Full Judgment Text
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PETITIONER:
COMMISSIONER OF SALES-TAX, U.P.
Vs.
RESPONDENT:
MANGAL SEN SHYAM LAL
DATE OF JUDGMENT02/04/1975
BENCH:
ACT:
U.P. Sales Tax Act, 1948-Section 10(3) and 10(3-B) period of
limitation for filing revision by the Commissioner.
Interpretation of Statute-Whether scheme of the Act and rule
can be taken into consideration in interpreting the Act-
Whether provision of an Act can be construed on the analogy
of another Act not part materia.
HEADNOTE:
The respondent, a dealer, was assessed in July, 1948. In
January, 1960, the Sales Tax Officer wrote a letter to the
Sales Tax Commissioner pointing out a mistake which had
crept in the order of assessment. In April 1960, the
Commissioner filed a Revision Application under s. 10 of the
Act. Section 10(3) and s. 10(3-B) read as under :
"(3)(i) The Revising Authority (or an
Additional Revising Authority) may, for the
purposes of satisfying itself as to the
legality or propriety of any order made by any
appellate or assessing authority under this
Act, in its discretion, call for and examine,
either on its own motion or on the application
of the Commissioner of Sales Tax or the
persons aggrieved, the record of such order as
it thinks fit :
Provided that no such application shall be
entertained in any case where an appeal lay
against the order, but was not preferred.
(3-B) The Application under sub-section (3)
shall be made within one year from the date of
service of the order complained of but the
Revising Authority may on proof of sufficient
cause entertain an application within a
further period of six months."
The assessee contended before the Revisional Authority that
the revision was time-barred inasmuch as it had been filed
much beyond the period of limitation specified in s. 10(3-
B). The Revenue contended that the starting point for
limitation was January, 1960 when the Commissioner received
the intimation of the assessment order and that since the
revision had been filed within one year from that
intimation, it was within time. The Revisional Authority
accepted the contention of the assessee and dismissed the
application as time barred. On a reference the High Court
answered the questions against the Revenue and in favour of
the assessee.
On appeal by Special Leave it was contended before this
Court by the Revenue :
(1) Sub-section (3-B) does not provide any
starting point of limitation in the ease of a
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revision filed by the Commissioner.
(2) In any case, the starting point of
limitation is the date of service of the order
on the Commissioner or the dealer, as the case
may be.
On the other hand, the assessee contended that the starting
point of limitation for a revision application whether filed
by the dealer or the Commissioner is the date on which the
order of assessment is served on the dealer.
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HELD : The contention of the Revenue that there is no
limitation for a revision application filed by the
Commissioner, is not correct. Sub-section (3-B) prescribes
a period of limitation for every revision-application, whe-
ther filed by the Commissioner or the dealer (assessee), and
the starting point of limitation is the date of the service
of the order on the revision-applicant. [64E]
(2) For the purpose of sub-section (3-B) service of the
order complained of means something subsequent to and
distinct from the mere making of the order. It implies
formal communication of the order after it has been passed,
on the revision application. [64A]
(3) Since the revision application in the instant case was
filed by the Commissioner within one year of the
communication of the assessment order, it was within time.
[66B]
(4)The difficulty in construing the unhappy language of the
statute was felt in the year 1960 and even earlier, and has
given rise to this protracted litigation extending over
fifteen years. It is desirable that the Legislature should
amend the statute and make its intent clear. In any event,
it should make a statutory provision requiring the Sales Tax
Officer to send forthwith a copy of every assessment order
made by him to the Commissioner for information. [66F-G]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1861 of
1971.
Appeal by Special Leave from the Judgment & Order dated the
22nd January, 1970 of the Allahabad High Court in S.T.R. No.
361 of 1964.
S. C. Manchanda and O. P. Rana for the appellant.
Hardayal Hardy, K. B. Rohtagi M. K. Garg and E. C. Agarwala
for the respondent.
Hardayal Hardy, k. B. Rohtagi and Ram Lal for the intervener
The Judgment of the Court was delivered by
SARKARIA J.-This appeal by special leave is directed against
the judgment of the Allahabad High Court answering against
the Department, the following question referred to it under
s. 11 of the U.P. Sales Tax Act, 1948
"Whether under the circumstances of the case,
starting point of limitation for the
Department to prefer a revision against the
original assessment order would start from the
date of assessment order or would start
according to the discretion of the assessing
officer or the Department from the time the
assessing officer wishes to apprise the
Department about the passing of the assessment
as in this case."
