Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 6
PETITIONER:
COMMISSIONER OF SALES TAX ORISSA & ANR.
Vs.
RESPONDENT:
M/S. HALARI STORE ETC.
DATE OF JUDGMENT: 26/09/1997
BENCH:
S.P. BHARUCHA, V.N. KHARE
ACT:
HEADNOTE:
JUDGMENT:
THE 26TH DAY OF SEPTEMBER, 1997
Present:
Hon’ble Mr. Justice S.P. Bharucha
Hon’ble Mr. Justice V.N. Khare
A.B.Diwan, Sr. adv., and P.N. Misra, Adv. with him for the
appellants
Raju Ramachandran, Sr.Adv., Sanjeev Das, Rajesh, P.K.
Mullick and Gaurab Banerjee, Advs. with him for the
Respondents
J U D G M E N T
The following Judgment of the Court was delivered:
J U D G M E N T
V.N. KHARE, J.
Leave granted in all the matters.
These appeals by special leave, raise the question
"whether the Commissioner of Sales Tax, suo motu can revise
under clause (a) of Sub-section (4) of Section 23 of the
Orissa Sales Tax Act (in short "the Act") read with rule 80
of the Orissa Sales Tax Rules (in short "the Rules"), an
appellate order passed by the Assistant Commissioner of
Sales Tax."
The respondent herein is a registered dealer under the
Act and running a wholesale business in purchase and sale of
beetle nuts at malgodown, Cuttack. In pursuance to the
notices issued under Section 12(4) of the Act, the
respondent appeared before the concerned Sales Tax Officer
and produced the books of accounts for the relevant
assessment years for verification. The Sales Tax officer
rejected the books of accounts produced by the respondent-
dealer and completed the assessments to the best of his
judgment. Feeling aggrieved by the same, the respondent-
dealer preferred appeals before the first appellate
authority, namely, the Assistant Commissioner of Sales Tax,
Cuttack, under Section 23(1) of the Act. The appellate
authority by its orders allowed the appeals in part for the
assessment year 1992-93 and in full for the assessment year
1993-94. Thereafter, the Additional Commissioner of Sales
Tax, exercising his suo motu revisional power conferred
under Section 23(4)(a) of the Act read with rule 80 of the
Rules, issued notices dated 9.6.1995 to the respondent-
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 6
dealer to show cause as to why should the appellate orders
passed by the Assistant Commissioner of Sales Tax be not
revised, the same being erroneous and prejudicial to the
interest of the Revenue. It is at this stage, the
respondent-dealer challenged the said notices by means of
writ petitions under Article 226 and 227 of the Constitution
of India before the High Court of Office. The contention of
the respondent dealer before the High Court was that the
Commissioner of Sales Tax has no jurisdiction to issue the
impugned notices. The High Court quashed the eimpugned
notices and allowed the Original Jurisdiction Cases No. 4496
and 4497 of 1995. want of jurisdiction in Additional
Commissioner of Sales Tax in issuing the impugned notices to
the respondent dealer was found by the High Court on two
grounds. Firstly, the appellate order passed by the
Assistant Commissioner of Sales Tax was not an order within
the meaning of expression "order made under this Act"
occurring in clause (a) of sub-section (4) of Section (4)
(a) of Section 23 places a limitation on the exercise of
revisional power by the Commissioner when it concerns an
appellate order.
Before we advert to the reasonings given by the High
Court in allowing the writ petition, it is appropriate to
notice the decision of this Court in the case of State of
Orissa and others vs. Krishna Stores, [1997(3) SCC 246],
wherein this court was called upon to interpret clause (a)
of the subject matter for consideration before us, and
unamended rule 80 of the Rules. In that case a dealer
successfully challenged the notice issued to him under
Section 23(4)(a) of the Act read with unamended rule 80 of
the Rules before the High Court of Orrisa on the ground that
issue of notice to revise an appellate order is without
jurisdiction. This Court while interpreting Section 23(4)(a)
of the Act was of the view that, in the context of Section
23(4) where the words "other than an appellate order" are
absent, there is no limitation on the power of the
Commissioner exercising suo motu power as to revise an
appellate order. This Court held thus:-
"under Section 23(4) the
Commissioner can, inter alia, on
his own motion revise any order
made under this act or the Rules by
any person other than a tribunal or
an additional tribunal. Therefore,
under this sub-section the
Commissioner is not expressly
prevented from revising is not
expressly prevented from revising
an appellate order if made by any
person other than the tribunal or
an additional tribunal".
