:1: bgp IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SALES TAX REFERENCE NO.1 OF 2002 IN REFERENCE APPLICATION NO.67 OF 1992 The Commissioner of Sales Tax, Maharashtra State, Bombay – 400 010 ..Applicant Vs. M/s.Kirloskar Tractors Ltd. Now known as Kirloskar Pneumatic Co.Ltd. Thermal Power Station Road, Nasik – 422 010. ..Respondent Mr.V.A.Sonpal, ‘A’ Panel Counsel for applicant. Mr.P.C.Joshi for respondent. CORAM :- V.C.DAGA & K.K.TATED,JJ. DATE : 16TH APRIL,2010 JUDGMENT (PER : V.C.DAGA,J.) Heard learned Counsel for the parties. Perused Reference Application. :2: INTRODUCTION: 2. In the present Reference application filed by the Commissioner, question of law referred to this Court is “Whether on the facts and circumstances of the case, the Tribunal is justified in law in holding that the power under Section 57 of the Bombay Sales Act,1959 cannot be exercised twice on the same subject matter by the Department at different level” and that such power is exercised within a period of limitation? FACTS 3. The respondent herein is a dealer registered under the provisions of Bombay Sales Tax Act as a manufacturer and has made purchases on furnishing declaration on Form 15 during the period 1st July, 1975 to 30th June,1976. As per the said declaration of Form 15, the goods so purchased were to be used in manufacturing activity. The Sales Tax Officer, Nashik, On the basis of the returns filed by respondent, on 30th June, 1981 has assessed the said respondent wherein, he allowed set off under rule 41A of the Bombay Sales Tax Rules,1969 (the Rules) at Rs.1,33,104/- but disallowed set-off proportionately in respect of the use of purchased material in the goods manufactured and transferred to branches out side the State of Maharashtra. 4. The order of assessment came to be scrutinized by the Assistant Commissioner of Sales Tax (Adm) Range IV, Nasik Division, Nasik. The learned Assistant Commissioner found that the assessee had contravened the declarations issued in Form No.15 by using the purchases in manufacture of goods transferred to branches out of State. Therefore, the assessee was held liable to purchase tax under Section 14(1) of the Act. The Assistant Commissioner, therefore, issued legal notice in Form 40 and passed the order of revision dated 20th July, 1984. The learned Assistant Commissioner proceeded to levy purchases tax under Section 14 of the Act on purchases of Rs.4,39,175/-. After granting set-off under proviso to Section 14(1) of the Act :3: at Rs.3,78,350/-, the Assistant Commissioner created demand of Rs.13,906/- by passing the revision order dated 20th July, 1984. 5. Aggrieved by the aforesaid order dated 20th July,1984, preferred an appeal before Deputy Commissioner of Sales Tax (Appeals) under Section 55 of the said Act), challenging the order passed by the Assistant Commissioner of Sales Tax in revision. The Deputy Commissioner of Sales Tax (Appeal) vide order dated 18th March, 1986, has set aside the revisional order dated 20th July, 1984 passed by Assistant Commissioner of Sales Tax and restored the order passed by the Sales Tax Officer. 6. The Additional Commissioner of Sales Tax, Pune, on 24th Separately, 1990, on scrutiny of the order passed by the Deputy Commissioner of Sales Tax (Appeals) has found that there was an error committed by the Deputy Commissioner of Sales Tax (Appeals) in passing the order in not withdrawing the set off granted by the Sales Tax Officer. It was noticed by the Additional Commissioner of Sales Tax that the Deputy Commissioner of Sales Tax (Appeals) has set aside the purchase tax levied under Section 14(1) but has not withdrawn the set off granted while deleting the purchase tax under Section 41(1) of the said Act. The Additional Commissioner, therefore, has withdrawn the set off which was not withdrawn by the Deputy Commissioner of Sales Tax (Appeals). 7. Aggrieved by the aforesaid order dated 24th September, 1990 passed by the Additional Commissioner of Sales Tax, Pune, respondent filed an appeal being Appeal No.22 of 1991 before the Maharashtra Sales Tax Tribunal. In the said appeal, the respondent has challenged the order pass by the Additional Commissioner of Sales Tax, Pune on the ground that order of the Additional Commissioner would amount to double revision which is not permissible in law. :4: 8. The Maharashtra Sales Tax Tribunal, vide its order dated 30th April, 1990 allowed the appeal filed by respondent and set aside the order passed by Additional Commissioner under Section 57 of the said Act holding that the order was passed without having jurisdiction. 