State
of Tamil Nadu Vs. TVL. Jeevanlal Ltd. [1996]
INSC 949 (13 August
1996)
Majmudar
S.B. (J) Majmudar S.B. (J) Bharucha S.P. (J) S.B. Majmudar, J.
CITATION:
JT 1996 (7) 272 1996 SCALE (5)809
ACT:
HEAD NOTE:
WITH
[Civil Appeal Nos.3442 (NT)/83: 4550(NT)/84: Special Leave Petition (C)
Nos.7928/80 and 7712/80].
The
aforesaid three civil appeals by special leave to appeal under Article 136 of
the Constitution of India filed by the common appellant State of Tamil Nadu and
the two special leave petitions also moved by the same State of Tamil Nadu and
which are ordered to be tagged with the aforesaid civil appeals, raise a common
question for our consideration. The common appellant, State of Tamil Nadu, in
all these proceedings, seeks to challenge identical decisions rendered by
different Division Bench of the Madras High Court impugned in Civil Appeal No.
2295 of 1980 and Civil Appeal No.4550 of 1984 as well as in the companion
special leave petitions; while in Civil Appeal No. 3442 of 1983 the State of
Tamil Nadu seeks to challenge the decision of full Bench of the same High Court
concurring with the decisions of the Division Benches of the High Court taking
the same view. The short question which is posed for our consideration by the
appellant-State of Tamil Revenue functioning under the provisions of the Tamil Nadu
General Sales Tax Act, 1959 (hereinafter referred to as 'the Act') can revise
in exercise of its suo motu revisional jurisdiction that part of the order of
the Appellate Assistant Commissioner which is, against the Revenue when the
other part of this very order of the Appellate Assistant Commissioner against
the assessee is made subject-matter of an appeal before the Sales Tax Appellate
Tribunal functioning under the same Act. In the impugned Judgments the High
Court has taken the being aggrieved be that part of the order of the Appellate
Assistant Commissioner which is against him, the entire order comes within the
purview of the Appellate Tribunal and under these circumstances the Board of
Revenue will have no jurisdiction to exercise suo motu revisional powers
against the remaining part of the order of the Appellate Assistant,
Commissioner which is in favour of the assessee and against the Revenue. The
appellant State disputes the aforesaid conclusion reached by the High Court on
the jurisdiction of the Board of Revenue Learned counsel appearing for the
appellant contended before us that the High Court was in error when it took the
view that once the order of the Appellate Assistant Commissioner is challenged
in appeal before the Appellate Tribunal by the assessee who is aggrieved by a
part of the order against him the other part of the order which is in favour of
the assessee and which is obviously not the subject-matter of the appeal before
the Appellate Tribunal could not be examined by the Board of Revenue in
exercise of its suo motu revisional powers with a view to seeing whether the
order against the Revenue and in favour of the assessee was correct in law or
not. Learned counsel for the appellant submitted that the assessee had no
occasion to challenge that part of the order of the Appellate Assistant
Commissioner which was in his favour and, therefore, the Tribunal was not
seized of any inquiry regarding the validity of that part of the order. That
part of the order, therefore, was outside the ken of the scrutiny of the
Tribunal and consequently it could not be said that it was subject-matter of
appeal before the Tribunal. Consequently the Board and ample power under
Section 34 of the Act to examine the correctness of that part of the order.
Learned
counsel for the respondent appearing in one of these matters, on the other
hand, submitted that the High Court was justified in construing the sweep of
Sections 34 and 36 of the Act which dealt with special powers of the Board of
Revenue on the one hand and powers of the Appellate Tribunal on the other and
in taking the view that once appeal is taken by the assessee before the
Tribunal challenging that part of the order of the Appellate Assistant Commissioner
which was against him the Tribunal would be seized of the entire matter and not
in piecemeal and as the Tribunal has ample jurisdiction in appropriate cases
even to enhance the assessment, of course, at the instance of the Revenue and
after hearing the assessee appellant before it, the field of controversy would
be occupied by the Appellate Tribunal's jurisdiction and consequently the Board
of Revenue would loss its jurisdiction to trench upon that field of controversy
between the parties. It was, therefore, contended that the High Court was right
in taking the view that the impugned orders of the Board of Revenue under
Section 34 of the Act in these proceedings were incompetent and accordingly
they were rightly set aside by the High Court.
Having
given our anxious consideration to these rival contentions we find that on the
scheme of the relevant provisions of the of to which we will presently refer no
exception can be taken to the view which appealed to different Division Benches
of the High Court as well as to the Full Bench of the High Court and these
appeals and special leave petitions are, therefore, liable to fail. The
controversy before us is required to be resolved in the light of the statutory
settings projected by two relevant Sections of the Act. They are Section 34
dealing with special powers of the Board of Revenue and Section 36 dealing with
powers of the Appellate Tribunal. It will be profitable to extract them in extenso
:
"34.
