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PETITIONER: GURBAKSH SINGH

       Vs.

RESPONDENT: UNION OF INDIA & OTHERS

DATE OF JUDGMENT27/01/1976

BENCH: UNTWALIA, N.L. BENCH: UNTWALIA, N.L. KRISHNAIYER, V.R. GUPTA, A.C.

CITATION:  1976 AIR 1115            1976 SCR  (3) 247  1976 SCC  (2) 181  CITATOR INFO :  F          1977 SC 540  (14)

ACT:      Bengal Finance (Sales Tax) Act, 1941 as extended to the Union Territory of Delhi-Sections 11, 11A and 20 Scope of.

HEADNOTE:      Section 11  of the Bengal Finance (Sales Tax) Act, 1941 as extended  to the  Union Territory  of Delhi  provides for assessment of  tax. Section  11A provides  for assessment or reassessment in case of escaped or under-assessment. Section 20 provides for appeals and revision.      In 1959  the assessee  was assessed  by the  Sales  Tax officer for  the  assessment  year  1955-56.  The  appellate authority remanded  the matter  holding that  the assessment for the  first two quarters was invalid having been made out of time.  The Sales  Tax officer  passed a  fresh assessment order in  respect of  the third  and fourth  quarter of  the assessment year.  In July,  1960, the  Commissioner under s. 20(3) revised  the appellate  order holding  that no part of the assessment  was barred  by limitation and directed fresh assessment.  Appellant’s  challenge  to  the  order  of  tho Commissioner and  the  assessment  order  by  the  assessing authority was unsuccessful in the High Court.      On appeal to this Court, it was contended: (1) that the revisional authority  must exercise  his powers  within  the period of  four years  prescribed under s. 11(2) (a) whether the order was a final order of assessment by him or a remand order for  fresh assessment by the assessing authority; (ii) while exercising  the power  of  revision  the  Commissioner cannot ignore  the  period  of  limitation  of  three  years provided in  s. 11A;  (iii) even  when the  Commissioner was exercising the revisional power under s. 20(3), his power is subject to  the periods  of limitation  provided because. in ss.  11   11A  and   20,  the  authority  mentioned  is  the Commissioner  and  (iv)  the  Revisional  authority  in  the exercise of  his power  suo moto  must exercise  it within a reasonable time and not after a long lapse of lime.      Dismissing the appeals, ^      HELD: The  Legislature  has  not  provided  any  period

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within which  an order  is to  be made  by an  appellant  or revisional authority or a court. [250 E] F      (1)(a) If  the appeal is filed in time for the exercise of the  appellate  power  either  to  assess  or  to  direct assessment under  s. 20(2),  there is no limitation of time. The limits  of the  revisional power in s. 20(3) are akin to the power of the appellate authority in s. 20(2). [250 F-H]      (b) No  limitation has  been provided  for the suo moto exercise of  the  re  visional  power  similar  to  the  one provided   in rule  66(2) of  the Delhi  Sales Tax Rules for filing an application in revision. [251 D]      (c) It will be wholly unreasonable almost impossible-to say that all orders in appeal, revision or reference must be passed within  four years  of  the  end  of  the  period  of assessment and  that otherwise  they would  be  barred.  The contention that  there would be anomaly because of s. 11(2a) in that  if the  appellate or  revisional authority  made  a remand order,  the assessing  authority could  pass a  fresh assessment order  within four  years  of  the  remand  order whereas if  the appellate  or  revisional  authority  itself passed an order of assessment, it should be done within four years. and  that such  an anomaly would be avoided if it was held that  the revising  authority must  exercise its powers within four  years in  all cases  is not  warranted  by  the language of  the provision.  Further, it  does not solve the anomaly because even if the order 248 of remand is made just on the last day of the period of four years it  would be  competent to  the assessing authority to make a  fresh assessment  within the  further period of four years. [252 D; B-C]      (d) The State of Orissa v. Debki Debi [15 STC, 153 (SC] is distinguishable  because the period of limitation in that case applied  to assessment made i exercise of the appellate or revisional  power also  whereas in the present case there is no  period of limitation for the exercise of appellate or revisional power                                                      [252 F]      ( 2)  While correcting  a mistake  in exercise  of  his revisional power  the Commissioner  was merely setting right the illegality  in the  appellate order,  and was  not doing anything- which  the Sales  Tax Officer  was empowered to do under s.  11A  and  so  was  not  bound  by  the  period  of limitation mentioned in that section. [253]      The State  of  Kerala  v.  K.  M.  Cheria  Abdulla  and Company, 16 Sales Tax Cases, 875, referred to.      (3) The  order of  assessment was that of the Sales Tax officer action  as an officer to assist the Commissioner for the purpose of assessment. The term "Commissioner" is merely descriptive and  includes  the  various  officers  appointed under s.  3 to assist the Commissioner. There is a hierarchy of officers  and all cannot be treated as "Commissioner" for the purpose of different powers exercised by them. [253 G-Hl      (4) Assuming  that the  revisional power  could not  be exercised suo  moto after  a long and unreasonable delay, in the  instant   case  there  was  no  undue  delay.  What  is reasonable time  will depend  upon the  facts of  each case. [254 A-B]

