IN THE SUPREME COURT OF BANGLADESH
Mr. Justice Hasan Foez Siddique, C. J.
Mr. Justice M. Enayetur Rahim
Mr. Justice Jahangir Hossain
CIVIL APPEAL NO. 65 OF 2009 (From the judgement and order dated the 4th day of February, 2001 passed by the High Court Division in Writ Petition No.1694 of 1998).
The President, Customs, Excise : . . . Appellants and Vat Appellate Tribunal,
BTMC Building, 7-9 Kawran
Bazar, Dhaka-1215 and others
Chattala Industries Limited : . . . Respondents
For the Appellants : Ms. Farjana Rahman Shampa
Assistant Attorney General, instructed by
Ms. Sufia Khatun, Advocate-on-Record For the Respondent : Mr. Chowdhury Md. Zahangir,
Date of hearing : The 2nd day of May, 2023
Date of judgment : The 3rd day of May, 2023
M. Enayetur Rahim, J: This civil appeal, by leave, is directed against the judgment and order dated 04.02.2001
passed by the High Court Division in Writ Petition No.1694 of 1998 making the Rule absolute.
The relevant facts for disposal of this appeal in brief, are that the present respondent filed Writ Petition No.1694 of 1998 before the High Court Division challenging Memo No. CEVT/Case(VAT)/Misc./15/98 issued by the writ respondent No.1, Customs, Excise and VAT Appellate Tribunal, Dhaka rejecting the memo of appeal for non-payment of deposit of 50% of the demand as a precondition for
admission of appeal by respondent No. 1 under the amended provisions of sections 42 (2)(Kha) of the Value Added Tax Act, 1991 as amended by Finance Act, 1996.
In the writ petition it was contended that the writ petitioner Company was engaged in the business of manufacturing of M.S. Rod and after commencement of VAT Act, 1991 was collecting and paying VAT regularly as per declaration by the writ petitioner and approval by the VAT authority. So, the writ petitioner Company has been supplying at declared price and collected VAT thereon. There was no due from the writ petitioner. The writ petitioner received a show cause notice on 16.1.1994 issued by the writ respondent No.3 alleging, inter alia, that the officer of the Intelligence Branch of VAT while visiting the writ petitioner's Mill found the same in operation. On demand by the said VAT official the store keeper of the Mill in the absence of the Manager of the Mill produced 4 chalan books,
3 register and five files before the VAT official who on spot examination of the same detected anomalies therein and confiscated those. On examination of the said records it was alleged by the said notice that the writ petitioner evaded payment of VAT to the tune of Tk. 1,24,35,306/-for the period between November, 1991 to October, 1993 by concealing production of 6,274.20 tons M.S. Rod. The writ petitioner however did not receive the said Memo dated 16.1.1994. The writ petitioner came to know about the said memo through another Memo dated 03.06.1995 and collected a copy of the said Memo dated 16.01.1994 on 1.7.1995 from the office of the writ respondent No.5.
The writ petitioner refuted the allegation vide his reply dated 24.07.1995 contending, inter alia, that there is no office in the mill premises as alleged in the show cause notice. A room is used to maintain register and papers relating to VAT under the supervision of an employee for regular inspection by VAT Inspector. All other activities of the mill is conducted from the office situated at Agrabad under supervision of the manager of the mill. There is no store keeper in the name of Aslam Hossain and there is also no employee in the name of Aslam Hossain, Shamsul Alam and Jahanangir working in the mill as alleged which is evident from the attendance register of the mill. The machine manufacturing rods is 8" manually operated machine assembled by country made old spare parts and officials of VAT circle- 5 determined the production capacity of the mill at about 900 tons per year. Moreover production was hampered due to load shedding, shortage of gas, strike, want of raw materials, damage of spare parts as such concealment of production of 6000 tons M.S. Rods in two years is baseless and against the feasibility and earlier order of VAT authority. There is VAT Inspector to inspect the mill and apart from the said Inspector other VAT officials also examine documents and transactions of the mills regularly and no anomalies were found in those regular inspections. VAT authority also conduct periodical audit.