9. Being aggrieved by the order dated 30th April, 1990 passed by the Maharashtra Sales Tax Tribunal, the applicant preferred a Reference Application bearing No.67 of 1992 in Appeal No.22 of 1991 raising substantial question of law to be referred for the opinion of this Court. The Tribunal has allowed the Reference Application and vide its order dated 24th January, 1994 referred the following substantial questions of law to this Court for determination. QUESTION OF LAW 1) Whether on the facts and circumstances of the case, was the Tribunal justified in law in setting aside the revision order passed under section 57 of the Bombay Sales Tax,1956 by the Additional Commissioner of Sales Tax, Pune Zone, on the ground that the powers under the said Section were already exercised by the Additional Commissioner of Sales Tax? 2) Whether on the facts and circumstances of the case, was the Tribunal justified in law in holding that the revisional power cannot be exercised twice by the Departmental Authority on the same subject and consequently setting aside the order passed by the Additional Commissioner of Sales Tax, Pune ? SUBMISSION: 10. Mr.Sonpal appearing on behalf of the Revenue urged that the provisions of Section 57 holding field at the relevant time permitted the Revisionary Authority to suo-motu call for and examine the record of any order passed including an order passed in appeal under this Act or the rules made thereunder by any officer or person sub-ordinate to him and pass such order thereon as Revisionary Authority may think just and proper. According to :5: Mr.Sonpal, on plain reading of the said Section, it is clear that there is no bar for second revision under this Section. 11. Mr.Sonpal, in support of the proposition of law, submits that as per Section 57, in the facts of the present case, the order passed by the Additional Commissioner of Sales Tax does not amount to second revision. He pressed into service the judgment from The Karnataka High Court in the case of Malika Metal Foundry Vs. Commissioner of Commercial Tax 95 STC 27. He also relied upon the judgment of this Court in H.B.Munshi Vs. Commissioner of Sales Tax 34 STC 113 and Tel Utpadak Kendra Vs. Dy.Commissioner of Sales Tax 48 STC 248 to buttress his submission. 12. Borrowing support from the aforesaid decisions, Mr.Sonpal, learned Counsel for the Revenue submits that, it be declared that the Tribunal has erred in passing an order by setting aside the order passed by the Additional Commissioner, Pune. The questions referred be answered in favour of the Revenue and against the Assessee. PER CONTRA 13. Mr.Joshi, learned Counsel for the assessee submits, that on the basis of the provisions and the Rules applicable; (i) the word “Commissioner” as defined under Section 2(7) does not include his subordinates. (ii) the charging Section 6 is expressly made subject to provisions of the Act and the Rules. (iii) the provision of purchase tax under Section 14 nowhere mentions about set off as a related action or a consequential one, except what is stated in the proviso thereto. (iv) the power of the respective authorities are codified one under Section 20 with the clear provision that all the authorities appointed under sub-Section (2) of Section 20 were subordinate to the Commissioner. In other words, Commissioner is the fountain source of :6: all powers while the powers of the Assistant Commissioner, as provided in sub-section (6) of section 20, were only delegated powers. Once the delegated powers are utilized by one of the delegate, nothing survived for being exercised at any time in future. 14. Mr.Joshi further submits that, section 55 read with Rule 58 restricted the scope of power of appellate authority only to the prayer or the relief claimed before it. The appellate authority cannot deal with that part of the order which is not appealed against, since that part of the order becomes final and conclusive. According to him, the law on this issue is settled by the judgment of this Court in the case of Amar Dyechem Vs. State of Maharashtra 53 STC 14. 15. Mr.Joshi further submits that, the point of set off under Rule 41-A, having not been made the subject matter of Revision under Section 57, as per the order of Assistant Commissioner, and the same not being the subject matter in appeal before the Deputy Commissioner, the question of merger did not arise. The notice in Form-40 issued by the Additional Commissioner on 31st January, 1989, sought to revise the order in appeal which, inter-alia, did not refer to the grant of any set off much less the one under Rule 41-A. If at all the Additional Commissioner desired to revise the order of assessment, the same ought to have been done within the period of limitation provided in section 57. 