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PETITIONER: SWASTIK OIL MILLS LTD.

       Vs.

RESPONDENT: H.   B. MUNSHI, DEPUTY COMMISSIONER OF SALES TAX,BOMBAY

DATE OF JUDGMENT: 29/11/1967

BENCH: BHARGAVA, VISHISHTHA BENCH: BHARGAVA, VISHISHTHA SHAH, J.C. RAMASWAMI, V.

CITATION:  1968 AIR  843            1968 SCR  (2) 492  CITATOR INFO :  RF         1972 SC  38  (8,11)  D          1976 SC1115  (10,13)  R          1976 SC1545  (17)  R          1976 SC2136  (12,14)

ACT: Revisional   powers-suo  motu   exercise   of-limitations-if further inquiry to gather additional material permissible. Bombay  Sales Tax Act, 5 of 1946, Act 3 of 1953, s. 31,  Act 51 of 1959, ss. 57, 77(1) (a), 77(3)-Scope of.

HEADNOTE: The  appellant was registered as a dealer under the  various Sales  Tax  Acts in force in Bombay from time to  time  i.e. Bombay  Acts  5 of 1946, 3 of 1953 and 51 of 1959.   In  the course of its assessments to sales tax for the periods  from 1st April, 1948 to 31st March, 1950, and from 1st April 1950 to  31st March, 1951, the appellant claimed  exemption  from tax,  inter alia, in respect of certain despatches of  goods from  its  head office in Bombay to its  branches  in  other States.  The Sales Tax Officer rejected these claims but, in appeal,  the  Assistant  Collector  accepted  the  claim  in respect  of  the despatches to various  branches  though  he rejected all other claims for exemption.  He also directed a refund  of  the excess ’tax collected from  the  appellants. While  revision  petitions filed by  the  appellant  against these  orders  were pending, a notice was issued to  him  on January  7, 1963 by the Deputy Commissioner of Sales Tax  in Form  XXIV  under s. 31 of the Bombay Sales Tax  Act,  1953, intimating the appellant that he proposed to revise suo motu the orders passed by the Assistant Collector in so far as he had  allowed  deduction  in  respect  of  the  entire  goods despatched  to the appellants’ branches outside  Maharashtra because,  in so doing, he had overlooked certain  provisions of  law which were specified in the notice.  Tile  appellant filed  a petition under Art. 226 of the Institution  seeking to quash the notice dated 7th January, 1963 but his petition was dismissed by the High Court. In  the appeal to this Court it was contended on  behalf  of the  appellant,  inter  alia (i) that  in  exercise  of  the revisional  powers, the Deputy Commissioner, whether  acting

