# April 29. Appeal allowed. M/S. CHANDAJI KUBAJI & CO v. THE STATE OF ANDHRA PRADESH

- **Citation:** [1960] 3 S.C.R. 804
- **Court:** Supreme Court of India
- **Decided:** 1960
- **Case number:** Civil Appeal No. 420of1957
- **Bench:** S. K. Das, J. L. K~Pur, M. Hidayatullah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/april-29-appeal-allowed-m-s-chandaji-kubaji-co-v-the-state-of-andhra-pradesh-1897
- **Pages:** 7

## Headnote

R_eview-Grounds for-Whether allowable on party's own deliberate · negligence and intentional withholding of evidence-The
Madras General Sales Tax Act, I939 (Mad. Act IX of Ig39), s. I2A
(6) (a).
The appellant company was a dealer in ghee and groundnut oil et~. The Deputy Commercial Tax Officer assessed it to
sales tax for the year 1948-49 on a turnover of Rs. 28,69,151
and odd. Similarly for the year 1949-50 the appellant was
assessed to sales ·tax on a turnover of Rs. 28,72,083 and odd.
The appellant challenged these assessments and its appeal before
the Commercial Tax Officer having failed the two matters came
up in second appeal before the Sales Tax Appellate Tribunal. In
the Tribunal the appellant did not place any materials in support
of its contentions and the two appeals were disposed of by the
Tribunal holding that the appellant was correctly assessed to
sales tax. In respect of the aforesaid orders of the Tribunal the
appellant filed applications for review under s. l2A(6)(a) of the
Madras General Sales Tax Act, 1939 (Mad. Act IX of 1939), taking
the plea that in the first case the materials could not be placed
before the Tribunal as there was none to instruct the appellant's
advocate in English or Telegu, and in the second case the relevant correspondence was mixed up with other records. The Tribunal rejected the applications for review on the ground that a
failure to produce the necessary materials in support of a plea
taken before it, due either to gross negligence or deliberate withholding, did not come within the reason of s. 12A(6)(a) of the
Act. The High Court upheld the decision of the Tribunal. On
appeal by specialleave in one case and a certificate of the High
Court in the other :
Held, that the provision ins. l2A(6)(a) of the Madras General
Sales Tax Act, 1939 (Mad. Act IX of 1939), permits a review
when through some oversight, mistake or error the necessary facts,
basic or evidentiary, were not present before the Court when it
passed the order sought to be reviewed, but a party was not
r
3 S.C.R. SUPREME COURT REPORTS
805
entitled to ask for a review when it had deliberately or intentionally
withheld evidence in support of a claim made by it.
State of Andhra v.
Sri Arisetty Sriramulu, A.LR. r957
Andhra Pradesh r30, not approved.

## Text

804
SUPREME COURT REPORTS
[1960)
r96o
We accordingly allow this appeal, set aside the
Shrimant Dattajirao judgment and decree of the High Court dated N ovemBuhirojirao
ber 12 1952 and restore that of the learned Civil
Gho~~ade
Judge' dated' April 20, 1949. The appellant will be
Shrimant Vijaya- entitled to his_ costs throughout from the plaiutiffsinhrao
-
S. K, Das j.
April 29.
respondent.
Appeal allowed.
M/S. CHANDAJI KUBAJI & CO.
v.
THE STATE OF ANDHRA PRADESH.
(S. K. DAS, J. L. K~PUR and M. HIDAYATULLAH, JJ.)
R_eview-Grounds for-Whether allowable on party's own deliberate · negligence and intentional withholding of evidence-The
Madras General Sales Tax Act, I939 (Mad. Act IX of Ig39), s. I2A
(6) (a).
The appellant company was a dealer in ghee and groundnut oil et~. The Deputy Commercial Tax Officer assessed it to
sales tax for the year 1948-49 on a turnover of Rs. 28,69,151
and odd. Similarly for the year 1949-50 the appellant was
assessed to sales ·tax on a turnover of Rs. 28,72,083 and odd.