Special powers of Board of Revenue.-
(1)
The Board of Revenue may, of its own motion, call for and examine an order
passed or proceeding recorded by the appropriate authority under section 4-A,
section 12, section 14, section 15 or sub-section (1) or (2) of section 16 or
an order passed by the Appellate Assistant Commissioner under sub-section.
(3) of
section 31 or by the Deputy Commissioner under Sub-section (1) of section 32
and may make such inquiry or cause such inquiry to be made and subject to the
provisions of this Act may pass such order thereon as it thinks fit.
(2)
The Board of Revenue shall not pass any order under sub-section (1) if- (a) the
time for appeal against that order has not expired; or (b) the order has been
made the subject of an appeal to the Appellate Tribunal or of a revision in the
High Court; or (c) more than five years have expired after the passing of the
order.
36.
Appeal to the Appellate Tribunal.-
(1)
Any person objecting to an order passed by the Appellate Assistant Commissioner
under sub-section (3) of section 31, or an order passed by the Deputy
commissioner under sub- section (1) of section 32 may, within a period of sixty
days from the date on which the order was served on him in the manner
prescribed, appeal against such order to the Appellate Tribunal :
Provided
that the Appellate Tribunal may admit an appeal presented after the expiration
of the said period if it is satisfied that the appellant had sufficient cause
for not presenting the appeal within the said period.
(2)
The appeal shall be in the prescribed form and shall be verified in the
prescribed manner and shall be accompanied by such fee not exceeding one
hundred rupees as may be prescribed.
(3) In
disposing of an appeal, the Appellate Tribunal may, after giving the appellant
a reasonable opportunity of being heard.
(a) confirm,
reduce, enhance or annual the assessment of penalty or both:
(ii)
set aside the assessment and direct the assessing authority to make a fresh
assessment after such further inquiry as may be directed: of (iii) pass such
orders as it may think fit: or (b) in the case of any other order, confirm,
cancel or vary such order;
Provided
that at the hearing of any appeal against an order of the Appellate Assistant
Commissioner or the Deputy Commissioner, the assessing authority shall have the
right to be heard either in person or by a representative;
Provided
further that, if the appeal involves a question of law on which the Appellate
Tribunal has previously given its decision in another appeal and either a
revision petition in the High Court against such decision of an appeal in the
Supreme Court against the order of the High Court thereon is pending, the
Appellate Tribunal may defer the hearing of the appeal before it, till such
revision petition in the High Court or the appeal in the Supreme Court is disposed
of." A mere look at Section 34 sub-section (2)(a) and (b) shows that the
Board of Revenue can exercise its suo motu powers to call for and examine the
orders passed by the lower authorities provided such orders are not made appeal
before the Tribunal or revision before the High Court. In fact Section 34 (2)
(a) imposes a temporary bar on the powers of the Board to call for the record
of any appellate order passed by the authorities below if time for preferring
an appeal before the Tribunal has not expired. This is a limited bar. During
the non-expiry of that time to file appeal before the Tribunal the Board cannot
touch such an order. Section 34 (2((b), on the other hand, imposes a permanent
bar on the power of the Board to exercise suo motu revisional powers against
those orders of the Appellate Assistant Commissioner or Deputy Commissioner
which get appealed against before the Tribunal or are carried in revision
before the High Court, obviously within the period available for filing such
appeals or revisions or even after such period has expired once the delay in
filing such proceedings before the Tribunal or High Court is condoned and the
appeal before the Tribunal or revision before the High Court becomes live and
is entertained for decision on merits. In short the Board of Revenue will have
no jurisdiction to touch any order of subordinate authority passed under
Section 31(3) or 32(3) in exercise of its revisional jurisdiction under Section
34(2)(a) for the temporary period till the time for appeal against such orders
is not over and even its jurisdiction will be permanently barred under Section
34(2) (b) once appeal or revision against such order of the subordinate
authority is carried for scrutiny in appeal before the Tribunal or in revision
before the High Court. It is pertinent to note that Section 34(2)(a) does not
refer to any part of the order which only might be against the assessee. It
refers to the order as a whole. Now the order of the subordinate authority,
namely, the Appellate Assistant Commissioner can be wholly in favour of the assessee
or can be wholly in favour of the Revenue or can be partly in favour of the assessee
and can be partly in favour of the Revenue. In the first case there will be no
occasion for such an order to be carried in appeal or revision either before
the Tribunal or before the High Court by the assessee. In such a case the Board
of Revenue will have ample jurisdiction to exercise its suo motu revisional
powers in scrutinizing the correctness of the concerned orders of the
subordinate authorities which are passed against the Revenues and the bar of
Section 34(2)(b) would not get attracted. But in latter two cases such order of
the Appellate Assistant Commissioner can certainly be made a subject- matter of
grievance by the assessee before the Appellate Tribunal or even before the High
Court in revision. So far as second type of order is concerned, as it is wholly
against the assessee, there will be no occasion for the Board to exercise its suo
motu revisional powers against such an order, especially when the assessee
prefers to challenge it in appeal before the Tribunal. But a possibility of
Board and Tribunal being simultaneously approached by the Revenue and the assessee
would arise of at all the order of the appellate authority is partly in favour
of and partly against the assessee. However, even in such a case the fact that
such order is partly against the assessee and partly in his favour will make no
difference as the a whole would be available for scrutiny before the Tribunal
or before the High Court in revision. Consequently the bar of jurisdiction
under Section 34 (2)(b) would operate against the Board of Revenue qua such an
order.
