Case: Santoshi Tel Utpadak Kendra Vs. Deputy Commissioner of Sales Tax

The appellant is a partnership firm, carrying on the business of manufacturing and selling vegetable The Sales Tax Officer estimated the turnover for the calendar year 1971 and made an order dated 26th March, 1973 levying Sales Tax at Rs. 73, 198.62 and a penalty of Rs. 36, 197.64. On the same date, another assessment order was made for the first six months of the year 1972, where again on the basis of an estimate the Sales Tax Officer computed the tax Rs. 81, 745 .71 and levied a penalty of Rs. 37, 572.26. The two assessment orders were apparently made under s.33 of the Bombay Sales Tax Act, 1959. Against the assessment and penalty orders for the two periods, the appellant appealed under cl. (a ) of sub-s. (1) of s. 55 of the Act to the Assistant Commissioner. By a common order dated 29th September, 1973 the Assistant Commissioner reduced the quantum of the turnover and, consequently, the tax liability to Rs. 30, 494. 67 and the penalty to Rs. 11, 745.71 for the first period and a tax liability of Rs. 16, 447.33 and penalty of Rs. 5, 572.26 for the second period. Not fully satisfied by the relief granted, the appellant proceeded in second appeal to the Maharashtra Sales Tax Tribunal on 8th December, 1973. During the pendency of the appeals before the Tribunal, the Deputy Commissioner, Nagpur issued two notices to the appellant on 24th April, 1974 requiring it to show cause why the appellate orders dated 29th September, 1973 passed by the Assistant Commissioner should not be revised under s. 57 of the Act. The appellant objected to the exercise of revisional power by the Deputy Commissioner during the pendency of the appeals before the Tribunal. On 12th September, 1975 the Deputy Commissioner rejected the objection. Against the order of rejection the appellant filed two appeals before the Tribunal, and by its order dated 27th October, 1977 the Tribunal dismissed the appeals. At the same time, the Tribunal adjourned the two second appeals filed by the appellant against the appellate orders dated 29th September, 1973 passed by the Assistant Commissioner. The Tribunal took the view that its deciding those appeals would result in nullifying the revisional power vested in the Deputy Commissioner.The appellant filed a writ petition in the High Court of Bombay against the order of the Deputy Commissioner dated 12th September 1975 rejecting its preliminary objection and also against the order passed by the Tribunal on 27th October, 1977 dismissing his appeals, as well as the notices issued by the Deputy Commissioner on 24th April, 1974 in the purported exercise of his revisional powerThe appellant is a partnership firm, carrying on the business of manufacturing and selling vegetable The Sales Tax Officer estimated the turnover for the calendar year 1971 and made an order dated 26th March, 1973 levying Sales Tax at Rs. 73, 198.62 and a penalty of Rs. 36, 197.64. On the same date, another assessment order was made for the first six months of the year 1972, where again on the basis of an estimate the Sales Tax Officer computed the tax Rs. 81, 745 .71 and levied a penalty of Rs. 37, 572.26. The two assessment orders were apparently made under s.33 of the Bombay Sales Tax Act, 1959. Against the assessment and penalty orders for the two periods, the appellant appealed under cl. (a ) of sub-s. (1) of s. 55 of the Act to the Assistant Commissioner. By a common order dated 29th September, 1973 the Assistant Commissioner reduced the quantum of the turnover and, consequently, the tax liability to Rs. 30, 494. 67 and the penalty to Rs. 11, 745.71 for the first period and a tax liability of Rs. 16, 447.33 and penalty of Rs. 5, 572.26 for the second period. Not fully satisfied by the relief granted, the appellant proceeded in second appeal to the Maharashtra Sales Tax Tribunal on 8th December, 1973. During the pendency of the appeals before the Tribunal, the Deputy Commissioner, Nagpur issued two notices to the appellant on 24th April, 1974 requiring it to show cause why the appellate orders dated 29th September, 1973 passed by the Assistant Commissioner should not be revised under s. 57 of the Act. The appellant objected to the exercise of revisional power by the Deputy Commissioner during the pendency of the appeals before the Tribunal. On 12th September, 1975 the Deputy Commissioner rejected the objection. Against the order of rejection the appellant filed two appeals before the Tribunal, and by its order dated 27th October, 1977 the Tribunal dismissed the appeals. At the same time, the Tribunal adjourned the two second appeals filed by the appellant against the appellate orders dated 29th September, 1973 passed by the Assistant Commissioner. The Tribunal took the view that its deciding those appeals would result in nullifying the revisional power vested in the Deputy Commissioner.The appellant filed a writ petition in the High Court of Bombay against the order of the Deputy Commissioner dated 12th September 1975 rejecting its preliminary objection and also against the order passed by the Tribunal on 27th October, 1977 dismissing his appeals, as well as the notices issued by the Deputy Commissioner on 24th April, 1974 in the purported exercise of his revisional

Court's reasoning:
Now it seems to us past question that when the appellate jurisdiction of superior authority is invoked against an order and that authority is seized of the case, it is inconceivable for a sub-ordinate authority to claim to exercise jurisdiction to revise that very order. The Tribunal is the supreme appellate and revisional authority under the statute. It cannot be divested of its jurisdiction to decide on the correctness of an order, it cannot be frustrated in the exercise of that jurisdiction, merely because a subordinate authority, the Commissioner, has also been vested with jurisdiction over that order. Unless the statute plainly provides to the contrary, that appears to us to be incontrovertible. It is not open to the Commissioner to invoke his power under cl. (a) of sub-s. (1) of s. 57 and summon the record of an order over which the Tribunal has already assumed appellate jurisdiction. The subordinate status of the Commissioner precludes that.The High Court felt burdened by the compulsion that unless a contemporaneous exercise of concur rent jurisdiction was read into sub-s. (1) of s.57, so that both the Tribunal and the Commissioner could be regarded as simultaneously enjoying "overlapping jurisdiction" in respect of