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under  the  Sales Tax Act of 1946, or of 1953, or  of  1959, could  only  proceed  to take action on  the  basis  of  the material already present on the record and was not  entitled to  act on conjecture or to institute any enquiry so  as  to include additional material nor to judge the correctness  of the  order  sought to be revised; (ii) that  the  notice  in question  was issued on 7th January, 1963, when the  Act  of 1959  had  already come into force and the Act of  1953  had been  repealed;  so that any revisional  jurisdiction  could only  be exercised by the Deputy Commissioner under the  Act of  1959 and not under the Act of 1953-, as the power  under s. 57 of the Act of 1959 could only be exercised within five years  from the date of the order sought to be revised;  the notice  issued by the Deputy Commissioner was  time  barred; and (iii) that the proceedings to be instituted were  barred by  time,  because limitation of a reasonable  time;  within which  the  revisional Powers are to be  exercised  must  be implied in the statute itself.  493 HELD : The proceedings initiated by the Deputy  Commissioner of Sales Tax against the appellant were not incompetent  and the High Court was right in refusing the writ sought by  the appellant. (i)  Whenever a power is conferred on an authority to revise an  order,  it  is  entitled  to  examine  the  correctness, legality  and  propriety  of  the order  and  to  pass  such suitable orders as it may think- fit in the circumstances of the  particular  case.   The proceedings  for  revision,  if started suo motu, must not be based on a mere conjecture and there  should  be some ground for  invoking  the  revisional powers.    Once  these  powers  are  invoked,   the   actual interference must be based on sufficient grounds and, if  it is considered necessary that some additional enquiry  should be  made to arrive at a proper and just decision, there  can be  no bar to the revising authority holding or directing  a further   enquiry   and  thereafter   admitting   additional material. [496 A-C] The  State  of Kerala v. K. M. Cheria Ahdulla  and  Company, [1965] 1 S.C.R. 601, explained and followed. State  of Andhra Pradesh v. T. G. Lakshmnaiah Setty &  Sons, 12 S.T.C. 663; disapproves. In  the  present  case,. the notice  issued  by  the  Deputy Commissioner, on the face of it, disclosed the reasons which led  him to take proceedings for exercising  his  revisional powers  suo  motu, and it could not be said on  those  facts that  he  was  acting merely on conjecture.   There  was  no reason  to think that, when proceeding with his inquiry,  he would  not  keep within the limitations  indicated  by  this Court in K. M. Cheria Abdullas case. (ii) The  effect  of s. 77(1) (a) of the Act of 1959  is  to continue  in  force the Act of 1953 as well as: the  Act  of 1946 to the extent to which they were in force when the  Act of   1959  came  into  force  for  the  purposes  of   levy, assessment, reassessment and collection of sales-tax.   Fur- thermore, by virtue of s. 7(e) of the Bombay General Clauses Act,  1904, which was made applicable to the repeal  of  the Act  of  1953  by  s.  77(3) of  the  1959  Act,  any  legal proceeding in respect of levy, imposition or recovery of tax is to continue and any fresh investigation, legal proceeding or remedy could be instituted as if there had been no repeal by the Act of 1959.  Consequently, the repeal of the Act  of 1953  did  not  in any way affect the power  of  the  Deputy Commissioner to institute proceedings for revision suo  motu against the appellate order of the Assistant Collector which had  been Passed in exercise of his power under the  Act  of

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1946. [499 C-500 B] Although  the  Deputy Commissioner, in seeking  to  exercise revisional  powers should have proceeded under s. 22 of  the Act  of 1946 and not under s. 31 of the 1953 Act, this  fact was  immaterial as the provisions of the two  Sections  were similar. [500 D-E] (iii)     Section 22 of the Act of 1946 and s. 31 of the Act of  1953  do not lay down any period of limitation  for  the exercise  of the power of revision by a Deputy  Commissioner suo  motu  and no such limitation could be read in  the  two Acts. [500 G] The  State  of Orissa v. Debaki Debi and Others,  15  S.T.C. 153.  Commissioner  of Income-tax, Bombay City 1  v.  Narsee Nagsee  &  Co.,  31 I.T.R. 164, Manordas Kalidas  v.  V.  V. Tatke,  11 S.T.C, 87.  Disesar House v. State of  Bombay,  9 S.T.C. 654, distinguished. 494 Maharaj  Kumar Kamal Singh v. C.I.T., Bihar and  Orissa,  35 I.T.R. 1, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 637 of 1967. Appeal from the judgment and order dated January 27, 1966 of the Bombay High Court in Misc.  Application No. 112 of 1963. S.   T. Desai, G. L. Sanghi, B. Datta and O. C. Mathur,  for the appellant. R.   M.  Hazarnavis, S. P. Nayar, and R. H. Dhebar, for  the respondents. The Judgment of the Court was delivered by Bhargava, J. The Swastik Oil Mills Ltd., appellant,  carries on business of manufacturing vegetable oils, soaps and other products and selling them in India as well as exporting them outside  India.   It was registered as a  dealer  under  the various  Sales  Tax Acts in force in Bombay.  The  first  of these Acts was the Bombay Sales Tax Act 5 of 1946, which was replaced  by th -Bombay Sales Tax Act 3 of 1953.  The  third and  the  latest -Act now in force in Bombay is  the  Bombay Sales  Tax Act 51 of 1959. ,’The appellant was  assessed  to sales  tax on its turnover for the periods from  1st  April, 1948  to 31st March, 1950, and from 1st April, 1950 to  31st March, 1951 on the basis of Returns of turnover submitted by it.  In these Returns, the appellant claimed exemption  from tax  in respect of the turnover representing the  despatches or  transfer  of goods from its Head Office Bombay,  to  its various  Depots  or Branches in other States in  India,  and also  exemption  in respect of sales which were  alleged  to have  taken place in the course of inter-State  trade  after 26th  January, 1950.  The Sales Tax Officer in his order  of assessment  dated  2nd  January, 1954  rejected  both  these claims.   The  appellant  went  up  in  appeal  before   the Assistant  Collector  of Sales Tax, who,  in  his  appellate order  dated 29th October, 1956, accepted the claim  of  the appellant in respect of the despatches to its various Depots or  Branches  in other States in India, but  disallowed  the claim  in  respect of the alleged inter-State sales.   As  a result of partially allowing the claim of the appellant, the Assistant Collector reduced the tax imposed by a sum of  Rs. 19,240-15-6  for the period between 1st April, 1948 to  31st March,  1950, and Rs. 97,208/for the second  period  between 1st April, 1950 to 31st March, 1951, and directed refund  of these amounts to the appellant.  The revisions filed by  the appellant  against the rejection of its claim in respect  of

