Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7
PETITIONER:
SANTOSHI TEL UTPADAK KENDRA
Vs.
RESPONDENT:
DEPUTY COMMISSIONER OF SALES TAX
DATE OF JUDGMENT24/07/1981
BENCH:
PATHAK, R.S.
BENCH:
PATHAK, R.S.
BHAGWATI, P.N.
CITATION:
1981 AIR 1617 1982 SCR (1) 97
1981 SCC (3) 466 1981 SCALE (3)1094
ACT:
Bombay Sales Tax Act 1959, S. 51(1) (a)-Scope of-
Assessment order by Sales Tax Officer-Assessee’s first
appeal before Assistant Commissioner disposed of-Assessee’s
second appeal before Sales Tax Tribunal pending-Commissioner
of Sales Tax whether competent to revise the appellate order
of Assistant Commissioner.
HEADNOTE:
The appellant, a partnership firm, was assessed by the
Sales Tax Officer, who estimated the turnover for the
Calendar year 1971, and for the first six months of the year
1972 and made two orders of assessment dated 26 March 1973
under section 33 of the Bombay Sales Tax Act, 1959 levying
Sales Tax and penalty. Against the assessment and penalty
orders for the two periods, the appellant appealed under
clause (a) of sub-section (1) of section 55 of the Act to
the Assistant Commissioner. By a common order dated 29th
September, 1973 the Assistant Commissioner reduced the
quantum of the turnover and, consequently, the tax liability
for each of the periods. Not fully satisfied by the relief
granted, the appellant proceeded in second appeal to the
Sales Tax Tribunal on 8th December, 1973. During the
pendency of the appeals before the Tribunal, the Deputy
Commissioner, issued two notices to the appellant on 24th
April, 1974 requiring it to show cause why the appellate
orders dated 29th September, 1973 passed by the Assistant
Commissioner should not be revised under section 57 of the
Act. The appellant objected to the exercise of revisional
power by the Deputy Commissioner during the pendency of the
appeals before the Tribunal. On 12th September 1975 the
Deputy Commissioner rejected the objection. Against the
order of rejection the appellant filed two appeals before
the Tribunal, and by its order dated 27th October, 1977 the
Tribunal dismissed the appeals. The Tribunal took the view
that its deciding those appeals would result in nullifying
the revisional power vested in the Deputy Commissioner. The
two second appeals filed by the appellant against the
appellate orders dated 19th September, 1973 passed by the
Assistant Commissioner were adjourned.
The appellant filed a writ petition in the High Court
against the order of the Deputy Commissioner dated 12th
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 7
September, 1975 rejecting its preliminary objection and also
against the order passed by the Tribunal on 27th October,
1977 dismissing his appeals as well as the notices issued by
the Deputy Commissioner on 24th April, 1974 in the purported
exercise of his revisional power, contending that the
Commissioner of Sales Tax could not exercise his revisional
power against the appellate order of the Assistant
Commissioner when a second appeal against that order was
pending before the Tribunal.
98
The High Court rejected the appellant’s contention
observing that as the statute did not provide any other
forum or jurisdiction for protecting the interests of the
Revenue, it was always open to the Commissioner to interfere
in revision with an order prejudicial to the Revenue
notwithstanding that such order may be already under appeal
before the Tribunal.
