JCG Associates V. Commissioner of Central Excise, Mangalore’ – 2009 (15) STR 50 (Tri.

Bang)

Service tax liability was contested by the appellant for the first time before tribunal on the ground
that interview for candidates conducted on behalf of foreign companies who were clients. The
Department objected the same and contended that new ground cannot be introduced to challenge
the impugned order.

The Tribunal held that a legal question is involved in the appeal. The question of law can be raised
at any stage. The Tribunal found that the matter should be examined properly by the Original
Authority. The Tribunal set aside the impugned order and remanded the matter to the Original
Authority.

In Jai Jai Ram Manohar Lal3, this Court was concerned with a matter wherein amendment in the
plaint was refused on the ground that the amendment could not take effect retrospectively and on
the date of the amendment the action was barred by the law of limitation. It was held :
"....Rules of procedure are intended to be a handmaid to the administration of justice. A party
cannot be 1
 refused just relief merely because of some mistake, negligence, inadvertance or even infraction of
the Rules of procedure. The Court always gives leave to amend the pleading of a party, unless it is
satisfied that the party applying was acting mala fide, or that by his blunder, he had caused injury to
his opponent which may not be compensated for by an order of costs. However negligent or careless
may have been the first omission, and, however late the proposed amendment, the amendment
may be allowed if it can be made without injustice to the other side." This Court further
stated :

".....The power to grant amendment of the pleadings is intended to serve the ends of justice
and is not governed by any such narrow or technical limitations."

20. Do the principles relating to amendment of pleadings in original proceedings apply to the
amendment in the grounds of appeal? Order XLI Rule 2 CPC makes a provision that the appellant
shall not, except by leave of the Court, urge or be heard in support of any ground of objection not
set forth in the memorandum of appeal; but the Appellate Court, in deciding the appeal, shall not be
confined to the grounds of objections set forth in the memorandum of appeal 1
or taken by leave of the Court. Order XLI Rule 3 CPC provides that where the memorandum of
appeal is not drawn up as prescribed, it may be rejected, or be returned to the appellant for the
purpose of being amended.

21. The aforesaid provisions in CPC leave no manner of doubt that the appellate court has power to
grant leave to amend the memorandum of appeal. As a matter of fact, in Harcharan v. State of
Haryana13, this Court observed that the memorandum of appeal has same position like the plaint in
the suit. This Court said: ".....When an appeal is preferred the memorandum of appeal
has the same position like the plaint in a suit because plaintiff is held to the case pleaded in
the plaint. In the case of memorandum of appeal same situation obtains in view of Order 41,
Rule 3. The appellant is confined to and also would be held to the memorandum of appeal.
To overcome any contention that such is not the pleading the appellant sought the
amendment....."

A four-Judge Bench of this Court in L.J. Leach and Company Ltd., v. Jardine Skinner and
Co.1while dealing with the prayer for amendment of the plaint made before this Court
whereby plaintiff sought to raise, in the alternative, a claim for damages for breach of
contract for non-delivery of the goods relied upon the decision of Privy Council in Charan
Das & Others12; granted leave at that stage and held : "It is no doubt true that
courts would, as a rule, decline to allow amendments, if a fresh suit on the amended claim
would be barred by limitation on the date of the application. But that is a factor to be taken
into account in exercise of the discretion as to whether amendment should be ordered, and
does not affect the power of the court to order it, if that is required in the interests of
justice."

. In Jai Jai Ram Manohar Lal3, this Court was concerned with a matter wherein
amendment in the plaint was refused on the ground that the amendment could not
take effect retrospectively and on the date of the amendment the action was barred
by the law of limitation. It was held : "....Rules of procedure are intended to be
a handmaid to the administration of justice. A party cannot be 1
 refused just relief merely because of some mistake, negligence, inadvertance or even
infraction of the Rules of procedure. The Court always gives leave to amend the
pleading of a party, unless it is satisfied that the party applying was acting mala fide,
or that by his blunder, he had caused injury to his opponent which may not be
compensated for by an order of costs. However negligent or careless may have been
the first omission, and, however late the proposed amendment, the amendment may
be allowed if it can be made without injustice to the other side." This Court
further stated :

".....The power to grant amendment of the pleadings is intended to serve the

ends of justice and is not governed by any such narrow or technical
limitations."

 In Ganesh Trading Co. v. Moji Ram10, this Court stated :

"Procedural law is intended to facilitate and not to obstruct the course of

substantive justice. Provisions relating to pleading in civil cases are meant to give to
each side intimation of the case of the other so that it may be met, to enable Courts to
determine what is really at issue between parties, and to prevent deviations from the
course which litigation on particular causes of action must take."

