground of inconsistency. In our view, such a notification does not in any way become inconsistent with the provisions of the Act by the mere enhancement of the rate of tax by an amendment made subsequent to the issue of a notification unless the amending Act clearly shows that it should be effective, notwithstanding a notification already issued under section 8A of the Act or that it took away the power of <ORG> under section 8A of the Act, generally or in respect of such items. There is nothing in the amending Act 5 of 1972 which could be considered as having affected the validity of the notification issued under section 8A of the Act. We hold that the view taken by the single Judge in the <NAME>'s case ([1975] 36 S.T.C. 223) is wrong and we overrule the said decision.

8. In conclusion we hold that the notification dated 10th September, 1970, issued by <ORG> in exercise of its power under section 8A of the Act exempting the purchase turnover of old gold and silver articles from the levy of tax under section 6 of the Act was not in any way affected by the amending Act 5 of 1972 and continued to be in force.

9. As the assessee was clearly entitled to the benefit of exemption granted under the notification dated 10th September, 1970, his turnover could not be brought to tax under section 6 of the Act. Therefore the orders of assessment levying tax on the purchase turnover of the assessee under section 6 of the Act cannot be sustained. Consequently the orders of the first and second appellate authorities confirming the said orders also cannot be sustained.

10. For the reasons aforesaid we make the following :

The orders of <ORG>, the Assistant Commissioner of Commercial Taxes (Appeals), Mangalore, and of the assessing authority, in so far as these orders subjected the assessee to tax under section 6 of the Act are set aside.

No costs.

11. Petitions allowed.


JUDGMENT <NAME>, J.

1. This is an appeal from an award of <ORG>, Kamrup, of March 25, 1986, made in MAC Case No. 47(K) of 1985.

2. A goods vehicle bearing registration No. AMK 6224 loaded with timbers was driven rashly and negligently and hit the car in which, the claimant was travelling. In that accident, the claimant sustained injuries on his chest, little finger of the right hand, left leg and private parts.. The claimant claimed Rs. 50,000 against the owner and the driver of the vehicle as well as against the insurance company. The case proceeded ex parte against the owner and the driver of the vehicle. The insurance company contested the case by filing a written statement. The <ORG> made an award directing the insurance company to pay Rs. 25,000 with interest at 9% from the date of application'for compensation to the date of payment and costs of Rs. 500. Against the award, the insurance company has filed this appeal.

3. The facts which emerge out of the record are as follows. The date, March 22, 1986, was fixed for framing issues and filing documents. But, on that day, no order was passed nor was any issue framed. No date was ever fixed by the <ORG> either for hearing of the case or for any purpose in the progress of the case. No forma! notice was issued to the parties concerned intimating the date of hearing as on March 25, 1986. The case was taken up unexpectedly on March 25, 1986, for hearing. The advocate for the insurance company was present accidentally at the time of recording evidence of the claimant and making the award. An application filed on March 25, 1986, by counsel for the insurance company for setting aside the award stating the facts abovementioned was rejected on March 29, 1986, by the memberof the <ORG> on the ground that he was to dispose of the matter on an off-date in order to clear his arrears as he was under orders of transfer.

4. Mr. <NAME>, learned counsel for the appellant, the insurance company, submitted that the award was made by the <ORG> on an offdate in violation of the principles of natural justice and procedural laws. Mr. <NAME>, learned counsel for the claimant, the respondent herein, submitted that the examination of witness and the delivery of the judgment were made in the presence of counsel for the insurance company ; and that the judgment of the <ORG> indicates that the <ORG>, heard the counsel for the insurance company, who was present at the time of hearing and the delivery of the judgment. Therefore, no prejudice was caused to the insurance company.

5. The purpose of fixing a date for hearing of evidence is for giving the parties concerned a reasonable opportunity to contest the case in a fair manner. The petition to set aside the award filed on March 25, 1986, by counsel for the company was disposed of by the learned member of the <ORG> on March 29, 1986. Therefore, there was no time compulsion to dispose of the case on March 25, 1986. By the mere presence of counsel for the insurance company accidentally at the time of recording evidence and delivery of the judgment, it cannot be said that the appellant, the insurance company, was given a reasonable opportunity of hearing because he was genuinely handicapped by reason of the procedure adopted by the learned member of the <ORG>. Justice is something more than to decide what is right or wrong. A judge may be fully satisfied in his mind that he has done justice. It is not enough. It should be done in such a manner that all persons are satisfied that justice has been done, bearingin mind that "justice must also appear to have been done ".

