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Asbestos Cement Limited Vs. Commissioner of Sales Tax - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case NumberMiscellaneous Petition No. 332 of 1972
Judge
Reported in[1976]38STC321(MP)
AppellantAsbestos Cement Limited
RespondentCommissioner of Sales Tax
Appellant AdvocateM.M. Sapre, Adv.
Respondent AdvocateK.K. Adhikari, Adv.
DispositionPetition dismissed
Cases ReferredRaipur v. Commissioner of Sales Tax
Excerpt:
- - we may observe that the said case is clearly distinguishable inasmuch as a different provision has been made in the m. 113. in that bombay case, the deputy commissioner, who exercised second appellate powers, came to the conclusion that the orders of forfeiture were bad in view of the decision of the supreme court in abdul quader and co. in this view, we are clearly of the opinion that because of alteration of the provisions in the m. in this view of the matter, the notice dated 23rd august, 1969 (petitioner's annexure b), was well within hree years of the order of the deputy commissioner of sales tax dated 25th august, 1966 (petitioner's annexure a), and, as such, the question of limitation would not at all arise......39(2) of the madhya pradesh general sales tax act, 1958, so as to revise an appellate order of the deputy commissioner of sales tax for the reason that the appellate order was prejudicial to the interests of the revenue. at this stage we are not concerned with the merits of the case regarding the point whether the sales effected by the petitioner were inter-state sales or intra-state sales.2. the petitioner had submitted quarterly returns of sales for the years 1960-61 and 1961-62, for the year 1960-61, the petitioner claimed exemption to the extent of rs. 30,39,717.35 on the ground that the sales were inter-state sales not liable to be taxed under the state act. in respect of the year 1961-62, exemption was claimed on the same ground to the extent of rs. 47,37,327.98. the consignments.....
Judgment:
ORDER

P.K. Tare, C.J.

1. In this petition under articles 226 and 227 of the Constitution of India, the petitioner, a limited company incorporated under the Indian Companies Act, 1913, seeks to have the notice dated 23rd August, 1969 (petitioner's annexure B), issued by the Additional Commissioner of Sales Tax and the order dated 18th April, 1972 (petitioner's annexure C), passed by the Commissioner of Sales Tax quashed on the ground that the Commissioner had no power of revision under Ssection 39(2) of the Madhya Pradesh General Sales Tax Act, 1958, so as to revise an appellate order of the Deputy Commissioner of Sales Tax for the reason that the appellate order was prejudicial to the interests of the revenue. At this stage we are not concerned with the merits of the case regarding the point whether the sales effected by the petitioner were inter-State sales or intra-State sales.

2. The petitioner had submitted quarterly returns of sales for the years 1960-61 and 1961-62, For the year 1960-61, the petitioner claimed exemption to the extent of Rs. 30,39,717.35 on the ground that the sales were inter-State sales not liable to be taxed under the State Act. In respect of the year 1961-62, exemption was claimed on the same ground to the extent of Rs. 47,37,327.98. The consignments were booked f. o. r. ex works, Kymore.

3. The Additional Commissioner of Sales Tax, Jabalpur, rejected the petitioner's contentions, while the Deputy Commissioner of Sales Tax by order dated 25th August, 1966 (petitioner's annexure A), allowed the petitioner's appeal and exempted the sales from taxation under the State Act. Consequently, the notice dated 23rd August, 1969 (petitioner's annexure B), was issued to the petitioner by the Additional Commissioner of Sales Tax under Section 39(2) of the M. P, General Sales Tax Act, 1958, intending to revise the order of the Deputy Commissioner of Sales Tax on the ground that it was prejudicial to the interests of the revenue. That notice was served on the petitioner on 6th September, 1969, Subsequently, by order dated 18th April, 1972 (petitioner's annexure C), the Commissioner of Sales Tax rejected the petitioner's objection to the proposed revision and fixed the case for final hearing on 13th June, 1972. It is against the said orders that the petitioner has filed the present writ petition, wherein the question of scope of Section 39(2) of the Act has been raised.

4. The learned counsel for the petitioner relied oa the observations of a Division Bench of this Court in Commissioner of Sales Tax, M.P., Indore v. Amarjeet Singh [1963] 14 S.T.C. 501. In that case, the Division Bench had to consider the implication of Section 22-B of the C.P. and Berar Sales Tax Act, 1947, with particular reference to Section 3 of that Act. The questions referred to the court by the Tribunal were as follows:

(i) Whether the revisional jurisdiction vested in the Commissioner of Sales Tax under Section 22-B of the Central Provinces and Berar Sales Tax Act, 1947, extends to orders passed in appeal under Section 22 of that Act ?

(ii) Whether an authority prescribed under Section 22(1) of the Central Provinces and Berar Sales Tax Act, 1947, read with Rule 53 of the Rules thereunder, is a person appointed under Section 3 of that Act to assist the Commissioner of Sales Tax?