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inter-State sales were still pending, when, on 7th  January, 1963,  a  notice was issued by the  Deputy  Commissioner  of Sales Tax, Bombay City Division, in Form XXIV under  495 section 31 of the Bombay Sales Tax Act, 1953, intimating the appellant that he proposed to revise suo motu the  appellate orders  passed  by  the Assistant  Collector  of  Sales  Tax insofar  as  he  had allowed deduction, in  respect  of  the entire  goods  despatched to its Branches  in  other  States outside Maharashtra, because, in so doing, he had overlooked the  provisions contained in proviso (b) to sub-clause  (ii) of  Rule 1 under sub-section (3) of section 6 of the  Bombay Sales  Tax  Act,  1946 as amended by the  Bombay  Sales  Tax Amendment  Act 48 of 1949.  On receipt of this  notice,  the appellant put in appearance before the Deputy  Commissioner, who  is  the respondent in this appeal, and  raised  several objections  against  the  proposed  revisional  proceedings, making a request that the proceedings be dropped.  Since the respondent did not accept this request, the appellant  filed a petition under Article 226 of the Constitution in the High Court  of Bombay challenging the notice dated  7th  January, 1963,  with  the prayer that the notice be quashed  and  the respondent be restrained from taking any action against  the appellant in pursuance thereof.  The petition was  dismissed by  the High Court and, now, on certificate granted by  that Court,  the  appellant has come up in this  appeal  to  this Court. In this appeal, Mr. S. T. Desai, appearing on behalf of  the appellant,  urged  the same objections  against  the  notice which  were  the basis of the prayer for writ  in  the  High Court,  and  we proceed to deal with them in  the  order  in which he has put them forward before us in his  submissions. The  first  point  urged by learned  counsel  was  that,  in exercise  of the revisional powers, the Deputy  Commissioner of  Sales  Tax, whether acting under the Sales  Tax  Act  of 1946,  or  of 1953, or of 1959, could only proceed  to  take action  on the basis of the material already present on  the record  and  was  not entitled to act on  conjecture  or  to institute  any enquiry so as to include additional  material in order to judge the correctness of the order sought to  be revised.   In support of this proposition,  learned  counsel referred  us to a decision of the Andhra Pradesh High  Court in  State  of  Andhra Pradesh v. T. G.  Lakshmaiah  Setty  & Sons.(1).   In  that  case,  the  Deputy  Commissioner,   in exercising  the  revisional jurisdiction, was found  by  the High  Court to have based his assessment on guess-work,  and the  Court  held  that  "this  conjecture  could  not  be  a _justification  for  seeking  to revise  the  order  of  the assessing  authority.  If the Deputy Commissioner could,  on the  material  before  him,  find  data  for  revising   the assessment,  it was open to him to do so.  It must  be  made clear  that  he  has no jurisdiction to  travel  beyond  the record that is available to the assessing authority and  the basis  should be found on the record already in  existence." We  are unable to accept this principle laid down,  by  that High Court as (1)  12 S.T.C. 663. 496 correct.   Whenever a power is conferred on an authority  to revise  an order, the authority is entitled to  examine  the correctness, legality and propriety of the order and to pass such  suitable orders as the authority may think fit in  the circumstances  of  the  particular  case  before  it.   When exercising such powers, there is no reason why the authority should  not  be  entitled to hold an enquiry  or  direct  an