JUDGMENT:      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 667-668 of 1975.      From the  Judgment and order dated the 10-5-1973 of the

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Delhi High  Court in Letter Patent Appeal Nos. 65 and 103 of 1969.      F. S. Nariman. Randhir Chawla. G. C. Sharma. Mrs. A; K. Verma, Talat  Ansari. Ravinder  Narain, and O. C. Mathur for the Appellant.      G. L. Sanghi, R. N. Sachthey and Girish Chandra for the Respondents.      The Judgment of the Court was delivered by      UNTWALIA,  J.  In  these  appeals  by  certificate  the question for  determination is  whether the  exercise of the power of revision under sub-section (3) of section 20 of the Bengal Finance  (Sales Tax)  Act, 1941  as extended  to  the Union  Territory  of  Delhi-hereinafter  called  the  Act-is subject to  the period of limitation provided in sub-section (2a) of  section 11  or section  11A of  the said  Act.  The requisite 3  facts lie  in a narrow compass and may usefully be stated at the outset.      The appellant  who was  carrying  on  the  business  of execution of  building contracts  was assessed  to sales tax under the  Act by the Sales Tax officer for the year 1955-56 by an  order of  assessment made  on November  23, 1959. The appellants appeal before the Assistant Commissioner of Sales Tax succeeded  in part.  He held that the assessment for the first two  quarters of  the year  1955-56 was invalid having been made  out of time. The case was, therefore, remanded to the Sales  Tax officer  for a fresh assessment in respect of the 3rd and 4th 249 quarters of  the year. The Sales Tax officer in pursuance of the A  appellate order  of remand  dated February  11,  1960 passed a  fresh .  assessment order  on March  21, 1960. The Commissioner, however,  after notice  dated July 21, 1960 to the appellant,  by his order dated July 29, 1960 revised the appellate order of the Assistant Commissioner in exercise of his power  under section  20(3) of  the Act. He held that no part of  the assessment  for the year 1955-56 was barred and directed a  fresh assessment  to be made. A fresh assessment for all  the four quarters was accordingly made by the Sales Tax officer  on September  24, 1960. The appellant filed two writ petitions in the Delhi High Court challenging the order made  in   revision  by   the  Commissioner  and  the  fresh assessment  order   passed  by  the  Sales  Tax  officer  in pursuance thereof.  A learned single Judge of the High Court allowed the  writ applications  on April 2, 1969 and quashed the impugned  orders. The  respondents took up the matter in letters patent  appeal and  succeeded before  a Bench of the High Court. Hence these appeals by the assessees      Mr.  F.   S.  Nariman   appearing  for   the  appellant contended:      (1)  That the  appellate and the revisional authorities           must exercise  their appellate or revisional power           within the  period  prescribed  under  sub-section           (2a) of section 11 of the Act. If their orders are           final orders  of assessment then directly they are           exercising their  powers under sub-sections (1) or           (2) of  section 11.  In case  their orders  are of           remand for  fresh  assessment  to  the  assessing‘           authority then  also they  must pass  their orders           within the  periods aforesaid  although under  the           proviso added  in 1959 the assessing authority may           have a  further period  of 4  years or 6 years, as           the case may be, for passing a fresh assessment.      (2)  That the  Commissioner while  exercising the power           in revision  cannot overstep and ignore the period           of limitation  of 3  years provided in section 11A

