9911796707
TMI Blog1967 (11) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 31 of the Bombay Sales Tax Act of 1953, on the ground that the said notice is illegal and without or in excess of jurisdiction and suffers from an error apparent on the face of the record. It has prayed for an appropriate writ or order quashing the said notice and restraining the respondent from taking any action against the petitioner in pursuance thereof. The petitioner carries on business of manufacturing vegetable oils, soaps and other products and selling them in the State of Maharashtra and other States in India and also in territories outside India. It has been a registered dealer under the Sales Tax Acts and for the periods from 1st April, 1948, to 31st March, 1950, and for 1st April, 1950, to 31st March, 1951, it had submitted its returns of turnovers in which it had claimed deductions from the turnovers in respect of despatches or transfer of goods from its head office in Bombay to its various depots or branches in other States in India and it had also claimed exemption of tax in respect of certain sales which it alleged had taken place in the course of inter-State trade after 26th January, 1950. The Sales Tax Officer in the orders of assessment which he p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was only under the Act of 1959 and since the period of limitation for exercising the powers of suo motu revision under the Act of 1959 was a period of two years from the date of the order sought to be revised, the action taken by the respondent was time-barred. In the second place, it was contended that the order which was sought to be revised was in respect of a liability under the Act of 1946 and could only be revised under the powers of revision under the Act of 1946 and the power of revision under the Act of 1946 was not capable of being exercised after the lapse of a reasonable period which for the purposes of the Act of 1946 must be taken to be a period of not more than eight years from the end of the relevant assessment period. Thirdly, it was contended that the revisional authority exercising its powers of suo motu revision under section 31 of the Act of 1953 could not travel beyond the order sought to be revised and cannot order a further inquiry or rely on material extraneous to the record of the order under revision. Finally, it was contended that a power of revision sought to be exercised by the respondent if permitted to be exercised after a long lapse of 13 years wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hts or the corresponding liabilities and obligations under the Act and not in respect of the procedural provisions. He argues that inclusion of the words "and all rules, regulations, orders, notifications, forms and notices issued under those laws and in force immediately before the appointed day" indicates that procedural provisions of the Act of 1953 are not available after the repeal. We are, in the first place, not inclined to agree with this interpretation of the learned counsel with regard to the language of the clause in question. In the second place, the power of suo motu revision under section 31 of the Act of 1953, in our opinion, is not a matter of procedure but a matter of substantive right. What is intended to be saved by clause (a) of sub-section (1) of section 77, in our opinion, is the law as it existed before the appointed day in respect of levy, assessment, reassessment, collection and other matters which are referred to in the said clause and all other matters connected with or incidental thereto. The power to revise suo motu an order of assessment is a power relating to the assessment and under the said clause the provisions of the Act of 1953 permitting the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (2) of section 48 the power could be exercised under the Act of 1953 and since there was no limitation to the exercise of the said power under the Act of 1953 the notices issued were competent and also not barred by time. In our opinion, these two decisions dispose of the contentions of the petitioner that the notice could not be issued under section 31 of the Act of 1953 and also the further contention that the notice has to be governed by the period of limitation which would be applicable to a revision under the Act of 1946 which could not in any event be more than eight years from the order of assessment sought to be revised. In view of the decisions already referred to, the revision proceedings could be taken under the Act of 1953 by reason of the provisions of section 48(2) and would be governed only by the limitation, if any, applicable to section 31 of the Act of 1953. By reason of the amendment introduced in 1959 in section 15 of the Act of 1953, it has been provided that there will be no period of limitation for an action to be taken under section 31 of the Act of 1953 and such action could be taken after any length of time. The notice issued in the present case there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d out, the assessment order was first passed on the 2nd June, 1954, by the Sales Tax Officer, by which he had brought to tax the turnover representing the despatches as well as the sales, which were claimed to be in the course of inter-State trade. In the appeals against the said orders, which were taken by the petitioner, the despatches were excluded and the tax on the inter- State sales was retained. The revision, which thereafter was taken by the petitioner, was only in respect of the claim that was disallowed, viz., the tax on the alleged inter-State sales. There was no revision nor any proceeding pending in respect of the other part, viz., the exclusion of the despatches. As a matter of fact, the refund which was directed to be paid by the appellate authority under his decision was claimed and also recovered by the petitioner. There was therefore no legal proceeding pending in respect of that part of the assessment order. Secondly, a proceeding commenced suo motu by a notice given under section 31 of the Act of 1953 is a fresh proceeding and not a part of the assessment proceeding, which commences with the submission of return before the Sales Tax Officer