Madras High Court
Ashok Leyland Limited vs The State Of Tamil Nadu on 21 August, 1979
JUDGMENT Ismail, J.
1. This is an appeal under Section 37 of the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959), against the order of the Board of Revenue dated 26th August, 1974, suo motu revising the order of the Appellate Assistant Commissioner. When the matter came up for hearing before a Bench of this Court consisting of Sethuraman and Balasubrahmanyan, JJ., the learned counsel for the appellant-assessee contended that since against the order of the Appellate Assistant Commissioner, the appellant-assessee itself had preferred an appeal arid that appeal had been disposed of, the Board of Revenue has no jurisdiction under Section 34 of Act 1 of 1959 to revise the order of the Appellate Assistant Commissioner. For this purpose, the appellant relied on a Bench decision of this Court in Jeewanlal (1929) Ltd. v. State of Tamil Nadu [1978] 42 S.T.C. 263. The Bench was of the opinion that there was an apparent conflict between the decision of the Bench referred to above and its own decision in Puthuthotam Estates (1943) Ltd. v. State of Tamil Nadu (1978) 2 I.T.J. 243 dealing with the scope of the revisional powers of the Commissioner of Agricultural Income-tax under the Tamil Nadu Agricultural Income-tax Act, 1955, and, therefore, referred the case to a Full Bench. That is how the matter comes up before the Full Bench.
2. As far as the facts of the present case are concerned, they lie within a very narrow compass. The appellant was assessed by the Joint Commercial Tax Officer, Red Hills Division, to general sales tax for the assessment year 1967-68. The appellant preferred an appeal to the Appellate Assistant Commissioner (Commercial Taxes) V, Madras, challenging the liability of four items of turnover to general sales tax. The four items were :
1. Supply of raw materials to ancillary industries covered by debit notes Rs. 6,49,493.59
2. Sale of empty gunnies in the canteen Rs. 3,941.48
3. Sale of discarded goods Rs. 6,36,048.86
4. Sales in the fair price shop Rs. 68,126.62
3. The Appellate Assistant Commissioner rejected the claim of the appellant in respect of item 1, but granted relief to the appellant in respect of items 2 to 4 on the ground that the appellant was not a dealer in the respective items. After the Appellate Assistant Commissioner passed the order in question, the Board of Revenue issued a notice to the appellant herein in exercise of its suo motu powers of revision under Section 34 of Act 1 of 1959 proposing to revise the order of the Appellate Assistant Commissioner in respect of items 2 to 4 mentioned above on the ground that the Supreme Court has held in State of Tamil Nadu v. Bwmah Shell Oil Storage and Distributing Company of India Ltd. [1973] 31 S.T.C. 426 (S.C.) that even such turnover would be liable to tax. When the Board of Revenue issued notice to the appellant, the appellant objected to the exercise of revisional jurisdiction by the Board of Revenue putting forward the contention that against the order of the Appellate Assistant Commissioner deciding item 1 narrated above against the appellant, the appellant preferred T. A. No. 707 of 1971 before the Sales Tax Appellate Tribunal, that the Tribunal allowed the appeal reversing the decision of the Appellate Assistant Commissioner, that the State itself had filed a tax case in the High Court against the said decision and that in that situation the Board of Revenue could not invoke its revisional jurisdiction under Section 34 of the Act because of the restriction contained in Section 34(2)(b) of the Act. The Board of Revenue overruled this objection and revised the order of the Appellate Assistant Commissioner. It is against the order of the Board of Revenue that the present appeal has been filed by the dealer.
4. As far as the relevant provision of the Tamil Nadu General Sales Tax Act is concerned, there is a direct decision of this Court in Jeewanlal (1929) Ltd. v. State of Tamil Nadu [1978] 42 S.T.C. 263 to the effect that under such circumstances the Board of Revenue has no jurisdiction to revise the order of the Appellate Assistant Commissioner. As we pointed out already, the Bench took the view that there was an apparent conflict between this decision and its own decision in Puthuthotam Estates (1943) Ltd. v. State of Tamil Nadu (1978) 2 I.T.J. 243. We shall now have to consider whether there is a conflict at all, and, if there is a conflict, to resolve the conflict. We are clearly of the opinion that there is no conflict between the two decisions because the two decisions came to be rendered with reference to different statutory provisions containing different languages. We shall now consider the position with regard to the Tamil Nadu General Sales Tax Act, 1959, which was the subject-matter of the decision in Jeewanlal (1929) Ltd. v. State of Tamil Nadu [1978] 42 S.T.C. 263.
