PETITIONER: STATE OF A.P. Vs. RESPONDENT: T.G. LAKSHMAINAH SETTY & SONS DATE OF JUDGMENT13/04/1994 BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. VENKATACHALA N. (J) CITATION: 1994 AIR 2377 1994 SCC Supl. (2) 386 JT 1994 (3) 367 1994 SCALE (2)668 ACT: HEADNOTE: JUDGMENT:
ORDER
1. CA No. 2798 of 1983 is taken on board.
2. These two appeals relate to different assessments under
the Andhra Pradesh General Sales Tax Act, 1957 (Act No. VI
of 1957), for short, ‘the Act’. The respondent-assessee is
a registered dealer carrying on business in groundnut oil
seeds and cotton seeds. The appeals relate to “cotton
lint”. The respondent was assessed under Section 5(1) for
the assessment years 1967-68, 1970-71 and 1971-72, the last
of which was on November 29, 1975 as “cotton” unclassified
general goods at 3%. In similar circumstances, when the
other assessees carried the matter in revision to the High
Court in Alimchand Topandas Oil Mills v. State of A.P.I the
High Court of A.P. held that cotton lint comes under ‘cotton
waste’ in Entry 69 of Schedule I and becomes exigible to tax
at 1 % at the relevant time. Relying upon the decision, the
respondent-assessee made a representation in May 1976 under
Section 20(2) of the Act requesting the Dy. Commissioner to
revise the assessments. Initially even without numbering
the revisions the Dy. Commissioner had dismissed them.
But, on appeal, the Sales Tax Appellate Tribunal (STAT) by
its order dated November 18, 1977 remitted the cases to the
Dy. Commissioner directing to number the cases and to
dispose them of according to law. On receipt thereof, the
Dy. Commissioner by his order dated October 14, 1980 again
dismissed the revisions. The respondent assessee carried in
revision to the STAT which by its order dated October 16,
1984, allowed the revisions applying the ratio in Alimchand
case, and directed reassessment under Entry 69 of Schedule
1. On revision, the High Court by impugned order dated April
4, 1985, dismissed them in limine. Thus these appeals by
special leave.
3.The primary question in these cases is whether a
revision under Section 20(2) is maintainable at the instance
of the assessee. Section 20 provides at the relevant time
thus :
“20. Revision by Commissioner of Commercial
Taxes and other prescribed authorities.- (1)
The Commissioner of Commercial Taxes may suo
motu call for and examine the record of any
order passed or proceeding recorded by any
authority, officer or person subordinate to
it, under the provisions of this Act,
including sub-section (2) of this section*
[and if such order or proceeding recorded is
(prejudicial to the interests of revenue), may
make such enquiry, or cause such enquiry to be
made and subject to the provisions of this
Act, may initiate proceedings to revise,
modify or set
1 (1976) 37 STC 603 (AP)
388
aside such order or proceeding] and may pass
order in reference thereto as it thinks fit.
*Substituted for the words ‘for the purpose of
satisfying itself as to the legality or
propriety of such order as to the regularity
of such proceeding’ by Act 18 of 1985, w.e.f.
1-7-1985.”
Sub-section (2) of Section 20 gives power similar to that in
sub-section (1), to the Joint Commissioner, Dy.
Commissioner and the Commercial Tax Officer in the case of
orders passed or proceedings recorded by the authorities or
officers or persons subordinate to them.
4.The question whether the assessee has a right to make
an application for the exercise of suo motu power by the
Commissioner calls for consideration in the light of the
other provisions in the Act, expressly providing for a right
of appeal to the assessee. Under Section 19 of the Act a
right to appeal to the appellate authority against original
orders or proceedings of certain authorities, has been given
to the aggrieved dealer. Section 21 also gives a right of
appeal, to the aggrieved dealer to the Appellate Tribunal
postulating that any dealer objecting to an order passed or
proceeding recorded by any prescribed authority on appeal
under Section 19 or Section 14(4-C) or Section 20(2) may
appeal to the Appellate Tribunal within 60 days from the
date on which the order or proceeding was served on him.
Thus the statute itself has given a right to the dealer to
object to an order passed or proceeding recorded under the
Act, which is prejudicial to him, by filing an appeal
against such order, under Section 14 or 19 or Section 21 or
a revision under Section 22 of the Act to the Appellate
Tribunal (sic). As stated earlier, against the original
order an appeal shall lie to the appellate authority within
a period of 30 days from the date of the receipt of the
notice served on the dealer and a further appeal to the
Appellate Tribunal. The order under Section 20(1) could
also be appealable again to the STAT by the aggrieved dealer
and a further revision under Section 23 to the High Court
under the Act. Thus, the Act has given right and remedy of
appeal or a revision to the dealer, wherever it was so
intended. As seen, Section 20 is a suo motu revisional
power exclusively given to the Commissioner or the Joint
Commissioner or the Dy. Commissioner or the Commercial Tax
Officer, as the case may be, to revise the orders or the
proceedings of the officers subordinate to the respective
officers. Whether suo motu power under Section 20 of the
Act could have been invoked by an assessee is the question.
The Judicial, Committee of the Privy Council in CIT v.
Tribune Trust2 had considered similar question. It was a
case where an income tax assessment order in respect of an
assessment year had reached finally by reason of an order
made by the Judicial Committee of the Privy Council dated
June 13, 1939. On August 13, 1939, suo motu power of the
Commissioner was, however, sought to be invoked by the
assessee to revise the orders of assessments relating to
previous years, which had become final. The High Court,
following the decision of the Privy Council which was in
favour of the assessee, directed the Commissioner to
exercise the power of revision and revise the earlier orders
of assessment. Section 33 of the Indian Income Tax Act,
1922 reads thus :
“(1) The Commissioner may of his own motion
call for the record of any proceeding under
this Act which has been taken by any authority
2 AIR 1948 PC 102: 74 IA 306: (1948) 16 ITR
214
389
subordinate to him or by himself when
exercising the power of an
Assistant Commissioner under sub-section (4)
of Section 5.
