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TMI Blog1969 (5) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... as, that the Legislature did not intend to fetter the power of the Commissioner under section 21 by any rule of limitation, and this power could be exercised by the Commissioner at any time. Subsequently, the Supreme Court in The State of Orissa v. Debaki Debi and Others[1964] 15 S.T.C. 153., had the occasion to consider similar provisions of the Orissa Sales Tax Act (14 of 1947). Their Lordships came to a contrary conclusion. In these circumstances, the Division Bench judgment in National Rayon Corporation's case(1) requires reconsideration. Again, this very question cropped up before Sharma, J., in Messrs Rattan Chand Sureshat Kumar v. The Additional Assistant Excise and Taxation Commissioner, Civil Writ No. 2126 of 1963, who has referred the matter for being placed before a larger Bench. Mr. Bhagirath Dass and Mr. G. R. Majithia have also informed me that the same question will also crop up in Civil Writ No. 1819 of 1966, which is pending in this Court, and they have made a joint request for reference of that case also to a larger Bench. I would, therefore, direct under proviso (b) of rule I, Chapter III-B, High Court Rules and Orders, Volume V, that the papers in all thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Chief Justice for constituting a larger Bench to reconsider the aforesaid Division Bench judgment and to determine the question: "Whether the jurisdiction of the Commissioner under section 21(1) of the Punjab General Sales Tax Act, 1948, is subject to the period of limitation prescribed in sub-section (6) of section 11 of the Act." It is admitted by both the learned counsel that instead of sub-section (6) of section 11 it should be section 11-A so that the question referred will read as under: "Whether the jurisdiction of the Commissioner under section 21(1) of the Punjab General Sales Tax Act, 1948, is subject to the period of limitation prescribed in section 11-A of the Act." This is how these cases have been placed before us for deciding the point of law referred. This precise point had arisen in an earlier Division Bench judgment of this Court in Narain Singh Mohinder Singh v. The State of Punjab and Another[1963] 14 S.T.C. 610. The judgment in that case was delivered by Mehar Singh, J. (as my Lord the Chief justice then was) with which my learned brother Shamsher Bahadur, J., agreed and it was held as under: "In so far as the first question is concerned it is obviou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner may decide to reopen a matter settled twenty or thirty years previously, does not lead anywhere. The power of revision mentioned in section 21 is altogether separate from and unconnected with the power of reassessment by an assessing authority under section 11-A of the East Punjab General Sales Tax Act. In my opinion, therefore, the learned Single judge was right in holding that the Additional Assistant Excise and Taxation Commissioner had authority to revise the previous orders made by the assessing authority in the present cases." It is thus obvious that the two Division Benches of this Court had independently come to the same conclusion on the question of law argued before them. It is now to be considered whether the correctness of this decision has been, in any way, impaired by the decisions of their Lordships of the Supreme Court in State of Orissa v. Debaki Debi and Others [1964] 15 S.T.C. 153. and The Swastik Oil Mills Ltd. v. H. B. Munshi, Deputy Commissioner of Sales Tax, Bombay[1968] 21 S.T.C. 383. Before proceeding to discuss the arguments of the learned counsel, I prefer to notice the relevant provisions of the Act as it applied to the cases in han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nite information which has come into his possession, the assessing authority discovers that the turnover of the business of a dealer has been under-assessed, or escaped assessment in any year, the assessing authority may, at any time within three years following the close of the year for which the turnover is proposed to be reassessed, and after giving the dealer a reasonable opportunity, in the prescribed manner of being heard, proceed to reassess the tax payable on the turnover which has been under-assessed or has escaped assessment. (2) An assessing authority or any such authority as may be prescribed, may, at any time, within one year from the date of any order passed by him and subject to such conditions as may be prescribed, rectify any clerical or arithmetical mistake apparent from the record." The period of three years provided in sub-sections (4), (5) and (6) of section 11 and section 11-A of the Act was extended to four years with effect from 10th January, 1963, and to five years with effect from 1st April, 1966. The provision for an appeal is made in section 20 of the Act and section 21(1) provides for the power of revision of the Commissioner in the following words: " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order is liable to be set aside or modified on a reference to the High Court under section 22 of the Act or on a petition under Article 32 or 136 or 226 of the Constitution made to the appropriate court. In order to decide the point of law referred to us, in the context of the argument of the learned counsel, it is necessary to determine the respective scope of sections 11-A and 21(1) of the Act. Section 11-A empowers the assessing authority to reassess a dealer in respect of any turnover which had escaped assessment or which had been under-assessed in consequence of any definite information which comes into his possession after the original order of assessment was made. This power cannot be exercised either by the appellate authority or the revisional authority. The revisional authority is entitled to call for the record of any case decided by the assessing authority or any appellate authority in order to see whether the order passed is proper or legal. Similarly he can call for the record of any proceedings pending before any assessing authority or appellate authority in order to determine the legality or propriety of the proceedings. But, before he decides to exercise this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord of any proceedings pending before an assessing authority and pass such order in respect thereof as he thinks fit according to section 21(1) of the Act. In exercise of that power he can also rely upon the information in his possession and enhance the assessment after giving notice to the dealer provided the period of limitation prescribed in section 11-A of the Act has not expired. There is no period of limitation prescribed in the Act or the Rules framed under the Act within which alone the revising authority can exercise its power of suo motu revision under section 21(1) of the Act on the basis of the record called for by him nor can any such period of limitation be implied on the basis of section 11-A of the Act. I am, thus, in respectful agreement with the decisions of the two Division Benches of this Court noticed above. For coming to the above conclusion I have mainly drawn on the judgment of their Lordships of the