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Commercial Taxes Officer Vs. Rajasthan Small Industries Corporation - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtRajasthan High Court
Decided On
Case Number D.B. Civil Sales Tax Reference No. 31 of 1975
Judge
Reported in[1986]62STC79(Raj); 1984()WLN427
AppellantCommercial Taxes Officer
RespondentRajasthan Small Industries Corporation
Appellant Advocate K.K. Sharma, Adv.
Respondent Advocate S.M. Mehta, Adv.
Cases ReferredJaipur v. Mohanlal Bishambhar Dayal
Excerpt:
.....been merged whereby the penalty of rs. 6,000/- imposed under section 16(1)(b) was concerned.;the revision filed by the assessing authority could not have been dismissed merely on the ground that the order of deputy commissioner (appeals-i) had merged into the order of board dated february 23,1972, and ought to have been decided on merits.;reference answered in negative - section 2(k), 2(1), 7 & 40 & juvenile justice (care and protection of children) rules, 2007, rule 12 & 98 & juvenile justice act, 1986, section 2(h): [altamas kabir & cyriac joseph, jj] determination as to juvenile - appellant was found to have completed the age of 16 years and 13 days on the date of alleged occurrence - appellant was arrested on 30.11.1998 when the 1986 act was in force and under clause (h) of..........industries corporation, sahadeo marg, jaipur (hereinafter referred to as 'the assessee'), had filed a revision before the board of revenue against the order of the deputy commissioner (appeals i) dated 9th september, 1970. the board by its order dated 23rd february, 1972, allowed the revision in part. the commercial taxes officer had also filed a revision against the aforesaid order of the deputy commissioner (appeals i) relating to the setting aside of a penalty of rs. 6,000 against the assessee. when the revision filed by the department came up for consideration before the board of revenue, an objection was raised that since the order of the deputy commissioner (appeals i) dated 9th september, 1970, has already become part of the board's order dated 23rd february, 1972, as such.....
Judgment:

N.M. Kasliwal, J.

1. The Board of Revenue by its order dated 23rd May, 1975, has sent the following question for the opinion of this Court under Section 15(1) of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as 'the Act'):

Whether an order of the Board under Sub-section (2) of Section 14 of the Rajasthan Sales Tax Act, 1954, revising a part of the order impugned by the dealer, passed before the expiry of the period prescribed in the proviso to Sub-section (1) of Section 14 of the said Act, operates as res judicata in respect of all the matters covered by the impugned order

2. It may be mentioned at the outset that the Commercial Taxes Officer (Special Circle I), Jaipur, had requested the Board to refer the following question of law to the High Court :

Whether under the facts and circumstances of the case, the Board wa9 justified in holding that the revision petition filed by the assessing authority is not maintainable because the order has become part of the Board's order dated 23rd February, 1972, although no finding has been given by the Board on the issue raised by the applicant-assessing authority

3. The Board, however, sent the question of law as mentioned above and not as requested by the Commercial Taxes Officer.

4. Brief facts as the case are that M/s. Rajasthan Small Industries Corporation, Sahadeo Marg, Jaipur (hereinafter referred to as 'the assessee'), had filed a revision before the Board of Revenue against the order of the Deputy Commissioner (Appeals I) dated 9th September, 1970. The Board by its order dated 23rd February, 1972, allowed the revision in part. The Commercial Taxes Officer had also filed a revision against the aforesaid order of the Deputy Commissioner (Appeals I) relating to the setting aside of a penalty of Rs. 6,000 against the assessee. When the revision filed by the department came up for consideration before the Board of Revenue, an objection was raised that since the order of the Deputy Commissioner (Appeals I) dated 9th September, 1970, has already become part of the Board's order dated 23rd February, 1972, as such the revision filed by the department was not maintainable. The Board by its order dated 2nd September, 1974, came to the conclusion that the order of the Deputy Commissioner dated 9th September, 1970, had become a part of the Board's order dated 23rd February, 1972, and had become final and as such the revision filed by the department was not maintainable. In view of these circumstances, the department requested the Board to refer the question of law to the High Court and the Board by its order dated 23rd May, 1975, has referred the above question of law for the opinion of this Court.

