1990 (8) TMI 370 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Competence of the Deputy Commissioner of Sales Tax to revise the order of the Assistant Commissioner of Sales Tax (Appeals) under Section 57 of the Bombay Sales Tax Act, 1959.
2. Applicability of the principle of merger in the context of appellate and revisional jurisdiction under the Act.
3. Impact of the Supreme Court's decision in Tel Utpadak Kendra v. Deputy Commissioner of Sales Tax on the revisional powers of the Commissioner.

Detailed Analysis:

1. Competence of the Deputy Commissioner of Sales Tax to Revise the Order:
The primary issue was whether the Deputy Commissioner of Sales Tax was competent under Section 57 to revise the order passed by the Assistant Commissioner of Sales Tax (Appeals) when the point of allowing the freight charges was not the subject-matter of the second appeal before the Tribunal. The applicant was assessed on the turnover, which included railway freight charges and trade discounts. The Assistant Commissioner allowed the exclusion of railway freight charges but not the trade discount. The Deputy Commissioner, exercising revisional jurisdiction, issued a notice to revise the exclusion of railway freight charges. The Tribunal dismissed the appeal against this revision, leading to the present reference.

2. Applicability of the Principle of Merger:
The principle of merger was a significant point of contention. The Tribunal is both an appellate and revisional authority over the Commissioner, making the Commissioner subordinate to the Tribunal in quasi-judicial matters. The legal discussion revolved around whether the revisional jurisdiction of the Commissioner could be exercised on an issue that could have been addressed by the Tribunal but was not. The Supreme Court's decision in Tel Utpadak Kendra v. Deputy Commissioner of Sales Tax was pivotal, where it was held that the Tribunal has the power to enhance the assessment and that the Commissioner cannot interfere with an order pending appeal before the Tribunal. The principle of merger implies that an appellate decision supersedes the original decision, making the appellate decision the operative one.

3. Impact of the Supreme Court's Decision in Tel Utpadak Kendra:
The judgment referenced the Supreme Court's decision in Tel Utpadak Kendra, emphasizing that the Tribunal, being a superior authority, has jurisdiction to enhance the assessment and protect the interests of the Revenue. The Supreme Court had held that the absence of an express provision prohibiting the Commissioner from exercising revisional powers does not detract from the conclusion that the Tribunal's decision supersedes the Commissioner's revisional powers. The principle of merger, as discussed in the cases of Commissioner of Income-tax v. Amritlal Bhogilal Co. and State of Madras v. Madurai Mills Co. Ltd., was applied, indicating that the original decision merges into the appellate decision, which then becomes the operative and enforceable decision.

Conclusion:
The High Court concluded that the Deputy Commissioner of Sales Tax was not competent to revise the order of the Assistant Commissioner of Sales Tax (Appeals) concerning the exclusion of railway freight charges, as the matter was implicitly covered by the Tribunal's appellate jurisdiction. The principle of merger applied, meaning the appellate decision by the Tribunal subsumed the original decision, leaving no scope for the Deputy Commissioner to exercise revisional jurisdiction on the same matter. The Tribunal's decision in the second appeal implicitly confirmed the first appellate order, including the exclusion of railway freight charges, thus precluding further revision by the Deputy Commissioner. The reference was answered in the negative, affirming that the Deputy Commissioner lacked the jurisdiction to revise the order in question.