Allowing the appeal to this Court,
^
HELD: 1. It is not open to the Commissioner to invoke
his power under clause (a) of sub-section (1) of section 57
and summon the record of an order over which the Tribunal
has already assumed appellate jurisdiction. The subordinate
status of the Commissioner precludes that. [102 G]
2. An assessment order under the Bombay Sales Tax Act
is appealable under section 55 of the Act. When the order is
made by the Sales Tax Officer an appeal goes to the
Assistant Commissioner. If the order is made by the
Assistant Commissioner an appeal goes to the Commissioner
and if it has been made by the Commissioner or Deputy
Commissioner or Additional Commissioner an appeal lies
before the Tribunal. Sub-section (2) of section 55 provides
for a second appeal against the appellate order of the
Assistant Commissioner. The second appeal lies at the option
of the appellant to the Commissioner or the Tribunal. The
Tribunal exercises appellate jurisdiction by way of second
appeal in respect of an assessment order made by the Sales
Tax Officer. It also exercises by way of first appeal,
appellate jurisdiction over an assessment order made by the
Commissioner. It is at the apex of the appellate hierarchy,
the Sales Tax Officer, the Assistant Commissioner and the
Commissioner all of them being, subordinate to it. [101 C-E]
3. While the Commissioner exercises revisional
jurisdiction over an order passed by any officer or person
subordinate to him, the Tribunal is the revisional authority
over an order of the Commissioner. The Act constitutes the
Tribunal an appellate as well as a revisional authority over
the Commissioner. In quasi-judicial matters the Commissioner
is therefore subordinate to the Tribunal.
[102 D]
4. The Tribunal is the supreme appellate and revisional
authority under the statute. It cannot be divested of its
jurisdiction to decide on the correctness of an order, it
cannot be frustrated in the exercise of that jurisdiction,
merely, because a subordinate authority, the Commissioner,
has also been vested with jurisdiction over that order.
Unless the statute plainly provides to the contrary that
appears to be incontrovertible. [102 F]
5. The High Court was in error in concluding that the
power to enhance an assessment can be discovered only in the
revisional jurisdiction of the Commissioner and nowhere
else. [104 H-105 A]
6. In a second appeal under sub-section (2) of section
55 of the Bombay Sales Tax Act, the Tribunal has power to
enhance the assessment. That being so, it is open to the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 7
Revenue to invoke that power in a pending second appeal
filed by the dealer before the Tribunal. [104 G]
7. The Commissioner being a subordinate authority to
the Tribunal cannot interfere with an order pending in
appeal before the Tribunal, especially when
99
the interest of the Revenue is protected by the power of
enhancement vested in the Tribunal while disposing of a
second appeal filed by a dealer. [105 G]
Commissioner of Sales Tax v. Motor and Machinery
Manufacturers Ltd., (1976) 38 STC 78 over-ruled.
Commissioner of Income Tax v. Amritlal Bhogilal (1958)
34 ITR 130 (SC) distinguished.
Ramlal Onkarmal v. Commissioner of Income Tax, Assam
(1962) 44 ITR 578, Kelpunj Enterprises v. Commissioner of
Income Tax Kerala. (1977) 108 ITR 294, Russell Properties
(P.) Ltd. v. A. Chowdhury, (1977) 109 ITR 229 inapplicable.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1968 of
1978.
Appeal by special leave from the judgment and order
dated 22nd/23rd June/5th July 1978 of the High Court of
Bombay (Nagpur Bench) in Special Civil Application No. 238
of 1978.
V.S. Desai, P.H. Parekh, C.B. Singh, B.L. Verma & Miss
V. Caprihan for the Appellant.
R.H. Dhebar & M.N. Shroff for the Respondent.
The Judgment of the Court was delivered by
PATHAK, J. This appeal by special leave raises the
important question whether the Commissioner of Sales Tax can
revise under cl. (a) of sub-s. (1) of s. 57 of the Bombay
Sales Tax Act, 1959, an appellate order passed by the
Assistant Commissioner when the assessee’s second appeal
against that order is pending before the Maharashtra Sales
Tax Tribunal.
The appellant is a partnership firm, carrying on the
business of manufacturing and selling vegetable The Sales
Tax Officer estimated the turnover for the calendar year
1971 and made an order dated 26th March, 1973 levying Sales
Tax at Rs. 73,198.62 and a penalty of Rs. 36,197.64. On the
same date, another assessment order was made for the first
six months of the year 1972, where again on the basis of an
estimate the Sales Tax Officer computed the tax Rs.
81,745.71 and levied a penalty of Rs. 37,572.26. The two
assessment orders were apparently made under s.33 of the
Bombay Sales Tax Act, 1959. Against the assessment and
penalty orders for
100
the two periods, the appellant appealed under cl. (a) of
sub-s. (1) of s. 55 of the Act to the Assistant
Commissioner. By a common order dated 29th September, 1973
the Assistant Commissioner reduced the quantum of the
turnover and, consequently, the tax liability to Rs.