5. In order to properly appreciate the controversy raised in the present case, it may be mentioned that the returns had been filed late by the assessee and the amount of tax of Rs. 25,000 and Rs. 15,000 were also deposited very late. The assessee was asked to show cause as to why action should not be taken against them under Section 16(1)(b) and (c) of the Act. As no satisfactory answer was given by the assessee the Commercial Taxes Officer by his order dated 2nd July, 1968. imposed a penalty of Rs. 6,000 under Section 16(1)(b), and a penalty of Ps. 2 000 under Section 16(1)(c) of the Act. The assessee aggrieved against the aforesaid order filed an appeal and the learned Deputy Commissioner (Appeals I), Jaipur, by his order dated 9th September, 1970, set aside the order of the Commercial Taxes Officer so far as the penalty of Rs. 6,000 under Section 16(1)(b) was concerned but maintained the imposition of penalty of Rs. 2,000 under Section 16(1)(c) of the Act. The Deputy Commissioner also considered the question of imposition of tax at 10 per cent on the sales of stainless steel to the tune of Rs. 7,767.42. The contention of the assessee before him was that the tax should have been imposed at the general rate of 6 per cent and the extra tax of 4 per cent imposed by the assessing authority should be remitted. The learned Deputy Commissioner, however, did not agree with the contention of the assessee in this regard and dismissed his appeal so far as assessment of tax from 10 per cent to 6 per cent was concerned. In the above circumstances the appeal filed by the assessee was allowed in part. The assessee aggrieved against the order of the Deputy Commissioner dated 9th September, 1970, filed a revision in which he challenged the imposition of tax at 10 per cent on the sales of stainless steel and also challenged the penalty of Rs. 2,000 under Section 16(1)(c) of the Act.

6. The Board of Revenue heard the revision filed by the assessee and by its order dated 23rd February, 1972, held that the tax should have been imposed at the rate of 6 per cent instead of 10 per cent. So far as the imposition of penalty of Rs. 2,000 under Section 16(1)(c) of the Act for late filing of returns is concerned, the order of the Deputy Commissioner was maintained.

7. The department had also filed a separate revision challenging the order of the Deputy Commissioner dated 9th September, 1970, by which the penalty of Rs. 6,000 imposed on the assessee under Section 16(1)(b) of the Act was set aside. At the time of hearing of this revision the counsel for the assessee raised a preliminary objection that the impugned order of the Deputy Commissioner dated 9th September, 1970, had come up for consideration of the Board in the revision filed by the assessee and the same has been decided by the Board on 23rd February, 1972, and the Board's decision had become final. The learned members of the Board of Revenue held that they were in agreement with the learned counsel that since the impugned order have become part of the Board's order dated 23rd February, 1972, and no special appeal was preferred against it, the matter could not be agitated in revision. The Board as such by order dated 2nd September, 1974, dismissed the revision filed by the department.

8. We may, at the outset, mention that the proper question of law which arises out of the judgment of the Board of Revenue dated 2nd September, 1974, should have been framed in the following manner and not in the manner as it has been referred to us by the Board in its order dated 23rd May, 1975 :

Whether, under the facts and in the circumstances of the case, the Board was justified in holding that the revision petition filed by the assessing authority was not maintainable, as the order of the Deputy Commissioner (Appeals I), Commercial Taxes, Jaipus, dated 9th September, 1970, had become a part of the Board's order dated 23rd February, 1972, although no finding had been given by the Board on the merits of the revision

9. In order to decide the above question of law we would like to reproduce relevant portions of Section 14 of the Act which provides for filing of revision :

14. Revisions.-(1) The Board of Revenue may on being moved by the assessing authority, call for and examine the records of any proceedings not being proceedings under the proviso to Sub-section (3) of Section 11 under this Act and if it considers that any order is illegal or improper or erroneous it may pass such order as it thinks fit:

