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TMI Blog1965 (3) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Madras General Sales Tax Act, 1939. Not satisfied with this order, the respondent preferred an appeal to the Commercial Tax Officer claiming a deduction of the entire amount. The Commercial Tax Officer allowed a further deduction of Rs. 52,220-1-9 and assessed the taxable turnover at Rs. 14,471-0-6 by his order dated 7th August, 1957. On 12th August, 1960, the Supreme Court in State of Madras v. Noor Mohammed & Company(1) reversed the decision in Noor Mohammed & Company v. State of Madras[1956] 7 S.T.C. 792. and held that unlicensed dealers in hides and skins were liable to tax under section 6-A of the Act. The Board of Revenue, on the strength of the decision of the Supreme Court in State of Madras v. Noor Mohammed & Company[1960] 11 S.T.C. 570., gave a notice under section 34 of Madras Act I of 1959 on 23rd June, 1961, to show cause why the turnover for 1954-55 should not be fixed at Rs. 45,52,329-6-1 in accordance with the decision of the Supreme Court. A writ petition was preferred by the respondent for prohibiting the State of Madras from proceeding with the proposed revision of the assessment. The writ petition having been allowed, the State of Madras has preferred the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of revision is also provided. Under section 12 the Commercial Tax Officer, the Deputy Commissioner and the Board of Revenue are conferred powers of revision. The powers are exercisable suo motu or on application by the assessee. The right of an assessee to apply for a revision under section 12 is limited, for the right of revision is available only in cases where there is no appeal or where he has not preferred an appeal. The Commercial Tax Officer, in exercise of his revisional jurisdiction, is empowered to examine the records of any officer subordinate to him for satisfying himself as to the legality or propriety of such order and the regularity of the proceeding and to pass such order as he may think fit. So also the Deputy Commissioner is entitled to examine the legality or propriety of the order and the regularity of the proceeding before the Commercial Tax Officer and pass such order as he may think fit. The Board of Revenue is empowered to examine the legality or propriety of the order or the regularity of the proceeding before the Deputy Commissioner, and to pass such order as it thinks fit. Under subsection (4) of section 12 the power of revision by the Commercial Tax Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4)(b) can only be from the date of the appellate order. In support of his contention that the order appealed against became merged in the appellate order, the learned Additional Government Pleader relied on several decisions which may be referred to. In Kristnamachariar v. Mangammal[1903] I.L.R. 26 Mad. 91., it was held that under Article 179 of Schedule II to the Limitation Act, when a portion of a decree had been appealed against and a portion had not been appealed against the period of limitation for an application to execute the portion not appealed against runs from the date of the decree in appeal. Bhashyam Ayyangar, J., observed that, "When an appeal is preferred from a decree of a Court of First Instance, the suit is continued in the Court of Appeal and re-heard either in whole or in part, according as the whole suit is litigated again in the Court of Appeal or only a part of it. The final decree in the appeal will thus be the final decree in the suit, whether that be one confirming, varying or reversing the decree of the Court of First Instance. The mere fact that a matter is litigated both in the Court of First Instance and again, though only in part, in the Court of App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e jurisdiction of the Appellate Assistant Commissioner, it would not be open to the appellate authority to entertain a plea about the correctness, propriety or validity of such an order. It was further held that if the contention were to be accepted, it would virtually give the department a right of appeal against the order in question and there can be no doubt that the scheme of the Act is not to give the department a right of appeal to the Appellate Assistant Commissioner against any orders passed by the Income-tax Officer. The Supreme Court further observed: "If that be the true position, the order of registration passed by the Income-tax Officer stands outside the jurisdiction of the Appellate Assistant Commissioner and does not strictly form part of the proceedings before the appellate authority. Even after the appeal is decided and in consequence the appellate order is the only order which is valid and enforceable in law, what merges in the appellate order is the Income-tax Officer's order under appeal and not his order of registration which was not and could never become the subject-matter of an appeal before the appellate authority. The theory that the order