http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

PETITIONER: BOARD OF REVENUE, MADRAS

       Vs.

RESPONDENT: M/S.  RAJ BROTHERS AGENCIES ETC.

DATE OF JUDGMENT06/02/1973

BENCH: HEGDE, K.S. BENCH: HEGDE, K.S. REDDY, P. JAGANMOHAN KHANNA, HANS RAJ

CITATION:  1973 AIR 2307            1973 SCR  (3) 492  1973 SCC  (4) 216  CITATOR INFO :  RF         1979 SC1725  (40)

ACT: Madras  General Sales Tax Act 1959-S. 34(1)-Meaning  of  the words  "Subject  of an appeal to  the  appellate  Tribunal"- Whether  an  appeal  against  a  time-barred  order  can  be considered as an order which had been made the subject of an appeal.

HEADNOTE: The  respondent  was  assessed  to  Sales  Tax  during   the assessment  years  1960-61 and 1961-62.   Against  the  said orders  of assessment, the respondent went up in  appeal  to the  Appellate  Assistant Commissioner,  who  dismissed  the appeals.   On  a second appeal to the  Sales  Tax  Appellate Tribunal,  these appeals were also dismissed as  being  time barred.  Thereafter, the assessee moved the Board of Revenue under  s. 34(1) of the Madras Sales Tax Act, 1959 to  revise the  assessment  orders.  The Board came to  the  conclusion that  it had no jurisdiction to entertain  those  petitions. On  a writ petition, the High Court held that the Board  has jurisdiction  to  entertain  those  appeals  and  therefore, issued  a  writ of mandamus to the Board, to  entertain  the revision  petitions  and to consider them  on  merits.   The State  against that decision, has come up in  appeal  before this Court. The main question in these appeals was for determination  of the  true scope of s. 34.  Section 34(1) gives power to  the Board  of Revenue suo moto to call for and examine an  order passed  by  the appropriate authorities under  some  of  the provisions  of  the Act.  Section 34(2)  provides  that  the Board  of Revenue shall not pass any order under  subsection (1),  if  the  time for appeal against that  order  has  not expired  or that the order has been made the subject  of  an appeal  to the Appellate Tribunal, or of a  revision  before the High Court, or that more than 4 years have expired after the passing of the order. The question for consideration was whether an appeal against an  order  which  was  dismissed  as  time  barred  can   be considered as an order which had been made the subject of an appeal.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

Desmissing the appeal, HELD  :  (i) The scope of s. 34 came  up  for  consideration before  the Madras High Court in Erode Yarn Stores v.  State of  Madras in which it was held by the High Court of  Madras that  before the jurisdiction of the Board to  exercise  its power under s. 34 is taken away, the appeal filed before the Tribunal  must  have been an effective appeal, and  that  an appeal  which was dismissed on the ground of limitation,  is not  an effective appeal.  That decision has stood the  test of time and till now it is good law.  After that decision of the  High  Court,  the Act has  been  subjected  to  several amendments, the Legislature not thought fit to amend s.  34. Therefore, it would not be proper to upset that decision  at this late stage and disturb the settled position in law.  If the State wants to change the law, it is open to it to  move the Legislature for making the necessary amendments.  [495B- E] Erode  Yarn  Stores  v.  State of  Madras,  14  S.T.C.  734, referred to. (ii) The  second  contention  of  the  appellant  that   the assessee  had  no right to invoke the  jurisdiction  of  the Board to exercise its revisional 493 power  has  also no force.  The power is  conferred  on  the Board  to remedy an injustice. It is open to an assessee  or the  revenue to bring to the notice of the Board  any  error made by the subordinate authorities.  It is up to the  Board to consider whether the case is fit case for exercising  its revisional  jurisdiction.   If the Board had gone  into  the case   and  come  to  the  conclusion  that  There  was   no justification  for exercising its jurisdiction under s.  34, then  in  absence of any vitiating circumstances,  the  High Court would not interfere with the discretion of the  Board. [495E-G] (iii)     In the present case, the decision of the Board was vitiated  by  an error apparent on the face of  the  record. The Board had refused to exercise its jurisdiction under  an erroneous view that the assessee’s appeal was dismissed  and therefore,  it was not competent to entertain the  petition. In  the  circumstances,  the High  Court  was  justified  in interfering with that decision. [495G-H] M/s.   Melaram  & Sons v. The Commissioner-  of  Income-tax, Punjab, [1956] S.C.R. 1966, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 492 to 493 of 1970. Appeals  by  certificate from the Judgment and  order  dated December  9,  1968 of the Madras High Court in  W.  Petition Nos. 4628 and 4630 of 1965. A. V. Rangam and A. Subhashini, for the appellant. Respondent did not appear. The Judgment of the Court was delivered by HEGDE,  J.  These  appeals are  by  certificate.   They  are directed  against the Order of the Madras High Court in  two writ petitions in which Mandamus was issued to the Board  of Revenue to consider and decide the revision petitions  filed by  the  assessee--respondent under S. 34(1) of  the  Madras General Sales Tax Act, 1959 (1 of 1959) (hereinafter  called the ’ACT’). The facts of the case lie within a narrow compass.  The res- pondent  assessee  was  assessed to  sales  tax  during  the assessment  years  1960-61 and 1961-62.   Aggrieved  by  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