and proceeds thereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner may call for and examine the record of any order passed or proceeding recorded under the provisions of the Act by any officer subordinate to him for the purpose of satisfying himself as to the legality or impropriety of such order or as to the regularity of such proceedings and may pass such order with respect thereto as he thinks fit. The question before the Supreme Court was whether in pursuance of this power of revision the Deputy Commissioner could direct a further inquiry under rule 14-A made under section 19 of the Act. The argument advanced before the Supreme Court was that the scope of the revisional power of the Deputy Commissioner being confined to the examination of the record and the order, it could not be exercised so as to call for a further inquiry, which would amount to travelling beyond the record of the revision and rule 14-A which enabled him to do so was ultra vires, inasmuch as it sought to extend the revisional jurisdiction given under section 12(2) of the Act. It was held by the Supreme Court that it could not be said that in the exercise of the revisional jurisdiction a further inquiry could not be direct- ed. It is no doubt true that the scope of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent in the present case is, in our opinion, a ground which would show prima facie at any rate that the order passed by the appellate authority, permitting the exemption in respect of the entire amount of despatches, is erroneous, since it is reasonably possible that in the manufacture of the goods despatched the petitioner had utilised some of the raw material and processing material, which it had purchased in this State, without payment of sales tax thereon on the basis of its registration certificate. At any rate, an inquiry in the matter was necessary to be made by the assessing authority before a total exemption was allowed to the assessee in respect of the despatched goods and since that was not done and the assessing authority had not applied his mind in that connection, the revising authority was entitled to consider the order as not a proper order of assessment made by the assessing authority. In our opinion, therefore, in exercise of the revisional power given to the respondent under section 31 of the Act of 1953, he was entitled to pass the order which he has passed in the present case, invoking his jurisdiction under section 31 of the Act. In the case which we have r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en issued merely on conjectures and surmises, we do not think, having regard to what is stated in the notice, that such is the position. The ground on the basis of which the notice has been issued is that the assessing authority, which allowed exemption in respect of the entire despatches, has overlooked a particular statutory provision which had to be borne in mind. Inasmuch as no investigation has been even made by the assessing authority to find out whether that provision had any application or not, the ground stated by the revising authority in its notice under section 31 is not a matter of conjecture but a matter of thought. Having regard to the facts and circumstances of the case, there can be no doubt whatsoever that whether any part of the despatched goods were made out of the raw material and processing material purchased by the petitioner in the State of Bombay, was a material matter required to be considered in the assessment of the petitioner, which clearly has not been considered on the face of the order itself. In our opinion, therefore, all the contentions which are raised by the learned counsel for the petitioner fail and the petition, therefore, must be dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Deputy Commissioner of Sales Tax, Bombay City Division, in Form XXIV under section 31 of the Bombay Sales Tax Act, 1953, intimating the appellant that he proposed to revise suo motu the appellate orders passed by the Assistant Collector of Sales Tax in so far as he had allowed deduction in respect of the entire goods despatched to its branches in other States outside Maharashtra, because, in so doing, he had overlooked the provisions contained in proviso (b) to sub-clause (ii) of rule 1 under sub-section (3) of section 6 of the Bombay Sales Tax Act, 1946, as amended by the Bombay Sales Tax (Amendment) Act (48 of 1949). On receipt of this notice, the appellant put in appearance before the Deputy Commissioner, who is the respondent in this appeal, and raised several objections against the proposed revisional proceedings, making a request that the proceedings be dropped. Since the respondent did not accept this request, the appellant filed a petition under Article 226 of the Constitution in the High Court of Bombay challenging the notice dated 7th January, 1963, with the prayer that the notice be quashed and the respondent be restrained from taking any action against the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound for invoking the revisional powers. Once those powers are invoked, the actual interference must be based on sufficient grounds, and, if it is considered necessary that some additional enquiry should be made to arrive at a proper and just decision, there can be no bar to the revising authority holding a further enquiry or directing such an enquiry to be held by some other appropriate authority. This principle has been clearly recognised by this Court in The State of Kerala v. K. M. Cheria Abdulla and Company [1965] 16 S.T.C. 875 at p. 884. In that case, sub-section (2) of section 12 of the Madras General Sales Tax Act, 1939, which came up for interpretation, empowered the Deputy Commissioner, suo motu, or under certain circumstances on an application, to call for and examine the record of any order passed or proceeding recorded under the provisions of that Act by any officer sub- ordinate to him, for the purpose of satisfying himself as to the legality or propriety of such order, or as to the regularity of such proceeding, and to pass such order with respect thereto as he thought fit. This Court held: "There is no doubt that the revising authority may only call for