1976 (1) TMI 162 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the Tribunal erred in law in holding that the order of the Assistant Commissioner of Sales Tax passed in appeal is not open to suo motu revision by the Deputy Commissioner under section 57(1) of the Bombay Sales Tax Act, 1959.

Detailed Analysis:

1. Background and Facts:
On December 3, 1962, the respondent, a limited company manufacturing and selling electric motors, was assessed by the Sales Tax Officer for the period from January 1, 1960, to March 31, 1960. The respondent had collected sales tax and general sales tax on the sales of electrical motors at an aggregate rate of 5%, treating the goods as falling under entry No. 22 of Schedule E to the said Act. The Sales Tax Officer, following a statutory determination by the then Commissioner of Sales Tax under section 52 of the Act, assessed these goods at 3% under entry No. 15 of Schedule C and forfeited the surplus tax collected. The respondent appealed this order to the Assistant Commissioner of Sales Tax, who set aside the penalty but confirmed the forfeiture. The respondent then appealed to the Sales Tax Tribunal, during which the Deputy Commissioner issued a notice proposing to revise the order of the Assistant Commissioner suo motu under section 57 of the Act and subsequently revised the order, holding the goods liable to sales tax at 5% under entry No. 20 of Schedule C. The respondent challenged the Deputy Commissioner's authority to revise the order, and the Tribunal treated the revisional application as an appeal, concluding that the Assistant Commissioner's order was not open to revision by the Deputy Commissioner under section 57(1).

2. Legal Provisions:
The relevant legal provisions include:
- Section 20: Appointment of officers to assist the Commissioner, including Assistant Commissioners.
- Section 55: Appeals process, specifying that appeals from original orders lie to the Assistant Commissioner, and second appeals from the Assistant Commissioner's orders lie to either the Commissioner or the Tribunal.
- Section 57(1): Allows the Commissioner to revise any order passed by any officer appointed under section 20 to assist him.

3. Tribunal's Reasoning:
The Tribunal held that the Assistant Commissioner, in disposing of the appeal, could not be considered an officer appointed to assist the Commissioner. Therefore, the Commissioner was not entitled to revise suo motu under section 57(1) an order passed by the Assistant Commissioner in disposing of a first appeal.

4. Court's Analysis:
The court examined whether the Deputy Commissioner, exercising the functions of the Commissioner under section 57(1), was entitled to revise the Assistant Commissioner's order. The court noted that under section 20(2), an Assistant Commissioner is appointed to assist the Commissioner, and thus, the Commissioner has the power to revise any order passed by such an officer. The court rejected the contention that the Assistant Commissioner, while exercising appellate authority, could not be regarded as assisting the Commissioner. The court emphasized that the term "appointed under section 20 to assist him" describes the officer whose order can be revised, not the nature of the order.

5. Relevant Case Law:
The court referred to the decision in *H. B. Munshi, Commissioner of Sales Tax, Bombay v. Oriental Rubber Industries Pvt. Ltd.*, where it was held that the Deputy Commissioner, exercising powers under section 20(5), is an officer appointed to assist the Commissioner, and thus, his orders are subject to revision by the Commissioner under section 57(1). The court found this reasoning applicable to the Assistant Commissioner as well.

6. Contentions and Rejections:
- Mr. Joshi's Contentions: The Assistant Commissioner, while hearing appeals, acts under statutory powers and not as an officer assisting the Commissioner. The court rejected this, stating that the Assistant Commissioner is appointed to assist the Commissioner, regardless of the specific function performed at any time.
- Right to Appeal: The court dismissed the argument that the Commissioner's revisional powers under section 57(1) infringe on the assessee's right to a second appeal, noting that the assessee can appeal to the Tribunal against the Commissioner's order.
- Finality of Orders: The court rejected the contention that the Assistant Commissioner's order was not final due to the pending appeal, stating that the order remains final unless disturbed by the Tribunal.

7. Conclusion:
The court concluded that the Commissioner (or Deputy Commissioner exercising the Commissioner's functions) has the power to revise suo motu any order passed by the Assistant Commissioner, as the Assistant Commissioner is an officer appointed to assist the Commissioner. Therefore, the Tribunal erred in holding otherwise.

Judgment:
The question referred was answered in the affirmative, and the assessee was ordered to pay costs of Rs. 250 to the Commissioner.