10

(1978) 2 SCR 614

Chitturi Subbanna vs Kudapa Subbanna & Others on 18 December,

1964
Equivalent citations: 1965 AIR 1325, 1965 SCR (2) 661

1. Rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963, provides that the
appellant, shall not, except by leave of Tribunal, urge to be heard in support of
ground not set forth in the memorandum of appeal. However, the Tribunal is
competent to allow the appellant to raise at the time of hearing of the appeal,
 additional grounds of appeal even without a formal amendment of the
memorandum of appeal (CIT vs. Nelliappan 66 ITR 722 (SC).

New India Life Ass. Co. Ltd. vs. CIT 31 ITR 844, 846 (Bom.)

In Ahmedabad Electricity Co. Ltd. vs. CIT 199 ITR 413 (Bom) (FB), the Court held
that Rules 11 and 29 of the Appellate Tribunal Rules indicate that the scope of
enquiry before the Tribunal can be wider than the points which are raised before
the Tribunal. The Tribunal, therefore, would ordinarily have the power to allow
additional points to be raised before it so long as they arise from the subject
matter of the proceedings and not necessarily only the subject matter raised in
the memorandum of appeal.

The Tribunal has jurisdiction to permit additional grounds to be raised before it,
even though they may not arise from the order impugned before it as long as
these grounds are in respect of the subject matter of the entire tax proceedings.
The Apex Court in the case National Thermal Power Corporation vs. CIT (1998)
229 ITR 383 (SC) observed that Tribunal is confined only to issues arising out of
the appeal before the CIT(A) takes too narrow a view of the powers of the
Appellate Tribunal. Undoubtedly, the Tribunal will have the discretion to allow or
not to allow a new ground to be raised. But where the Tribunal is only required to
consider a question of law arising from the facts which are on record in the
assessment proceeding we fail to see why such a question should not be allowed
to be raised when it is necessary to consider that question in order to correctly
assess the tax liability of an assessee.

REPORTAB
L E
 
 IN THE
SUPREME
COURT OF
INDIACIVIL
APPELLATE
JURISDICTI
ON
 
 CIVIL APPEAL NOs. 4148-4149 OF 2009(Arising out of SLP©Nos.23661-23662 of
2007)
O l y m p i c   I n d u s t r i e s   - - - -
A p p e l l a n t VersusMulla Hussainy Bhai
MullaAkberally & Ors. ….Respondents

Usha Balasaheb Swami &O r s . v s . K i r a n A p p a s o S w a m i & O r s . ( 2 0 0 7 ) 5

SCC 602

4. In L.J. Leach & Co. Ltd. and Anr. v. Jardine, Skinner & Co. MANU/SC/0009/1957 : AIR 1957
SC

357, a suit for damages for `conversion of goods' filed by the plaintiff was decreed by the
trial court but

the decree was set aside by the High Court. In an appeal before this Court, the plaintiff
applied for

amendment of the plaint by raising an alternative claim for damages for breach of contract
for `nondelivery of goods'. The amendment was resisted by the defendant contending that
it sought to introduce a

new cause of action which was barred by limitation on the day the amendment was sought
and, hence, it

would seriously prejudice the defendant.

45. Though the Court noticed `considerable force' in the objection, keeping in view the
prayer in the

amendment which was no

4. In L.J. Leach & Co. Ltd. and Anr. v. Jardine, Skinner & Co. MANU/SC/0009/1957 : AIR
1957 SC
357, a suit for damages for `conversion of goods' filed by the plaintiff was decreed by the
trial court but

the decree was set aside by the High Court. In an appeal before this Court, the plaintiff
applied for

amendment of the plaint by raising an alternative claim for damages for breach of
contract for `nondelivery of goods'. The amendment was resisted by the defendant
contending that it sought to introduce a

new cause of action which was barred by limitation on the day the amendment was
sought and, hence, it

would seriously prejudice the defendant.

45. Though the Court noticed `considerable force' in the objection, keeping in view the
prayer in the

amendment which was no `foreign to the scope of the suit' and all necessary facts were
on record, it

allowed the amendment.

The Tribunal has jurisdiction to permit additional grounds to be raised before it, even
though they may not arise from the order impugned before it as long as these grounds are
in respect of the subject matter of the entire tax proceedings. The Apex Court in the case
National Thermal Power Corporation vs. CIT (1998) 229 ITR 383 (SC) observed that
Tribunal is confined only to issues arising out of the appeal before the CIT(A) takes too
narrow a view of the powers of the Appellate Tribunal. Undoubtedly, the Tribunal will
have the discretion to allow or not to allow a new ground to be raised. But where the
Tribunal is only required to consider a question of law arising from the facts which are on
record in the assessment proceeding we fail to see why such a question should not be
allowed to be raised when it is necessary to consider that question in order to correctly
assess the tax liability of an assessee.