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enquiry  to be held and, for that purpose, admit  additional material.   The  proceedings for revision,  if  started  suo motu, must not, of course, be based on a mere conjecture and there  should  be some ground for  invoking  the  revisional powers.    Once  those  powers  are  invoked,   the   actual interference must be based on sufficient grounds and, if  it is considered necessary that some additional enquiry  should be  made to arrive at a proper and just decision, there  can be  no  bar  to the revising  authority  holding  a  further enquiry  or  directing such an enquiry to be  held  by  some other  appropriate  authority.   This  principle  has   been clearly  recognised by this Court in The State of Kerala  v. K.  M.  Cheria Abdulla and Company(1).  In that  case,  sub- section  (2) of s. 12 of the Madras General Sales  Tax  Act, 1939, which came up for interpretation, empowered the Deputy Commissioner, suo motu or under certain circumstances on  an application, to call for and examine the record of any order passed  or proceeding recorded under the provisions of  that Act  by any officer subordinate to him, for the  purpose  of satisfying  himself as to the legality or propriety of  such order,  or as to the regularity of such proceeding,  and  to pass  such  order with respect thereto as  he  thought  fit. This Court held :-                "There   is  no  doubt  that   the   revising               authority may only call for the record of  the               order or the proceeding, and the record  alone               may   be  scrutinised  for  ascertaining   the               legality   or   propriety  of  an   order   or               regularity  of the proceeding.  But  there  is               nothing  in the Act that for passing an  order               in exercise of his revisional jurisdiction, if               the  revising authority is satisfied that  the               subordinate    officer   has   committed    an               illegality  or  impropriety in  the  order  or               irregularity in the proceeding, be cannot make               or direct any further enquiry." It was further held                "It  is,  therefore,  not  right  baldly   to               propound  that,  in passing an  order  in  the               exercise of his revisional jurisdiction,  the’               Deputy  Commissioner  must, in all  cases,  be               restricted  to  the record maintained  by  the               officer subordinate to him, and can never make               enquiry outside that record."                (1)  [1965] 1 S.C.R. 601.                497 While thus explaining the scope of the revisional power, the Court also indicated the limitations within which such power can be exercised, holding :-                " It would not invest the revising  authority               with  power to launch upon enquiries at  large               so  as either to trench upon the powers  which               are  expressly reserved by the Act or  by  the               Rules  to other authorities or to  ignore  the               limitations inherent in the exercise of  those               powers.   For instance, the power to  reassess               escaped  turnover is primarily vested by  rule               17  in  the  assessing officer and  is  to  be               exercised subject to certain limitations,  and               the  revising authority will not be  competent               to make an enquiry for reassessing a taxpayer.               Similarly,  the power to make a best  judgment               assessment  is vested by section 9 (2) (b)  in               the   assessing  authority  and  has   to   be               exercised  in the manner provided.   It  would