of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Madras v India Coffee Board(1), the assessee was assessed on a turnover of Rs. 3,89,38,275 for the year 1949-50. The assessee took the matter on appeal to the Deputy Commercial Tax Officer. The appeal was dismissed on 31st May, 1951. The assessee took a further appeal to the Sales Tax Appellate Tribunal, and the Tribunal confirmed the order of assessment on 24th July, 1952. A revision by the assessee to the High Court was also dismissed by the High Court on 14th April, 1954. After the Tribunal dismissed the appeal on 24th July, 1952, and during the pendency of the revision before the High Court, the Deputy Commissioner of Commercial Taxes initiated proceedings suo motu under section 12 of the Act to revise the order of assessment confirmed by the Commercial Tax Officer. According to the Deputy Commissioner, a sum of Rs. 33,73,733 was not entitled to exemption. The assessee objected to this assessment by the Deputy Commissioner, but the Deputy Commissioner revised the assessment. Against the said assessment by the Deputy Commissioner, the assessee preferred an appeal to the Tribunal. The Tribunal held that as the original assessment had been appealed against to the Tribunal, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commercial Tax Officer. We are unable to draw any such inference from the passage quoted above. Further, it will have to be noted that the scope and effect of section 12-A of the Act was not under consideration by the Bench in that case. The decision reported in Commissioner of Income-tax v. Tejaji[1953] 23 I.T.R. 412; A.I.R. 1954 Bom. 93. was next referred to by the learned Additional Government Pleader. Chagla, C.J., while dealing with an assessment order confirmed by the Appellate Assistant Commissioner of Income-tax, held that the order of the Income-tax Officer merged in the order of the Appellate Assistant Commissioner. In the case cited, the Income-tax Officer passed an order assessing the capital gains of the assessee at Rs. 25,000. The assessee preferred an appeal to the Appellate Assistant Commissioner who confirmed the order and dismissed the appeal by the assessee. The Commissioner of Income-tax revised the order of assessment by enhancing it to Rs. 10,00,000. The Bombay High Court held that by enhancing the assessment to Rs. 10,00,000, the Commissioner was not revising the order of the Income-tax Officer, but was revising the order of the Appellate Assistant Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d collected as tax. The assessee did not raise any objection against the order of assessment by the Deputy Commercial Tax Officer or the Commercial Tax Officer in regard to any other matter. The Deputy Commissioner dismissed the revision petition on 21st August, 1954. The Board of Revenue issued a notice on 4th August, 1958, calling upon the assessee to show cause why the assessment should not be revised to include in the net turnover the sum of Rs. 7,74,62,706-1-6 as that amount was wrongly excluded by the assessing authority. It was contended by the State that under section 12(4)(b) of the Act, the order of the Commercial Tax Officer dated 28th November, 1952, became merged in the order of the Deputy Commissioner of Commercial Taxes dated 21st August, 1954, and as the Board of Revenue sought to revise the order within four years on 4th August, 1958, it should be held that the order was within time. It was contended on behalf of the assessee that the order sought to be revised was only that of the Deputy Commercial Tax Officer of 28th November, 1952, and was therefore out of time. The Bench, after considering the various provisions of the Act, held that there was a clear demarcati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that the theory of merger is not applicable in this case and the Board of Revenue could have exercised its powers of revision only within four years from the date of the order of the Deputy Commercial Tax Officer. The Act has made elaborate provisions providing for appeals and revisions and specifying the time within which such reliefs should be asked for. When the Act itself has made specific provisions providing for limitation, there is no justification for travelling outside the Act for fixing the period of limitation. The general principle that the order appealed against merges in the appellate order and the appellate order is the only effective and enforceable order is not unqualified in its application. It can have no application in a case where the question could not form part of the proceedings before the appellate authority and in which the appellate authority could not have passed an order sought to be made by the revising authority. In the present case the Commercial Tax Officer, exercising his appellate powers, could not have assessed the assessee as an unlicensed dealer under section 6-A, for the assessee only had a right of appeal and the department had no right ..... 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