30,494.67 and the penalty to Rs. 11,745.71 for the first
period and a tax liability of Rs. 16,447.33 and penalty of
Rs. 5,572.26 for the second period. Not fully satisfied by
the relief granted, the appellant proceeded in second appeal
to the Maharashtra Sales Tax Tribunal on 8th December, 1973.
During the pendency of the appeals before the Tribunal, the
Deputy Commissioner, Nagpur issued two notices to the
appellant on 24th April, 1974 requiring it to show cause why
the appellate orders dated 29th September, 1973 passed by
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 7
the Assistant Commissioner should not be revised under s. 57
of the Act. The appellant objected to the exercise of
revisional power by the Deputy Commissioner during the
pendency of the appeals before the Tribunal. On 12th
September, 1975 the Deputy Commissioner rejected the
objection. Against the order of rejection the appellant
filed two appeals before the Tribunal, and by its order
dated 27th October, 1977 the Tribunal dismissed the appeals.
At the same time, the Tribunal adjourned the two second
appeals filed by the appellant against the appellate orders
dated 29th September, 1973 passed by the Assistant
Commissioner. The Tribunal took the view that its deciding
those appeals would result in nullifying the revisional
power vested in the Deputy Commissioner.
The appellant filed a writ petition in the High Court
of Bombay against the order of the Deputy Commissioner dated
12th September 1975 rejecting its preliminary objection and
also against the order passed by the Tribunal on 27th
October, 1977 dismissing his appeals, as well as the notices
issued by the Deputy Commissioner on 24th April, 1974 in the
purported exercise of his revisional power.
The only point pressed by the appellant before the High
Court was that the Commissioner of Sales Tax could not
exercise his revisional power against the appellate order of
the Assistant Commissioner when a second appeal against that
order was pending before the Tribunal. The High Court turned
down the plea by its order dated 5th July, 1978, observing
that it was always open to the Commissioner to interfere in
revision with an order prejudicial to the Revenue
notwithstanding that such order may be already under appeal
before the Tribunal. The High Court felt compelled to take
this view because, in its opinion, the statute did not
provide any
101
other forum or jurisdiction for protecting the interests of
the Revenue. It relied on its earlier judgment in
Commissioner of Sales Tax v. Motor and Machinery
Manufactures Ltd., and also sought support from the
observations of this Court in Commissioner of Income Tax v.
Amritlal Bhogilal. It spoke further of "the anomaly of
overlapping jurisdiction" between the Commissioner and the
Tribunal, and referred with approval to an earlier decision
of the High Court in H. B. Munshi v. Oriental Rubber
Industries Pvt. Ltd.
An assessment order under the Bombay Sales Tax Act is
appealable under s.55 of the Act, and we may mention only
that when the order is made by the Sales Tax Officer an
appeal lies to the Assistant Commissioner, if the order is
made by the Assistant Commissioner an appeal goes to the
Commissioner and if it has been made by the Commissioner (or
Deputy Commissioner or Additional Commissioner) an appeal
lies before the Tribunal. Sub-s. (2) of s.55 provides for a
second appeal against the appellate order of the Assistant
Commissioner. The second appeal lies at the option of the
appellant, to the Commissioner or the Tribunal. The
Tribunal, it will be noticed, exercises appellate
jurisdiction by way of second appeal in respect of an
assessment order made by the Sales Tax Officer. It also
exercises, by way of first appeal, appellate jurisdiction
over an assessment order made by the Commissioner. It is at
the apex of the appellate hierarchy, the Sales Tax Officer,
the Assistant Commissioner and the Commissioner all of them
being, therefore, subordinate to it.
S.57 of the Act provides for revisional
jurisdiction.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 7
"57 (1) Subject to the provisions of section 56
and to any rules which may be made in this behalf.
