Statutory Authority Has Implicit Jurisdiction To Pass Orders Being Incidental In Nature Including Interim Orders Unless There’s Prohibition: Rajasthan HC

The Rajasthan High Court reiterated that a statutory authority/Appellate Authority having power to decide a matter has implicit jurisdiction and authority to pass such orders which are incidental in nature including the order of interim nature unless there is expressed or implied prohibition to pass interim order or incidental orders.

The Jaipur Bench was dealing with a writ petition filed by a company named M/s Mangalam Cement Ltd. against the State.

A Division Bench comprising Chief Justice Manindra Mohan Shrivastava and Justice Bhuwan Goyal observed, “In our considered opinion, the view taken by the Appellate Authority is completely erroneous and unsustainable in law. It is well settled principle that statutory authority/Appellate Authority having power to decide a matter has implicit jurisdiction and authority to pass such orders which are incidental in nature including the order of interim nature unless there is expressed or implied prohibition to pass interim order or incidental orders. This principle was propounded by the Hon'ble Supreme Court way back in the case of ITO, Cannanore vs. M.K. Mohammed Kunhi (1969) 71 ITR 815.”

Senior Advocate R.B. Mathur appeared for the petitioner while AAG Bharat Vyas appeared for the respondents.

Facts of the Case -

The petitioner was a company incorporated under the Companies Act and was engaged in manufacturing of cement. In the matter of consumption of electricity, the petitioner was liable for payment of electricity duty under Rajasthan Electricity (Duty) Act, 1962. According to the petitioner, it was subjected to assessment with regard to its liability for payment towards electricity duty and earlier it was assessed also in the year 2019 but, later on, on certain instructions issued by the Commissioner, it was subjected to fresh reassessment which culminated in an order and a separate demand notice.

Aggrieved by the aforesaid order, the petitioner preferred statutory appeal available under the provisions of Rule 11 of the Rajasthan Electricity (Duty) Rules 1970. The petitioner also submitted an application for stay of recovery. That application, however, was rejected vide an order. Therefore, the petitioner was before the High Court, challenging the same.

The High Court in the above context of the case noted, “The aforesaid principle has been succinctly reiterated and restated in various decisions. In a later decision, in the case of DCIT vs. Pepsi Foods Ltd. (supra), the principle laid down earlier in the case of M.K. Mohammed Kunhi (supra) was affirmed.”

The Court said that the Appellate Authority abdicated its function and failed to exercise jurisdiction while rejecting the application for stay without deciding it on merits.

“Therefore, even though there is an alternative remedy, we are inclined to exercise our discretion. … In view of the above, the impugned order is set aside on that count alone. The Appellate Authority/Commercial Taxes Department, Kota is directed to consider the application for grant of stay on its own merits.”, it further ordered.

Accordingly, the Court allowed the writ petition and set aside the impugned order.

Cause Title- M/s Mangalam Cement Ltd. v. State of Rajasthan & Ors. (Neutral Citation: 2024:RJ-JP:17981-DB)

Appearance:

Petitioner: Senior Advocate R.B. Mathur, Advocates Falak Mathur, and Varnit Jain.

Respondents: AAG Bharat Vyas and Advocate Niti Jain Bhandari.

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