The appellant challenged these assessments and its appeal before
the Commercial Tax Officer having failed the two matters came
up in second appeal before the Sales Tax Appellate Tribunal. In
the Tribunal the appellant did not place any materials in support
of its contentions and the two appeals were disposed of by the
Tribunal holding that the appellant was correctly assessed to
sales tax. In respect of the aforesaid orders of the Tribunal the
appellant filed applications for review under s. l2A(6)(a) of the
Madras General Sales Tax Act, 1939 (Mad. Act IX of 1939), taking
the plea that in the first case the materials could not be placed
before the Tribunal as there was none to instruct the appellant's
advocate in English or Telegu, and in the second case the relevant correspondence was mixed up with other records. The Tribunal rejected the applications for review on the ground that a
failure to produce the necessary materials in support of a plea
taken before it, due either to gross negligence or deliberate withholding, did not come within the reason of s. 12A(6)(a) of the
Act. The High Court upheld the decision of the Tribunal. On
appeal by specialleave in one case and a certificate of the High
Court in the other :
Held, that the provision ins. l2A(6)(a) of the Madras General
Sales Tax Act, 1939 (Mad. Act IX of 1939), permits a review
when through some oversight, mistake or error the necessary facts,
basic or evidentiary, were not present before the Court when it
passed the order sought to be reviewed, but a party was not
r
3 S.C.R. SUPREME COURT REPORTS
805
entitled to ask for a review when it had deliberately or intentionally
withheld evidence in support of a claim made by it.
State of Andhra v.
Sri Arisetty Sriramulu, A.LR. r957
Andhra Pradesh r30, not approved.
CIVIL APPELLATE JURISDICTION:
Civil Appeal
No. 420of1957.
Appeal by special leave from the judgment and
order dated August 8, 1955, of the former Andhra
High Court in Tax Revision Case No. 2 of 1955.
WITH
Civil Appeal No. 142 of 1958.
Appeal from the' judgment and order dated July
28, 1955, of the former Andhra High Court in T.R.C.
No. 32 of 1954.
N. Rajeswara Rao and Sarrlar Bahailur, for the
appellants (in both the appeals).
T. V. R. Tatachari and T. M. Sen, for the respondent (in both the appeallil).
ll960. April 29.
The Judgment of the Court was
delivered by
Chandaji
Kubaji 0- Co.
v;
State of A ndhra
Pradesh
R K. DAS, J.-These two appeals, one with special
s. K. Das J.
leave from this Court and the other on a certificate
grnnted by the High Court of Andhra, have been
heard together and this judgment will govern them
bo•jh,
'rhe faets are similar and the short question for
decision is whether the appellant, Messrs. Chandaji
Knbaji and Company, Guntur, was entitled to apply
under s. 12A(6)(a) of the Madras General Sales Tax
Act, 1939 (Madras Act IX of 1939), as applied to.
Andhra, for a review of an order of the Appellate
Tribunal made under sub-s. (4) of s. 12A of the said
Act. The relevant facts are these. The appellant is
a dealer in ghee, groundnut oil, chillies, etc., and was
·carrying on its business at Guntur. In Civil Appeal
No. 420 of 1957, the Deputy Commercial Tax Officer,
Guntur, a.ssessed the appellant to sales tax for the
yea,r 1948 .. 49 on a turnover of Rs. 28,69,151 and odd.
Tbe appellant having unsuccessfully appealed to the
Commercial Tax Officer, Guntur, made a second appeal
to the Sales Tax Appellate Tribunal, hereinafter called
z960
Chandaji
Kubaji 6- Co.
v.
State of Andhra
Pradesh
S. K. Das J.
806
SUPREME COURT REPORTS
[1960)
the Tribunal. Before the Tribunal the appellant
contended inter alia that out of the total turnover a
sum of Rs. 10,45,156 and odd related to commission
purchase of commodities taxable at the stage of sale
on behalf of principals resident outside the State of
Andhra and was not therefore taxable by the respondent State. In respect of this plea the Tribunal said :
"As regards the alleged commission agency
business to the tune of Rs. 10,45,156-4-9 the appellants have neither advanced arguments nor placed
before us any materials in support of the contention
raised in this behalf ".
In the result the Tribunal dismissed the appeal on
May 30, 1953.
In Civil Appeal No. 142 of 1958 the appellant was
assessed by the Deputy Commercial Tax Officer,
Guntur, on a net turnover of Rs. 28,72,083 and odd
for the year 1949-50.