The Division Bench held that the Commissioner could not revise an appellate order of the Deputy Commissioner under Section 22-B of the C.P. and Berar Sales Tax Act, 1947. The reasoning of the Division Bench was that in view of Section 3 of that Act, an appellate authority which exercised appellate powers on account of the rules prescribed, could not be considered to be an authority appointed to assist the Commissioner. For the sake of convenience, we may reproduce Section 3 of that Act, which is as follows:

3. (1) The State Government may appoint any person to be a Commissioner of Sales Tax, and such other persons under any prescribed designations to assist him as it thinks fit.

(2) Persons appointed under Sub-section (1) shall, within such areas as the State Government may specify, exercise such powers as may be conferred and perform such duties as may be imposed, by or under this Act.

(3) All persons appointed under Sub-section (1) shall be deemed to be public servants within the meaning of Section 21 of the Indian Penal Code.

Section 22 of that Act provided as follows:

22. (1) Any dealer aggrieved by an original order under this Act may, in the prescribed manner, appeal to the prescribed authority against such order and any dealer aggrieved by an order passed in appeal under this Act may appeal to such authority as may be prescribed against the order passed by the first appellate authority:

Provided that no first or second appeal against an order of assessment with or without penalty shall be admitted by the appellate authority unless such appeal is accompanied by a satisfactory proof of the payment of the tax, with penalty, if any, in respect of which the appeal has been preferred.

(2) Notwithstanding anything contained in the proviso to Sub-section (1), the appellate authority may in its discretion allow time to the dealer to pay the whole or part of the amount of tax or penalty or both and if the amount is paid within such time, the appeal shall be admitted.

(3) Every first or second appeal shall be filed within thirty days from the date of the communication of the order against which the appeal is to be filed.

(4) Subject to such procedure as may be prescribed and after such further enquiry as it may think fit, the appellate authority, in disposing of any appeal under Sub-section (1), may --

(a) confirm, reduce, enhance or annul the assessment, or

(b) set aside the assessment or penalty, or both, and direct the Commissioner or the person appointed under Section 3 to assist the Commissioner to make a fresh assessment after such further inquiry as may be directed, or

(c) in other cases, pass such orders as it may think fit.

(5) Every order passed in first appeal or second appeal under this section shall, subject to the provisions of this section, Section 22-A or Section 23, as the case may be, be final.

(6) Subject to rules made under this Act, any person appointed under Section 3 may review any order passed by him and likewise the second appellate authority may review any order passed by it.

(7) The Tribunal may, on application by a dealer for revision of an order passed under this Act by the second appellate authority made within sixty days from the date of communication of the order, revise the order, if it appears to the Tribunal that the order passed by the second appellate authority is contrary to law.

Section 22-A of that Act provided as follows:

22-A. (1) The Commissioner may of his own motion call for the record of any proceeding under this Act in which an order has been passed by any authority subordinate to him and may make such inquiry or cause such inquiry to be made, and, subject to the provisions of this Act, may pass such order thereon, not being an order prejudicial to the dealer, as he thinks fit:

Provided that the Commissioner shall not revise any order under this sub-section if, --

(a) where an appeal against the order lies to an authority prescribed under Sub-section (1) of Section 22, the time within which such appeal may be made has not expired; or

(b) the order is pending on an appeal before the authority prescribed under Sub-section (1) of Section 22 or has been made the subject of a revision to the Tribunal;

(c) the order has been made more than one year previously.

(2) The Commissioner may, on application by a dealer for revision of an order under this Act passed by any authority subordinate to the Commissioner made within one year from the date of the order, call for the record of the proceeding in which such order was passed, and on receipt of the record may make such inquiry or cause such inquiry to be made, and subject to the provisions of this Act, may pass such order thereon, not being an order prejudicial to the dealer, as he thinks fit:

Provided that the Commissioner shall not revise any order under this Sub-section, if --

(a) where an appeal against the order lies to the authority prescribed under Sub-section (1) of Section 22, but has not been made, the time within which such appeal may be made has not expired, or in the case of a revision to the Tribunal the dealer has not waived his right of revision; or

(b) where an appeal against the order has been made to the authority prescribed under Sub-section (1) of Section 22, the appeal is pending before such authority; or

(c) the order has been made the subject of a revision to the Tribunal:

Provided further that an order by the Commissioner declining to interfere shall be deemed not to be an order prejudicial to the dealer.

Section 22-B of the said Act provided as follows:

22-B. (1) The Commissioner may call for and examine the record of any proceeding under this Act and if he considers that any order passed therein by any person appointed under Section 3 to assist him is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the dealer an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment.

(2) No order shall be made under Sub-section (1) after the expiry of two years from the date of the order sought to be revised.