The papers of the mill are examined by the VAT authority in every week and every month. So, the allegation of evading VAT by way of concealing production is baseless, concocted and not sustainable.
After hearing writ respondent No.3 held the writ petitioner liable for evading payment of VAT to the tune of Taka 1,24,35,630.60 and also imposed Taka 50,00,000.00 as
penalty vide order dated 04.12.1997.
Being aggrieved by the said order the writ petitioner
filed appeal under section 42 of the VAT Act, before the Customs, Excise and VAT Appellate Tribunal which was numbered as File No.CEVT/Case (VAT)/Misc./ 15/98. The Registrar, writ respondent No.2, issued a notice dated 28.04.1998 demanding deposit of Tk.87,17,817.30 as 50% of the demanded VAT. The writ petitioner made application for exemption from deposit of the said demand but the prayer was not considered vide order dated 21.05.1998. The writ petitioner thereafter engaged a lawyer to proceed with the matter and conduct the appeal before writ respondent No. l. In the said appeal the writ petitioner filed an application on 07.06.1998 for exemption from paying 50% of the demanded amount as contemplated under the amended provisions of section 42(2) (Kha) of VAT Act, 1991 as amended by Finance Act of 1996 on the ground that the taxable period is November, 1991 to October, 1993 and the proceedings was initiated before 01.07.1996 when the amendment came into effect by writ respondent No.6. In the above circumstances, the writ petitioner compelled to file the writ petition.
The writ respondents though contested the Rule but did not file any affidavit-in-opposition.
The High Court Division upon hearing the parties and considering the materials and records made the Rule absolute.
Being aggrieved by and dissatisfied with judgment and order passed by the High Court Division, the writ respondents filed Civil Petition for Leave to Appeal No. 477 of 2002 before this Division and, accordingly, leave was granted. Hence the appeal.
Ms. Farjana Rahman Shampa, learned Assistant Attorney General appearing on behalf of the appellants submitted that the High Court Division erred in law in not holding that the respondent filed appeal before the Customs Excise and VAT Appellate Tribunal after 1st July, 1996 when the mandatory provision of law depositing 50% of the demanded amount came into force and as such the Tribunal rightly and lawfully rejected the application of the respondent for exemption and as such the impugned judgment and order is liable be set aside.
No one has appeared for the respondent.
We have considered the submissions of the learned Assistant Attorney General, perused the impugned judgments and order of the High Court Division and other materials as placed before us.
Upon perusal of the impugned judgment and order, it transpires that the High Court Division made the Rule absolute holding that the impugned order directing deposit of 50% of demanded amount as precondition of appeal is not sustainable and also directed the respondents-appellants to consider the application for exemption and entertain the appeal in exercise of its discretion in allowing the prayer for exemption of depositing 50% of demanded money in accordance with law.
The High Court Division came to the above finding on the plea that since the demand being prior to July, 1996 and same is made in 1997, i.e. after amendment of section 42 of the VAT Act, 1991 the authority can consider the prayer of the writ petitioner.
To decide the issue involved in this appeal it is necessary to look into the provision of sub-section 42 of the VAT Act 1991, before amendment and after amendment in 1996.
The Value Added Tax Act, 1991 was passed by the Legislature during the budgetary session of 1991-92 and the Act came into operation from 1st July, 1991. In the original Act there was the provision to file appeal before the Tribunal on payment of 50% of the demand and on furnishing bank guarantee for balance. A proviso to the said Section provided for a power to the appellant authority to exempt furnishing bank guarantee for the entire amount if the payment would be a matter of hardship for the appellant. The said provision is quoted below:
Section 42 of the VAT Act, 1991 had amended in 1995 (Act 12 of 1995) and provision was made to the effect:
Customs Act section
section 82 section 98
section 196 Appellate Tribunal Appellate Tribunal
Appellate Tribunal Appellate Tribunal Customs Act Tribunal
Through the Finance Act, 1996 the Legislature has again amended section 42 (2) of the VAT Act inserting a mandatory provision of depositing 50% of the penalty or claimed amount at the time of filing the appeal before the Appellate Tribunal.