The Rajasthan High Court in the case of Shilpa Associates vs. ITO (2003) 181 CTR (Raj.) 92
has held that the additional grounds of Appeal cannot be rejected on the ground that the
same have been filed beyond the time limit provided u/s. 253(3).
Jai Jai Ram Manohar Lal v. National Building Material Supply MANU/SC/0016/1969 :
(1969)

1 SCC 869, A sued B in his individual name but afterward soughts leave to amend the
plaint to sue as the

proprietor of a Hindu Joint Family business. The amendment was granted and the suit was
decreed. The

High Court, however, reversed the decree observing that the action was brought by a
`non-existing

person'.

54. Reversing the order of the High Court, this Court (per Shah, J., as he then was) made
the following

oft- quoted observations:

Rules of procedure are intended to be a handmaid to the administration of justice. A party

cannot be

refused just relief merely because of some mistake, negligence, inadvertence or even
infraction of the

rules of procedure. The Court always gives leave to amend the pleading of a party, unless
it is satisfied

that the party Applying, was acting mala fide, or that by his blunder, he had caused injury
to his opponent

which may not be compensated for by an order of costs. However negligent or careless
may have been

the first omission, and, however late the

B.K. Narayana Pillai v. Parameshwaram Pillai and Anr.
MANU/SC/0775/1999 : (2000) 1 SCC
712, a suit was filed by A for recovery of possession from B alleging that B was a licensee.
In the written

statement B contended that he was a lessee. After the trial began, he applied for
amendment of the

written statement by adding an alternative plea that in case B is held to be a licensee, the
licence was

irrevocable. The amendment was refused.

59. Setting aside the orders refusing amendment, this Court stated:

The purpose and object of Order 6 Rule 17 CPC is to allow either party to alter or amend
his pleadings in

such manner and on such terms as may be just. The power to allow the amendment is
wide and can be

exercised at any stage of the proceedings in the interests of justice on the basis of
guidelines laid down

by various High Courts and the Supreme Court. It is true that the amendment cannot be
claimed as a

matter of right and under all circumstances. But it is equally true that the courts while
deciding such

prayers should not adopt hypertechnical approach. Liberal approach should be the
general rule

particularly in cases where the other side can be compensated with the costs.
Technicalities of law should

not be permitted to hamper the courts in, the administration of justice between the
parties. Amendments

are allowed in the pleadings to avoid uncalled for multiplicity of litigation.

In deciding whether the courts have the power to allow an amendment of the Memorandum after
the expiry of the time limit specified under section 34(3) of the Act, the Supreme Court first
analysed its judgments in Ganesh Trading Co v Moji Ram, LJ Leach and Company Ltd v Jardine
Skinner and Co, Pirgonda Hongonda Patil v Kalgonda Shidgonda Patil, Jai Jai Ram Manohar Lal v
National Building Material Supply, Gurgaon and the Privy Council’s judgment in Charan Das and
Others v Amir Khan and Others. An analysis of these judgments showed clearly that it is an
established principle with respect to original proceedings that leave to amend pleadings and
particulars can be granted by the court even after the expiry of the time limit, if the amendment is
considered to be in the "interest of justice". Further, referring to its judgment in Harcharan v State
of Haryana, the Supreme Court observed that the same power extends to an appeal court in
respect of an amendment to the memorandum of an appeal.

Do the principles relating to amendment of

pleadings in original proceedings apply to the amendment in

the grounds of appeal? Order XLI Rule 2 CPC makes a

provision that the appellant shall not, except by leave of the

Court, urge or be heard in support of any ground of objection

not set forth in the memorandum of appeal; but the Appellate

Court, in deciding the appeal, shall not be confined to the

grounds of objections set forth in the memorandum of appeal

1or taken by leave of the Court. Order XLI Rule 3 CPC provides

that where the memorandum of appeal is not drawn up as

prescribed, it may be rejected, or be returned to the appellant

for the purpose of being amended.

21. The aforesaid provisions in CPC leave no manner

of doubt that the appellate court has power to grant leave to

amend the memorandum of appeal. As a matter of fact, in

Harcharan v. State of Haryana

13

, this Court observed that the

memorandum of appeal has same position like the plaint in the

suit. This Court said:

“…..When an appeal is preferred the memorandum of

appeal has the same position like the plaint in a suit

because plaintiff is held to the case pleaded in the

plaint. In the case of memorandum of appeal same

situation obtains in view of Order 41, Rule 3. The

appellant is confined to and also would be held to the

memorandum of appeal. To overcome any contention

that such is not the pleading the appellant sought the

amendment…..