Provided further that the Board of Revenue shall not revise an order against which an application for revision has not been made within three years of the passing of such order.(2) The Board of Revenue may on application for revision of an order not being an order passed under the provisos to Sub-section (3) of Section 11 by a dealer under this Act, made, within six months of the date of the order, call for the record of the proceeding in which the order complained against was passed and after examining the record, subject to the provisions of this Act, pass such order not prejudicial to the assessee, as it thinks fit:

Provided that an order declining to interfere shall be deemed not prejudicial to the assessee :

Provided further that no revision under this sub-section shall be entertained upon the application of a dealer-

(a) if he could have appealed under Section 13 and no appeal has been filed by him; or

(b) if an appeal is pending before the appellate authority :

Provided also that the Board of Revenue may admit an application for revision after the said period of six months if it is satisfied that the applicant had sufficient cause for not making the application within the said period..

(6) No order under this section shall be passed without giving the dealer as also the authority whose order is sought to be revised or their representatives, a reasonable opportunity of being heard.

10. A perusal of the above provision would show that under Sub-section (1) of Section 14, the assessing authority can file an application for revision within a period of 3 years of passing of the order sought to be revised. On the other hand, under Sub-section (2) of Section 14 a dealer may move the Board for exercising its revisional jurisdiction within six months of the date of order sought to be revised. It may also be mentioned that under Sub-section (2) of Section 14 of the Act, if a revision is filed by a dealer, the Board may call for the record of the proceedings in which the order complained against was passed and after examining the record, subject to the provisions of this Act, could have passed such orders not prejudicial to the assessee, as it thought fit. A perusal of the above provisions clearly go to show that the assessing authority is entitled to file a separate revision under Sub-section (1) of Section 14 of the Act if the assessing authority was aggrieved against any portion of the judgment passed against it. The Board in Sub-section (1) of Section 14 of the Act on such revision was entitled to call for and examine the records and if it considered that any order was illegal or improper or erroneous, it was authorised to pass such orders as it thought fit. The period of limitation for filing a revision by the assessing authority has been provided as three years of the date of passing of the impugned order. Under Sub-section (2) of Section 14 of the Act, the dealer has been given an independent right to file a revision within six months of the date of the order and the Board was authorised to pass such orders not prejudicial to the assessee, as it thought fit. Thus, a reading of the above provisions makes it abundantly clear that in the revision filed by the assessee in the present case which came to be decided on 23rd February, 1972, no order could have been passed prejudicial to the assessee and as such even if the Board was of the opinion that penalty of Rs. 6,000 was wrongly set aside by the Deputy Commissioner, no relief could have been granted to the assessing authority while deciding the revision filed by the dealer. Thus, in our opinion, the order dated 23rd February, 1972, by which the revision of the assessee was decided, that part of the order of the Deputy Commissioner dated 9th September, 1970, could not have been merged whereby the penalty of Rs. 6,000 imposed under Section 16(1)(b) was concerned.

11. That apart, the legislature itself has provided different periods for filing revisions and in case of a revision by the assessing authority under Sub-section (1) of Section 14 of the Act, the period provided is 3 years. The period of limitation for filing a revision by the dealer under Sub-section (2) of Section 14 of the Act is only six months and in a given case it might happen that a revision filed by the dealer may be disposed of, even before a period of 3 years during which a revision could be filed by the assessing authority. In this view of the matter, even after a decision of revision filed by the dealer, the assessing authority is entitled to file a revision though of course within three years and in that case the revision filed by the assessing authority will have to be decided by the Board on merits.