Supreme Court in The State of Kerala v. K.M. Cheria Abdulla and Company[1965] 16 S.T.C. 875., wherein their Lordships defined the scope of revision under section 12(2) of the Madras General Sales Tax Act, 1939, which is in identical terms as section 21(1) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in exercise of his revisional jurisdiction, if the revising authority is satisfied that the subordinate officer has committed an illegality or impropriety in the order or irregularity in the proceeding, he cannot make or direct any further enquiry. The words of sub-section (2) of section 12 that the Deputy Commissioner 'may pass such order with respect thereto as he thinks fit' mean such order as may in the circumstances of the case for rectifying the defect be regarded by him as just. Power to pass such order as the revising authority thinks fit may in some cases include power to make or direct such further enquiry as the Deputy Commissioner may find necessary for rectifying the illegality or impropriety of the order, or irregularity in the proceeding. It is, therefore, not right baldly to propound that in passing an order in the exercise of his revisional jurisdiction, the Deputy Commissioner must in all cases be restricted to the record maintained by the officer subordinate to him, and can never make enquiry outside that record. " It will be noticed that the power to hold further enquiry was conferred by rule 14-A on the revising authority and it was held by their Lordships th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: Provided further that no order assessing the amount of tax due from a dealer in respect of any period shall be passed later than thirty-six months from the expiry of such period." Sub-section (7) of section 12 provided that "if for any reason the turnover of a dealer has escaped assessment or has been under-assessed, the Collector may call for a return within thirty-six months of the end of the period in question and may proceed to assess the amount of tax in the manner laid down in sub-section (5)." It is thus evident that subsection (7) of section 12 of the Orissa Act corresponds to section 11-A of the Act. Section 23(3) of the Orissa Act gives the power of revision to the Collector and the Revenue Commissioner in the following terms: "23. (3) Subject to such rules as may be prescribed and for reasons to be recorded in writing, the Collector may upon application, or of his own motion, revise any order passed under this Act or the rules thereunder by a person appointed under section 3 to assist him, and, subject as aforesaid, the Revenue Commissioner may, in like manner, revise any order passed by the Collector." Their Lordships of the Supreme Court held that the proviso to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initimating that he proposed to revise suo motu the appellate order passed by the Assistant Collector, Sales Tax, in so far as he allowed deductions 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 of 1946 as amended by the Bombay Act 48 of 1949. The dealer filed a petition under Article 226 of the Constitution in the High Court of Bombay challenging that notice with the prayer that the notice be quashed and the respondent be restrained from taking any action against the dealer in pursuance thereof. The petition was dismissed by the High Court and the dealer filed an appeal in the Supreme Court on a certificate granted by the High Court. It was submitted before their Lordships that the notice could not be issued by the Deputy Commissioner of Sales Tax, Bombay, after the expiry of 5 years as was provided in section 57 of the 1959 Act which was in force at the time the notice was issued in 1963. Reliance was also placed on the judgment of their Lordships in State of Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment, the appropriate provision, under which action is to be taken for assessing that turnover to tax, is section 11-A. 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 initiate a fresh proceeding in respect of it under section 11-A. The assessment made by him was set aside in appeal by the Assistant Collector and it is this order of the Assistant Collector which is sought to be revised by the Deputy Commissioner. This is, therefore, not a case where the powers are being exercised for the purpose of assessing or reassessing an escaped turnover. The case is one where the revisional powers are sought to be exercised to correct what appears to be an incorrect order passed in appeal by the Assistant Collector, and, for such a purpose, proceedings could not possibly have been taken under section 11-A. In exercising his revisional p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Punjab and Another' (Mehar Singh, J., and myself), and National Rayon Corporation Ltd. v. The Additional Assistant Excise and Taxation Commissioner, Punjab[1964] 15 S.T.C. 746., (Dulat and Pandit, JJ.). The seemingly contrary decision of the Supreme Court in The State of Orissa v. Debaki Debi and Others[1964] 15 S.T.C. 153. was given on its own facts relating to the Orissa Sales Tax Act of 1947. Section 11 of the Act deals with the various situations which may arise for the "assessing authority" which is defined to mean "any person authorised by State Government to make any assessment under this Act." If the registered dealer has filed a return in response to the statutory notice, to the satisfaction of the assessing authority, the amount of tax may be computed on its basis under sub-section (1). Should the assessing authority so desire, evidence may be called from the dealer by issuing a notice to this effect under sub-section (2). Now, if a dealer either fails to file a return altogether or does not comply with the requirement of producing further evidence in consequence of the notice under subsection (2), the assessing authority may proceed to make a "best judgment assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such an enquiry under section 21 has been amplified by Mr. justice Shah, who delivered the Supreme Court judgment in The State of Kerala v. K.M. Cheria Abdulla and Company[1965] 16 S.T.C. 875. His Lordship was no doubt dealing with the Madras Act but the principle enunciated in the judgment is fully applicable to the facts of the cases relating to the Punjab Act. As observed at page 883 by the learned judge: "............... There is no doubt that the revising authority may only call for the record of the order or the proceedings, and the record alone may be scrutinised for ascertaining the legality or propriety of an order or regularity of the proceeding. But there is nothing in the Act that for passing an order in exercise of his revisional jurisdiction, if the revising authority is satisfied that the subordinate officer has committed an illegality or impropriety in the order or irregularity in the proceeding he cannot make or direct any further enquiry....... It is therefore not right baldly to propound that in passing an order in the exercise of his revisional jurisdiction, the Deputy Commissioner must in all cases be restricted to the record maintained by the officer subo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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