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             not  be  open  to the  revising  authority  to               assume that power." (p. 887). In the present case, the notice issued by the Deputy Commis- sioner  of  Sales  Tax, on the face  of  it,  discloses  the reasons which led him to take proceedings for exercising his revisional  powers suo motu, and it cannot be said on  those facts  that he was acting merely on conjecture.  The  Deputy Commissioner has not yet proceeded further under the  notice to  make  the assessment.  We have no doubt that,  when  the Deputy  Commissioner does make an enquiry, if any,  for  the purpose  of exercising his revisional powers, he  will  keep within  the limitations indicated by this Court in the  case cited   above.   The  notice  cannot  be  quashed   or   the proceedings restrained merely on the ground that the  Deputy Commissioner  may  have to hold some enquiries in  order  to properly exercise his revisional jurisdiction.  Mr. Desai on behalf of the appellant emphasised the circumstance that  in s.  12(2)  of the Madras General Sales Tax  Act,  which  was considered  by this Court, the Deputy  Commissioner’s  power was expressed by stating that he may pass such order as  he, thinks  fit, while no such words occur in the  corresponding provisions  in the Bombay Sales Tax Acts with which  we  are concerned, but we do not think that this circumstance  makes any  difference.  A revising authority necessarily  has  the power  to  make  such  order as,  in  the  opinion  of  that authority,  the  case  calls  for  when  the  authority   is satisfied that it is an appropriate case for interference in exercise of revisional powers.  In fact, in S. 12(2) of  the Madras General Sales Tax Act, the Deputy Commissioner,  when exercising  his  powers, was to call for the record  of  the order  or  proceeding  before passing  any  order  which  he thought  fit,  so that there was an  expression  used  which could  have been interpreted as limiting his powers  to  the examination of the record only without holding any further 498 enquiry,  and,  yet,  this  Court  held  that  the,   Deputy Commissioner  could not be restricted to the record and  was empowered  to make an enquiry outside that record.   In  the provisions  relating to revisions in the three Bombay  Sales Tax Acts, there are no such words indicating any limitation; and  that  would be an additional reason  for  holding  that there can be no bar to an appropriate enquiry being held  by the  Deputy  Commissioner  when  seeking  to  exercise   his revisional powers suo motu.  The next point urged by learned counsel was that the notice in  question was issued on the 7th January, 1963,  when  the Act of 1959 had already come into force and the Act of  1953 had  been repealed, so that if any  revisional  jurisdiction could be exercised by the Deputy Commissioner, it could only be under the Act of 1959 and not under the Act of 1953.   On this  basis,  advantage  was  sought  to  be  taken  of  the circumstance  that,  under the Act of 1959,  the  revisional powers conferred by s. 57 can be exercised within five years from the date of the order sought to be revised and, at  the relevant  time in 1963, could only be exercised  within  two years  from the date of that order.  The order sought to  be revised was passed on 29th October, 1956, so that the notice to  exercise revisional powers was being issued more than  6 years  after that order had been passed.  It appears  to  us that  this  submission is adequately met by  the  provisions contained in s. 77 of the Act of 1959.  The Act of 1953  was repealed  by  s. 76 of the Act of 1959 and then s.  77  lays down :                "(1)  Notwithstanding the repeal by s. 76  of               any of the laws referred to therein,-

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              (a)  those  laws (including any  earlier  law               continued   in  force  under  any   provisions               thereof), and all rules, regulations,  orders,               notifications, forms and notices issued  under               those laws and in force immediately before the               appointed day shall, subject to the provisions               of  s.  42  continue to have  effect  for  the               purposes    of    the    levy,     assessment,               reassessment, collection, refund or set-off of               any  tax,  or the granting of a  draw-back  in               respect  thereof,  or the  imposition  of  any               penalty, which levy, assessment, reassessment,               collection,   refund,  setoff,  draw-back   or               penalty  relates  to  any  period  before  the               appointed  day,  or  for  any  other   purpose               whatsoever connected with or incidental to any               of the purposes aforesaid;                499                (3)  Without  prejudice  to  the   provisions               contained  in the foregoing  sub-sections  and               section  thereto,  section  7  of  the  Bombay               General  Clauses  Act, 1904,  shall  apply  in               relation  to  the repeal of any  of  the  laws               referred  to  in section 76 as if the  law  so               repealed  had  been an  enactment  within  the               meaning of section 7 of that Act." (We have only quoted the portions of s. 77 with which we are concerned). The  effect  of  s. 77 (1)(a) is to continue  in  force  the Bombay Sales Tax Act of 1953 as well as the Bombay Sales Tax Act  of 1946 to the extent to which they were in force  when this Act of 1959 came into force for the purposes  mentioned in  that clause.  These purposes included levy,  assessment, reassessment  and  collection  of  sales-tax,  so  that  the proceedings against the appellant, which had been  initiated under  the  Act  of 1946, continued to be  governed  by  the provisions  of  that Act.  Section 7 of the  Bombay  General Clauses  Act  1 of 1904, which was made  applicable  ’by  s. 77(3)  to  the  repeal  of the Act  of  1953,  includes  the following provisions : -                " Where this Act, or any Bombay Act, or Maha-               rashtra  Act, made after the  commencement  of               this Act, repeals any enactment hitherto  made               or  hereafter  to  be  made,  then,  unless  a               different intention appears, the repeal  shall               not-                (c)  affect any right, privilege,  obligation               or  liability  acquired, accrued  or  incurred               under any enactment so repealed; or                (e)  affect    any    investigation,    legal               proceeding  or remedy in respect of  any  such               right,   privilege,   obligation,   liability,               penalty,    forfeiture   or   punishment    as               aforesaid,  and any such investigation,  legal               proceeding   or  remedy  may  be   instituted,               continued  or enforced, and any such  penalty,               forfeiture or punishment may be imposed, as if               the repealing Act had not been passed." Very  clearly, the repeal of the Act of 1953 by the  Act  of 1959  did  not  affect the rights  and  liabilities  of  the assessee to tax under the Act of 1953 or the Act of 1946  in respect  of  the turnover which became liable  to  sales-tax under the Act of 1946.  The effect of clause (e) of s. 7  of the Bombay General Clauses Act 500