When
we turn to Section 36 the same conclusion flows from the various provisions of
the said Section. It was vehemently submitted by learned counsel for the
appellant that in an appeal filed by the assessee against that part of the
order of the Appellate Assistant Commissioner which is against him, the
jurisdiction of the Appellate Tribunal will be invoked for scrutinizing only
that part of the order of the order of the Appellate Assistant Commissioner
which is against the assessee. Under these circumstances the Appellate Tribunal
will hare no occasion to look into the other part of the order of the Appellate
Assistant Commissioner which in favour of the assessee. In short it would not
be on the anvil of scrutiny of the Appellate Tribunal. When such part of the
order of Appellate Assistant Commissioner is out of focus before the Tribunal it
could not be said that part of the order is made subject matter of appeal to
the Tribunal or a revision to the High Court as contemplated by Section 34(2)(b).
It is not possible to agree with this contention. Section 36 sub-section (3)(a)(i)
clearly indicates that in an appeal taken out by the assessee before the
Tribunal, the Tribunal can even enhance the assessment or penalty or both. It
is obvious that the assessee who is an appellant would never urge for
enhancement of assessment or penalty. His appeal would be confined to the
prayer of getting the assessment reduced or annulled. In the process the
Tribunal may even confirm such assessment by dismissing the appeal wholly.
Consequently the contingency envisaged by section 26 sub-section (3)(a)(i)
empowering the Appellate Tribunal to enhance the assessment or penalty in
appeal by the assessee would obviously contemplate a situation where the
Revenue being respondent in such appeal would seek such enhancement by filing
cross objections. Of course before deciding such a grievance put forward by the
Revenue seeking such enhancement the appellant has to be given reasonable
opportunity of being hard as contemplated by sub section (3) of Section 36
itself. But subject to that procedural safeguard there is no prohibition
against the Appellate Tribunal in considering the question of enhancement of
assessment or penalty in an appeal preferred by the assessee against that part
of the order of the Appellate Assistant Commissioner which is against him, if
the Revenue as respondent in appeal seek to get the other part of the order
which is against it also reconsidered by the Tribunal in exercise of its
jurisdiction under Section 36(3)(a)(i). Consequently it must be held that once
the order of the Appellate Assistant Commissioner is brought on the anvil of
scrutiny of the Appellate Tribunal by the dissatisfied assessee by filing
appeal against the adverse part of that order, the entire order becomes open
for scrutiny of the Appellate Tribunal and the entire controversy qua that
order vis-a-vis both the contesting parties, namely, the assessee on the one
hand and the Revenue on the other comes under the focus of scrutiny of the
Tribunal. Once the entire appellate order being partly in favour and partly
against the assessee becomes subject to the jurisdiction of the Appellate
Tribunal, the bar of Section 34(2)(b) against the revisional powers of the
Board of Revenue would operate in its full swing and such an order of the
Appellate Assistant Commissioner which is pending scrutiny before the Appellate
Tribunal will go out of the ken of revisional jurisdiction conferred on the
Board of Revenue under Section 34. We entirely concur with the view of the High
Court that piecemeal scrutiny of the order of the Appellate Assistant Commissioner
partly by the Appellate Tribunal at the instance of the dissatisfied assessee
and partly by the Board of Revenue in exercise of its suo motu revisional
powers against other part of the same order in favour of the assessee is
contra-indicated by the aforesaid relevant provisions of the Act. It must,
therefore, be held that once the order of Appellate Assistant Commissioner is
made subject matter of appeal before the Appellate Tribunal by the assessee who
is aggrieved by only a part of such order the Board of Revenue cannot exercise
it revisional jurisdiction against the remaining part of that very order of the
Appellate Assistant Commissioner which is in favour of the assessee and against
the Revenue. In view of the conclusion reached by us as aforesaid the result is
obvious.
These
appeals and special leave petitions fail and are dismissed. In the facts and
circumstances of the cases there will be no order as to costs.
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