orders of the assessing authorities, he went up in appeal to the   Appellate  Assistant  Commissioner.    The   Appellate Assistant  Commissioner dismissed his appeals.   Thereafter, he filed second appeal to the Sales Tax Appellate  Tribunal, Madras.   Those appeals were dismissed as having been  time- barred.   After  the  Tribunal  dismissed  the  appeals  the assessee moved the Board of Revenue under S. 34(1) to revise the  assessment  orders.  The Board came to  the  conclusion that  it had no jurisdiction to entertain  those  petitions. The  High Court. in the writ petitions filed held  that  the Board  had  jurisdiction  to  entertain  those  appeals  and consequently  issued  a  writ of mandamus to  the  Board  to entertain  the  revision  petitions  and  consider  them  on merits.  It is against that decision the State of Tamil Nadu has come up in appeal. 494 In  these appeals we are called upon to determine  the  true scope  of s. 34.  S. 34(1) confers on the Board  of  Revenue suo  moto power to call for and examine an order  passed  or proceeding  recorded  by the appropriate  authorities  under some of the provisions of the Act.  S. 34(2) reads thus :               "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 four years have expired  after               the passing of the order." The question for consideration is as to what is the  meaning of the expression "the order has been made the subject of an appeal  ?  Whether  an appeal against  an  order  which  was dismissde as having been barred by time can be considered as an  order  which had been made the subject of an  appeal  ?" This question does present some difficulty.  But in view  of the circumstances, which we shall presently set out, we will not  be  justified  in  examining  the  correctness  of  the conclusion  reached by the High Court.  As far back as  1963 the  scope  of s. 34 came up for  consideration  before  the Madras  High  Court  in  Erode  Yarn  Stores  v.  State   of Madras(1).   Therein  the assessee contended  that  once  an appeal  is filed before a Tribunal, the Board  is  precluded from  invoking its power under s. 34.  The State  of  Madras controverted  that  position.  Therein the  State  contended that  before the jurisdiction of the Board to  exercise  its power  under s. 34 can be held to be taken away, the  appeal filed before the Tribunal must have been an effective appeal and  that  an appeal which was dismissed on  the  ground  of limitation  is not an effective appeal.  The High  Court  of Madras  accepted  that contention and decided  the  case  in favour of the State.  In arriving at the conclusion that the words  "subject of an appeal" mean subject of an  "effective appeal" High Court took into consideration the mischief that would  otherwise  arise namely, all that  an  assessee,  who want,, to stifle the Board’s suo motu power of revision, has to do is to file a time-barred appeal and get it  dismissed. It  was because of that difficulty the High Court  in  Erode Yarn Stores’ case came to the conclusion that expression the order  which  has been the subject of an appeal  as  meaning "subject  of  an  effective appeal".  In  arriving  at  that decision.  the  High Court did take into  consideration  the decision  of this Court in Messrs.  Mela Ram & Sons  v.  The Commissioner (1)  14 S.T.C. 724.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

                           495 of  Income-tax, Punjab (1) wherein this Court ruled that  an appeal  presented  out  of time is an appeal  and  an  order dismissing  it  as time-barred is one passed in  an  appeal. That  was  a decision rendered under the provisions  of  the Indian  Income Tax Act, 1922.  The question for decision  in that case was whether an appeal lay against an order of  the Appellate  Assistant  Commissioner dismissing an  appeal  as time-barred. In the circumstances of the present case it is not necessary for us to consider whether the decision of the High Court in Erode  Yarn  Stores’  case  was  correctly  decided.    That decision  was rendered in respect of a provision in a  State Act.  It was rendered as far back as 1963.  In that case the High  Court  accepted  the contention of  the  State.   That decision  has  stood  the  field till  now.   It  must  have governed  several  cases, decided  thereafter.   After  that decision  was  rendered  " the Act  had  been  subjected  to several amendments.  The Legislature has not thought fit  to amend s. 34.  To put it differently the State had prayed for and  obtained a particular interpretation of s. 34.  It  has accepted that interpretation to be correct ever since  1963. Under these circumstances it is not proper for this Court to upset that decision at this late stage and disturb a settled position in law.  If the State wants to change the law it is open to it to move the Legislature for making the  necessary amendments.   We find it difficult to appreciate  the  State conduct in taking inconsistent positions. Yet another contention was taken on behalf of the State.  It was  contended on behalf of the State that the assessee  had no right to invoke the jurisdiction of the Board to exercise its  revisional  power.   This  contention  too  has  to  be rejected.  The power is conferred on the Board to remedy any injustice.   It  is open to an assessee or  the  Revenue  to bring  to  the  notice of the Board any error  made  by  the subordinate authorities.  It is up to the Board to  consider whether the case is a fit case for exercising its revisional jurisdiction.  If the Board had gone into the case and  come to  the  conclusion  that there  was  no  justification  for exercising its jurisdiction under s. 34, then in the absence of  any  vitiating circumstance recognised by law  the  High Court  would not have interfered with the discretion of  the Board.  But what has happened in this case is that the Board had refused to exercise its jurisdiction under the erroneous view that in view of the dismissal of the assessee’s  appeal it  was  not  competent  to  entertain  the  petition.   The decision  of the Board was vitiated by an error apparent  on the face of the record.  Hence the High Court was  justified in  interfering with that decision.  Whether the case is.  a fit  one for exercising jurisdiction of the Board or not  is entirely a matter for the Board to consider and decide.  Mr. Rangam drew our atten- (1)  [1956] S.C.R. 166. 496 tion to two decisions of the Andhra Pradesh High Court where the High Court held that no appeal lay against the order  of the  Andhra  Pradesh  Revenue Board under s.  20(1)  of  the Andhra Pradesh General Sales Tax Act, 1957, which  provision is  similar  to S. 34 of the Act.  Those decisions  lend  no assistance to the appellants’ case. In  the  result these appeals fail and they  are  dismissed. The respondents are absent and hence there will be no  order as to costs. S.N.C.                         Appeals dismissed. 497

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5