JUDGMENT
K. Shivashankar Bhat, J.
1. In these writ petitions, certain notices under section 35 of the Karnataka Agricultural Income-tax Act, 1957 (“the Act” for short), issued by the respondent in respect of the assessment years relatable to the periods prior to the accounting year ending on March 31, 1982, are primarily challenged. The petitioners contend that the power of the Joint Commissioner to take any action to revise an order of assessment cannot be exercised in respect of any assessment year which pertains to a period prior to the accounting year ending on March 31, 1982, because the Joint Commissioner was empowered to act under section 35 only by virtue of the Karnataka Act 14 of 1983 (for short “the earlier Amendment Act”). By Karnataka Act 23 of 1985, this power of the Joint Commissioner is alleged to have been enlarged by empowering him to revise the assessment orders for earlier periods and this purported enlargement is attacked as conflicting with section 2 of the earlier Amendment Act. Therefore, this enlargement of the jurisdiction will have to be confined to the period stated in the Karnataka Act 14 of 1983, according to the petitioners.
2. The Act was originally enacted in the year 1957 and it levies a tax on the agricultural income, for which purpose, apart from the charging provision, several machinery sections were also enacted. Section 35 empowered the Commissioner to call for and examine the record of any proceeding under the Act and, if he considers that any order passed therein by any authority subordinate to him is erroneous in so far as it is prejudicial to the interests of the Revenue, after complying with the principles of natural justice, the Commissioner may pass such order thereon as the circumstances of the case may justify. The purpose of this provision is quite clear and is similar to the revisional powers created under the provisions of the Income-tax Act, Sales Tax Act, etc., to safeguard the interest of the Revenue. There was no such officer called “Joint Commissioner” in the original Act. Obviously, with the increase of the work load, the State thought of having another officer who can also exercise the power of revision under section 35. Apart from this, there was several other matters requiring to be provided under the Act by appropriate amendments. Therefore, several provisions of the Act were amended by the Karnataka Act 14 of 1983. This earlier Amendment Act declared that it shall be deemed to have come into force on December 1, 1982 (even though the Act was published in the Karnataka Gazette on May 5, 1983, and received the assent of the Governor on May 3, 1983). Section 2 of this Act, which is relevant, reads :
“Application of the Act. – Notwithstanding anything contained in the Karnataka Agricultural Income-tax Act, 1957 (Karnataka Act 22 of 1957) (hereinafter referred to as the principle Act), the provisions of this Act shall apply to the assessment of agricultural income derived during any previous year ending on or after the thirty-first day of March, 1982.”
3. As per section 3 of this amendment Act, clause (ml) was introduced in section 2(1) of the principal Act defining the term “Joint Commissioner” as the person appointed to be so under section 17 of the Act. Section 17 of the Act is in Chapter III providing for the income-tax authorities and this section enumerates the several authorities for the purpose of the Act. The earlier Amendment Act also amended section 17 of the principal Act to include the Joint Commissioner of Agricultural Income-tax Act (for short “Joint Commissioner”) along with other authorities stated therein. Section 16 of this Amendment Act amended section 35 of the principal Act to insert the words “or Joint Commissioner” after the word “Commissioner” wherever the said word is found. From this the power under section 35 could be exercised either by the Commissioner of by the Joint Commissioner to call for the relevant record and revise the assessment as provided in the said section. It is not necessary to refer to several other amendments made by this Amendment Act at present.
4. There is no dispute that, by virtue of this amendment, the Joint Commissioner could exercise the power of revision under section 35. However, because of section 2 of this Amendment Act, it was doubtful whether the Joint Commissioner could exercise his power under section 35 in respect of any order of assessment pertaining to any accounting period (previous year), prior to the previous year ending on or after March 31, 1982. In other words, there has been no dispute that the Joint Commissioner was competent to exercise the revisional power under section 35 in respect of any assessment order pertaining to the agricultural income derived during any previous year ending on or after March 31, 1982. But, in the case of assessment orders relating to any period earlier to the previous year ending on March 31, 1982, but made subsequent to the date of the earlier Amendment Act, it was doubtful as to whether the Joint Commissioner could exercise his power of revision regarding these assessment orders. Hence, the Legislature added an Explanation to section 35 by enacting section 8 in Karnataka Act 23 of 1985. This Karnataka Act 23 of 1985 is deemed to have come into force on April 1, 1985. Section 8, which is relevant, reads thus :
“Amendment of section 35. – In section 35 of the principal Act, –
(1) for sub-section (2), the following shall be substituted, namely :-
‘(2) No power shall be exercisable under sub-section (1) after the expiry of four years from the date of the order sought to be revised.’