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         of the Art      (3)  That the  authority mentioned  in sections 11, 11A           and 20(3) being the Commissioner, the Commissioner           is subject to the period of limitation provided in           sections 11  and  11A  even  when  exercising  the           revisional power under section 20(3).      (4)  That in  any view  of the  matter  the  revisional           authority must  exercise the Dower in a reasonable           manner and-  within a  reasonable time.  It cannot           exercise the  power of revision, suo moto, after a           long lapse of time at its sweet will and pleasure.      Under section 3 of the Act, a hierarchy of officers has been  constituted  by  the  Chief  Commissioner-namely,  the Commissioner of  Sales Tax, Sales Tax officers and others to assist him.  Section 11  of the Act deals with assessment of tax. The Sales Tax officer 250 exercising  the   powers  as   an  officer   to  assist  the Commissioner under  section 11(1)  of the Act can proceed to assess the  amount of  the tax  due from a registered dealer within 18  months of  the expiry  of a  particular period. A dealer who  has been liable to pay tax under the Act but has failed to  get himself  registered can  be assessed  to  tax under sub-section (2). Then sub-section 2(a) says:           "No assessment under sub-section (1) shall-be made      after the  expiry of four years and no assessment under      subsection (2)  shall be  made after the expiry of six-      years from  the end  of the year in respect of which or      part of which the assessment is made :"      A proviso  was added to sub-section (2a) w.e.f. October 1, 1959 By the Amending Act of 1958 and it reads as follows:           "Provided that  where such  assessment is  made in      consequence of  or to  give effect  to any  order of an      appellate or  revisional authority  or of  a court, the      period of  four years or six years, as the case may be,      shall be reckoned from the date of such order."      lt is  to be  noticed that  a period  of limitation has been provided  in section  11(2a) and  no assessment  either under sub-section  (1) or  sub-section (2) can be made after the expiry  of the  specified  period.  But  where  such  an assessment is made by the assessing authority in consequence of or  to give  effect to  any  order  of  an  appellate  or revisional authority  or  any  order  of  a  court  made  in reference, writ  or in  any other  proceeding then under the proviso the  period of limitation is to be reckoned from the date of  such order.  The Legislature  has not  provided any period. within  which an order is to be made by an appellate or revisional  authority of a court. Obviously it would have been unpractical and unworkable to do so.      Section 20 deals with an appeal, revision or review. If the appeal  is filed  in time  the  appellate  authority  in disposing of any appeal filed Under sub-section (1) may-      (a)  confirm, reduce,  enhance or annul the assessment,           or;      (b)  set aside  the assessment and direct the assessing           r authority  to make a fresh assessment after such           further inquiry as may be directed." For exercise  of the  appellate power  in any of the manners mentioned  above,   there  is  no  limitation  of  time.  If assessment can  be reduced  in appeal  at any time it can be enhanced also  without the fetter of time. If the assessment is  set  aside  and  the  case  remanded  to  the  assessing authority to  make a  fresh assessment  then the  authority, because of the proviso to section 11(2a), is obliged to make the fresh  assessment within  four years  of  the  appellate