5. Section 34 of the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959), which deals with the revisional powers of the Board of Revenue runs as follows :
34. Special powers of Board of Revenue.-(1) The Board of Revenue may, of its own motion, call for and examine an order passed or proceeding recorded by, the appropriate authority under Section 4-A, Section 12, Section 14, Section 15 or Sub-section (1) or (2) of Section 16 or an order passed by the Appellate Assistant Commissioner under Sub-section (3) of Section 31 or by the Deputy Commissioner under Sub-section (1) of Section 32 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 as it thinks fit.
(2) The Board of Revenue shall not pass any order under Sub-section (1) if-
(a) the time for appeal against that order has not expired ; or
(b) the order has been made the subject of an appeal to the Appellate Tribunal or of a revision in the High Court ; or
(c) more than five years have expired after the passing of the order.
6. It is not necessary to refer to Sub-sections (3) and (4) thereof for the purpose of this case.
7. Section 36 of the Act deals with the power of the Tribunal when it disposes of an appeal and Sub-sections (1) to (3) of that section read as follows :
36. Appeal to the Appellate Tribunal.-(1) Any person objecting to an order passed by the Appellate Assistant Commissioner under Sub-section (3) of Section 31, or an order passed by the Deputy Commissioner under Sub-section (1) of Section 32 may, within a period of sixty days from the date on which the order was served on him in the manner prescribed, appeal against such order to the Appellate Tribunal:
Provided that the Appellate Tribunal may admit an appeal presented after the expiration of the said period if it is satisfied that the appellant had sufficient cause for not presenting the appeal within the said period.
(2) The appeal shall be in the prescribed form and shall be verified in the prescribed manner and shall be accompanied by such fee not exceeding one hundred rupees as may be prescribed.
(3) In disposing of an appeal, the Appellate Tribunal may, after giving the appellant a reasonable opportunity of being heard,
(a) in the case of an order of assessment-
(i) confirm, reduce, enhance or annul the assessment or penalty or both ; (ii) set aside the assessment and direct the assessing authority to make a fresh assessment after such further inquiry as may be directed ; or
(iii) pass such other orders as it may think fit ; or
(b) in the case of any other order, confirm, cancel or vary such order :
Provided that at the hearing of any appeal against an order of the Appellate Assistant Commissioner or the Deputy Commissioner, the assessing authority shall have the right to be heard either in person or by a representative :
Provided further that, if the appeal involves a question of law on which the Appellate Tribunal has previously given its decision in another appeal and either a revision petition in the High Court against such decision or an appeal in the Supreme Court against the order of the High Court thereon is pending, the Appellate Tribunal may defer the hearing of the appeal before it, till such revision petition in the High Court or the appeal in the Supreme Court is disposed of.
8. From the above statutory provisions, it is clear that Sub-section (2) of Section 34 imposes certain restrictions on the power of the Board of Revenue to revise the orders under sub-section (1) thereof. Sub-section (1) of that section expressly refers to an order passed by the Appellate Assistant Commissioner under Sub-section (3) of Section 31 being one of the orders subject to revision by the Board of Revenue. Consequently under Section 34(1), the Board has jurisdiction to revise the order of the Appellate Assistant Commissioner in the present case. But the only question is whether the restriction imposed by Sub-section (2) of Section 34 has in any way taken away that jurisdiction. Section 34(2)(b) clearly states that the Board of Revenue shall not pass any order under Sub-section (1) if the order has been made the subject of an appeal to the Appellate Tribunal or of a revision in the High Court. It is the scope of that provision which came to be considered by a Bench of this Court in Jeewanld, (1929) Ltd. v. State of Tamil Nadu [1978] 42 S.T.C. 263. The Bench had earlier held in another decision, namely, Deputy Commissioner of Commercial Taxes, Tiruchirapalli v. S. Gnanapatham [1978] 42 S.T.C. 262, to the same effect, regarding the revisional powers of a Deputy Commissioner. That was comparatively a short order where the Bench has stated thus :
We think the Tribunal was right in denying to the Deputy Commissioner the right to interfere in suo motu revision when the order of the Sales Tax Officer has been the subject-matter of appeal. This is clear from the wording of Section 32(2)(b) of the Tamil Nadu General Sales Tax Act, 1959, which reads as follows :
...