16. The power of revision, being that of superintendence, have to be exercised subject to the limitations provided under different sections and has to be resorted to by complying the two fold limitations of issuing a notice within three years and order to be passed within a period of five years. Finally, he submits that, the action of the Additional Commissioner of withdrawing the set off under the garb of revising the order in appeal was admittedly not only without jurisdiction but it was barred by limitation. 17. Before proceeding to consider rival submissions, let us turn to the relevant statutory provisions which were holding the field at the relevant time. :7: RELEVANT STATUTORY PROVISIONS Section 55 : Appeals (1) An appeal, from every original order, not being an order mentioned in section 56 passed under this Act or the rules made thereunder, shall lie- (a) .......... (b) if the order is made by an Assistant Commissioner, to the Commissioner. (c) .......... (2) to (6) .................... (7) Subject to such rules of procedure as may be prescribed, every appellate authority (both in the first appeal and the second appeal) shall have the following powers: (a) and (b) ......... (c) in any other case, the appellate authority may pass such orders in the appeal as it deems just and proper; Provided that, the appellate authority shall not enhance an assessment or a penalty or reduce the amount of drawback, set- off or refund of tax, unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Section 57 : Revision (1) Subject to the provisions of section 56 and to any rules which may be made in this behalf- 1-5-70 to date (a) the Commissioner may, of his own motion, call for and examine the record of any order passed (including an order passed in appeal) under this Act or the rules made thereunder by any officer or person subordinate to him, and pass such order thereon as he thinks just and proper. :8: Provided that, no notice in the prescribed form shall be served by the Commissioner under this clause after the expiry of three years from the date of the communication of the order sought to be revised, and no order in revision shall be made by him hereunder after the expiry of five years from such date; CONSIDERATION : 18. After having heard both learned counsel canvassing rival views this Court was of the prima facie view that, without admitting, assuming for the sake of argument, the second revision was tenable against the order dated 30th June,1981, then admittedly, the revisional power by the Additional Commissioner under section 57 of the BST Act was exercised beyond the period prescribed under section 57 of the Act. As per the proviso to section 57(1)(a), no notice in the prescribed form can be served by the Commissioner after expiry of three years under this section from the date of the communication of the order sought to be revised and no order in revision shall be made by him after expiry of five years from the said date. This legal position is clear from the text of section 57 quoted hereinabove: 19. On being asked, Mr.Sonpal fairly conceded and went on to submit that even if he is held to be right in his submission with regard to the maintainability of second revision under section 57 of the BST Act, even then, the revisional power ought to have been exercised within a period of three years from the date of communication of the order sought to be revised. He fairly stated that the order sought to be revised by the Additional Commissioner was the order passed by the Sales Tax Officer, Nashik dated 30th June, 1981 and, if the period of limitation is counted, obviously, revisional power was exercised beyond the period of limitation. Mr.Sonpal could not justify invocation of power after expiry of three years. In view of this obstacle in the way of of Revenue, Mr.Sonpal could not take his submission to the logical end so far as question of limitation is concerned. :9: 20. In the above view of the matter, questions referred do not arise from the order of the Tribunal. They need not be answered in the facts and circumstances of the case. We, therefore, return the reference keeping questions open for being considered in appropriate case. In the result, Reference stands disposed of in terms of this order with no order as to costs. (K.K.TATED,J.) (V.C.DAGA,J.)