(2)On receipt of the record the Commissioner may make such
enquiry or causesuch enquiry to be made and, subject to
the provisions of this Act, may passsuch 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.”
When the matter was carried in appeal, the Judicial
Committee which considered the scope and ambit of suo motu
power of the Commissioner under Section 33 of the Income Tax
Act held thus :
“The fallacy implicit in this question has
been made clear in the discussion of the first
two questions. It assumes that Section 33
creates a right in the assessee. In their
Lordships’ opinion it creates no such right.
On behalf of the respondent the well-known
principle which was discussed in Julius v.
Bishop of Oxford3 was invoked and it was urged
that the section which opens with the words,
‘[t]he Commissioner may of his own motion’
imposed upon him a duty which he was bound to
perform upon the application of an assessee.
It is possible that there might be a contest
in which words so inapt for that purpose would
create a duty. But in the present case there
is no such context. On the contrary, Section
33 follows upon a number of sections which
determine the rights of the assessee and is
itself, as its language clearly indicates,
intended to provide administrative machinery
by which a higher executive officer may review
the acts of his subordinates and take the
necessary action upon such review. It appears
that as a matter of convenience a practice has
grown up under which the Commissioner has been
invited to act ‘of his own motion’ under the
section and where this occurs a certain degree
of formality has been adopted. But the
language of the section does not support the
contention, which lies at the root of the
third question and is vital to the
respondents’ case, that it affords a claim to
relief. As has been already pointed out,
appropriate relief is specifically given by
other sections; it is not possible to
interpret Section 33 as conferring general
relief.
It appears to them that an order made by the
Commissioner under Section 33, can only be
said to be prejudicial to the assessee when he
is, as a result of it, in a different and
worse position than that in which he was
placed by the order under review. If the
assessee has a complaint against any
assessment or order made by a subordinate
officer, he has the appropriate and specific
remedy which the Act provides. The
Commissioner may act under Section 33, with or
without the invitation of the assessee; if he
does so without invitation, it is clear that,
if he does nothing to worsen the position of
the assessee, the latter can acquire no right;
the review may be a purely departmental matter
of which the assessee knows nothing. If on
the other hand the Commissioner acts at the
invitation of the assessee and again does
nothing to worsen his position, there is no
justification for giving him a new right of
appeal. He has a specific right of appeal
against the assessment or order of the
subordinate officer, which is subject to its
own time limit.
3 (1880) 5 AC 214
390
That he cannot enlarge by taking a course
which is on his part purely voluntary. This
view of the section is confirmed by the
exception.”
5. The High Court of Andhra pradesh had occasion to consider
the scope of Section 20 of the Act in two of its judgments.
In Kalluri Bheemalingam, in re4 the assessee had sought to
file an appeal to the High Court under Section 23 of the Act
against the order of the Board of Revenue (at that time the
revisional power was exercised by the Board of Revenue)
revising the assessment under Section 20(1) of the Act,
which the Board had rejected as being not maintainable. The
High Court upheld the order of the Board of Revenue holding
that Section 20(1) of the Act does not provide a right of
revision at the instance of the assessee, but only provides
suo motu power of revision to the Commissioner and under
Section 23(1) [sic 22(1)] a revision does lie to the High
Court against the order passed by the Board. Therefore, the
appeals were held not maintainable. The same view was
reiterated in Sree Ramachandra Ginning & Oil Mills v. State
of A.P.5 It must therefore, be held that the validity of an
assessment order must be tested in an appeal or revision
filed by an assessee as provided for in the Act and in no
other way. The assessee cannot invoke the suo motu power of
the authorities under Section 20. Any order validly made
does not become void or illegal by subsequent declaration of
law. The suo motu power was conferred on higher authorities
to correct errors of law or to correct improper or irregular
procedure or illegality in the procedure, to safeguard the
interest of the Revenue, as there was no express power given
to the State, to file an appeal against order of assessment.
6.The Tribunal had placed reliance on the decision of
another Division Bench reported in State of A.P. v. Lalitha
Oil Mills’. In that case following the decision of this
Court in Sri Venkateswara Rice, Ginning and Groundnut Oil
Mill Contractors Co. v. State of A.P.7 the Commissioner
exercising suo motu power under Section 20(1) had revised
the assessment made in accordance with the law laid down by
this Court. It was not a case where the Commissioner had
exercised the power at the instance of an assessee. The
Tribunal had wrongly held that the Commissioner could
exercise the revisional power at the instance of the
assessee under Section 20(1) and (2) of the Act.
7.We have, therefore, no hesitation to hold that the High
Court has committed an error in rejecting the revision by
the State. Accordingly we hold that the aggrieved assessee
has only to pursue the remedies provided in the Act and he
has no right to make an application under Section 20 of the
Act seeking revision of the orders of assessments made under
the Act by original authorities. The appeals are
accordingly allowed. The orders of the High Court and STAT
are set aside and the orders of the Dy. Commissioner are
recorded. But in the circumstances, there shall be no order
as to costs.
4 (1967) 19 STC 116 (AP)
5 (1967) 19 STC 354 (AP)
6 (1978) 42 STC 169 (AP)
7 (1971) 2 SCC 650: (1971) 28 STC 599
391