The respondent-assessce is a dealer carrying on business at
Beriyaganj, Sbahjahanpur. On 26-7-1958, the Sales-tax
Officer passed an order assessing him for the year 1957-58.
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Subsequently, the Sales-tax Officer felt that by oversight a
mistake had crept in the order of assessment made by him.
Consequently, in January 1960, he wrote a letter to P. A. to
the Commissioner, Sales-tax seeking
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guidance as to how he should proceed in the matter to
rectify the omission. The Commissioner treated that
intimation received on 27-1-1960 as service on him.
Thereafter on 11-4-1960, the Commissioner filed a revision
application under S. 10 of the Act before the Judge
(Revisions).
When this revision came up for arguments before the
revisional authority, the assessee urged that the revision
was time-barred inasmuch as it had been filed more than 18
months after the date of the assessment order. The
assessee’s contention was that the starting point for
limitation was the date of the assessment order. As against
this, the Department maintained that the terminus a quo for
limitation was 27-1-1960, on which date, the Personal
Assistant to the Commissioner had received the intimation of
the assessment order, and consequently the revision having
been filed within one year of that date, was fully within
time. The Judge (Revisions) accepted the contention of the
assessee and dismissed the revision as barred by limitation.
At the instance of the Commissioner, the Judge (Revisions)
referred the question under s. 11 of the Act to the High
Court for opinion. The reference, in the first instance,
was heard by a Division Bench consisting of Jagdish Sahai
and Mt H. Beg, JJ. Jagdish Sahai J. was of the view that
the starting point of limitation in the case of a revision
application filed by the Commissioner would be the date on
which the assessment order was passed by the Sales-tax
Officer because the law creates a presumption that the
Commissioner would be deemed to have been served on that
date.
Beg J. struck the discordant note :
"My answer to the first part of the question,
as framed, is in the negative. I am of
opinion that the period of limitation for the
Commissioner to prefer a revision application
under s.10(3) (i) of the Act, will not start
from the date of the assessment order. I
would answer the second part of the question
also in the negative by saying that the period
of limitation would not commence to run from
any date lying within the discretion of or
depending upon the wishes of the assessing
officer. It would commence, in accordance
with s. 10 (3-B), from the actual date on
which the Commissioner has been duly apprised
of the contents of the assessment order in a
mode which may be deemed to be "service" upon
him. The mere passing of an assessment order
cannot, in my opinion, be possibly deemed to
be "service" Automatically upon the
Commissioner. In the ease before us the Com-
missioner applied within the prescribed period
after the communication of the contents of the
assessment order to him which was sufficient
"service"."
On account of this difference of opinion, the case was
referred to Verma J. who agreed with Jagdish Sahai J. and
answered the question against the Department. Hence this
appeal.
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Before 1954, no limitation for filing an application for
revision was provided in the Act or in the rules framed
thereunder. Such a provision was first made by the U. P.
Act VIII of 1954. This amending Act added sub-sections (3-
A) and (3-B) in s.10 of the principal Act of 1948. Section
10, after this amendment, reads as follows :
"10. Power of Revision. (1) The State
Government shall appoint as Revising Authority
a person qualified under clause (2) of Article
217 of the Constitution for appointment as
Judge of a High Court.
(2) The appellate authority appointed under
section 9 shall be under the superintendence
and control of the Revising Authority.
(3) (i) The Revising Authority (or an
Additional Revising Authority) may, for the
purposes of satisfying itself as to the
legality or propriety of any order made by any
appellate or assessing authority under this
Act, in its discretion, call for and examine,
either on its own motion or on the application
of the Commissioner of Sales Tax or the
persons aggrieved, the record of such order as
it thinks fit
Provided that no such application shall be
entertained in any case where an appeal lay
against the order, but was not preferred :
(Provided further that an application for stay
of realisation of any amount of tax, fee or
penalty, shall not be entertained by the
Revising Authority or by any Additional Revi-
sing Authority, unless an appeal or revision
from the order of the assessing authority or
the appellate authority, as the case may be,
is pending before proper authority :
Provided also that whenever realisation of any
amount of tax, fee or penalty is stayed by the
Revising Authority, or by any Additional
Revising Authority, the applicant shall be
required to furnish security to the
satisfaction of the assessing authority
concerned, within such period as may be
specified by it).