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further  is  that any legal proceeding in respect  of  levy, imposition  or recovery of that tax is to continue  and  any fresh  investigation,  legal proceeding or remedy  could  be instituted  as  if there had been no repeal by  the  Act  of 1959.   Consequently, the repeal of the Act of 1953 did  not in  any way affect the power of the Deputy  Commissioner  to institute  proceedings  for revision suo  motu  against  the appellate  order of the Assistant Collector which  had  been passed in exercise of his powers under the Act of 1946.   It is true, as urged by Mr. Desai in the alternative, that,  in fact, the proceedings should have been taken not under S. 31 of  the  Act of 1953, but under S. 22 of the  Act  of  1946. This is so, because when the Act of 1946 was repealed by the Act of 1953, similar provisions were made in the Act of 1953 to  continue in force the provisions of the Act of  1946  in respect of rights and liabilities which may have accrued  or have been incurred under the Act of 1946.  Section 48(2) and S.  49(1) clearly contained provisions indicating  that,  in respect  of  a liability to tax under the Act of  1946,  the rights and liabilities of the assessee had to be  determined in accordance with the provisions of the Act of 1946 and all legal proceedings or remedies in respect thereof had also to be  taken  under  the same Act.   Consequently,  the  Deputy Commissioner,  in  seeking  to  exercise  revisional  powers against  the order of the Assistant Collector  passed  under the  Act of 1946, had to proceed under S. 22 of the  Act  of 1946.   That, however, is not at all material,  because  the provisions of S. 22 of the Act of 1946 are quite similar  to those  of  s.  31 of the Act of 1953.   The  mere  incorrect mention  of  S.  31  of the Act of 1953  in  the  notice  is immaterial.   The Deputy Commissioner has  the  jurisdiction and power to revise the order under S. 22 of the Act of 1946 and,  consequently the proceedings initiated by him are  not without jurisdiction. The  last  submission made by Mr. Desai was that, if  it  be held  that the revisional powers are sought to be  exercised under  the  Act  of  1946,  it  should  be  held  that   the proceedings  sought  to be instituted are  barred  by  time, because  limitation of a reasonable time, within  which  the revisional  powers are to be exercised, must be  implied  in the statute itself.  Section 22 of the Act of 1946 and s. 31 of  the  Act  of 1953 do not lay  down  any  limitation  for exercise  of the power of revision by a Deputy  Commissioner sue  motu, and we are not prepared to accept that  any  such limitation  must  be necessarily read in the two  Acts.   In support  of his proposition that such a limitation  must  be read by us, Mr. Desai referred to the decision of this Court in  the State of Orissa v. Debaki Debi and Others(1).   That case,  however,  has no relevance at all,  because,  in  the Orissa  Sales Tax Act, there was a proviso in general  terms laying down that no order "assessing the (1)  15 S.T.C. 153. 501 amount  of tax shall be passed after the lapse of 36  months from  the expiry of the period", and it was held  that  this provision  was,  in  substance, not a real  proviso  to  the section  in which it was placed, but was, in fact, a  period of  limitation prescribed for all orders of assessment  made under  any other provision of the Act.  In the Bombay  Sales Tax  Acts  of  1946  and 1953,  there  is  no  such  general provision  prescribing a period of limitation for making  an assessment  and, even though the effect of the order of  the Dy.   Commissioner passed in revision may be to bring  about an assessment to tax of turnover which was set aside by  the Assistant Collector in appeal., such an assessment does  not