(2) after sub-section (3), the following Explanation shall be and shall be deemed always to have been inserted, namely :-
‘Explanation. – For the removal of doubts, it is hereby declared that subject to the provisions of sub-section (2), the revisional power conferred on the Joint Commissioner by sub-section (1) shall be exercisable in respect of an order passed under this Act, by any authority subordinate to him before or after the conferment of revisional power on him’.”
5. While the first part provides for the period of limitation to exercise the revisional power, the subsequent part has inserted the Explanation as part of section 35. A literal reading of this Explanation conveys the ideas that power under section 35 could be exercised by the Joint Commissioner in respect of an order the assessment, etc., whether such an order was passed before or after the conferment of the revisional power on him; thus, it means that the Joint Commissioner is competent to revise any order even though the order relates to the assessment of agricultural income derived during any previous year earlier to the previous year ending of March 31, 1982.
6. The above meaning conveyed by the Explanation added to section 35 is seriously challenged by the petitioners and the question is whether the ambit of this Explanation should be restricted as operating only in respect of the period commencing with the date stated in section 2 of the earlier Amendment Act.
7. There is no dispute that the State Legislature is competent to create a forum whereby the assessment orders can be revised and, for this purpose, appropriate authorities can be designated and appointed. There is also no dispute that the State Legislature was competent to create the office of the Joint Commissioner who can exercise the same power as the Commissioner. The only question is the period from which such a power could be exercised. Mr. Ramabhadran, learned counsel for the petitioners, contended that the office of the Joint Commissioner was contemplated by the Karnataka Act 14 of 1983 and the Joint Commissioner was given the power under section 35 by the said Amendment Act and, while doing so, the said, Amendment Act clearly stated that the provisions of the Amendment Act shall apply to the assessment of agricultural income derived during any previous year ending on or after March 31, 1982, and section 2 further declared that its provisions would prevail notwithstanding anything contained in the principal Act. According so Sri Ramabhadran, the Explanation added by the Karnataka Act 23 of 1985 is in conflict with section 2 of the earlier Amendment Act (Act 14 of 1983) and, therefore, to harmonise the two provisions, the Explanation should be confined to empowering the Joint Commissioner to revise the orders which satisfy section 2 of the earlier Amendment Act.
8. Learned counsel pointed out that section 2 of the earlier Amendment Act was not modified or amended while enacting the subsequent Act No. 23 of 1985 and the non obstinate provision in section 2 of the earlier Amendment Act is still in force.
9. Learned counsel cited a decision of the Bombay High Court in Ritz Ltd. v. Union of India [1990] 184 ITR 599. The court, there, was concerned with clause (c) of the Explanation to section 263 (1) of the Income-tax Act. The main section 263(1) of the Income-tax Act is almost similar to section 35 of the Act which vests in the Commissioner a similar revisional power. Since the category of orders that could be the subject-matter of revision by the Commissioner required enumeration by amplifying the scope of section 263(1), an Explanation was added in the year 1984, with effect from October 1, 1984, Clauses (a) and (b) of the Explanation declared that a few other kinds of orders were also liable to be revised, apart from those covered by the main section 263(1). Some of the judicial pronouncements expressed the view that the order covered by section 263(1) did not include any order which has been the subject-matter of any appeal and the doctrine of merger was applied to such orders. To remove this difficulty, the Explanation was substituted with the addition of a new clause (c) with effect from June 1, 1988. Again here, there was some doubt as to whether the order referred to in clause (c) was an order which became the subject-matter of an appeal after June 1, 1988 (the day from which the clause came into force). Therefore, the width of clause (c) was widened and certain words were inserted in it stating that the order of the Assessing Officer, whether it had been the subject-matter of any appeal filed on or before or after June 1, 1988, could be subjected to the power of the Commissioner under section 263(1) and further words were also inserted to state that such a power shall be deemed always to have existed. The Revenue contended that, because of theses deeming words in clause (c), the Commissioner’s power extended even in respect of the earlier orders which were the subject-matter of any appeal prior to the insertion of the Explanation and thus the Revenue gave a literal meaning to the words conveying the deeming provision in it. The High Court pointed out that to scope of the power under clause (c) cannot be wider than the power sought to be extended by the main Explanation and, since the Explanation was only with effect from October 1, 1984, clause (c) also should be read as operative and applicable to the cases arising thereafter. At page 603, the learned judge observed thus :
“The question, however, is if the was so, why did the Legislature not stop at that and went further to say that the insertion of these words though factually in 1989 was with retrospective effect from June 1, 1988, the date on and from which Explanation (c) itself was inserted by the Finance Act, 1988. In my judgment, Explanation (c) requires to be constructed harmoniously. The insertion of the words at two places as well as the fact that the insertion is made retrospective from the date on which the Explanation itself was inserted can all be given proper meaning if it is held that these words are to be read in the Explanation right from the date the Explanation it self was inserted. Thus, only in cases where action under section 263 is taken after June 1, 1988, the merger of the assessment order will be treated as confined to the issues actually considered and decided in appeal in terms of Explanation (c). In my judgment, the construction placed herein is based on sound logic, namely, irrespective of the language in which the amending provisions are couched, the amendment cannot be retrospective with effect from a date earlier to the date on which the provisions sought to be amended itself was brought on the statute book.”
