1981 (1) TMI 227 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of section 39(2) of the M.P. General Sales Tax Act regarding the Commissioner's power to revise orders passed by the Deputy Commissioner under section 39(1).

Analysis:
The High Court of Madhya Pradesh was tasked with determining whether the Commissioner of Sales Tax had the authority to revise an order passed by the Deputy Commissioner under section 39(1) of the M.P. General Sales Tax Act if found erroneous and prejudicial to revenue. The case involved an assessee, a dealer in iron goods, who was assessed for the period from January 1, 1960, to December 31, 1960, through a best judgment assessment. The Deputy Commissioner remanded the case for fresh assessment, which was subsequently set aside by the Additional Commissioner of Sales Tax under section 39(2) of the Act. The Board of Revenue upheld the assessee's contention that the Deputy Commissioner's order, being a delegate of the Commissioner, could not be revised by the Additional Commissioner under section 39(2). The central issue revolved around the interpretation of the unamended section 39(2) which did not explicitly empower the Commissioner to revise orders passed by a delegate.

The Court referred to the Supreme Court's decision in Roop Chand v. State of Punjab, emphasizing that when a delegate exercises powers conferred by an authority, they act on behalf of the principal and not independently. The Court rejected the department's reliance on a Bombay High Court decision, stating that the delegate's powers are derived from the delegating authority. The Court distinguished a previous decision involving the revision of an appellate order by the Commissioner, noting that in this case, the Deputy Commissioner acted as a delegate of the Commissioner. Consequently, the Additional Commissioner had no jurisdiction to set aside the Deputy Commissioner's order under section 39(2) in the absence of a specific provision allowing such revision.

In conclusion, the Court answered the referred question in the negative, ruling against the department. Each party was directed to bear their own costs in the matter. The judgment clarified the limitations on the Commissioner's revisional powers under the unamended section 39(2) of the M.P. General Sales Tax Act when dealing with orders passed by delegates like the Deputy Commissioner.