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The State of Gujarat Vs. Jamnagar Motor Stores - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtGujarat High Court
Decided On
Case NumberSales Tax Reference Nos. 1, 6 and 11 of 1971
Judge
Reported in[1974]33STC353(Guj)
ActsBombay Sales Tax Act, 1959 - Sections 20, 55, 55(2), 56 and 57; Gujarat Sales Tax Act, 1969 - Sections 57
AppellantThe State of Gujarat
RespondentJamnagar Motor Stores
Appellant Advocate G.N. Desai, Govt. Pleader, i/b.,; H.V. Chhatrapati, Adv. of Bhaishanker Kanga & Girdharlal
Respondent Advocate S.L. Modi, Adv.
Cases ReferredN. V. S. Kadirvel Nadar v. The State of Madras
Excerpt:
sales tax - construction - section 57 of bombay sales tax act, 1959 - whether under section 57 period of limitation of five years prescribed for exercising revisional jurisdiction applies only for calling of record or also applies to examination of such records and passing such order - anomalous to hold that revisional power becomes ineffective after 5 years - such intention cannot be attributed to legislature - held, period of limitation for exercising revisional jurisdiction was only for calling of record of any order and not for passing final order. - .....the record. when the commissioner calls for the record, he does so in exercise of his revisional power or power of superintendence. the power of revision commences when the commissioner calls for the record and terminates when he passes the final order. see the case of the mysore high court in s. subba rao v. commissioner of commercial taxes in mysore, bangalore ([1967] 19 s.t.c. 257.). the period of 5 years referred to in section 57 refers to initiation of the revisional proceeding. it is not necessary that the entire process of revision must be completed within the specified period. the revisional power under section 57 can be exercised in favour of the state or in favour of the assessee. to accept the argument that the entire process of revision including the passing of the final.....
Judgment:

Desai, J.

1. The question of law referred to in these references is identical and, therefore, we shall dispose of them by this common judgment.

2. It is not necessary to state the facts in detail in respect of these references. We will narrate shortly and broadly the necessary facts. The Sales Tax Officer in these references passed an order of assessment against the opponents herein relating to the turnover in respect of a particular year. The Assistant Commissioner invoked his revisional power in these references within the period of 5 years. The final orders in revision were passed by the Assistant Commissioner after a period of 5 years. It was contended before the Tribunal on behalf of the assessees that the orders revising the assessment passed by the Assistant Commissioner were illegal because it was necessary under the law that the final orders revising the assessment should have been passed within the period of 5 years. The Tribunal accepted the said argument and at the instance of the State has referred the following question for our determination, namely, whether on the correct interpretation of section 57 of the Bombay Sales Tax Act, 1959, the period of limitation of 5 years prescribed for exercising the revisional jurisdiction by the Commissioner on his own motion, applies only to the calling of the record of any order of any officer appointed under section 20 to assist him, or also applies to the examination of such record and passing such order thereon as he thinks just and proper. The answer to the question depends upon the correct interpretation of section 57 of the Bombay Sales Tax Act, 1959 (hereinafter referred to as the Act), and the section is as under :

'57. (1) Subject to the provisions of section 56 and to any rules which may be made in this behalf, -

(a) the Commissioner of his own motion within five years from the date of any order passed by any officer appointed under section 20 to assist him, may call for and examine the record of any such order and pass such order thereon as he thinks just and proper;

(b) the Tribunal, on application made to it against an order of the Commissioner not being an order passed under sub-section (2) of section 55 in second appeal within four months from the date of the communication of the order, may call for and examine the record of any such order, and pass such order thereon as it thinks just and proper.

(2) Where an appeal lies under section 55 and no appeal has been filed, no proceedings in revision under this section shall be entertained upon application.

(3) No order shall be passed under this section which adversely affects any person, unless such person has been given reasonable opportunity of being heard.

(4) If the Tribunal rejects any application for revision under this section, the Tribunal shall record the reasons for such rejection.'