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come under any provision relating to limitation. The  decision  of the Bombay High Court in  Commissioner  of Income-tax, Bombay City 1 v. Narsee Nagsee & Co. (1) is also similarly  inapplicable.   In that case, section 11  of  the Business  Profits  Tax Act, 1947, which  had  no  limitation prescribed  for  an  order of assessment,  was  held  to  be governed  by  the 4 years’ period of  limitation  which  was prescribed   under  s.  14  for  issue  of  a   notice   for reassessment.  The decision in that case turned on the  fact that,  if proceeding for reassessment could not  be  started after  the  expiry  of  four  years  from  the  end  of  the chargeable accounting period concerned, it would be  totally unreasonable to hold that the first assessment of tax can be made  after the expiry of that period.  The case  before  us relates  to exercise of revisional powers and does not  deal with  the question of the first assessment to be  made  when the Return is initially filed by an assessee.  In fact, when a  revisional  power is to be exercised, we think  that  the only limitations, to which that power is subject, are  those indicated  by this Court in K. M. Cheria Abdulla  &  Co’s(2) case.   These  limitations are that the  revising  authority should  not  trench  upon the  powers  which  are  expressly reserved by the Acts or by the Rules to other authority  and should  not ignore the limitations inherent in the  exercise of   those  powers.   In  the  present  case,   the   Deputy Commissioner,  when  seeking  to  exercise  his   revisional powers, is clearly not encroaching upon the powers  reserved to  other  authorities.  Under the Act of  1946,  the  first assessment is made by the Sales-Tax Officer under S. 11.  If information  comes into his possession that any turnover  in respect of sales or supplies of any goods chargeable to  tax has  escaped  assessment  in any year  or  has  been  under- assessed or assessed at a lower rate or any deductions  have been wrongly made therefrom, proceedings can be taken afresh under  S.  11A.  On the face of it, if  a  first  assessment order  is  made  under  s.  11  and  any  turnover   escapes assessment, the appropriate provision, under which action is to  be taken for assessing that turnover to tax, is S.  11A. There  is, however, no provision under which the  power  now sought to be exercised by (1) 31 I.T.R. 164. (2) [1965] 1 S.C.R. 601. 502 the  Deputy  Commissioner in the case before us  could  have been exercised by any other authority.  In this case, as  we have indicated earlier, the first assessment of tax was made by  the Sales Tax Officer, and the turnover now in  question was  assessed  to tax by him.  Having  once  assessed-  that turnover  to tax, he could .not initiate a fresh  proceeding in respect of it under s. 11A.  The ,assessment made by  him was set aside in appeal by the Assistant Collector and it is this order of the Assistant Collector which is sought to  be revised by the Deputy Commissioner.  This is, therefore, not a case where the powers are being exercised for the  purpose of  assessing or reassessing an escaped turnover.  The  case is  one  where  the  revisional  powers  are  sought  to  be exercised  to correct what appears to be an incorrect  order passed in appeal by the Assistant Collector, and, for such a purpose,  proceedings  could not possibly  have  been  taken under   s.  11A.   In  exercising  his  revisional   powers, therefore,  the Deputy Commissioner is not encroaching  upon the jurisdiction of any other authority specially  entrusted with taking such proceedings. In  this connection, Mr. Desai relied on a decision  of  the Bombay  High  Court in Manordas Kalidas v. V.  V.  Tatke(1).