(2) The Deputy Commissioner shall not pass any order under Sub-section (1), if-
...
(b) the order has been made the subject of an appeal to the Appellate Assistant Commissioner or the Appellate Tribunal, or of a revision in the High Court....
The order has been made the subject-matter of appeal to the Appellate Assistant Commissioner. The question is not whether every part of that order has been the subject-matter of appeal. Such a contention is not justified by the wording of the section. The Tribunal was right in saying that the Deputy Commissioner interfered without jurisdiction.
9. In Jeewanlal (1929) Ltd. v. State of Tamil Nadu [1978] 42 S.T.C. 263, the Bench followed another Bench decision of this Court in C. Gnanasundara Nayagar v. Commissioner of Income-tax [1961] 41 I.T.R. 375, dealing with the scope of the revisional powers under Section 33A(2) of the Income-tax Act, 1922. After expressing its agreement with the above view of the Bench construing the scope of Section 33A(2) of the Income-tax Act, 1922, the Bench observed :
...we feel that Section 34(2)(b) is a complete ban preventing the Board of Revenue in acting and exercising the power of revision under Section 34 once an appeal had been taken from the order of the Appellate Assistant Commissioner which is the order with which we are concerned in this case.
10. We are of the opinion that on the language of Section 34(2)(b) of Act 1 of 1959, if we may say so with respect, the decision of the Bench was correct. The ban under Section 34(2)(b) is a complete one, namely, the moment the order of the Appellate Assistant Commissioner has been made the subject of an effective appeal, the power of the Board of Revenue to interfere with the order of the Appellate Assistant Commissioner comes to an end. The statute itself does not contemplate the order of the Appellate Assistant Commissioner being split up into different orders dealing with different items of reliefs claimed by the dealer and granted or rejected by the Appellate Assistant Commissioner; the statute treats the order of the Appellate Assistant Commissioner as a single order not capable of being dissected into different pieces.
11. Apart from this, we are also of the opinion that there is, on principle, every justification for imposing such a ban on the Board of Revenue in interfering with the order of the Appellate Assistant Commissioner, once the said order has been made the subject of an appeal before the Tribunal. We have already extracted Section 36 of Act 1 of 1959 dealing with the powers of the Tribunal in hearing appeals and Section 36(3)(a)(i) contemplates the Tribunal enhancing the assessment or penalty. Such enhancement certainly cannot take place at the instance of the dealer who prefers an appeal, but can take place only at the instance of the department. Thus it is clear that in an appeal preferred by a dealer, there is scope for the department intervening and calling upon the Tribunal to enhance the assessment or the penalty and in view of this there is no justification to confer an independent power of revision on the Board of Revenue after the order of the Appellate Assistant Commissioner has been made the subject of an appeal. Therefore, on the language of Section 34 of the Act, we are clearly of the opinion that the Bench was right in holding that once the order of the Appellate Assistant Commissioner has been made the subject of an appeal, the Board loses its power to interfere with the order of the Appellate Assistant Commissioner under Section 34(1) of the Act.
12. Now we shall consider the language of the Tamil Nadu Agricultural Income-tax Act. The relevant section is Section 34 of the Act which deals with the revisional power of the Commissioner. Section 34(1) and (2) read as follows :
34. (1) The Commissioner may, of his own motion or on application by an assessee, call for the record of any proceeding under this Act which has been taken by any authority subordinate to him and may make such enquiry or cause such enquiry to be made and, subject to the provisions of this Act, may pass such orders thereon as he thinks fit:
Provided that he shall not pass any order prejudicial to an assessee without hearing him or giving him a reasonable opportunity of being heard :
Provided further that an order passed declining to interfere shall not be deemed to be an order prejudicial to the assessee.
(2) The Commissioner shall not revise any order under Sub-section (1) if-
(a) where an appeal against an order lies to the Appellate Tribunal, the time within which such appeal may be made has not expired; or
(b) where an appeal against the order has been made to the Appellate Tribunal, the appeal is pending before it; or
(c) the order has been made more than three years previously.