The appellant objected to the
inclusion of a sum of Rs. 19,89,076 and odd on the
ground that the goods relating thereto had been consigned to self and despatched to places outside the
State and in fact were delivered outside the State.
This plea was disallowed by the Sales Tax authorities, and the Tribunal said :
" In the grounds of appeal it has been urged with
regard to these sale transactions the ownership in
the goods continued to vest in the appellant till the
sale price was collected and the goods were delivered
to the buyers at places outside the State. Beyond
advancing a broad argument of this type no material has been placed before us or was placed bef0re
the assessing authority or the Commercial Tax
Officer to support the appellant's version that the
property in the goods passed to the buyer only at
places outside the State ".
x
x
x
" It is not denied that though contracts in writing
were not entered into, these transactions were the
result of correspondence between the appellant on
the one hand as seller and various persons on the
other as buyers. It is conceded that such corresp9rr<fonce exists but the appellants have not chosen
,..3 S.C.R. SUPREME COURT REPOltTS
807
)
to make this correspondence available either to us or
to the officer below. When documents which would
establish the nature of the transaction beyond doubt
are available and have been withheld by the appellant, the normal result is that an inference adverse
to his contention has to be drawn. We are accordingly of the opinion that in this case, the sales must
be deemed to have taken place within this State
and that they have been rightly included in the
taxable turnover ".
The appeal was disposed of on this finding on
August 19, 1952.
·
In respect of both the aforesaid orders the appellant
filed applications for review under s. 12A(6)(a) of the
Act. That section, in so far as it is relevant for these
appeals, reads :
" 12A(6)(a)-The Appellate Tribunal may, on the
application either of the assessee or of the Deputy
Commissioner, review any order passed by it under
sub-section (4) on the basis of facts which were not
before it when it passed the order :
Provided that no such application shall be preferred more than once in respect of the same order ".
The point taken on behalf of the appellant in Civil
Appeal No. 420 of 1957 was that the accounts were in
Gujrati language and as there was none on behalf of
the appellant who could give instructions to the
appellant's advocate either in Telugu or English when
tlie appeal was heard by the Tribunal, the appellant
could not place the materials before the Tribunal. In
the other appeal, the point taken in support of the
application for review was that the relevant correspondence was mixed up with other records and so it
could not be placed before the Tribunal. The Tribunal
rejected the applications for review on the ground
that a failure to produce the necessary materials in
support of a plea taken before it, due either to gross
negligence or deliberate withholding, ·did not come
within the reason of s. 12A(6)(a) as stated in the expression " on the basis of facts which were not before it
when it passed the order". The appellant then moved
the. High Court in revision under s. 12B of the Act and
L960
Chandaji
Kubaji& Co.
v.
State of Andnra
Pradesh
S. K. Das j.
z960
Chandaji
Kubf1ji ($..Co.
v.
?late of A ndhra
Pradesh
808
SUPREME COURT REPORTS
[1960)
·contended that the view which the Tribunal took of
s.12A(6)(a) was not correct. The High Court drew a
distinction between what it called basic facts and
evidence in support thereof and said:
" There is an essential distinction between a fact
and the evidence to establish that fact".
S. J(. Das].
x
x
X
"Section 12A(6)(a) in our view is not intended to
give two opportunities to every assessee to establish
his case before a Tribunal. It is really conceived in
the interests of. the assessee, who was not able to
place some fact"s before the· Tribunal at the first
instance which would have made a difference in its
decision ".
In the view which the High Court took of s. 12A(6)(a),
it held that the applications for review were rightly
rejected.
In the two appeals before us the argument has been
that the Tribunal as also the High Court took an
erroneous view of the true scope and effect of s. 12A
(6)(a) of the Act. Our attention has been drawn to a
subsequent Full Bench decision of the same High Court
in The State of Andhra v. Sri Arisetty Sriramulu (1)
and it has been submitted that the view expressed
therein is the correct view. In that decision, it was
held that the word "facts" in s. 12A(6)(a) may be
taken to have been used in the sense in which it is used
in the law of evidence, that is to say, as including the
factum probandum or the principal fact to be proved
and the factum probans or the evidentiary facts from
which the principal fact follows .immediately or by
inference; facts may be either "facts in issue " which
are the principal matters in dispute or relevant facts
which are evidentiary and which directly or by
inference, prove or disprove the "facts in issue".