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The  decision in that case also related to this very Act  of 1946, but the point to be kept in view is that in that case, the  revisional power was sought to be exercised in  respect of  the  original assessment order passed by the  Sales  Tax Officer   under  S.  11  of  the  Act.   It  was  in   these circumstances that the Bombay High Court, after referring to its two decisions in Bisesar House v. State of Bombay (2 and Commr. of Income-tax v. Narsee Nagsee & Co. held :-                ,,In  neither of those two cases,  revisional               powers  were sought to be exercised,  but  the               principle   of  those  cases  must,   in   our               judgment,  apply for the same reasons  to  the               exercise of revisional jurisdiction, and  that                             jurisdiction   must  be  exercised   w ithin   a               reasonable  period,  and  the  yard-stick   of               reasonableness  will be the period  prescribed               for re-assessment." It appears that in view of the fact that proceedings for re- assessment  could have been taken under s. 11A in that  case and, instead, revisional powers were sought to be exercised, that Court held that the exercise of such revisional  powers must  be, governed by the same limitation which  applied  to the exercise of power of reassessment.  In fact, the correct principle that should have been applied in that case is  the principle mentioned by us earlier laid down in K. M.  Cheria Abdulla  & Co.(4). The revision should have been held to  be incompetent on the ground that the power (1) 11 S.T.C. 87.               (2) 9 S.T.C. 654. (3) 31 I.T. R. 164.           (4) [1965] 1 S.C.R. 601.  503 was  sought  to  be  exercised  for  assessment  of  escaped turnover which had not ’been assessed at all at the  initial stage  of -assessment under s. 11 and proceedings  under  s. 11A could have been competently initiated for bringing  that turnover to tax.  Instead, the Court equated the  proceeding in revision with the proceeding for reassessment and applied the  4-year period of limitation which was  prescribed  only for  reassessment and not for exercise of revisional  power. In  our  opinion,  the ultimate decision in  that  case  was perfectly  correct, but we are unable to affirm  the  vie,%, that  the  revisional  power is governed by  any  period  of limitation   laid  down  in  s.  11A  for  proceedings   for reassessment of escaped turn over. Reference,  in this connection, was also made to a  decision of  this Court in Maharaj Kumar Kamal Singh v.  Commissioner of Income-tax, Bihar and Orissa(1), in which the Court dealt with a case of an assessee whose income to the extent of Rs. 93,604/representing interest on arrears of rent was  omitted to  be  brought  to assessment by  the  Income-tax  Officer. Subsequently,  in another case, the Privy Council held  that interest   on  arrears  of  rent  payable  in   respect   of agricultural   land   was  not  agricultural   income   and, consequently, the Income-tax Officer initiated  reassessment proceedings  under s. 34(1) (b) of the Income-tax Act.   The circumstance   relied  upon  by  learned  counsel  for   the appellant was that the omission by the Income-tax Officer to bring to assessment that interest was part of an order  made by him after his initial assessment order had been set aside by the Appellate Assistant Commissioner who directed a fresh assessment, allowing the appeal against that order.  In that case,  it was held that the escaped income could be  brought to tax under s. 34 of the Income Tax Act; and, on the  basis of  this  decision,  it was urged that,  similarly,  in  the present  case, the turnover now sought to be brought to  tax

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in exercise of revisional powers could be re-assessed  under s.  11A.   This argument ignores the circumstance  that,  in that  case,  the  last order, under which  the  income  from interest  had been exempted from tax, was an order  made  by the Income Tax Officer himself, though after the  assessment proceedings  had  been  remanded to  him  by  the  Appellate Assistant  Commissioner.   Since  the  income  had   escaped assessment  under an order passed by the Income-tax  Officer himself, he could competently take proceedings under section 34.  In the case before us, the turnover of the assessee now sought  to  be taxed in the revisional proceedings  did  not escape  liability to tax under the orders of  the  Sales-tax Officer  and, on the other hand, was actually taxed by  him, which   imposition   of  tax  was  set  aside   in   appeal. Consequently, the Sales Tax Officer could not possibly  take proceedings under s. II A in respect of that turnover. (1)  35 I.T.R. 1. 504 For these reasons, we hold that the proceedings initiated by the  Deputy Commissioner of Sales Tax against the  appellant are not incompetent and the High Court was right in refusing the  writ sought by the appellant.  The appeal fails and  is dismissed with costs. R.K.P.S.                               Appeal dismissed. L1Sup.Cl/68 -15-10-68-GIPF.- 505