13. Even though Section 34(2)(b) of this Act can be said to correspond to Section 34(2)(b) of the Tamil Nadu General Sales Tax Act, 1959, still there is a vital difference in the language. As we saw, under Section 34(2)(b) of the Tamil Nadu General Sales Tax Act, 1959, once the order of the Appellate Assistant Commissioner has been made the subject of an appeal before the Appellate Tribunal, the power of the Board of Revenue to interfere with the order of the Appellate Assistant Commissioner under Section 34(1) of the Act comes to an end. On the other hand, the language of Section 34(2)(b) of the Tamil Nadu Agricultural Income-tax Act will make it clear that such a power does not come to an end, but is kept suspended during the pendency of the appeal before the Tribunal and that is why the language that is used in Section 34(2)(b) of the latter Act is "where an appeal against the order has been made to the Appellate Tribunal, the appeal is pending before it". Consequently the language makes it clear that it is the pendency of the appeal before the Tribunal that temporarily bars the jurisdiction of the Commissioner to revise the order and not the fact of the order having been made the subject of an appeal before the Tribunal. The very language itself indicates that the moment the appeal is disposed of by the Tribunal, the Commissioner would acquire jurisdiction to revise the same under Section 34(1) of the Act, because the bar under Section 34(2)(b) of the Act is not a permanent and absolute bar, but is only a temporary and provisional one having the effect of suspending the exercise of the power of revision. In addition, there is the further difference between the provisions of the Tamil Nadu General Sales Tax Act, 1959, and the Tamil Nadu Agricultural Income-tax Act, 1955. There is no controversy before us that under the Tamil Nadu Agricultural Income-tax Act, 1955, a power is available to the Commissioner to direct the Agricultural Income-tax Officer to prefer an appeal to the Tribunal against the order of the appellate authority. In fact, Section 32(2) expressly states :
(2) The Commissioner may, if he objects to any order passed by an Assistant Commissioner under Section 31, direct the Agricultural Income-tax Officer to appeal to the Appellate Tribunal against such order....
14. Such a provision is not available under the Tamil Nadu General Sales Tax Act, 1959, even though, as we pointed out already, from the language of Section 36(3)(a)(i), there is a power available to the Tribunal to enhance the assessment or penalty and that power can be exercised on an application or request made by the department before the Tribunal in an appeal preferred by the dealer. It is against this background of the language of Section 34(2) of the Tamil Nadu Agricultural Income-tax Act, 1955, that the Bench in Puthuthotam Estates (1943) Ltd. v. State of Tamil Nadu (1978) 2 I.T.J. 243 stated as follows :
As rightly pointed out by the learned Additional Government Pleader, the restrictions imposed on the powers of the Commissioner are under clauses (a), (b) and (c) of Sub-section (2) of Section 34. Clause (a) applies to a case where an appeal against an order lies to the Appellate Tribunal and the time for such an appeal has not expired. In the present case, it is not in dispute that an appeal could have been filed before the Appellate Tribunal at the instance of the Commissioner, but the time for such an appeal has already expired. Therefore the restriction imposed by Clause (a) has no scope for application. Clause (b) applies to a case where an appeal against the order has been made to the Tribunal and the appeal is pending before it. In the present case, as can be seen from the dates given earlier, the Tribunal had already disposed of the appeal by the time the Commissioner took the revision proceedings. It therefore implies that Clause (b) also does not apply.
15. Consequently, on the language of Section 34(2)(b) of the Tamil Nadu Agricultural Income-tax Act, 1955, the decision of the Bench, if we may say so with respect, was right. In view of this there is no conflict between the two decisions referred to above, as the scope of the revisional power and the restrictions in respect of the exercise thereof have to be gathered from the language of the respective statutory provisions conferring the revisional power and imposing the restrictions. There cannot be any analogy between two cases unless the language is identical in all respects. In view of this we are clearly of the opinion that the decision of the Bench of this Court in Jeewanlal (1929) Ltd. v. State of Tamil Nadu [1978] 42 S.T.C. 263 does not require any reconsideration and following that decision it must be held that having regard to the facts of this case, namely, that the appellant herein had preferred an appeal against the order of the Appellate Assistant Commissioner to the Sales Tax Appellate Tribunal in T.A. No. 707 of 1971, which has been disposed of on 9th August, 1972, the Board of Revenue had no jurisdiction to revise the order of the Appellate Assistant Commissioner purporting to exercise its powers under Section 34(1) of the Tamil Nadu Act 1 of 1959. Hence, the appeal of the appellant is allowed and the order of the Board of Revenue dated 26th August, 1974, is set aside. There will be no order as to costs.