(ii)The State Government may appoint (such
number of Additional Revising Authorities as
it may deem necessary, out of persons
qualified for appointment as Revising
Authority). The Additional Revising Authority
shall exercise such powers of the Revising
Authority as may be prescribed or assigned to
him by the State Government either generally
in any area or in respect of any class of
cases.
(3-A) A copy of the order passed under sub-
section (3) shall be served upon the
applicant.
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(3-B) The application under sub-section (3)
shall be madewithin one year from the date
of service of the ordercomplained of but
the Revising Authority may on proof of
sufficient cause entertain an application
within a further period of six months.
(4) The Revising Authority shall not pass
any order under sub-section (3) adversely
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affecting any person unless an opportunity has
been given to such person to be heard.
(5) If the amount of tax assessed, fee
levied or penalty imposed is reduced by the
Revising Authority under subsection (3) it
shall order the excess amount of tax, fee or
penalty) if already realised to be refunded."
Answer to the question referred hinges upon a correct
interpretation of sub-section (3-B).
From the imprecise and unhappy language of this provision,
four different constructions can possibly be suggested, and
indeed have been suggested at one stage or the other.
First, that sub-section (3-B) does not at all take in a
revision application by the Commissioner. Second, even if
it does so, it does not provide any starting point of
limitation in the case of a revision filed by the Commis-
sioner. Third, that the starting point of limitation for a
revision application, whether filed by the dealer or the
Commissioner, is the date on which the order of assessment
is serverd on the dealer. Fourth the starting point of
limitation is the date of service of the order on the
revision applicant, be he the Commissioner or the dealer.
The first is manifestly untenable. Sub-section (3-B) starts
with an express reference to "the application under sub-
section (3) ". Subsection (3), in terms, provides that the
revision-application may be made either by the dealer or by
the Commissioner. The Commissioner’s right under sub-
section (3) to move the Revising Authority by an application
is distinct and independent of the one conferred on the
dealer, although the latter has under s. 9, an additional
right of appeal against the assessment order, which must be
exhausted before he can invoke the revisional jurisdiction
under this section. Thus, in the context, sub-section (3-B)
comprehends both categories of revision-applicant, namely,
the Commissioner as well as the dealer.
Mr. Manchanda, the learned Counsel for the appellant
canvasses, in the first place, for the second construction,
and, in the alternative, for the fourth, with the
elucidation that the mere making of an order of assessment
by the Sales-tax Officer does not-contrary to the reasoning
of the High Court-amount to automatic ’service’ of that
order on the Commissioner.
Mr. Hardyal Hardy, the learned Counsel for the caveators,
does not support the interpretation adopted by the High
Court. He maintains that the third construction is the
correct one. The starting point
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of limitation for a revision application, according to the
Counsel, even if it be filed by the Commissioner, is the
date of ’service’ of the order on the assessee. ’Mr. Hardy
does not dispute the correctness of the proposition
propounded by Mr. Manchanda that the very act of passing an
assessment order by the, Sales-tax Officer does not amount
to its ’service’ upon the Commissioner or his representa-
tive. Learned Counsel, however, points out that there is no
provision in respect of ’service’ of an order of assessment
made against a dealer by the Sales-tax Officer, on the
Commissioner, while elaborate provisions for service of such
an order on the dealer exist in the Act and the rules framed
thereunder. Viewed against this background, proceeds the
argument, limitation would start running from the date of
service of the order of assessment on the dealer, even
against the Commissioner, irrespective of whether the latter
was or was not aware of the order. This is so, contends the
Counsel, because once limitation begins to run, then, on the
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principle of s. 9, Limitation Act, unawareness of the order
on the part of the Commissioner, will not stop it.
Once it is conceded that sub-section (3-B) encompasses all
revision-applications, whether made by the assessee or by
the Commissioner, then it necessarily follows that the
period and the starting point of limitation provided
therein, govern, without exception, all such applications.
