Shiv Shyam Sales Enterprises. vs State Of Maharashtra And Two Ors.
2006 Latest Caselaw 522 Bom

JUDGMENT

B.P. Dharmadhikari, J.

Page 2317

1. The petitioner a Partnership Firm dealing in Gas Hot Plates as importer and retailer has filed this Writ Petition under Article 226 of the Constitution of India, questioning the orders dated 17th January, 1989 passed by the respondent No. 2 Assistant Commissioner of Sales Tax (Administration - I), Nagpur Division, Nagpur whereby the said authority has upheld the tax liability of the petitioner for two different periods and has set aside the orders under Section 62 of the Bombay Sales Tax Act passed on 5th August 1988, directing refund of the tax amount already paid by the petitioner.

2. The petitioner states that the establishment of petitioner is registered under the Bombay Sales Tax Act, and also under the Central Sales Tax Act, and he has been filing return regularly. He has filed return for the period 25.10.1984 to 21.11.1985 and, it is the case of the petitioner that he is not liable to pay sales tax on sale of gas hot plates being purchased from out of Maharashtra, because he was exempted from payment of the same vide notification issued under Section 41, particularly entry No. 164[1][v]. The said contention was rejected by the Sales Tax Officer and he was held liable to pay tax @ 8%. Accordingly the petitioner paid an amount of Rs. 1,57,540/-for the said period. The petitioner also filed second return for the period from 13.11.1985 to 02.11.1986 and his total tax liability for the said period was assessed at Rs. 4,58,762/-. The petitioner accordingly paid the said amount also. The petitioner thereafter moved an application under Section 62 of the Bombay Sales Tax Act and sought rectification of the mistake in both the orders on the ground that the sale of hot plates/gas stoves was exempted from payment of tax. He relied upon the above mentioned entry and also upon the judgment of the Additional Commissioner of Sales Tax, Pune in the case of M/s. Universal Trading Company. This contention of the petitioner was accepted by the respondent No. 3 Sales Tax Officer who held that, the petitioner could not have been taxed at all and therefore ordered refund. Before the petitioner could receive this refund he received notices from the respondent No. 2 in Form No. 40 along with the gist of the orders, and, petitioner learnt that the respondent No. 2 was intending to revise the said orders passed under Section 62, in exercise of powers under Section 57 of the Sales Tax Act. The petitioner therefore, raised some objections and ultimately filed his reply to those notices. He thereafter also filed his written statement, which is practically in the shape of Written Notes of Arguments and, also raised preliminary objection to exercise of revisional jurisdictional by the respondent No. 2 in the matter. The respondent No. 2 after hearing the counsel for the petitioner ultimately passed the impugned order on 17th January 1989. There were two returns filed by the petitioner and, therefore, two separate orders have been passed by the respondent No. 2 on the same date. Both these orders are questioned in the present petition.

3. Mr. Arun Agarwal, the learned Counsel for the Petitioner has contended that the entry upon which the respondent No. 2 has relied upon in his order dated 17th January 1989 had been amended later on in July 1988 and as per the said amendment the original entry No. 164[1][v] had been Page 2318 modified retrospectively. He states that the entry as it stood originally from 01.09.1981 exempted Air/Gas/Fluid Heating Systems from payment of sales tax. He further argued that by amendment what has been exempted is Solar Air heating system and solar gas heating system or solar fluid heating system. He contends that thus the words .solar" has been added later on retrospectively and therefore, the orders passed under Section 62 were just and proper. He contends that as per the original entry the mistake apparent on the fact of record which has been rectified by the sales tax officer and it is in exercise of jurisdiction under Section 62 of the Act. He further contends that the Sales Tax Officer in this respect relied upon the order of the Additional Commissioner of Sales Tax, Pune passed in identical situation in case of M/s. Universal Trading Corporation and the said Authority namely the Additional Commissioner of Sales Tax, Pune has also found that the sale of Gas Stove was also exempted as per the original entry. He contends that the Sales Tax Officer has in view of these two circumstances exercised the jurisdiction under Section 62. and there is no error in the said order. He further argues that the reasons put forth by the respondent No. 2 to reverse the said order are unsustainable. He contends that one of the reason put forth by the Additional Commissioner of Sales Tax is that the orders has been passed beyond the period of 2 years from the original order. He contends that Section 62 only contemplates initiation of the proceedings therein within a period of two years. He points out that the original order in this respect was passed on 24.07.1986 and the application for correction was moved on 21.07.1988. As the application was moved within a period of two years according to him the passing of the orders subsequently i.e. on 5.8.1988 is of no consequence. He states that the revisional authority was therefore in error in holding that the cognizance of the orders passed by the Sales Tax Officer was itself without jurisdiction.