In the view which we have taken of these two
appeals, it is not necessary to discuss at great length
the divergent views taken in the High Court of Andhra
as to the true scope and effect of s. 12A(6)(a) of the
Act.
A Division Bench expressed the view that
" facts" in the sub-section meant basic facts, that is,
\ti A.LR. 1957 Andhra Pradesh 130.
-·
3 8.C.R. SUPREME COUR'r REPOR'r8
809
facts necessary to sustain a claim, and drew a distinction between such facts and the evidence required to
establish them; it further expressed the view that
under s. 12A(6)(a) the Tribunal may review its order
if any of the basic facts were not present before it
when it passed the order, but the sub-section was not
meant to give a second opportunity to a party to
produce fresh evidence. The Full Bench took a wider
view of the sub-section and said that facts referred to
in the sub-section might be " facts in issue" or
"evidentiary facts". We think that in an appropriate
case evidentiary facts may be so interlinked with the
facts in issue that they may also fall within the
purview of the sub-section. The Full Bench, however,
went a step further and said that even if relevant
evidentiary facts were intentionally or deliberately
withheld or suppressed, the party guilty of such
suppression or withholding would still be entitled to
ask for a review under s. 12A(6)(a).
We say this with
great respect, but this is precisely what the section
does not permit. The Full Bench said:
"The language of section 12A(6)(a) is so wide and
general that it might possibly lead to inconvenient
results in that it might enable an assessee to get a
further chance of hearing before the Appellate Tribunal on the strength of evidence which he negligently or designedly failed to produce at the first
hearing.
As the language used in section 12A(6)(a)
is clear and unequivocal and, in our opinion, capable
only of one interpretation, we are bound to give
effect to it in spite of the possibility of any inconvenience resulting therefrom. The inconvenience,
if any, is not to the· assessee for whose benefit
the provision is intended. In any case, the remedy
is with the Legislature".
It is, we think, doing great violence to language to say
that an intentional or deliberate withholding or
suppression of evidence in support of a plea or contention or a basic fact urged before the Tribunal, is
comprehended within the expression " facts which
were not before it (Tribunal) when it passed the
order". 'fo so construe the section is to put a, premium
Chandaji
Kubaji& Co.
v.
State of Anahra
Pradesh
S. K. Das].
Chandaji
Kubaji & Co.
v.
State of A ndhra
P-radesh
S. K. Das].
x960
May3.
810
SUPREME COURT REPORTS
[1960]
on deliberate negligence and fraud and amounts to
allowing a party to profit from its own wrong. We
do not think that such a construction follows from
the language used, which is more consistent with the
view that the provision ins. 12A(6)(a) permits a review
when through some oversight, mistake or error the
necessary facts, basic or evidentiary, were not present
before the Court when it passed the order sought to be
reviewed. It is entirely wrong to think that the subsection permits a party to play hide and seek with a
judicial Tribunal; that is to say to raise a fact in issue
or evidentiary fact as a plea in support of a claim and
at the same time deliberately withhold the evidence
in support thereof. Such a situation cannot be said
to be one within the meaning of the expression "facts
not present before the Tribunal ".
In the appeals before us there was intentional withholding or suppression of evidence. In the case, the
materials were not produced on the plea that they
were written in Gujrati and nobody was avail:;tble to
instruct counsel in English or Telugu and in the other,
on an equally specious plea that the correspondence
was mixed up with other records for about two years.
These two appeals can be disposed of on this short
ground that the appellant was not entitled to ask for
review under s. 12A(6)(a) by reason of his own deliberate negligence and intentional withholding of evidence.
We see no merit in these appeals and dismiss them
with costs.
Appeals dismissed.
THE COTTON AGENTS LTD., BOMBAY
v.
COMMISSIONER OF INCOME-TAX,
BOMBAY.
.
(S. K. DAS and M. HrnAYATULLAH, JJ.)
Income-tax-Managing Agency Agreement-Proper construction
of-Commission on sale proceeds of the managed company-Time of
accruing.
Messrs. Shivnarayan Surajmal Nomani were the managing
agents of the New Swadeshi Mills of Ahmedabad Ltd. The
Nemani group and the appellant-company which is the assessee