6. For the foregoing reasons, the judgment and award dated March 25, 1986, passed by the <ORG> is set aside and the case is remitted to the <ORG> for disposal afresh after giving an opportunity to the appellant, the insurance company, to be heard. However, it is made clear that any amount paid to the respondent-claimant shall not be recovered for the time beingand it would be subject to the result of the final decision of the <ORG>. No costs.


JUDGMENT

1. The present appeal arises out of a suit brought by the plaintiffs as zemindars of plot <ORG> against the defendants Nos. 1 and 2, the putnidars of 9 mouzahs included in that towzi. The plaintiffs sought to recover khas possession of 201 bighas odd of resumed chowkidari chakran lands lying within those 9 mouzahs and for wasilat, of, in he alternative, if the defendants should be found entitled to retain possession of the lands, to recover fair and equitable rents of the lauds from the defendants. The rent they claimed was Rs. 500 for the 201 bighas of land. The defendants Nos. 1 and 2, the putnidars, contended that they were by law entitled to the possession of the chaukidari chakran lands after their resumption by the Collector, and that the plaintiffs, as zemindars, could not demand a higher rent from them than the amount which was assessed by the Collector under Section 49 of Bengal Act VI of 1870. The lower Court has dismissed the plaintiffs' claim for khas possession of the lands, holding that, under the condition of the putni lease, the putnidars are entitled to settlement of those lands from the landlords in preference to any body else. The Subordinate Judge, however, held that the plaintiffs were entitled to recover from the defendants a fair and equitable rent, and he fixed the same at Rs. 408-8 for the 201 bighas of land. We may observe that that was the total rent which was fixed by the Collector, half of which he assessed, under Section 49 of Bengal Act VI of 1870, as the amount to be paid by the zemindars to the chaukidari fund. It has not been seriously contested before us that the lower Court is not right in its conclusion that the putnidars, under the terms of the lease, are entitled to a settlement of the resumed chaukidari chakran lands; but the points which have been urged in support of the appeal are (i) that the plaintiffs are not entitled to demand a higher rent from the putnidars than the amount assessed by the Collector under Section 49 of Bengal Act VI of 1870, and (ii) that, even if the plaintiffs are entitled to more, the amount assessed by the lower Court is excessive. It is admitted that the decision on these points must to a considerable extent depend on the construction of the putni lease or <ORG>. The present defendants are the purchasers of the rights of the original putnidar The putni <ORG>, dated the 18th Jaistha 1280 (30th May 1873) was originally executed by one <NAME> in favour of the predecessor-in-interest of the present plaintiff. That <ORG> has been produced in evidence, and <NAME>, son of <NAME>, the original lessee, has been examined on behalf of the defendants. The clause in this <ORG>, which is construed differently by the appellants and the respondents, runs as follows:

<NAME> kimba zelar tapshil thanar chakran jama sadar bajeyapta oilay jay jamnyre sarkar bahadur hoitay apankar bandobasta kariya loiya amahay jay jamaye bandobista karibeu shay jamaye ami bandobisba kariya loitay soikar no, hoilay any a byaktikay bondobasta hariben, thahatay amoro amar oarisaner konao ojar apatli chalibay na.u On behalf of the appellants, it has been contended that the meaning of this passage is that, if the putnidar refused to take settlement of the chaukidari chakran lands from the zemindar at the same jama as that at which settlement of the same was made with the zemindar by the Government, then the zimindar would be entitled to settle the lands with other persons: and it has been argued that from this clause it is clear that the putnidars are entitled to a settlement from the landlords at the same rent as the amount which was fixed by the Collector under Section 49. On behalf of the respondents, this page has been translated differently, and it is said to mean that if the chaukidari chakran lands be resumed by Government, and if the Government settles the lands with the zemindar, then, if the zemindar offers to settle the same with the putnidar at a given rental, and the putnidar refuses to accept that rental, the zemindar may settle the lands with other persons, it is argued that this means that, if the zemindar after taking settlement makes an offer to the putnidar of a settlement of the lands at a certain rent, and the putnidar refuses to accept that rent, then the zemindar may settle the lands with other persons; that is to say, that under this clause in the lease, the landlords have the option of fixing the amount of rent, and if the defendants do not accept it, the landlords would be able to settle the lands with other persons. Of course, this right of the landlords to settle the lands with other persons would be subject to the right of the plaintiffs to have the settlement concluded on fair and reasonable terms. We have given our best consideration to the passage in question in the <ORG>, and we think that the view taken by the lower Court is correct, and that it does not bind the landlords to settle the resumed chaukidari chakran lands with putnidars at the same amount at which the assessment for the purpose of the chaukidari tax has been made on the land under the provisions of Section 49 of Bengal Act VI of ? 1870. Apart from this construction which we place on the terms of the lease, we have to add that we have lately held in the case of <NAME>. <NAME> C.W.N. 995 : 7 Ind. Cas. 554, that the rent which a landlord is entitled to claim when making a settlement of resumed chaukidari chakran lands with a putnidar, is not restricted to the amount of the assessment made by the Collector under Section 49 of Bengal Act VI of 1870, and we have pointed out that this view is supported by principle and by authority. In particular, we referred to the decisions of this Court in the cases of <NAME> v. <NAME> 4 C.W.N. 814. and <CITATION> 34 C. 109 : 5 C.L.J. 33 : 11 C.W.N. 201. The learned pleads for the appellants has made a calculation on the basis of the principle suggested in the former of these two cases, with the result that the extra rent to which the landlords would thus be entitled in the present-case comes to Rs. 392-11-2, which is only Rs. 15 less than the rent fixed by the lower Court.

2. The learned pleader, however, contends that the determination of the, question of the amount of rent, which the zemindars are entitled to demand on the settlement, must depend mainly on the terms of the contract between the parties as evidenced by the <ORG> lease or <ORG>. We have already given our reasons for holding that the passage in the <ORG>, relied on by both parties, cannot fairly be construed to mean that the rent must not exceed the assessment made by the Collector. But the learned pleader for the appellants has argued that it is clear, from the terms of the <ORG>, that the <ORG>dars were to have the full benefit of any increase to the profits of the lands covered by the <ORG> lease which might accrue subsequently to the lease, because the zemindars, under the terms of the lease, settled the <ORG> rent at the full amount of the then profits, and- in addition took a bonus of Rs. 4,000 from the <ORG>dars. Now, it is clear that the profits from the chaukidari chakran lands were not taken into consideration in determining the rent at the time when the <ORG> was created, and the fact that in respect of the other lands the <ORG>dars agreed to pay as rent the full amount they then were entitled to collect goes rather to support the view contrary to that advanced for the appellants, and to suggest that, if these profits had been included, the full profits would have been demanded as rent. We agree with the lower Court that the evidence of <NAME>, the son of the original <ORG>lar, is not true, and is worthless. It is impossible to believe him when he says "we took the said <ORG> settlement without any profit on payment of the said sum of Rs. 4,000 as salami, considering that, on the resumption of the chaukidari lauds, we would get the said lands." The <ORG>. lease was given in 1874, and the chaukidari lands were, not resumed till twenty-five years afterwards. It seems to us perfectly clear that, at the time the lease was granted, it was well-known that the nominal rents did not represent the actual profits of the <ORG>dars, and this, indeed, is supported by the evidence given by the plaintiffs to prove that no less than Rs. 1,360 has been realized by the <ORG>dars as salami for settling a portion only of the resumed lands since their resumption.

3. The lower <ORG>, in fixing a fair and equitable rent which the zemindars are entitled to demand from the putnidars, has accepted the rent as determined by the Collector at the time of resumption. We have already noticed that, that sum exceeds by Rs. 15 only the rental arrived at on the basis of the principle suggested in the case of <NAME> v. <NAME> 4 C.W.N. 814, and, in the circumstances of the case, we see no reason to differ from the lower <ORG> that Rs. 404-8 is a fair and equitable rent which the zemindars, the plaintiffs, are entitled to receive from the defendants for the 201 bighas 14 cottas of resumed chaukidari chakran lands.

4. We, therefore, confirm the judgment and decree of the lower Court and dismiss the appeal with costs.