10. From the last sentence of the above passage, it is clear that clause (c) of the Explanation being part of Explanation, cannot travel beyond the scope of the Explanation and that is how the Bombay High Court viewed the question raised before it. In the instant case, the provision involved is quite different. No doubt, initially, the earlier Amendment Act vested the power of revision in the Joint Commissioner and, at the same time, stated that the provision of the said Amendment Act shall apply to the assessment of the income derived during the year ending on March 31, 1982, or thereafter. But, section 35 was subsequently amended by the Karnataka Act 23 of 1985 and bar of limitation was brought in by substituting sub-section (2) under which the power of revision shall not be exercisable after the expiry of four years from the date of the order in question. Therefore, even if the order of assessment is made in respect of a very old year, still, if can be revised so long as the order is made within four years from the date on which the revisional power is sought to be exercised. However, doubts arose about the power of the Joint Commissioner to exercise the power of revision in respect of the assessment order pertaining to any previous year ending prior to the year ending on March 31, 1982, referred to in section 2 of the earlier Amendment Act. Hence, the Explanation certainly empowers the Joint Commissioner to exercise the power of revision in respect of any order passed, whether before or after the conferment of revisional power on him. The only restriction is the bar of limitation under sub-section (2) of section 35 other condition stated in section 35(1). Such a reading of the Explanation in question no doubt brings it in conflict with section 2 of the Karnataka Act 14 of 1983 and Mr. Ramabhadran, learned counsel, wants us to apply the ratio of the aforesaid decision of the Bombay High Court and to restrict the operation of the Explanation to an order to assessment of agricultural income derived during any previous year ending on or after March 31, 1982, only. It is to be noted that section 2 of the earlier Amendment Act is not part of the principal Act by itself. Further, under the earlier Amendment Act, several provisions of the principal Act were amended and, in that connection, section 2 was enacted to clarify the scope of the said amendments and the said section 2 of the Karnataka Act 14 of 1983 is a general provision governing the various amendments made under the said Act. But, the subject of revision is found in section 35 and, therefore, it is a special provision governing the revisional power. The Explanation now added by section by section 8 of the subsequent Amendment Act (Act 23 of 1985) is a special provision as to the scope of the Joint Commissioner’s power with reference to the period covered by the assessment orders. A special provision normally excludes the operation of a general provision and were are of the view that such a principle governs the instant case. In South India Corporation (P.) Ltd. v. Secretary, Board of Revenue , the Supreme Court had to consider whether article 277 or article 372 of the Constitution should govern the particular fact situation involved therein. The Supreme Court pointed out that a special provision should be given effect to the extent of its scope, leaving the general provision to control cases where the special provision does not apply.
11. In the instant case, the Explanation was added to section 35 to remove the difficulty caused in the administration of the Act so that the Joint Commissioner also may exercise the powers vested in the Commissioner, for the purpose of section 35. The problem posed by restricting the orders that can be subject-matter of revision by the Joint Commissioner had to be cleared and the object of this amendment by which the Explanation was added to section 35 was to clearly declare the competence of the Joint Commissioner to revise the orders, provided the power is exercised within the period of limitation stated in section 35(2). The amplitude of the power of the Joint Commissioner is subject to the provisions of section 35(2) only. The principle enunciated in the well-known Heydon’s case [1584] 3 Co Rep 7a, will have to be borne in mind in such a situation at this :
“To arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope, and object of the whole Act : to consider, according to Lord Coke : 1. What was the law before the Act was passed; 2. What was the mischief or defect for which the law had not provided; 3. What remedy Parliament has appointed; and 4. The reason of the remedy.”
12. In these circumstances, were are the view that the scope of the Explanation cannot be restricted by the application of section 2 of the earlier Amendment Act 14 of 1983. Full effect will have to be given to the words used in the Explanation.
13. Sri Ramabhadran further contended that, in all these cases, the notices issued by the Joint Commissioner were beyond the period of four years and, therefore, the bar provided under section 35(2) operates.
14. The petitioners have approached this court against the notices. The plea of limitation can be raised before the authority concerned. Basically, the question involves investigation of facts. It is open to petitioners to show caused to the notices receives by them within six weeks from today and question of limitation also may be raised before the Joint Commissioner. The respondent shall consider all such question as may be raised by the petitioners and decide the same in accordance with law subject to the observation made in these writ petitions.
15. Consequently, these writ petitions are dismissed. No costs.