4. The learned Counsel for the petitioner invites attention to the provisions of Section 20 of the Bombay Sales Tax Act, to point out that it is the Commissioner who is empowered to pass various orders under the Scheme of the Act. He further states that even the powers to pass orders under Section 62 is basically given to the Commissioner and powers to revise the orders under Section 57 is again given to the Commissioner. He further states that in view of Section 20[6], these powers are delegated to various authorities by the Commissioner and Sales Tax Officer i.e. the respondent No. 3 is one such officer. He further argues that the revision under Section 57 is decided by the Assistant Commissioner of Sales Tax is in exercise of the powers delegated by Commissioner. According to him therefore, the powers exercised by the Sales Tax Officer and also the Assistant Commissioner Sales Tax are that of Commissioner only. He contends that therefore, the cognizance of the revision under Section 57 by the Assistant Commissioner of Sales Tax is itself not legal and warranted. He has relied upon the judgment in the matter of Roopchand .v. State of Punjab in support. He has also pointed out a un-reported judgment of this Court in Writ Petition No. 2273 of 1990 decided on 2nd August, 2004 to Page 2319 substantiate his contention. He contends that the fact that Gas Stoves were exempted from provisions of the Bombay Sales Tax Act during the relevant period also is established by the judgment of Division Bench.

5. As against this Mrs. S.S. Wandile, learned Assistant Government Pleader appearing on behalf of the State Government/respondents in the matter, contended that the alternative remedy of filing appeal under Section 55 of the Bombay Sales Tax Act is available to the petitioner and he should have exhausted that remedy. She contends that Writ Petition should not be entertained in view of the availability of the remedy. Her next contention is that the Sales Tax Officer could not have exercised the powers under Section 62 because there is no mistake apparent on the face of record in the facts of the present case. She further states that perusal of the impugned order passed by the Sales Tax Officer reveals total non application of mind in this respect. She has taken the Court to the discussion in this respect to contend that the Sales Tax Officer has not given any reason whatsoever while ordering refund. Even reliance upon the decision of the Additional Commissioner of sales Tax, Pune in the matter of M/s. Universal Trading Corporation has been placed mechanically without discussing the facts of the said case. She further argues that the orders impugned in revision under Section 57 by the Assistant Commissioner, Sales Tax are is passed on 5.8.1988, i.e. beyond the period of two years from the date of the original order passed by the Sales Tax Officer. She contends that though the revisional authority has noticed certain tampering of dates in this respect, the said aspect need not be gone into and even if the date of application for rectification moved by the petitioner is treated to be 21.07.1988, filing of application within two years is not sufficient. She argues that language of Section 62 is very clear and the final order of rectification itself is required to be made within two years. She has relied upon the judgment i.e. 56 STC 82 & 38 STC 593, to point out the meaning of mistake apparent on the face of record or error apparent on the face of record, and, the approach in these circumstances. She has further pointed out that the judgment of Division Bench reported at 1977 Mh.L.J. 324 (Babulal and Sons .vrs. Asstt. Commissioner of Sales Tax), to point out the authority of the respondent to exercise the revisional jurisdictional under Section 57 in the matter. She contends that in the facts of the present case there was no mistake apparent and the order refund under Section 62, could not have been passed and the said order is without jurisdiction. She further states that in any case as the order is beyond the period of two years, the order is without jurisdiction and the revisional orders under Section 57 therefore deserves to be maintained.