Contention in favour of the second construction thus suffers
from an inherent infirmity and self-contradiction. It must,
,-therefore, be rejected.
We are now left to choose between the third and the fourth
constructions.
The only starting point of limitation mentioned in s. 10(3-
B) is "the date of service of the order complained of".
Now, what is ,.meant by ’service’? And on whom is it
contemplated ? The subsection is either obscure or silent on
these points. The learned Judges ,of the High Court have
tried to clear this obscurity by referring to the scheme of
the Act and the Rules. They have also referred to somewhat
similar provisions of the Income-tax Act, and imported them
by analogy into the sub-section in question so as to reach
the conclusion that in the case of a revision application by
the Commissioner, the starting point of limitation is the
date on which the assessment ,.,order is made by the Sales-
tax Officer. If we may say so with respect, in accepting
that construction, the High Court has, as it were, by
,’judicial legislation introduced in sub-section (3-B) a
different starting point of limitation in case of a revision
filed by the Commissioner.
In our opinion, it is not proper to interpret s. 10 (3-B) of
the Act on the analogy of ss. 263(2) and 264(2) of the
Income-tax ’Act, 1961 which are not in pari materia with the
sub-section in ,question.
It is safe and sufficient for our purpose to adhere to the
scheme ,and language of the Act and the Rules. ’Service’ of
an order of assessment in the context of the scheme of the
Act and the Rules
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means something subsequent and distinct from the mere making
of the order of assessment. It implies formal communication
of the Order after it has been passed on termination of the
proceedings, so that the party to whom it is communicated,
may, if aggrieved,, seek redress in a higher forum in the
manner prescribed by law. That this should be the sense of
the term ’service’ in sub-section (3-B) will be clear from a
reference to Rule 70(1) which provides :
"70(1). A copy of every order of the
Assistant Commissioner (Judicial) under sub-
section (3) of section 9 or of the Judge
(Revisions) under sub-section (3) of s. 10
shall be delivered or sent by post to the
person affected by the order, and to the
Commissioner."
It is true that the Rule does not, in terms, apply to an
original assessment order passed by the Sales-tax Officer,
but that does not detract from its value as illustrative of
the proposition that the mere passing of an order (in appeal
or revision) does not operate as service or communication of
its contents to the Commissioner. It is to be noted that an
order passed under section 9(3) by the Assistant
Commissioner (Judicial) in appeal, is revisable on an
application filed by the Commissioner under sub-section (3)
and limitation for such an application, also, is governed by
sub-section (3-B) of S. 10. The starting point of
limitation for a revision-application whether filed against
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an appellate order or an original order of assessment, being
the same viz., service of the order sought to be revised,
the connotation of the term ’service’ must also remain
constant.
True, that the Act and the Rules do not make any provision
for service of an assessment order passed by the Sales-tax
Officer against a dealer, on the Commissioner. At the same
time there is nothing in these statutory provisions, which
inhibits the service of such an order on the Commissioner.
Rather, the necessity of serving such an order of assessment
on the Commissioner to enable him, if necessary, to file a
revision-application. is implicit in the language of s. 10
(3-B). Indeed, regular and prompt communication of such
orders to the Commissioner, is a must for a proper and fair
working of the provision.
We are not persuaded to accept Mr. Hardy’s contention that
the phrase "the date of service of the order complained of"
does not include service on the Commissioner. This phrase
has to be. read as a whole, consistently with the scheme of
the Act and the Rules [particularly Rule 70(1)] with due
emphasis on the key words complained of’. This is the only
interpretation which, in our opinion, expanded as "the date
of service on the revision-applicant, of the orders
complained of". This is the only interpretation which, in
our opinion, comports best with the scheme and language of
the statute and the maintenance of parity between the
assessee and the Department in the matter of limitation
which was intended to be secured by the amendment of 1954.
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The alternative interpretations-one suggested by Mr. Hardy,
and the other devised by the High Court-appear to be
repugnant to the scheme and object of the statute ; they
envisage a varying and uneven construction of the scope,
meaning and effect of the word "service", applying it
differently to different applicants though similarly
situated. The very nature of the right to file a revision
under s. 10 imports, as a necessary condition, service or
communication of the contents of the order complained of.