(a) the Commissioner may, of his own motion, call for
and examine the record of any order passed
(including an order passed in appeal) under this
Act or the rules made thereunder by any officer or
person subordinate to him, and pass such order
thereon as he thinks just and proper;
102
Provided that, no notice in the prescribed form
shall be served by the Commissioner under this clause
after the expiry of three years from the date of the
communication of the order sought to be revised, and no
order in revision shall be made by him hereunder after
the expiry of five years from such date;
(b) the Tribunal, on application made to it against an
order of the Commissioner (not being an order
passed under sub-section (2) of s.55 in second
appeal) within four months from the date of the
communication of the order, may call for and
examine the record of any such order, and pass
such order thereon as it thinks just and proper.
It will be noticed that while the Commissioner
exercises revisional jurisdiction over an order passed by
any officer or person subordinate to him, the Tribunal is
the revisional authority over an order of the Commissioner
(not being an order passed by the Commissioner disposing of
a second appeal). The Act thus constitutes the Tribunal an
appellate as well as a revisional authority over the
Commissioner. Plainly, therefore, in quasi-judicial matters
the Commissioner is subordinate to the Tribunal.
Now it seems to us past question that when the
appellate jurisdiction of superior authority is invoked
against an order and that authority is seized of the case,
it is inconceivable for a sub-ordinate authority to claim to
exercise jurisdiction to revise that very order. The
Tribunal is the supreme appellate and revisional authority
under the statute. It cannot be divested of its jurisdiction
to decide on the correctness of an order, it cannot be
frustrated in the exercise of that jurisdiction, merely
because a subordinate authority, the Commissioner, has also
been vested with jurisdiction over that order. Unless the
statute plainly provides to the contrary, that appears to us
to be incontrovertible. It is not open to the Commissioner
to invoke his power under cl. (a) of sub-s. (1) of s. 57 and
summon the record of an order over which the Tribunal has
already assumed appellate jurisdiction. The subordinate
status of the Commissioner precludes that.
The High Court felt burdened by the compulsion that
unless a contemporaneous exercise of concurrent jurisdiction
was read into sub-s. (1) of s.57, so that both the Tribunal
and the Commissioner
103
could be regarded as simultaneously enjoying "overlapping
jurisdiction" in respect of the same order, it would be
impossible to safeguard the interests of the Revenue; for,
says the High Court, a second appeal is available only to a
dealer and not to the Revenue, and an enterprising dealer
could, by expeditiously filing a second appeal before the
Tribunal effectively shut out the Commissioner from
interfering with the order in the interests of the Revenue.
The High Court found itself driven to the conclusion that
the Commissioner was entitled to revise an order at any
stage, otherwise there could be cases where the assessment
could not be enhanced. The High Court, we think, has
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 7
overlooked an important provision of the Act. In our
opinion, the appellate powers elaborated in sub-s. (6) of
s.55 take account of such a need. Their comprehensive sweep
can be judged from the terms of the sub-section.
"(6) Subject to such rules of procedure as may be
prescribed, every appellate authority (both in the
first appeal and the second appeal) shall have the
following powers:
(a) in an appeal against an order of assessment, it
may confirm, reduce, enhance or annul the
assessment; or it may set aside the assessment and
refer the case back to the assessing authority for
making a fresh assessment in accordance with the
direction given by it and after making such
further inquiry as may be necessary; and the
assessing authority shall thereupon proceed to
make such fresh assessment and determine where
necessary, the amount of tax, payable on the basis
of such fresh assessment;
(b) in an appeal against an order imposing a penalty,
the appellate authority may confirm or cancel such
order or vary it so as either to enhance or reduce
the penalty.
(c) In any other case, the appellate authority may
pass such orders in the appeal as it deems just
and proper;
Provided that, the appellate authority shall not
enhance an assessment or a penalty or reduce the amount
104
of draw-back, set off or refund of the tax, unless the
appellant has had a reasonable opportunity of showing
cause against such enhancement or reduction".
Three distinct categories of cases are enumerated An
appeal against an assessment order, an appeal against a
penalty order and an appeal in any other case. The power to
enhance the liability is given to the appellate authority in
the first two categories only. We are concerned with one of
them, an appeal against an order of assessment.