6. Perusal of Section 55 of the Bombay Sales Tax Act, reveals that it provides remedy of appeal from every original order. The orders impugned in the present petition by the petitioner are passed in exercise of revisional jurisdiction under Section 57 of the said Act, and therefore are not the original order. It is therefore apparent that remedy of filing appeal under Section 55 is not available to the present petitioner. In such circumstances the argument of alternative remedy holds no water. In any case the point as sought to be raised ought to have been taken at the time of initial hearing when the writ Page 2320 petition was entertained in the year 1989. In view of the law settled on the point, such an argument cannot be allowed to be raised at the stage of final hearing after expiry of long period. We therefore, find no merits in the preliminary objection raised by the respondents.

7. The revisional order has held that the order of refund passed under Section 62 is beyond the period of two years and hence is beyond the scope of Section 62 of the Bombay Sales Tax Act. Perusal of Section 62[1], reveals that it requires the authority to rectify the mistake apparent within a period of two years. Provisions of Section 62[1] reads as under :

62[1] The Commissioner may at any time within two years from the date of any order passed by him, on his own motion, rectify any mistake apparent from the record, and shall within a like period rectify any such mistake which has been brought to his notice by any person affected by such order.

It is therefore, clear that the emphasis is upon the decision within two years. The rectification has to be finally effected within a period of two years and as sought to be contended by Mr. Agrawal, the learned Counsel for petitioner, the section no where contemplates only initiation of rectification proceeding within two years. If the interpretation as sought for by Mr. Agrawal, is accepted it would be doing violence to the language of Section 62. In this respect the reliance by learned Assistant Government Pleader upon the Division Bench judgment of Kerala High Court, reported at AIR 2001 Kerala 33 (George Mathai and Anr. .v. Tahsildar, Kanayannur), is apt and the discussions in this respect is contained in paragraph Nos. 3 and 4 and the said paragraphs reads as under :

3. The learned Government Pleader submits that since the notice of rectification was issued within three years, the question of limitation will not be applicable here. Learned Government Pleader relied on the Division Bench decision in T.D. Davis v. State of Kerala, 1997 Ker.LJ (Tax Case) 112, there the Division Bench was considering Section 19 of the Sales Tax Act wherein it is provided that when an assessee escaped tax, the assessing authority can within five years from the expiry of the year to which the tax relates can proceed to redetermine the tax payable. On the basis of the words used in the section, this Court held that proceedings need only be started within five years. Here the wording is entirely different. Here it has been very clearly stated that authority may rectify any mistake apparent on the record within three years from the date of order and shall rectify any such mistake within such period if it is brought to the notice and mere notice or starting of proceedings is not enough.

4. As held in Cape Brandy Syndicate .v. I.R.C. (1921) 1 KB64 in a taxing Act one has to look merely at what is clearly said. There is no room from any intendment. There is no equity about tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used. Since Page 2321 the pecuniary burden is being placed on the assessee, the taxing statute has to be strictly considered. See A.V. Fernandez .vrs. State of Kerala, , Mathuram Agrawal .v. State of M.P. and Mahamood .v. Tahsildar, (2000) 2 Ker LT 820. We agree with the decision of this Court in George v. Tahsildar, . In Section 15 for rectification of mistakes it is very clearly stated that rectification should be done within three years and mere issuance of notice within three years of the date of order sought to be rectified is not enough. Therefore, we are of the opinion that rectification order issued after seven years is barred by limitation even though notice for rectification was issued before the expiry of three years from the date of the original order. There may be substance in the contention of the appellants that what was done by Ext. P-5 is actually not rectification of a mistake apparent on the face of record but a reassessment itself. But in view of the finding that rectification itself is time barred, we are not examining that point in detail.