In that case, the unamended rule 80 also fell for
consideration. The unamended rule 80 as it stood then, is
extracted below:-
"80. The Commissioner may of his
own motion, at any time within
three years from the date of
passing of any order by the
Assistant Sales Tax Officer or by
the Sales Tax Officer and within
two years from the date of passing
of any order other than an
appellate order by the Additional
Commissioner, Deputy Commissioner
or the Assistant Commissioner, as
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 6
the case may be, call for the
record of the proceedings in which
such order was passed and revise
any such order."
(emphasis supplied)
Interpreting the unamended rule 80, this Court observed
that the Commissioner is empowered to revise any order other
than an appellate order passed by the Additional
Commissioner, Deputy Commissioner or the Assistant
Commissioner. The said view of this Court was on account of
the language used in the unamended rule to which expressly
prohibited the revision of an appellate order. however,
this Court upheld the exercise of suo motu power of revision
by the Commissioner on the ground that the appeal filed by
the dealer was rejected at the threshold due to certain
defects in the appeal.
Subsequently, rule 80 which was the subject matter of
interpretation in the case of State of Orissa v. Krishna
Stores (supra) was amended, and the amended rule 80 is
reproduced below:-
"80, Revision by the Commissioner
suo motu.
The Commissioner may on his own
motion at any time within three
years from the date of passing of
any order by the Sales Tax Officer
or within two years from the date
Officer or within two years from
the date of passing of any order by
the Additional Commissioner,
Special Additional Commissioner or
Assistant Commissioner, as the case
may be, call for records of the
proceedings in which such order was
passed and if he considers that any
order passed therein is erroneous
in so far as revenue he may after
giving the dealer an opportunity of
being heard and after making or
causing to be made such enquiry as
he deems necessary revise any such
order :
Provided that the Commissioner
shall not revise any order under
this rule-
(1) where an appeal against the
order is pending before the
appellate authority under S. 23, or
(2) where time-limit for filling an
appeal under S. 23 has not
expired."
In view of deletion of words "other than an appellate
order" in the amended rule, there is no manner of doubt that
under Section 23(4)(a), read with amended rule 80, the
Commissioner has suo motu power to revise an appellate
order. The decision in the case of State of Orrisa vs.
Krishna Stores (supra) read with amended rule 80,
substantially resolves the controversy as regards the
Commissioner exercising suo motu power of revision as to
revise under Section 23(4) (a) of the Act read with rule 80
of the Rules, an appellate order.
Adverting to the first reasoning given by the High
Court that the appellate order does not fall within the
meaning of the expression "order made under the Act"
occurring in clause (a) of sub-section (4) of Section 23 of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 6
the Act, it is necessary to set out the provisions of the
Act which are extracted below:
"23. Appeals and revision.
(2) Within thirty days from he date
of receipt of the copy of-
(a) an order of assessment with or
without penalty under S. 12, 12-A
or 12-B; or
(b) an order directing payment of
interest under sub.S. (4-a) of S.
12; or
(c) an order imposing penalty under
sub-S.(3) of S.9-B or under sub-S.
(3) of S. 11,
any dealer or person, as the case
may be, may, in the prescribed
manner appeal to the prescribed
authority against such order:
Provided that no appeal shall be
entertained by the said authority
unless he is satisfied that such
amount of tax as the appellant may
admit to be due from him has been
paid;
Provided further that the
prescribed authority may admit the
appeal after the period herein
before specified if it is satisfied
that the appellant had sufficient
cause for not preferring the appeal
within the said period.
(2) Subject to such rules as may be
made or procedure as may be
prescribed, the appellate
authority, in disposing of any
appeal under sub.S(1), may-
(a) confirm, reduce, enhance or
annual the assessment or the
penalty or interest, if any; or
(b) set aside the assessment or the
penalty or interest, if any, and
direct the assessing authority to
pass a fresh order after such
further enquiry as may be directed.
(3) (a) Any dealer, or as the case
may be, the State Government,
dissatisfied with an appellate
order made under sub.S.(2) may
within sixty days from the date of
receipt of such order prefer an
appeal in the prescribed manner to
the Tribunal against such order :
Provided that an appeal under this
clause may be admitted after the
aforesaid period o limitation, if
the Tribunal is satisfied that the
appellant had sufficient cause for
not preferring the appeal within
such period.
(b) The dealer, or the State
Government as the case may be on
receipt of notice that an appeal
has been preferred under C1.(a) may
notwithstanding that the said
dealer or the State Government may
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 6
not have appealed against such
order or any part thereof, within
sixty days of the service of the
notice file a memorandum of cross
objections and such memorandum
shall be disposed of by the
Tribunal as if it were an appeal
presented within time under C1.(a).
(c) While disposing of an appeal
under this sub-section the Tribunal
shall have the same powers subject
to the same conditions as are
enumerated in sub.S.(2) and any
order passed under this sub-section
shall, except as otherwise provided
in S. 24, be final.