In a sense, this remedial right cannot be said to accrue
until the party concerned on being served, becomes Aware of
the cause of grievance and consequent necessity of redress.
The interpretation expounded by Mr. Hardy seems to be lop-
sided and anomalous. It unfairly reserves the "service"
exclusively for the dealer, keeping the Commissioner out in
complete darkness without due chance of knowing whether an
order of assessment passed by the Sales-tax Officer is
injurious to public revenue or not. The construction put by
the High Court is too fictional and innovative. Nor does it
keep the Commissioner and the assessee in pari passer.
Drawing more by analogy from sections 263 and 264 of the
Income-tax Act, 1961 and less from the statute under
consideration, it is, at best, a conception of law as it
ought to be, rather than of what it actually is.
We are conscious that the law contained in s. 10(3-B), as
exposed by us, is not perfect. It is susceptible to abuse.
Indeed, it was such an apprehension that seems to have
persuaded the learned Judges of the High Court, too far away
from the language of the statute, into the realm of
speculation and induced them, as it were, to substitute so
far as the Commissioner was concerned "the date of the
order" for "the date of service of the order" provided by
the Legislature. Said Verma, J. :
"If a different view were to be taken then it
would be open to the Sales-tax Officer not to
serve a copy of the assessment order on the
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Commissioner for ten or twenty years. It is
prosperous to imagine that the period of
limitation would remain in abeyance until the
Sales-tax Officer chooses to serve, formally,
a copy of the assessment order on the
Commissioner".
These are strong words and the apprehension expressed
therein is not altogether baseless. But the apprehension
does not stem from any inherent defect in the legislature’s
choice of "service" as the terminus a quo for limitation.
It arises out of the omission to make any provision in the
Act and the Rules requiring the Sales-tax Officer to send
forthwith a copy of every assessment order to the Commis-
sioner, also. Supplying of that omission is a matter for
the legislature and not for the Court.
Be that as it may, the court cannot scan the wisdom of the
legislature in prescribing ’the date of service’ as the
starting point of limitation. Nor can the court refuse to
give effect to it or substitute for it any other terminus
which it thinks to be more reasonable. merely because there
is an apprehension of its abuse.
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In the light of the above discussion, we are of the opinion
that the date of service of the order complained of, on the
revision applicant, is the starting point of limitation
within the contemplation of s.10(3-B) of the Act.
Accordingly we allow the appeal, set aside the judgment of
the High Court and answer the question referred in favour of
the Revenue. Since the revision-application in the instant
case, was filed by the Commissioner within one year of the
communication of the assessment order to him, it was within
time. In the circumstances of the case, there will be no
order as to costs.
We part with this judgment with a note of regret but in the
hope that something good may come out of it.
A statute is supposed to be an authentic repository of the
legislative will and the function of a court is to interpret
it "according to the intent of them that made it". From
that function the court is. not to resile. It has to abide
by the maxim ut res magis valiat quam pereat, lest the
intention of the legislature may go in vain or be left to
evaporate into thin air. Where that intent is clearly
expressed in the language of the Act, there is little
difficulty in giving effect to it. But where such intent is
covert and couched in language which is imperfect, imprecise
and deficient, or in ambiguous or enigmatic, and external
aids to interpretation are few, scanty and indeterminate,
the court may despite application of all its experience,
ingenuity and ratiocination, find itself in a position no
better than that of a person solving a cross-word puzzle
with a few given hints and bunches. In such a situation a
mere reference to the High Court of a question for opinion
may not afford an adequate solution. Only legislative
amendment may furnish an efficacious and speedy remedy. The
present is a typical illustration of such a case. The
difficulty in the interpretation of the unhappy language of
this statute was felt in, 1960 and even earlier. We are now
in 1975. For fifteen long years, the Department has been
fighting this tardy, expensive and sterile litigation. Even
after this long-drawn struggle culminating in judicial
finale, a doubt ’might persist as to whether the court has
succeeded in divining the true legislative intent. It is
therefore. desirable that the legislature should amend the
statute and make its intent clear. In any event, to make
the law workable, it should make a statutory provision
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requiring the Sales-tax Officer to send forthwith a copy of
every assessment order made by him to the Commissioner for
information.
Appeal allowed. P.H.P.
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