The language of Section considered by the Division Bench of Kerala High Court and the language of Section 62 is identical. The law laid down by the Division Bench of Kerala High Court is squarely applicable and we accept the same. Therefore, we hold that the rectification order of refund passed beyond the period of two years from the original order is without jurisdiction and could not have been passed under Section 62.

8. The learned Counsel for the Petitioner has contended that as the order of refund was passed by the Sales Tax Officer in his capacity as delegate of Commissioner under Section 20[6] of the Bombay Sales Tax Act, the revision under Section 57 was not maintainable before the respondent No. 2. He has also pointed out the judgment of the Hon'ble Apex Court reported in AIR 1963 SC 1503 [supra]. Perusal of the said judgment particularly paragraph Nos. 10 and 11 reveals that the Hon'ble Apex Court was considering the situation in which the authority could have independently in his own right passed the original order and therefore, the Hon'ble Apex Court has held that the remedy of revision under Section 42 was available only against such original order. It has been held that the Appellate Authority exercising the powers under Section 21[4], was acting as a delegate of the State Government itself, and against such order passed in appeal, a revision was not maintainable. The petitioner therein had objected to the scheme which was framed under the provisions of East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948. The said objection was rejected by the Consolidation Officer and therefore, the petitioner filed appeal under Section 21[3] before the Settlement Officer, but that appeal also failed. The petitioner thereafter went up in appeal under Section 21[4] against the order of the Settlement Officer. Section 21[4] provided for appeal to State Government. The petitioners appeal was heard by Assistant Director of Consolidation of Holdings, Ambala Page 2322 to whom the governments powers and functions concerning the appeal had been delegated under Section 41[1] of the Act. The said Officer allowed the appeal of petitioner, and one Shri Harisingh -respondent No. 2 before the Hon'ble Apex Court being dissatisfied with the order moved in revision. Therefore, the question was, whether in such circumstances the remedy of revision was available to Harisingh in the matter. The discussions in paragraph Nos. 10 and 11 are important. The said discussions read as under :

10. Now, there cannot be much doubt that Section 42 makes a distinction between the Government and an officer, because under it the Government is given power to interfere with an order passed by an officer and, therefore, it does not authorize the Government to interfere with an order made by itself. As we understood the learned Advocate General of Punjab, who appeared for the respondent State of Punjab, he conceded that position. He said that the Government could no doubt have itself heard an appeal preferred under Section 21[4] instead of getting it heard by an officer to whom it delegated its power, and if it did so, then it could not under Section 42 interfere with the order which it itself passed in appeal. We think that this is the correct position, and we wish to make it clear that we are not basing ourselves on the concessions made by the learned Advocate General. We feel no doubt that an order passed by an officer of the Government cannot be an order passed by the Government itself.

11. The question then arises, when the Government delegates its power, for example, to entertain and decide an appeal under Section 21[4], to an officer and the offer pursuant to such delegation hears the appeal and makes an order, is the order an order of the officer or of the Government ? We think it must be the order of Government. The order is made under a statutory power. It is the statute which creates a power. The power can, therefore, be exercised only in terms of the statute and not otherwise. In this case the power is created by Section 21[4]. That section gives a power to the Government. It would follow that an order made in exercise of that power will be the order of the Government for no one else has the right under the statute to exercise the power. No doubt the Act enables the Government to delegate its power but such a power when delegated remains the power of the Government, for the Government can only delegate the power given to it by the statute and cannot create an independent power in the officer. When the delegate exercises the power, he does so for the Government. It is of interest to observe here that Wills J. said in Huth v. Clarke, [1890] 25 Q.B.D. 391 that .the words delegate means title more than an agent.. An agent of course exercises no powers of his own but only the powers of his principal. Therefore, an order passed by an officer on delegation to him under Section 41[1] of the power of the Government under Section 21 [4], is for the purpose of the Act, an order of the Government. If it were not so and it were to be held that the order had been made by the officer himself and was not an order of the government and of course it had to be one or the other . then we would have an order order made by a person to whom the Act did not confer any power to make it. That would be an impossible situation. There can be no order except as authorised by the Act. What is true of Section 21[4] would be true of all other provisions in the Act conferring Page 2323 powers on the Government which can be delegated to an officer under Section 41[1]. If we are wrong in the view that we have taken then in the case of an order made by an officer as delegate of the Government's power under Section 21[4] we would have an appeal entertained and decided by one who had no power himself under the Act to do either. Plainly, none of these things could be done..