12. Apart from the above provisions of Section 14 of the Act itself, which, in our opinion, are clear, the case law cited by the learned counsel for the department also supports our view. In Commissioner of Income-lax, Bombay v. Amritlal Bhogilal and Co. : [1958]34ITR130(SC) it was held as under :

The powers of the Appellate Assistant Commissioner, however wide, have to be exercised in respect of the matters which are specifically made appealable under Section 30(1) of the Act. If any order has been deliberately left out from the 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. The order granting registration can be cancelled by the Income-tax Officer himself either under Rule 6-B or under Section 23(4). It may be cancelled by the Commissioner in exercise of his revisional power under Section 33-B; but it cannot be cancelled by the Appellate Assistant Commissioner in exercise of his appellate jurisdiction under Section 31 of the Act. It is true that, in dealing with the assessee's appeal against the order of assessment, the Appellate Assistant Commissioner may modify the assessment, reverse it or send it back for further enquiry; but any order that the Appellate Assistant Commissioner may make in respect of any of the matters brought before him in appeal will not and cannot affect the order of registration made by the Income-tax Officer. 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 merges in the order of the appellate authority cannot therefore apply to the order of registration passed by the Income-tax Officer in the present case.

13. In Madura Mills Co. Ltd. v. State of Madras [1962] 13 STC 124 it was observed as under by the Madras High Court:

The general rule that an order of an inferior tribunal appealed against and confirmed by a superior tribunal gets merged in the final order on appeal is not of universal application. It cannot be said that wherever there are two orders, one by an inferior tribunal and the other by a superior tribunal, passed in appeal or revision, there is a fusion or a merger of the two orders irrespective of the subject-matter of the appellate or revisional order, and the power of appeal and revision, which are creatures of statute.

Under the Madras General Sales Tax Act, 1939, the exercise of a revisional power can be with reference to portions of orders of assessment and where portions of the order alone are before the revising authority, the dismissal of the revision petition does not tantamount to a confirmation by the revising authority of other portions of the order of assessment which were not before that authority. The. calling for the entire records of assessment by the revising authority is only for the purpose of satisfying itself as to the legality, propriety of the order or regularity of the proceeding and that cannot indicate that the whole assessment proceeding is the subject-matter of revision. To take such a view would be to misapprehend the scope of the revisional power granted to the authority which falls into two categories, the one to be exercised suo motu and the other to be exercised on application by the assessee. The subject-matter of the decision of the revising authority moved by an assessee is in no way affected by the potential power of that authority to take action suo motu if it thought fit. The existence of such a dormant power cannot operate to bring about an enlargement of the scope of the actual decision in the matter.

14. In State of Madras v. Madurai Mills Co. Ltd. : [1967]1SCR732 it was held as under :

The doctrine of merger is not a doctrine of rigid and universal application, and it cannot be said that wherever there are two orders, one by the inferior authority, and the other by a superior authority, passed in an appeal or revision, there is a fusion or merger of two orders irrespective of the subject-matter of the appellate or revisional order and the scope of the appeal or revision contemplated by the particular statute. The application of the doctrine depends on the nature of the appellate or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisdiction.

15. A Full Bench of the Madhya Pradesh High Court in Commissioner of Income-tax, M.P.-II v. R. S. Banwari Lal : [1983]140ITR3(MP) held as under :

The doctrine of merger applies to income-tax proceedings but the extent of its application depends on the scope and subject-matter of the appeal and the decision rendered by the appellate authority. When an appeal has been preferred by the assessee to the AAC from an order of assessment made by the ITO in respect of only some of the items covered by the ITO's order and the remaining items, forming part of the ITO's assessment order, were not agitated by either party, though it was open also to the revenue to agitate them or the AAC to consider them suo motu and no decision of the AAC is, therefore, made in respect of the remaining items, the ITO's order merges with the appellate order of the AAC only to the extent it was considered and decided by the AAC but the matters which are not covered by the appellate order of the AAC are left untouched and to that extent the ITO's assessment order survives, permitting exercise of revisional jurisdiction by the Commissioner under Section 263 of the I. T. Act, 1961. Consequently, the items considered and decided by the AAC in his appellate order are beyond the scope of the revisional power of the Commissioner under Section 263 inasmuch as the ITO's order merges to that extent with that of AAC and the Commissioner has no revisional power over the order of the AAC.

