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TMI Blog1992 (8) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 4 disallowed the claim for deduction for Rs. 39,632.48 as there was no mention of orders in four declaration forms, out of eight declaration forms filed by the respondent No. 1 The applicant No. 4, the Commercial Tax Officer allowed the claim for exemption for the balance amount of sales. He passed an order of assessment on the balance amount of Rs. 35,372 and imposed penalty of Rs. 25 for late filing of returns. The respondent No. 1 preferred an appeal against the order of assessment. The appeal was disposed of by the applicant No. 3, the Assistant Commissioner of Commercial Taxes, Chowringhee Circle by an order passed on February 5, 1974, in Appeal Case No. A-941/72-73. The applicant No. 3 confirmed the order of assessment of tax and modified the order in respect of imposition of penalty. The respondent No. 1 filed an application for revision on May 17, 1974 before the respondent No. 2, the West Bengal Commercial Taxes Tribunal against the appellate order dated February 5, 1974. It was registered as revision case No. 142 of 1974-75. During the pendency of that revision case, a notice dated February 8, 1979 was sent by the applicant No. 2, the Additional Commissioner of Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... De, the learned State Representative, has assailed the judgment of the West Bengal Commercial Taxes Tribunal on two grounds. His first contention is that the appellate order dated February 5, 1974 passed by the applicant No. 3 in Appeal Case No. A-941/l972-73 merged in the order of revision passed by the applicant No. 2, the Additional Commissioner of Commercial Taxes, West Bengal on July 21, 1979 in Revision Case No. 345 of 1978-79 and, as such, the Revision Case No. 142 of 1974-75 pending before the respondent No. 2, the West Bengal Commercial Taxes Tribunal, arising out of the appellate order dated February 5, 1974, has become infructuous. His second contention is that the proceeding for revision initiated by the applicant No. 2 is within time, as the period of limitation will be counted from the date of the appellate order dated February 5, 1974 and not from the date of the order of assessment by the applicant No. 4, the Commercial Tax Officer, Esplanade Charge, on August 17, 1972. 5.. There are several pronouncements of the Supreme Court on the question of merger of an order of an inferior court in the order of the superior court. One of the earliest cases on the point is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act, 1939. The asseesee also resisted the revision on merits on contending that the exclusion of the sum of Rs. 7,74,62,706-1-6 by the Deputy Commercial Tax Officer was not wrong. The Board of Revenue by an order dated August 25, 1958 rejected both these contentions of the assessee and revised the assessment by including the sum of Rs. 7,74,62,706-1-6 in the taxable turnover of the assessee. On an appeal being preferred against that order of the Board of Revenue by the assessee before the Madras High Court, it was held by the Madras High Court, on allowing the appeal, that the Board of Revenue had no jurisdiction to revise the assessment made by the Deputy Commercial Tax Officer because a period of more than four years, which was the period of limitation under the Madras Act, had elapsed from the date when the order of assessment made by the Deputy Commercial Tax Officer was communicated to the assessee. The State of Madras preferred an appeal to the Supreme Court against the decision of the Madras High Court. The only question argued before the Supreme Court was whether the order of the Board of Revenue dated August 25, 1958 was illegal for being made after expiration of the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gross turnover by Rs. 10 only. He disallowed a part of the claim under section 5(2)(a)(ii) of the Act of 1941 and imposed a penalty of Rs. 25. Before the appellate authority there was no question about the meagre enhancement of the gross turnover. The only two points which were agitated before the appellate authority related to disallowance of part of the claim under section 5(2)(a)(ii) of the Act of 1941 and the penalty of Rs. 25. The suo motu revision by the applicant No. 2 was done in respect of a different subject-matter as the applicant No. 2, the Additional Commissioner, was of the view that sales were suppressed and both the gross turnover and the taxable turnover were understated. As this matter of suppression of gross turnover and taxable turnover was not the subject-matter for decision before the assessing authority or the appellate authority, the respondent No. 2 held that there was no merger of the appellate and the assessment orders with the revisional order of the Additional Commissioner. 7.. Mr. T.N. De, the learned State Representative, has referred to several decisions for showing that this view of the respondent No. 2 is not correct. He has referred to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ria show the limit or scope for application of the doctrine of implied decision for determining the question of merger. This doctrine of implied decision was discussed in the following manner by the Gujarat High Court in the case of Karsandas Bhagwandas Patel v. G.V. Shah, Income-tax Officer [1975] 98 ITR 255 at page 262: If the Appellate Assistant Commissioner, were under an obligation to examine the correctness of every decision recorded by the Income-tax Officer in the process of assessment, it might be possible to contend that when the Appellate Assistant Commissioner does not say anything about a particular decision recorded by the Income-tax Officer, he may be presumed to have assented to it and an inference of implied affirmance may be raised, but it cannot be disputed that, though the Appellate Assistant Commissioner has undoubted power to revise any decision of the Income-tax Officer suo motu, there is no obligation on him to do so and in the absence of such obligation, there can be no scope for the application of the doctrine of implied decision. The scope for application of the doctrine of implied decision was similarly considered by the Madhya Pradesh