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order. Sub-section (3) of section 20 reads thus:           "Subject to  such rules  as may  be prescribed and      for reasons to be recorded in writing, the Commissioner      upon 251      application  or  of  his  own  motion  may  revise  any      assessment A made or order passed under this Act or the      rules there under by a person appointed under section 3      to assist  him, and  subject as  aforesaid,  the  Chief      Commissioner may,  in like  manner,  revise  any  order      passed by the Commissioner." The Commissioner  can revise  any assessment  made or  order passed under  the Act  including the order of the appellate- authority. The  limits  of  the  revisional  power  are  not circumscribed in  sub-section (3), ut it goes without saying that they  will be  akin  to  the  power  of  the  appellate authority as  mentioned in  sub-section (2).  The revisional authority obviously,  as pointed  out by  this Court  in the case of  The State  of Kerala  v. K.  M. Cheria  Abdulla and Company(1)  should  not  trench  upon  the  power  expressly reserved by  the Act  or the  rules to other authorities and cannot ignore  the limits  inherent  in  exercise  of  those powers. Section  11A is  one such  power  which  deals  with assessment and  re-assessment of  tax in  case of an escaped assessment or  under-assessment. Exercise  of that  power is subject to  the limitations  provided therein. In Rule 66(2) of the Delhi Sales Tax Rules, 1951 a period of limitation of 60 days  has been  provided for the filing of an application in revision which can be extended under the proviso appended to that  rule on  sufficient cause  being shown. But no such limitation has  been provided  for the suo moto, exercise of the revisional power.      Mr. Nariman  very strongly  relied  upon  the  majority decision of this Court in The State of Orissa v. Debaki Debi and others  (2) and  Submitted that  the power  of  revision exercised by  the Commissioners  ill this  case  beyond  the period of  four years  prescribed  in  sub-section  (2a)  of section 11  was illegal and ultra vires. A close scrutiny of the argument will result in its rejection.      In the Orissa case all the orders made by the Collector in exercise of his power of revision under section 23 of the Orissa Sales  Tax Act  were passed later than 36 months from the expiry  of the period in respect of which the assessment was  made.   The  High   Court’s  view  that  they  were  in contravention  of   section  12(7)  which  was  a  power  of assessment or  re-assessment in case of an escaped or under- assessment was not upheld. But it was found that the proviso to section  12(6) was  in general  terms. It  was not only a proviso providing for the period of limitation for the first assessment but  it governed  the assessment made in exercise of the  appellate or  the revisional  power. The  main ratio decidendi of  the case  is that the proviso in section 12(6) is in reality an independent legislative provision unrelated to section  12(6). Therefore, its operation was not confined to assessment under section 12 but applied to any assessment made under  the Act.  In the  alternative it was also opined that assessment made in exercise of the revisional power was an assessment  made under section 12. It was so said because if the  appellate or  the revisional  authority  would  have directed the  assessing authority to make a fresh assessment it could do so only under section 12 and then it      (1) 16 Sales Tax Cases, 875.    (2) 15 Sales Tax Cases,                                                         153. 252 would be  subject to the period for limitation of 36 months.

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It was  pointed out  in the  majority decision of this Court that there would be an anomalous situation. If the appellate authority set aside the assessment and remanded it for fresh orders, no  fresh assessment  could be  made because  of the period of  limitation.  But  if  instead  of  doing  so  the appellate authority affected the same assessment there would be no  bar of limitation. In the present case in view of the proviso added  to section  11(2a) the  anomaly flows  in the reverse  direction.  If  the  appellate  or  the  revisional authority made  a remand order the assessing authority could pass a  fresh order  of assessment  within 4  years of  such order. But  if  the  higher  authority  itself  revised  the assessment then it would be barred by the rule of limitation provided in  section 11  (2a) . To avoid such an anomaly Mr. Nariman suggested  a construction  to be  put which  neither solves the  anomaly nor  is warranted by the language of the provisions of  the Act.  Counsel submitted that in all cases the powers  must be.  exercised within 4 years of the period in respect  of which  an assessment  was  being  made  on  a registered dealer.  It will  be  wholly  unreasonable-almost impossible-to say  that all  orders in  appeal, revision  or reference must be passed within four years of the end of the period of assessment, otherwise they will be barred. It does not solve the anomaly either. Even if the order of  remand  is made, say, just on the last day of the period of four years,  it will be competent to the assessing authority to make a fresh assessment within the further period of four years. The  ratio of  the case in Debaki Debi’s (supra) must be confined  within its  four corners and cannot be extended to the facts of the instant case.      In The  Swastik oil  Mills Ltd. v. H. B. Munshi, Deputy Commissioner Of  Sales Tax  Bombay (1)  the decision of this Court in  Debaki Debi’s case was distinguished on the ground that the  provision of  limitation of 36 months in substance was not a real proviso to the section in which it was placed but was  in fact  a period  of limitation  for all orders of assessment made under any other provision of the Orissa Act, while in the Bombay Acts there was no such general provision prescribing a period of limitation for making an assessment. Reference to  the period of limitation in section 11A of the Bombay Act  which is  a power  of making  assessment or  re- assessment  in   case  of   an  escaped   or  under-assessed assessments was also rejected.      our attention  was also  drawn to  the  decision  of  a single Judge  of the  Punjab High Court, Delhi Bench, in Sir Sobha Singh  & Company  v. Commissioner  of Sales Tax, Delhi (2) wherein  following the  decision of this Court in Debaki Debi’s case  it was held that an order of review made by the Commissioner under  section 20(4) of the Act in effect is an order of assessment under section 11(1) and cannot be made r o after  the expiry  of the  period prescribed under section 11(2a). The learned Judge in the course of his judgment made it clear  that he was concerned with the construction of the Act as  it stood before 1959 and was not obliged to consider the effect  of the  proviso added to section 11(2a) in 1959. It is  not necessary  to decide in this case whether without the aid of the proviso aforesaid the decision of the      (1) 21 Sales Tax Cases, 383.       (2) 18 S. T. C. 416. 253 learned single  Judge was  correct or not but surely in face of the proviso it cannot hold good.      In Commissioner  of Commercial  Taxes, Bihar,  Patna v. Sheodutta  Prasad   Chandeshwar   Singh   (1)   the   review proceedings initiated by the assessing authority was held to be barred  under the  proviso to  section 13(6) of the Bihar

