13 August 1996
Supreme Court


Bench: MAJMUDAR S.B. (J)
Case number: Appeal Civil 2295 of 1980






DATE OF JUDGMENT:       13/08/1996


CITATION:  JT 1996 (7)   272        1996 SCALE  (5)809



JUDGMENT:                           W I T H [Civil Appeal  Nos.3442 (NT)/83:  4550(NT)/84: Special Leave Petition (C) Nos.7928/80 and 7712/80].                       J U D G M E N T S.B. Majmudar, J.      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.