the record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty Commissioner may have to hold some enquiries in order to properly exercise his revisional jurisdiction. Mr. Desai on behalf of the appellant emphasised the circumstance that in section 12(2) of the Madras General Sales Tax Act, which was considered by this Court, the Deputy Commissioner's power was expressed by stating that he may pass such order as he thinks fit, while no such words occur in the corresponding provisions in the Bombay Sales Tax Acts with which we are concerned, but we do not think that this circumstance makes any difference. A revising authority necessarily has the power to make such order as, in the opinion of that authority, the case calls for when the authority is satisfied that it is an appropriate case for interference in exercise of revisional powers. In fact, in section 12(2) of the Madras General Sales Tax Act, the Deputy Commissioner, when exercising his powers, was to call for the record of the order or proceeding before passing any order which he thought fit, so that there was an expression used which could have been interpreted as limiting his powers to the examination of the record only without holding any further enquiry, and, yet, this Court held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntained in the foregoing sub-sections and subject thereto, section 7 of the Bombay General Clauses Act, 1904, shall apply in relation to the repeal of any of the laws referred to in section 76 as if the law so repealed had been an enactment within the meaning of section 7 of that Act." (We have only quoted the portions of section 77 with which we are concerned). The effect of section 77(1)(a) is to continue in force the Bombay Sales Tax Act of 1953 as well as the Bombay Sales Tax Act of 1946 to the extent to which they were in force when this Act of 1959 came into force for the purposes mentioned in that clause. These purposes included levy, assessment, reassessment and collection of sales tax, so that the proceedings against the appellant, which had been initiated under the Act of 1946, continued to be governed by the provisions of that Act. Section 7 of the Bombay General Clauses Act (1 of 1904), which was made applicable by section 77(3) to the repeal of the Act of 1953, includes the following provisions: "Where this Act, or any Bombay Act, or Maharashtra Act, made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under section 22 of the Act of 1946. That, however, is not at all material, because the provisions of section 22 of the Act of 1946 are quite similar to those of section 31 of the Act of 1953. The mere incorrect mention of section 31 of the Act of 1953 in the notice is immaterial. The Deputy Commissioner has the jurisdiction and power to revise the order under section 22 of the Act of 1946 and, consequently, the proceedings initiated by him are not without jurisdiction. The last submission made by Mr. Desai was that, if it be held that the revisional powers are sought to be exercised under the Act of 1946,. it should be held that the proceedings sought to be instituted are barred by time, because limitation of a reasonable time, within which the revisional powers are to be exercised, must be implied in the statute itself. Section 22 of the Act of 1946 and section 31 of the Act of 1953 do not lay down any limitation for exercise of the power of revision by a Deputy Commissioner suo motu, and we are not prepared to accept that any such limitation must be necessarily read in the two Acts. In support of his proposition that such a limitation must be read by us, Mr. Desai referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case, the Deputy Commissioner, when seeking to exercise his revisional powers, is clearly not encroaching upon the powers reserved to other authorities. Under the Act of 1946, the first assessment is made by the Sales Tax Officer under section 11. If information comes into his possession that any turnover in respect of sales or supplies of any goods chargeable to tax has escaped assessment in any year or has been under-assessed or assessed at a lower rate or any deductions have been wrongly made therefrom, proceedings can be taken afresh under section 11A. On the face of it, if a first assessment order is made under section 11 and any turnover escapes assessment, the appropriate provision, under which action is to be taken for assessing that turnover to tax, is section 11A. There is, however, no provision under which the power now sought to be exercised by the Deputy Commissioner in the case before us could have been exercised by any other authority. In this case, as we have indicated earlier, the first assessment of tax was made by the Sales Tax Officer, and the turnover now in question was assessed to tax by him. Having once assessed that turnover to tax, he could not initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the power was sought to be exercised for assessment of escaped turnover which had not been assessed at all at the initial stage of assessment under section 11 and proceedings under section 11A could have been competently initiated for bringing that turnover to tax. Instead, the Court equated the proceeding in revision with the proceeding for reassessment and applied the 4-year period of limitation which was prescribed only for reassessment and not for exercise of revisional power. In our opinion, the ultimate decision in that case was perfectly correct, but we are unable to affirm the view that the revisional power is governed by any period of limitation laid down in section 11A for proceedings for reassessment of escaped turnover. Reference, in this connection, was also made to a decision of this Court in Maharaj Kumar Kamal Singh v. Commissioner of Income-tax, Bihar and Orissa [1959] 35 I.T.R. 1, in which the Court dealt with a case of an assessee whose income to the extent of Rs. 93,604 representing interest on arrears of rent was omitted to be brought to assessment by the Income-tax Officer. Subsequently, in another case, the Privy Council held that interest On arrears ..... X X X X Extracts X X X X X X X X Extracts X X X X
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