High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 979] 43 STC 307 (Santoshi Tel Utpadak Kendra v. Deputy Commissioner) were, however, overruled and, reversed by the Supreme Court in the case of Tel Utpadak Kendra v. Deputy Commissioner of Sales Tax [1981] 48 STC 248. It was held by the Supreme Court in that case that when the appellate jurisdiction of a superior authority was invoked against an order and that authority was seized of the case, it was not permissible for a subordinate authority to claim to exercise jurisdiction to revise that very order. The Bombay Sales Tax Act, 1959, constituted the Maharashtra Sales Tax Tribunal as an appellate as well as a revisional authority over the Commissioner. The Tribunal was the supreme appellate or revisional authority under the Bombay Sales Tax Act, 1959. It could not be divested of its jurisdiction to decide on the correctness of an order. This could not be frustrated in the exercise of the jurisdiction merely because a subordinate authority, the Commissioner, had also been vested with jurisdiction over that order. In this case [1981] 48 STC 248 at page 253 (Tel Utpadak Kendra v. Deputy Commissioner of Sales Tax) the Supreme Court distinguished its earlier decision in the case of Amri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re would be no merger of the appellate order with the order passed by the applicant No. 2 on July 21, 1979 as a result of suo motu revision. In the case of Shri Govindeo Glass Works Ltd. v. A.C.C.T. (1978) 11 STA 1 (Cal) there was an appeal before the Assistant Commissioner of Commercial Taxes against an order of assessment passed by the Commercial Tax Officer. The appeal was dismissed on the grounds of non-payment of admitted tax in full and limitation. A notice was thereafter issued by the Assistant Commissioner of Commercial Taxes intimating the assessee that the information coming to his possession revealed that certain sales had escaped assessment of tax and hence he proposed to enhance the assessee s gross turnover and intended to tax the entire amount. The assessee moved the High Court, Calcutta under article 226 of the Constitution. One of the questions before the High Court was whether the order of assessment had merged with the appellate order and the Assistant Commissioner of Commercial Taxes had got jurisdiction to revise his own order by exercising powers under section 20(3) of the Act of 1941 for enhancing the tax of the assessee. On following the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed an appeal before the Tribunal, raising only the jurisdictional point. The appeal was dismissed by the Tribunal. Thereafter there was a reference before the Bombay High Court on the question whether the Tribunal was correct in law in holding that the Deputy Commissioner of Sales Tax was competent to revise the order passed by the Assistant Commissioner of Sales Tax (Appeals), when the point of allowing freight charges was not the subject-matter of second appeal before the Tribunal decided on February 27, 1976. This question was answered in the negative by the Bombay High Court on following the decision in the case of Tel Utpadak Kendra v. Deputy Commissioner of Sales Tax [1981] 48 STC 248 (SC). It was held that when neither the department requested the Tribunal to set aside the relief granted to the assessee in the first appeal and the Tribunal did not choose to do so, the decision on the point relating to wrongful inclusion of railway freight held in favour of the assessee in the first appellate order was impliedly confirmed in the second appeal. For lending assurance to this proposition the decisions of the Patna High Court in the cases of Commissioner of Commercial Taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one which is operative and enforceable be it reversing, modifying or confirming. This principle is not, however, of universal application. In certain situations, the question of merger depends on the subject-matter of the appellate or revisional order and the scope of the appeal or revision as contemplated by the particular statute, because an assessment order consists of various items. If there is identity of items or subject-matter, as in the case of Gojer Brothers (P.) Ltd. v. Shri Ratan Lal Singh AIR 1974 SC 1380, referred to by Mr. Bajoria, there is merger; otherwise, in the absence of any such identity or of an obligation or scope to decide any particular item or fact on the appellate or revisional authority, there will be no merger by applying the doctrine of an implied decision. In the present case there was no such identity and no scope or obligation on the Assistant Commissioner of Commercial Taxes in Appeal Case No. A-941/72-73 to decide any question of escaped assessment, while hearing the appeal from the order of assessment dated August 17, 1972 and hence the order of the Assistant Commissioner dated February 5, 1974, would not merge with the order of the applicant N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t dated August 17, 1972, cannot be accepted. Under rule 80(5)(ii) of the Bengal Sales Tax Rules, 1941, as amended by Notification No. 1123-F.T. dated March 30, 1974, the period of limitation is six years from the date of any assessment made or order passed under the Act of 1941 or the Rules thereunder. Retrospective effect has been given to this amendment with effect from November 1, 1971. Before the amendment the power of revision of any assessment or order was limited to four years from the date of assessment or order. Before the expiry of four years from the date of assessment by the applicant No. 4 on August 17, 1972, the notification dated March 30, 1974, was published, extending the period of limitation to six years with retrospective effect. The retrospective operation of this amendment with effect from November 1, 1971, has been held to be valid by the Calcutta High Court in the case of Biswanath Jhunjhunwalla v. Commercial Tax Officer [1979] 43 STC 96. This position has also been accepted by Mr. Bajoria. The period of limitation for initiation of the proceeding for suo motu revision by the applicant No. 2 by issuing the notice in form IX on February 8, 1979 should be calcu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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