1967 Supreme(SC) 346

SUPREME COURT OF INDIA
J.C. SHAH, V. RAMASWAMI AND V. BHARGAVA, JJ.
Swastik Oil Mills Ltd., Appellant
Versus
H. B. Munshi, Deputy Commissioner of Sales Tax, Bombay, Respondent.
Civil Appeal No. 637 of l967,
D/- 29-11-1967.
Advocates appeared
Mr. S. T. Desai, Senior Advocate (M/s. G. L. Sanghi and B. Datta, Advocates and Mr. O. C. Mathur, Advocate of M/s. J. B. Dadachanji and Co. with him), for Appellant; Mr. R. M. Hazarnavis, Senior Advocate (Mr. S. P Nayar, Advocate for Mr. R. H. Dhebar, Advocate, with him), for Respondent. 845

The Deputy Commissioner of Sales Tax had the power to revise the appellate order passed by the Assistant Collector of Sales Tax suo motu under the Bombay Sales Tax Act, 1946 or 1953 and the proceedings initiated by the Deputy Commissioner were not barred by time.

Headnote:

SALES TAX - Revision of assessment - Power of Deputy Commissioner - Scope - Limitation - Bombay Sales Tax Act, 1946, Ss. 22, 31 - Bombay Sales Tax Act, 1953, Ss. 31, 48 (2), 49 (1) - Bombay Sales Tax Act, 1959, Ss. 57, 76, 77 - Bombay General Clauses Act, 1904, S. 7.

Fact of the Case:

The appellant, a dealer under the various Sales Tax Acts in force in Bombay, claimed exemption from tax in respect of the turnover representing the despatches or transfer of goods from its Head Office Bombay to its various Depots or Branches in other States in India, and also exemption in respect of sales which were alleged to have taken place in the course of inter-State trade after 26th January, 1950. The Sales Tax Officer rejected both these claims. The appellant went up in appeal before the Assistant Collector of Sales Tax, who accepted the claim of the appellant in respect of the despatches to its various Depots or Branches in other States in India, but disallowed the claim in respect of the alleged inter-State sales. The revisions filed by the appellant against the rejection of its claim in respect of inter-State sales were still pending when, on 7th January, 1963, a notice was issued by the Deputy Commissioner of Sales Tax, Bombay City Division, in Form XXIV under Section 31 of the Bombay Sales Tax Act, 1953, intimating the appellant that he proposed to revise suo motu the appellate orders passed by the Assistant Collector of Sales Tax in so far as he had allowed deduction in respect of the entire goods despatched to its Branches in other States outside Maharashtra, because, in so doing, he had overlooked the provisions contained in proviso (b) to sub-clause (ii) of Rule 1 under sub-section (3) of Section 6 of the Bombay Sales Tax Act, 1946 as amended by the Bombay Sales Tax Amendment Act 48 of 1949. The appellant challenged the notice dated 7th January, 1963, with the prayer that the notice be quashed and the respondent be restrained from taking any action against the appellant in pursuance thereof. The petition was dismissed by the High Court and, now, on certificate granted by that Court, the appellant has come up in this appeal to this Court.

Finding of the Court:

The Court held that the Deputy Commissioner of Sales Tax had the jurisdiction and power to revise the order under S. 22 of the Act of 1946 and, consequently, the proceedings initiated by him were not without jurisdiction. The Court further held that there was no limitation prescribed for an order of assessment under the Bombay Sales Tax Acts of 1946 and 1953 and, therefore, the proceedings initiated by the Deputy Commissioner were not barred by time.

Issues: 1. Whether the Deputy Commissioner of Sales Tax had the power to revise the appellate order passed by the Assistant Collector of Sales Tax suo motu under the Bombay Sales Tax Act, 1946 or 1953? 2. Whether the proceedings initiated by the Deputy Commissioner were barred by time?

Ratio Decidendi: 1. The Court held that the Deputy Commissioner of Sales Tax had the power to revise the appellate order passed by the Assistant Collector of Sales Tax suo motu under the Bombay Sales Tax Act, 1946 or 1953. The Court relied on the provisions of Section 22 of the Bombay Sales Tax Act, 1946 and Section 31 of the Bombay Sales Tax Act, 1953, which empowered the Deputy Commissioner to revise any order passed by any officer subordinate to him. The Court also held that the Deputy Commissioner was entitled to hold an enquiry or direct an enquiry to be held in order to properly exercise his revisional jurisdiction. 2. The Court held that the proceedings initiated by the Deputy Commissioner were not barred by time. The Court relied on the provisions of Section 77 of the Bombay Sales Tax Act, 1959, which continued in force the provisions of the Bombay Sales Tax Act, 1946 and 1953 in respect of rights and liabilities which may have accrued or have been incurred under those Acts. The Court also held that there was no limitation prescribed for an order of assessment under the Bombay Sales Tax Acts of 1946 and 1953.

Final Decision: The appeal was dismissed with costs.