Now the sub-section speaks of an "appellate authority
both in the first appeal and the second appeal". It is quite
clear, therefore, that the appellate powers detailed in cl.
(a) have the same amplitude in a second appeal as in a first
appeal. An appellate authority disposing of a first appeal
has power to enhance the assessment. So has appellate
authority in a second appeal. We may also point out that
when an appellate authority is considering a second appeal a
"first appellate" order, it is examining an order which can
be broadly described as an order of assessment. It is a
final order disposing of an appeal which, in a sense, is a
continuation of the assessment. A second appeal against such
an order is an appeal against an order of assessment.
En passant, it will be noticed that sub-s. (6) of s.55
of the Bombay Sales Tax Act is in pari materia with sub-s.
(1) of s. 251 of the Income Tax Act, 1961. The language is
almost identical. Sub-s. (1) of s. 251 sets forth the same
three categories and the power to enhance is confined to an
order of assessment and an order imposing a penalty. But in
the case of a second appeal under the Income-tax Act, there
is a distinct departure from the scheme under the Bombay
Sales Tax Act. S.253 does not expressly speak of the "power
to enhance", and makes no distinction in regard to the
extent of the appellate power between any of the cases in
which a second appeal lies from an order under s.251.
It is evident then that in a second appeal under sub-s.
(2) of s.55 of the Bombay Sales Tax Act, the Tribunal has
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 7
power to enhance the assessment. That being so, plainly it
is open to the Revenue to invoke that power in a pending
second appeal filed by the dealer before the Tribunal. The
High Court is in error in concluding that the power to
enhance an assessment can be discovered only in the
105
revisional jurisdiction of the Commissioner and nowhere
else. The compulsion which drove the High Court to the
construction placed by it on sub-s. (1) of s.57 of the Act
does not have substance, and the entire sub-stratum
underlying the High Court judgment must give way.
On the view which finds favour with us we cannot
approve of the law laid down on the point in Motor and
Manufacturers Ltd. (supra) nor do we see any overlapping of,
or conflict in, the powers of the Commissioner and the
Tribunal inferred in Oriental Rubber Industries Pvt. Ltd.
(supra). As regards the observation of this Court in
Amritlal Bhogila (supra), that was not a case where a
subordinate authority sought to exercise its revisional
jurisdiction over an order pending in appeal before a
superior authority. No support can be derived by the
respondent from that case. For the same reason, Ramlal
Onkarmal v. Commissioner of Income-tax, Assam decided by the
Assam High Court Kelpunj Enterprises v. Commissioner of
Income-tax, Kerala, decided by the Kerala High Court and
Russell Properties (P) Ltd. v. A. Chowdhury, decided by the
Calcutta High Court, placed before us by the respondent have
no relevance.
Our attention has been invited to s.34 of the
Maharashtra Agriculture Income Tax Act, 1962 where when
defining the revisional power of the Commissioner the
Legislature has expressly incorporated a provision
prohibiting the Commissioner from exercising his revisional
power against an order pending in appeal before the
Assistant Commissioner or Tribunal. It is urged that if a
similar prohibition was intended against the Commissioner
under the Bombay Sales Tax Act, an express provision to that
effect would have been made. Reference has also been made to
the provisions in the Customs Act, 1962 conferring
revisional jurisdiction. We are not impressed by the
contention. The absence of an express provision cannot
detract from the conclusion reached by us - a conclusion
flowing from the necessary intendment of the statute - that
the Commissioner being a subordinate authority to the
Tribunal, cannot interfere with an order pending in appeal
before the Tribunal, and further that the interest of the
Revenue is protected by the power of enhancement vested in
the Tribunal while disposing of a second appeal filed by a
dealer.
106
In the result, the appeal is allowed, the judgment
dated 5th July, 1978 of the High Court is set aside, and the
order dated 29th October, 1977 of the Tribunal and the
revisional proceedings before the Deputy Commissioner,
including the orders made by him, are squared. The appellant
is entitled to its costs.
N.V.K. Appeal allowed.
107