CST vs. Sunil Haribhau Pote (Bombay High Court)

The High Court had to inter alia consider the following question of law:

“Whether on the facts and circumstances of the case and on true and correct interpretation of the provisions in rule 68 of the Bombay Sales Tax Rules, 1959, and having regard to the rulings of the Patna High Court judgment in the case of M/s. Judagi Sao and Another (116 STC 106) and the Orissa High Court judgment in the case of M/s. Mahabir Prasad Agrawalla (79 STC 163), the Tribunal was justified in holding that the revision notice dated 26.11.2002 calling the appellant for hearing on 27.01.2003 was not properly served, when in fact the said notice was properly sent by R.P.A.D. to the appellant’s place and the same was returned by the postal authorities with the remarks regarding the appellant’s having refused to accept it?”

(i) Rule 68 is titled “Orders and Notices”. That appears under Chapter XII. Chapter XII is titled “Service of Orders and Notices”. From a perusal of sub rule (1) of Rule 68, it is apparent that orders and notices under the Bombay Sales Tax Act or under the Bombay Sales Tax Rules shall be served by one of the methods indicated in the sub rule. Thus, this provision sets out the modes of service. It could be by hand delivery or by post. The proviso comes into play only if upon an attempt having been made to serve any such notice by either of the above modes, the sales tax authority concerned has reasonable grounds to believe that the addressee is evading the service of notice or that, for any other reason which in the opinion of such authority is sufficient, the notice cannot be served by any of the above methods, then, after recording reasons the authority can take recourse to further modes.

(ii) We do not see how in the backdrop of the factual position which emerges from the record of this reference, can it be said that there was no service. This matter essentially is of fact. No question of law and for the opinion and answer of this Court in abstract can arise. Eventually a factual conclusion would have to be recorded if there is compliance with this procedural rule or not. The rule requires service to be effected. Thus, service is mandated but its mode is set out in the sub rules. By sub rule (3) of Rule 68 it is stated that when service is made by post, the service shall be deemed to be effected by properly addressing or preparing the order or notice and posting it by registered post with acknowledgement due, and unless the contrary is proved, the service shall be deemed to have been effected at the time at which the notice or order would be delivered in the ordinary course of post. Thus, services of orders and notices under the Bombay Sales Tax Act and the Rules if by post, that is the mode chosen, then, this sub rule amplifies as to how that should be deemed to have been effected. Admittedly, in the present case, there is an endorsement on the packet which was sent to the address of the noticee, namely, the sole proprietor; that the sole proprietor received it but refused to accept the same. When it was sent by R.P.A.D. to the address, it was returned by the postal authorities with the remark, that the addressee refused to accept the packet. That is why it is returned. Thus, the presumption that when the addressee whose address is set out on the envelope had an occasion to notice and peruse the packet, meant for him, but he refuses to accept it, then, that is deemed to be served. The addressee in this case is correctly described. There is no dispute about his identity. Even his address is correct. It is at that address the packet is carried and by the concerned postal authority. The duly authorised person carrying the packet reached the address. On noticing the addressee, he serves it, but the addressee after having perused the packet refused to accept it. It is in these circumstances, the postal remark that the concerned person has refused to accept; hence, returned to the sender denotes good and valid service. Then there was no occasion to resort to the proviso. In the given facts and circumstances, when there was sufficient and adequate notice and the sole proprietor had an occasion to appear and object to the stand of the Department on merit, so also by raising other legal contentions, then, the conclusion is inevitable that there is no defect or deficiency as far as this service is concerned. There is a factual finding recorded that Rule 68(1) has been complied with. To our mind, therefore, such a conclusion in the backdrop of the peculiar facts and circumstances raises no question of law. There was nothing that required any answer and opinion by this Court. A purely factual finding and which, to our mind, would suffice enables the Tribunal to render a complete decision on the appeal. In other words, the other points in the appeal could have definitely been considered and answered, if required. The Tribunal got carried away only with this technical or procedural aspect of the matter and erroneously refused to consider and decide the appeal on merits. The Tribunal should have rendered that conclusion once the aspect of notice is duly taken care of.

(iii) As a result of the above discussion, we are of the opinion that the reference is wholly unnecessary. The Tribunal’s orders and referred by us above do not raise any question of law for opinion and answer of this Court. Suffice it to say that whether Rule 68 has been complied with in a given case would depend upon the circumstances and the record of that case. Whether there is proof of service or not would, therefore, necessarily depend on the facts and circumstances in each case. No general rule can be laid down.