the same order, it would be impossible to safeguard the interests of the Revenue; for, says the High Court, a second appeal is available only to a dealer and not to the Revenue, and an enterprising dealer could, by expeditiously filing a second appeal before the Tribunal effectively shut out the Commissioner from interfering with the order in the interests of the Revenue. The High Court found itself driven to the conclusion that the Commissioner was entitled to revise an order at any stage, otherwise there could be cases where the assessment could not be enhanced. The High Court, we think, has overlooked an important provision of the Act. In our opinion, the appellate powers elaborated in sub-s. (6) of s.55 take account of such a need. Their comprehensive sweep can b e judged from the terms of the sub-sectionNow the sub-section speaks of an "appellate authority both in the first appeal and the second appeal". It is quite clear, therefore, that the appellate powers detailed in cl. (a) have the same amplitude in a second appeal as in a first appeal. An appellate authority disposing of a first appeal has power to enhance the assessment. So has appellate authority in a second appeal. We may also point out that when an appellate authority is considering a second appeal a "first appellate" order, it is examining an order which can be broadly described as an order of assessment. It is a final order disposing of an appeal which, in a sense, is a continuation of the assessment. A second appeal against such an order is an appeal against an order of assessmentEn passant, it will be noticed that sub-s. (6) of s.55 of the Bombay Sales Tax Act is in pari materia with sub-s. (1) of s. 251 ofthe Income Tax Act, 1961. The language is almost identical. Sub-s. (1) of s. 251 sets forth the same three categories and the power to enhance is confined to an order of assessment and an order imposing a penalty. But in the case of a second appeal under the Income-tax Act, there is a distinct departure from the scheme under the Bombay Sales Tax Act. S.253 does not expressly speak of the "power to enhance", and makes no distinction in regard to the extent of the appellate power between any of the cases in which a second appeal lies from an order under s.251.It is evident then that in a second appeal under sub-s. (2) of s.55 of the Bombay Sales Tax Act, the Tribunal has power to enhance the assessment. That being so, plainly it is open to the Revenue to invoke that power in a pending second appeal filed by the dealer before the Tribunal. The High Court is in error in concluding that the power to enhance an assessment can be discovered only in the revisional jurisdiction of the Commissioner and nowhere else. The compulsion which drove the High Court to the construction placed by it on sub-s. (1) of s.57 of the Act does not have substance, and the entire sub-stratum underlying the High Court judgment must give wayOn the view which finds favour with us we cannot approve of the law laid down on the point in Motor and Manufacturers Ltd. (supra) nor do we see any overlapping of, or conflict in, the powers of the Commissioner and the Tribunal inferred in Oriental Rubber Industries Pvt. Ltd. (supra). As regards the observation of this Court in Amritlal Bhogila (supra), that was not a case where a subordinate authority sought to exercise its revisional jurisdiction over an order pending in appeal before a superior authority. No support can be derived by the respondent from that case. For the same reason, Ramlal Onkarmal v. Commissioner of Income-tax, Assam decided by the Assam High Court Kelpunj Enterprises v. Commissioner of Income-tax, Kerala, decided by the Kerala High Court and Russell Properties (P) Ltd. v. A. Chowdhury, decided by the Calcutta High Court, placed before us by the respondent have no relevanceOur attention has been invited to s.34 of the Maharashtra Agriculture Income Tax Act, 1962 where when defining the revisional power of the Commissioner the Legislature has expressly incorporated a provision prohibiting the Commissioner from exercising his revisional power against an order pending in appeal before the Assistant Commissioner or Tribunal. It is urged that if a similar prohibition was intended against the Commissioner under the Bombay Sales Tax Ac t, an express provision to that effect would have been made. Reference has also been made to the provisions inthe Customs Act, 1962 conferring revisional jurisdiction.We are not impressed by the contention. The absence of an express provision cannot detract from the conclusion reached by us - a conclusion flowing from the necessary intendment of the statute - that the Commissioner being a subordinate authority to the Tribunal, cannot interfere with an order pending in appeal before the Tribunal, and further that the interest of the Revenue is protected by the power of enhancement vested in the Tribunal while disposing of a second appeal filed by a dealer4. An assessment order under the Bombay Sales Tax Act is appealable under s.55 of the Act, and we may mention only that when the order is made by the Sales Tax Officer an appeal lies to the Assistant Commissioner, if the order is made by the Assistant Commissioner an appeal goes to the Commissioner and if it has been made by the Commissioner (or Deputy Commissioner or Additional Commissioner) an appeal lies before the Tribunal.. (2) of s.55 provides for a second appeal against the appellate order of the Assistant Commissioner. The second appeal lies at the option of the appellant, to the Commissioner or the Tribunal. The Tribunal, it will be noticed, exercises appellate jurisdiction by way of second appeal in respect of an assessment order made by the Sales Tax Officer. It also exercises, by way of first appeal, appellate jurisdiction over an assessment order made by the Commissioner. It is at the apex of the appellate hierarchy, the Sales Tax Officer, the Assistant Commissioner and the Commissioner all of them being, therefore, subordinate to it.S.57 of the Act provides for revisional jurisdiction:5. It will be noticed that while the Commissioner exercises revisional jurisdiction over an order passed by an y officer or person subordinate to him, the Tribunal is the revisional authority over an order of the Commissioner (not being an order passed by the Commissioner disposing of a second appeal). The Act thus constitutes the Tribunal an appellate as well as a revisional authority over the Commissioner. Plainly, therefore, inl matters the Commissioner is subordinate to the Tribunal.