3. Before we consider as to what is the true interpretation of section 57, it is necessary to state the legislative history on the point. The Bombay Sales Tax Act, 1946, and 1953, provided for revisional powers but no limitation was provided for the exercise of the said power. The revisional power thereunder could have been exercised at any time. The Legislature, in order to avoid this lacuna and to provide a just formula, enacted section 57 which initially provided a period of 2 years within which the Commissioner had to exercise his revisional powers suo motu. This section was amended and instead of 2 years the words '5 years' were substituted in the section. The Gujarat Sales Tax Act, 1969, which repeals the Bombay Sales Tax Act, 1959, contains section 67 which refers to revisional jurisdiction and provides that the revisional power can be exercised within the period of 3 years from the date of the assessment order which is challenged in revision.

4. It was argued by Mr. Modi that the exercise of revisional power commences after the Commissioner calls for the record and examines the same. It is only when after examining the record which he called for, that he can satisfy himself that this is a case which is fit for exercise of his revisional jurisdiction. The stage of calling record and examining the same do not form part of the exercise of revisional jurisdiction conferred by section 57 of the Act. There is no substance in this argument if one reads the provisions of section 57. The revisional power conferred by the section consists of various facets, namely, calling for the record, examining of the record and passing such order thereon as the Commissioner thinks just and proper. The exercise of power under section 57 commences when the Commissioner calls for the record. When the Commissioner calls for the record, he does so in exercise of his revisional power or power of superintendence. The power of revision commences when the Commissioner calls for the record and terminates when he passes the final order. See the case of the Mysore High Court in S. Subba Rao v. Commissioner of Commercial Taxes in Mysore, Bangalore ([1967] 19 S.T.C. 257.). The period of 5 years referred to in section 57 refers to initiation of the revisional proceeding. It is not necessary that the entire process of revision must be completed within the specified period. The revisional power under section 57 can be exercised in favour of the State or in favour of the assessee. To accept the argument that the entire process of revision including the passing of the final order must be completed within 5 years would lead to many anomalies and defeat the very purpose for which the section has been enacted. It would result in injustice to the assessee because an order of assessment which is apparently erroneous so far as he is concerned cannot be revised. Such cannot be the intention of the Legislature. It is anomalous to hold that the revisional power becomes ineffective after the period of 5 years as it may happen that the Commissioner may not deal with the matter for various reasons, either he had to attend other work or the assessee wants time to place material before him, or the assessee in collateral proceedings obtains a stay order and thus delays the proceedings beyond the period of 5 years. It was argued by Mr. Modi that if such is the interpretation, the result would be that the case may be kept hanging over the head of the assessee at the option of the authority concerned. The inconvenience imagined is more fanciful than real, and cannot lead us to accept the argument advanced by M. Modi. The calamity and anomaly resulting from the argument advanced by Mr. Modi is much more serious than the inconvenience sought to be made out. The aforesaid reasoning were adopted by the Supreme Court in the case of Sales Tax Officer, Special Circle, Ernakulam v. Sudarsanam Iyengar & Sons ([1970] 25 S.T.C. 252 (S.C.)), where the court in interpreting rule 33 of the Travancore-Cochin General Sales Tax Rules, 1950, held that the period of limitation mentioned in the said rule referred to the initiation of the proceeding and not the passing of the final order. The same reasoning were adopted by the Madras High Court while considering section 34 of the Madras Agricultural Income-tax Act in the case of N. V. S. Kadirvel Nadar v. The State of Madras ([1962] 46 I.T.R. 251.). In section 57 initially the Legislature provided a period of 2 years. The short period provided in the section for the exercise of revisional power is indicative of the fact that the period provided therein must be for initiating the proceedings and not for completion of the entire process of revision because the number of revisional proceedings would not be less and, therefore, cannot be completed within the time provided in the section. The period of limitation, no doubt, is subsequently enlarged but it is again reduced. For the aforesaid reasons the criteria is not the time when the final order is passed in the revision, but the point of time when the revision proceeding is initiated by the Commissioner.

5. We, therefore, answer the question which has been referred to us holding that on the correct interpretation of section 57 of the Bombay Sales Tax Act, 1959, the period of limitation of 5 years prescribed for exercising the revisional jurisdiction by the Commissioner on his own motion applies only to the calling of the record of any order of any officer appointed under section 20 to assist him and it is not necessary that the entire revision proceeding should be completed within that period. There shall be no order as to costs. Orders accordingly.

6. Reference answered accordingly.


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