9. The Hon'ble Apex Court has thereafter held that the order passed by the Settlement Officer and thereafter by the Assistant Director in Appeal was infact an order of Government itself, and as such the Government was incompetent to revise it. The discussion in this respect is contained in paragraph Nos. 12 to 14 of the order. Further the Hon'ble Apex Court has concluded that the remedy of revision contemplated by Section 42 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, was only in relation to the original order passed by the Officer. In the facts of the present case it is apparent that the Bombay Sales Tax does not contemplate any original order to be passed by the Sales Tax Officer. The orders are passed by the Sales Tax Officer in view of the delegation in his favour under Section 20 [6] thereof. The Act contemplates that, it is the Commissioner subject to delegation, who has to pass original orders and also the orders under appeal under Section 55 and the orders under Section 57 and the orders under Section 62. These powers are delegated to different officers and perusal of Section 55 itself reveals that the orders passed by the Sales Tax Officer as a delegate of Commissioner are treated as original orders. Thus though there is a delegation, the Act itself makes distinction between the orders passed by the different authorities in this respect and Section 57 expressly permits the Commissioner to call for and examine the records of any order passed under this Act or rules made thereunder by any officer or person subordinate to him. Thus the order of Sales Tax Officer passed in his capacity as delegate under Section 20[6] of the Bombay Sales Tax Act, is order which is amenable to revisional jurisdiction under Section 57[1][v] thereof. Act does not contemplate passing of any other order by Sales Tax Officer and if logic put forth by petitioner is accepted, Section 55 and Section 57 both would be rendered meaningless. We therefore find no substance in the arguments of learned Counsel for petitioner that by taking recourse to the revisional jurisdiction the respondent No. 2 has exercised the jurisdiction which is not available to it. The fact that Commissioner has delegated exercise of revisional jurisdiction to the respondent No. 2 is not at all in dispute before this Court. The scope of revisional jurisdiction has been considered by the Division bench of this Court in the judgment between -Babulal and Sons .v. Assistant Commissioner (supra), as under :

8. It is usual that in the dispensation of executive justice the taxing statutes not only keep the principles of natural justice alive but expressly make it applicable to the process of adjudication not only at the original stage but also provide remedies against the assessment to made by the original proceedings. These remedies usually take the form and shape of appeals or revision that operate on the initial field of assessment. Thus the total process of original assessment and that of appeal and revision provided is one and the composite process and for the purpose of the tax law can be treated as the first original phase Page 2324 of assessment as such. The jurisdiction and power of the authorities dealing with the mattes of original assessment emanate and operate clearly for the purpose of tax adjudication over the sphere of this original and basic assessment. The constructions of hierarchy and power of appeal and revision over the original proceedings provided by the statute, it may be added at this stage, are the matters of creation of statutes and by very implication and express terms that involve the superior scrutiny by the higher authorities of matters brought before such authorities, either sue motu or upon an application, the distinctive feature being that the identity of jurisdiction to be exercised in appeal as well as in revision, subject, however, to the limits imposed upon that jurisdiction by the statute, is one and the same. There is undoubtedly difference between appellate and revisional jurisdiction and it is noteworthy that revisional jurisdiction is treated as supervisory and operative within built limitations in exercise of the same. These higher jurisdictions, either called appellate or revisional, thus enable the juridical examination by the higher authorities of the decisions of inferior or the lower authorities. [See Sk. Wahiduddin v. Makhanlal, Mela Ram v. Income Tax Commissioner, Nagendra v. Suresh, J.P. Ojha v. R.R. Tandan and a decision of this Court in Asmita Dharaskat .v. City of Nagpur Corporation]