16. The Allahabad High Court in Jamuna Das Ram Kishan v. Commissioner of Sales Tax, Uttar Pradesh [1976] 38 STC 443 in similar circumstances held as follows:

The assessee carrying on a business declared a certain turnover, but the Sales Tax Officer rejected his accounts and enhanced the turnover. On appeal the Assistant Commissioner reduced the turnover and a revision filed by the assessee was dismissed by the revising authority. The department also preferred a revision against the order of the appellate authority, but that revision was not heard along with the revision of the assessee as it was filed subsequently. The revising authority, however allowed that revision and restored the order of the Sales Tax Officer. The question that arose was whether the revising authority could, in view of its earlier order, restore the order of the Sales Tax Officer :

Held, (i) that Section 10 does not contain any provision which destroys the right conferred by Section 10(2) of filing a revision in case the revision application of one party has been disposed of. In the absence of such a provision, it would not be appropriate to apply the theory of merger and hold that as soon as a revision application of one of the parties is diposed of, the other party loses the statutory right conferred on him by Section 10(2) to file a revision within the period prescribed by Section 10(6);

(ii) that although the technical rules of res judicata as contained in the Code of Civil Procedure do not apply to proceedings before tribunals other than the civil courts, the general principles of res judicata are of universal application;

(iii) that inasmuch as in the earlier revision the question as to whether the turnover returned by the assessee should be accepted or the turnover as fixed by the Sales Tax Officer should be maintained was in issue between the parties, it was not open to the Judge (Revisions) on the revision filed by the Commissioner to take a contrary view, and to hold that the turnover fixed by the Sales Tax Officer was correct.

17. Mr. Mehta, learned counsel for the assessee, relied on a Division Bench decision of this Court in which one of us was a member. In Commercial Taxes Officer, Special Circle II, Jaipur v. Mohanlal Bishambhar Dayal [1979] 43 STC 288 the assessee-firm was assessed to sales tax for the assessment year 1964-65 by the Commercial Taxes Officer on the ground that when edible oil was sold by the assessee, there was an implied sale of the container. This assessment was, however, quashed on appeal by the Deputy Commissioner holding that there was no implied sale of the container. Subsequently, the State Legislature enacted the Rajasthan Sales Tax (Amendment and Validation) Act, 1969, and thereupon the assessing authority without taking recourse to the proceedings for rectification of the order of the Deputy Commissioner raised a demand for the assessment year 1964-65 on the ground that there was an implied sale of the containers. The assessee preferred an appeal before the Deputy Commissioner, who quashed the demand raised by the assessing authority. The assessing authority filed a revision but the Board of Revenue upheld the decision of the Deputy Commissioner. The assessing authority then preferred a special appeal, which was also rejected by the Board. The Board also declined to make a reference under Section 15(1) of the Act. The assessing authority thereupon made a reference application under Section 15(3A) of the Act. In the above facts it was held that the assessing authority's order holding that there was an implied sale of the containers, was set aside by the Deputy Commissioner and it was no more open to the assessing authority to revise the order of the Deputy Commissioner. By virtue of the explanation to Section 17 inserted in the Act by the Amendment and Validation Act, order of the Deputy Commissioner, which was valid prior to the Amendment and Validation Act, was, by virtue of the retrospective operation of the Amendment and Validation Act, rendered invalid and that amounted to a mistake apparent from the record. For rectification of such a mistake the only remedy was to invoke or take recourse under Section 17 of the Act. As the assessing authority did not take any such action for rectification of the mistake but sought to revise the order of the superior authority, which was beyond his jurisdiction, the Board of Revenue rightly quashed the order of the assessing authority raising the demand and there was no scope for raising any question of law from the order of the Board. It was thus, held that there was no justification to direct the Board to state the case and refer a question under Section 15(3A) of the Act. The above case has no bearing at all on the controversy raised in the present case and lends no assistance at all to the assessee.

18. In view of the above circumstances, the revision filed by the assessing authority could not have been dismissed merely on the ground that the order of the Deputy Commissioner (Appeals I) has merged into the order of the Board dated 23rd February, 1972, and ought to have been decided on merits.

19. In the result, the question of law framed by us is answered in the negative.


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