(4) (a) Subject to such rules as
may be made and for reasons to be
Commissioner may, upon application
by a dealer or person or on his own
motion revise any order made under
this Act or the rules made
thereunder by any person other than
the Tribunal appointed under sub-S.
(3) of S. 3 to assist him:
Provided that the Commissioner
shall not entertain any such
application for revision if the
dealer or the persons filing the
same having a remedy by way of
appeal under sub-S. (3) did not
avail of such remedy or the
application is not filed within the
prescribed period.
Explanation. Any provision
contained elsewhere in this Act
which provides for determination of
any specific matter shall not debar
the Commissioner from determining
such matter in exercise of the
powers conferred upon him under
this sub-section.
A perusal of the aforesaid provisions shows that
Section 23 of the Act deals with appeals and revision. Sub-
section (i) thereof provides that any dealer or person may
prefer an appeal against the order of assessment or an order
directing payment of interest or an order imposing penalty.
Sub-section (2) of Section 23 deals with power of appellate
authority in disposing of appeals preferred under sub-
section (1). Sub-section (3)(a) deals with second appeal
which enables any dealer or State Government, as the case
may be, to prefer appeal to the State Sales Tax Tribunal
against the appellate order. Section 23(4)(a) deals with
the revisional power of the Commissioner of Sales Tax, which
may be either suo motu or at the instance of a dealer or
person against y order passed under the Act. The question,
therefore, which requires consideration is whether an
appellate order passed under sub-section (2) of Section 23
of the Act comes within the ambit of the expression "any
order made under the Act" occurring in Section 23(4)(a) of
the Act. The language used in Section 23(4)(a) is plain,
simple and there is no ambiguity in it. A plain reading of
Section 23(4)(a) Shows that the expression "any order made
under the Act" is of a wise connotation and it includes an
assessment order as well as an appellate order passed under
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 6
the Act. This construction placed on the said expression
neither runs contrary to the scheme envisaged in Section 23
of the Act nor it leads to any undesirable consequences, as
observed by the High Court. We are, therefore, of the
opinion that under Section 23(4)(a) of the Act, the
Commissioner on his own motion can revise any order,
including an appellate order made under the Act or the Rules
by a person other than the tribunal or additional tribunal.
So far as the second reasoning given by the High Court
that the proviso to clause (a) of sub-section (4) of Section
23 of the Act places limitation on the Commissioner’s suo
motu revisional powers to revise an appellate order is
concerned, a reading of the aforesaid proviso would show
that the limitation on the revisional power of the
Commissioner comes is only where a dealer or person filing
the revision having a remedy by way of appeal under sub-
section (3) of Section 23 or the Act, did not avail of such
remedy. However, it does not curtail the suo motu
revisional power of the Commissioner of Sales Tax to revise
an appellate order passed under the act. The proviso to
Section 23(4)(a) contemplates that the Commissioner shall
note exercise any revisional jurisdiction at the instance of
a dealer or person when he has a remedy by way of an appeal
under sub-section (3) of Section 23 of the act. Thus, the
Commissioner is not required to entertain an application
under Section 23(4)(a) of the Act if the dealer of person
instead of filing an appeal before the appellate authority
has invoked revisional jurisdiction of the Commissioner.
But, the same is not the position where the Commissioner
decides to exercise his suo motu revisional power to revise
an appellate order. Significantly, the words "on his own
motion" occurring in the enactment are conspicuously absent
in the proviso. Normally, a proviso is enacted o carve out
something special out of the general enactment or to qualify
what is in the enactment. By enacting the proviso the
legislature has excluded the revisional jurisdiction of the
Commissioner Sales Tax to revise an appellate order if
invoked at the instance of a dealer or person when such
dealer or person has a remedy by way of an appeal. As
noticed earlier, the limitation on the suo motu power of the
Commissioner as to revise an appellate order has not been
expressly provided in the proviso. In absence of any
expressed provisions, no limitation on suo motu power of the
Commissioner to revise an appellate order can be implied.
We, accordingly hold that the provisions of proviso to sub-
section (4)(a) of Section 23 of the act do not prohibit the
Commissioner to exercise suo motu revisional power to revise
an appellate order.
For the foregoing reasons, we are satisfied that the
High Court fell in error in quashing the impugned notices
and allowing the writ petition of the respondent herein. We
accordingly set aside the order and judgment of the High
Court dated 12.2.1996 in O.J.C.. Nos. 4496 & 4497/95 and
allow the appeals. There shall be no order as to costs.
In view of the decision in Civil Appeal Nos......of
1997 (arising out of S.L.P.(C) No. 23581 and 23972/1996) are
also allowed, with no order as to costs.