9. We have made these observations to underpin the distinctive difference of jurisdiction exercised by the authorities under Section 57 which cannot be confused with the jurisdiction that is created and can be exercised under Section 35 of the Act. If the order can be sustained on the basis of the jurisdiction conferred expressly by the provisions of Section 57 and if there be no bar for exercise of that jurisdiction otherwise available, the contention raised would stand repelled. Jurisdiction created by Section 57 is one that of revision and it enables clearly the Commissioner to call for an examine the record of any order passed including the one passed in appeal by any officer or person subordinate to the Commissioner and to make an order subject to proviso and subject to conditions of Sub-sections [2] to [4] which the Commissioner may think just and proper. It is obvious that the Commissioner is authorised to call for and examine the record of any order made by the subordinate authority and further make such order which the Commissioner thinks just and proper. This being the power of revision, which is akin to the judicial scrutiny or superintendence by the higher authority over the subordinate judicial authority, operates clearly on the original proceeding itself. In other words, in the matter of assessment leading unto that order can be examined and appropriate order with regard to that proceeding affecting the order of assessment for just and proper reasons can be made.. We therefore find that the above referred ruling of the Hon'ble Apex Court is not relevant and attracted here.

10. This brings us to the consideration of the un-reported judgment dated 2nd August 2004 in Writ Petition No. 2273/1990. Perusal of the said judgment, particularly paragraph No. 3 reveals that in case of petitioner therein namely Page 2325 NGDA, the contention about exemption from sales tax was accepted by the Third Bench of the Maharashtra Sales Tax Tribunal in respect of the period from 1.12.1983 to 30.6.1984 by its order dated 21.06.1988. This order was not challenged by the State of Maharashtra or Sales Tax Department, the said order therefore became final. It is in view of this fact that the Hon'ble Division Bench in paragraph No. 7 found that the decision of the First Bench dated 11.12.1987 and the Second Bench dated 30.12.1989 which were in respect of previous period i.e. 1.1.1981 to 25.10.1983 could not be sustained and therefore, quashed and set aside the same. It is therefore, apparent that there was a decision delivered by the Third Bench of the Maharashtra Sales Tax Tribunal, exempting the petitioner from payment of sales tax liability. The said decision became final. Such is not the issue in the facts of the case at hand, the petitioner has not pointed out any previous adjudication holding his product i.e. Gas Stoves exempt from payment of Sales Tax, therefore, this ruling has no application.

11. The learned Counsel for the petitioner has tried to contend that the original entry which stood till its amendment by notification dated 19.07.1988 was Air/Gas/Fluid heating system and therefore, the respondent No. 3 was right in ordering the refund. He contends that these entries have been later on replaced retrospectively and therefore, the view taken by the respondent No. 2 in this respect is un-sustainable. We find that the liability was fastened upon the petitioner by order dated24.07.1988 and it was also discharged by him. It was open for him to challenge the order by filing appropriate appeal under Section 55 of the Act within stipulated period, but that was not done. After adjudication in the matter of M/s. Universal Trading Corporation he preferred to file application under Section 62 for rectification, though prima facie the application appears to have been filed within two years, the final order of rectification has not been passed by the Sales Tax Officer within two years. In such circumstances, the arguments sought to be canvassed in the present petition is without any relevance and cannot be considered. In these circumstances, it is therefore not necessary for us to find out whether there was any mistake or error apparent on the face of record of this case to enable the respondent No. 3 to exercise jurisdiction under Section 62 of the Act. We hold that respondent No. 3 did not possess jurisdiction to deliver verdict on the said issue after expiry of two years from the date of his original order.

12. Thus we find no merits in the petition the same is accordingly dismissed, however, without any order as to cost.