The present amended provisions of Section 42 subsection
(2) is as hereunder:
Upon perusal of the said provision of law, after amendment in 1996, it transpires that deposition of 50% demanded money is mandatory, i.e. precondition and the appellate authority has no jurisdiction to exempt the said provision.
In Civil Petition for Leave to Appeal No. 896 of 2009, JMS Glass Industries Ltd. Vs. Customs, Excise and VAT Appellate Tribunal, reported in 64 DLR (AD) 43 this Division has decided the present issue involved in this appeal to the effect:
“From a close reading of clauses (ka) and (ga)of sub-section (2) of section 42 of the VAT Act, it appears that it is a precondition to make deposit of 10% of the demanded VAT or penalty imposed to file an Appeal before the Commissioner (Appeal) and to deposit 15% of the demanded VAT or penalty imposed to file an Appeal before the Appellate Tribunal respectively. The said two clauses further show that no power or authority has been given either to the Commissioner (Appeal) or to the Appellate Tribunal to waive or dispense with the deposit of the VAT or imposed penalty as mandated therein.” (Underlines supplied)
In the above case it has been finally observed to the
“We fail to understand how an Appeal filed without such deposit can be as an Appeal in the eye of law. In this regard it is necessary to state that the procedure of disposal of an Appeal has been clearly provided in section 196C of the Customs Act; section 196B has provided what Orders the Appellate Tribunal may pass including its power of rectifying any mistake apparent from the record and to amend any Order passed by it within 4 (four) years from the date of the Order, but we find no nexus of these two sections with section 194 of the Customs Act. When legislature has not given any power to the appellate authorities to waive/dispense with the deposit of certain percentage of VAT or imposed penalty in case of an Appeal to be filed under the VAT Act the Court cannot give such power to such authorities by invoking the provisions of the ‘Customs Act as being sought by the learned Advocate for the petitioner “relying on clause (Kha) of sub-section 1 (Ka) of section 42 of the VAT Act. In this regard, it is very striking to note that by Finance Act, 1995 power was given to the appellate authorities to allow the appellant to deposit the demanded VAT or imposed penalty subsequent to the filing of the Appeal but before hearing of the same; but by Finance Act, 1996 the said power was omitted. Therefore, the intention of the legislature is very clear that in order to file an Appeal under section 42 of the VAT Act the percentage of the demanded VAT and or the penalty as mentioned therein must be deposited at the time of filing the Appeal and in the absence of such deposit an Appeal cannot be accepted, so no illegality was committed either by the Commissioner (Appeal) in not accepting the Appeal or by the Appellate Tribunal in directing the petitioner to deposit the demanded VAT as per the VAT Act and deposit the treasury chalan of such deposit by 18.4.2007.” (Underline supplied)
In view of the above settled proposition, we have no hesitation to hold that the High Court Division approached into the present case in a wrong way and thus, arrived in a
Law clearly has made provision for depositing 50% of the demanded amount at the time of filing appeal before the VAT Appellate Tribunal, which is condition precedent. The High Court Division has given gracious relief to the writ petitioner ignoring the proposition of law that the Court should not give benevolent construction of a statue when the provision is plain, unambiguous and does not give rise to any doubt as to its meaning. [Reference: Shyam Sundar and others vs Ram Kumar and another AIR, 2001 (SC) 2472].
When the intention of the legislature is clear, no consideration of expediency or possibility of abuse can be allowed to deviate from the natural consequences following the correct interpretation. Thus, the Court has no jurisdiction to exercise its discretion beyond the scope of law.
In view of the above, we are of an opinion that the High Court Division committed error of law in passing the impugned judgment and order.
Thus, the appeal merits consideration. Accordingly, the appeal is allowed. The judgment and order dated 04.02.2001 passed by the High Court Division is hereby set aside. There will no order as to costs.
C. J. J.