(3) Any dealer objecting to an order passed by the Commissioner under Sub-section (1) may appeal to the Tribunal within sixty days of the date on which the order is communicated to him.

5. The Division Bench was of the view that Section 22 of the Act conferred appellate powers on the Deputy Commissioner of Sales Tax independently and for the purposes of Section 22-B of the Act, the first appellate authority could not be considered to be an authority appointed to assist the Commissioner of Sales Tax. On a perusal of the said provisions reproduced above, it is clear that the Commissioner of Sales Tax has no judicial appellate powers. But the only judicial power exercisable by him is by way of revision at the instance of a party or of his own motion, if he considers the order to be prejudicial to the interests of the revenue. Under the Act, a party aggrieved has the right of appeal, but the State has no right of appeal. It was for that reason that the revisional powers were conferred on the Commissioner, if he thought that an order was prejudicial to the interests of the revenue. We may observe that the said case is clearly distinguishable inasmuch as a different provision has been made in the M.P. General Sales Tax Act, 1958.

6. We may reproduce Section 39 of the M.P. General Sales Tax Act, 1958, which is as follows:

39. Power of revision by Commissioner. -- (1) The Commissioner may, either of his own motion or on application by a dealer or person made within the prescribed period from the date of the order, call for the record of the proceeding in which any order was passed, and on receipt of the record may make such inquiry or cause such inquiry to be made, as he considers necessary and subject to the provisions of this Act, may pass such order thereon, not being an order prejudicial to the dealer or person as he thinks fit:

Provided that the Commissioner shall not revise any order under this sub-section --

(a) where an appeal against the order is pending before any authority specified in Sub-section (1) of Section 38, or where if such appeal lies, the time within which it may be filed has not expired; or

(b) where a second appeal against the order has been filed:

Provided further that the Commissioner shall not entertain any application by a dealer against an order determining his liability to pay tax or a notice issued under this Act for assessment, except after an assessment order is passed.

Explanation, -- An order by the Commissioner declining interference shall not be deemed to be an order prejudicial to the dealer or person.

(2) The Commissioner may of his own motion or on information received call for and examine the record of any proceeding under this Act if he considers that any order passed therein by any person appointed under Section 3 to assist him is erroneous in so far as it is prejudicial to the interests of the revenue, he may after giving the dealer or person an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment:

Provided that no proceedings shall be initiated under this sub-section after the expiry of three years from the date of the order sought to be revised:

Provided further that the Commissioner shall not revise any order under this sub-section where a second appeal against such order is pending or such appeal has been decided on the merits.

(3) Any dealer or person objecting to an order passed by the Commissioner under Sub-section (2) may appeal to the Tribunal within sixty days of the date on which the order is communicated to him.

(4) The provisions of Sub-sections (3) and (5) of Section 38, shall, mutatis mutandis, apply to appeals filed under Sub-section (3).

7. Thus, the Commissioner has been given the power to revise an order which he considers prejudicial to the interests of the revenue. It is not urged by the learned counsel for the petitioner that such power cannot be exercised by the Commissioner in respect of original orders passed by the Sales Tax Officer or the Assistant Commissioner of Sales Tax. What is urged before this court is that the Commissioner has no jurisdiction to exercise revisional powers in respect of an appellate order passed by a Deputy Commissioner of Sales Tax, because the Deputy Commissioner cannot be considered to be an authority appointed to assist the Commissioner. Of course, that was the reasoning of the earlier Division Bench in Commissioner of Sales Tax, M.P., Indore v. Amarjeet Singh [1963] 14 S.T.C. 501. However, Section 3 of the M.P. General Sales Tax Act, 1958, is differently worded as follows:

8. Section 3 of the M.P. General Sales Tax Act, 1958, is as under:

3. Taxing authorities and other officers. -- (1) There may be appointed a person to be the Commissioner of Sales Tax and the following category of officers to assist him, namely;

(a) Additional Commissioner of Sales Tax;

(b) Deputy Commissioner or Additional Deputy Commissioner of Sales Tax;

(c) Appellate Assistant Commissioner or Additional Appellate Assistant Commissioner of Sales Tax;

(d) Assistant Commissioner or Additional Assistant Commissioner of Sales Tax;

(e) Sales Tax Officer or Additional Sales Tax Officer;

(f) Assistant Sales Tax Officer; and

(g) Inspector of Sales Tax.

(2) The Commissioner of Sales Tax and the Additional Commissioner of Sales Tax shall be appointed by the State Government and the other officers referred to in Sub-section (1) shall be appointed by the State Government or such other authority as it may direct.

(3) The person appointed under Sub-section (2) shall, within such areas as the appointing authority may specify, exercise such powers as may be conferred and perform such duties as may be imposed by or under this Act.