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Sales Tax  Act, 1947.  But distinguishing  the said decision another Bench  of the  Patna High Court held in Commissioner of Commercial Taxes, Bihar v. Ashoka Marketing Ltd: (2) that the order  of review  passed by  the Deputy Commissioner was not bared  by time.  The decision of the Patna High Court in Commissioner of  Commercial Taxes, Bihar, Patna v. Sheodutta Prasad Chandeshwar  Singh (supra)  on  identical  facts  was followed in Commissioner of Commercial Taxes, Bihar v. Shiva Pujan Prasad  Bhagat (3). But the principle decided in those cases cannot  help the appellant. It may well be that if the assessing authority  itself exercises the power of review it cannot  circumscribe  the  bar  of  limitation  provided  in section 11  (2a) .  But it  will be unjust, unreasonable and impracticable to  say that  the said  bar of limitation must also continue  to run  at all  stages  of  the  proceedings, namely, the  appellate, revisional,  reference, writ  or any other stage.      It was  pointed out by this Court in Swastik oil Mills’ case (supra)  that the  Deputy Commissioner  when seeking to exercise his  revisional powers was not encroaching upon the powers reserved  to other  authorities. The  powers were not exercised for  the purpose  of assessing  or re-assessing an escaped turn  over. The  revisional powers were sought to be exercised to  correct what appeared to be an incorrect order passed by  an Assistant  Commissioner and for such a purpose proceedings could not possibly have been taken under section 11A. In  the instant case also it could not be disputed that the view  taken by  the Assistant Commissioner in appeal was obviously wrong.  The  Commissioner  while  correcting  that mistake in  exercise of  his revisional  power was not doing anything which  the Sales  Tax officer  was empowered  to do under  section   11A.  He   was  merely  setting  right  the illegality in the appellate order.      The third point urged by the appellant is too obviously wrong to  merit any  detailed discussion.  It  was  not  the Commissioner who  had  passed  the  assessment  order  under section 11.  That order  was of the Sales Tax officer acting as an  officer to assist the Commissioner for the purpose of assessment. The  assessment order was interfered with by the appellate authority,  the  Assistant  Commissioner  and  the Commissioner  was   revising  the  order  of  the  Assistant Commissioner. All cannot be treated as Commissioners for the purpose of  the different  powers  exercised  by  the  three different authorities. The use of the term "Commissioner" in the sections is merely for the purpose of describing and, at any rate,  including the  officer assisting the Commissioner as Commissioner.      (1) 25 S.T.C. 114.                    (2) 33 S.T.C. 24,                     (3) ,33 S.T.C. 466. 254      Apropos the  fourth and  the  last  submission  of  the appellant, suffice  it to  say that  even assuming  that the revisional power  cannot be  exercised  suo  moto  after  an unduly long  delay, on  the facts  of this  case it is plain that it  was not so done. Within a few months of the passing of the  appellate order  by the  Assistant Commissioner, the Commissioner proceeded to revise and revised the said order. There was  no  undue  or  unreasonable  delay  made  by  the Commissioner. It may be stated here that an appeal has to be filed by  an assessee within the prescribed time and so also a time limit has been prescribed for the assessee to move in revision. The  appellate or  the  revisional  powers  in  an appeal or  revision filed by an assessee can be exercised in due course. No time limit has been prescribed for it. It may well be  that for  an exercise  of the  suo  moto  power  of

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revision also,  the revisional authority has to initiate the proceeding within  a reasonable time. Any unreasonable delay in exercise  may affect  its validity.  What is a reasonable time, however, will depend upon the facts of each case.      For the  reasons stated  above the appeals fail and are dismissed with costs. One set of hearing fee. P.B.R.                                    Appeals dismissed. 255