1974 (3) TMI 90 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Vires of Section 37 of the Bombay Sales Tax Act, 1959.
2. Commissioner's power to revise orders passed by the Deputy Commissioner under Section 57 of the Act.
3. Requirement of mens rea for forfeiture under Section 37 of the Act.

Issue-Wise Detailed Analysis:

1. Vires of Section 37 of the Bombay Sales Tax Act, 1959:
The petitioner-company initially challenged the vires of Section 37 of the Act, claiming it was ultra vires the State Legislature. However, this challenge was not pressed during the hearing due to a binding unreported judgment of a Division Bench of the High Court delivered on 25th November, 1971, in Special C.A. No. 818 of 1971. The learned judge acknowledged that he was bound by this decision and reserved the right for the petitioner to canvass this point in a higher court.

2. Commissioner's Power to Revise Orders Passed by the Deputy Commissioner Under Section 57 of the Act:
The principal ground of challenge was whether the Commissioner had the power under Section 57 of the Act to revise orders passed by the Deputy Commissioner. The learned judge initially accepted the petitioner's contention that the Deputy Commissioner acted as a statutory delegate of the Commissioner under Section 20(5) of the Act, and thus, his orders should be deemed as orders of the Commissioner himself, which the Commissioner could not revise.

Upon appeal, the Advocate-General argued that the Deputy Commissioner's powers were conferred by the statute itself and not by delegation from the Commissioner. The court examined Sections 20(5), 55, and 57 of the Act, concluding that the Deputy Commissioner exercised powers in his own right as conferred by the statute, not as a delegate of the Commissioner. Therefore, the Commissioner had the revisional jurisdiction over the Deputy Commissioner's orders under Section 57(1)(a) of the Act.

The court emphasized that the Deputy Commissioner's powers were defined by reference to the Commissioner's powers but were not delegated powers. The statutory language indicated that the Deputy Commissioner had independent authority, and thus, his orders were subject to revision by the Commissioner.

3. Requirement of Mens Rea for Forfeiture Under Section 37 of the Act:
The petitioner-company contended that mens rea should be proved before directing forfeiture under Section 37, as the provision was quasi-criminal in nature. However, the learned judge did not address this contention as he had already decided in favor of the petitioner on the principal ground.

On appeal, Mr. Chagla did not press this contention, especially in light of the amended provisions of sub-section (6) of Section 38 of the Act, which had been retrospectively introduced. Consequently, the court did not find it necessary to delve into the mens rea argument.

Conclusion:
The appeal was allowed, and the judgment of the learned trial judge was set aside. The court held that the Commissioner of Sales Tax had the authority to revise the orders passed by the Deputy Commissioner under Section 57(1)(a) of the Act. The petition filed by the petitioner-company was dismissed, and the orders passed by the Commissioner against the assessee were upheld. The court also directed that these orders would not be enforced for a period of six weeks from the date of the judgment.