(4) An Additional Commissioner of Sales Tax shall exercise such of the powers and perform such of the duties of the Commissioner, as the State Government may, by notification, direct and references to the Commissioner in this Act shall be deemed to include references to the Additional Commissioner of Sales Tax when exercising such powers or performing such duties.

9. It is to be noted that all other authorities mentioned in the said section would be authorities appointed to assist the Commissioner. Thus, there is a clear distinction between Section 3 of the present Act and Section 3 of the repealed Act. Under the present Act, the appellate powers are conferred on authorities, which are constituted by designation under Section 3 of the Act. Thus, any Deputy Commissioner of Sales Tax, who would exercise first appellate power would be an authority appointed to assist the Commissioner and we do not see as to why the Commissioner cannot exercise powers under Section 39(2) of the Act in respect of an appellate decision of the Deputy Commissioner of Sales Tax, if the Commissioner considers such an order prejudicial to the interests of the revenue. In this connection, we would rely on the observations of a decision of a Division Bench of the Bombay High Court in H.B. Munshi, Commissioner of Sales Tax, Bombay v. Oriental Rubber Industries Pvt. Ltd. [1974] 34 S T.C. 113. In that Bombay case, the Deputy Commissioner, who exercised second appellate powers, came to the conclusion that the orders of forfeiture were bad in view of the decision of the Supreme Court in Abdul Quader and Co. v. Sales Tax Officer, Hyderabad [1964] 15 S.T.C. 403 (S.c.), and directed the amounts to be refunded to the petitioner. The Commissioner of Sales Tax took the view that the decision of the Supreme Court in Abdul Quader and Co. v. Sales Tax Officer, Hyderabad [1964] 15 S.T.C. 403 (S.c.). was not applicable in view of another decision of the Gujarat High Court in Ramgopal & Sons v. Sales Tax Officer, Surat [1965] 16 S.T.C, 1005, and, therefore, the Commissioner purported to revise the orders of the Deputy Commissioner and passed an order of forfeiture. Thereupon, the aggrieved assessee filed a writ petition in the High Court. A learned single Judge of the Bombay High Court, accepting the assessee's contention, held that when the Deputy Commissioner passed the orders in appeals from the order of the Assistant Commissioner, he was exercising powers of the Commissioner under Section 55(1)(b) as statutory delegate of the Commissioner and, therefore, the orders made by the Deputy Commissioner would be deemed to be orders made by the Commissioner himself and, as such, the Commissioner had no power to revise the order of the Deputy Commissioner in exercise of powers conferred by Section 57 of the Bombay Sales Tax Act, 1959. The Division Bench, reversing the decision of the learned single Judge, held that the Deputy Commissioner exercised powers and performed functions conferred upon him under the Act in his own right and not as a delegate or an agent of the Commissioner and, for that reason, the orders passed by the Deputy Commissioner in second appeal were revisable by the Commissioner under Section 57(1)(a) of the said Act.

10. We may observe that the same analogy would be applicable to the instant case. The Deputy Commissioner under our State Act has been conferred powers of first appellate authority independently. But, all the same, by virtue of Section 3 of the State Act he is an authority appointed to assist the Commissioner. In this view, we are clearly of the opinion that because of alteration of the provisions in the M.P. General Sales Tax Act, 1958, the position is altogether changed and this case is distinguishable from the earlier Division Bench case of Commissioner of Sales Tax, M.P., Indore v. Amarjeet Singh [1963] 14 S.T.C. 501. Therefore, we are of the opinion that the Commissioner had the power to revise the first appellate order of the Deputy Commissioner of Sales Tax in exercise of powers conferred by Section 39(2) of the M.P. General Sales Tax Act, 1958, In this view of the matter, the impugned notice and the order (petitioner's annexures B and C) do not call for any interference.

11. As regards limitation of three years provided by the proviso to Sub-section (2) of Section 39 of the Act, the period will have to be computed from the date of issue of the notice and not from the date of service. In the present case, the notice dated 23rd August, 1969 (petitioner's annexure B), was issued on 23rd August, 1969, while it was served on the petitioner on 6th September, 1969. In R.M.E. Works, Raipur v. Commissioner of Sales Tax, M.P.M.C.C. No. 346 of 1973 decided on 26th August, 1975; since reported at page 306 supra. we have held that computation of period of three years anterior to the notice will be from the date of issuance of notice and not from the date of service of the notice. In this view of the matter, the notice dated 23rd August, 1969 (petitioner's annexure B), was well within hree years of the order of the Deputy Commissioner of Sales Tax dated 25th August, 1966 (petitioner's annexure A), and, as such, the question of limitation would not at all arise.

12. As a result of the discussion aforesaid, this petition fails and is accordingly dismissed. However, under the circumstances, we direct that there shall be no order as to costs of this petition. The outstanding amount of the security deposit shall be refunded to the petitioner.


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