Supreme Court of India
COMMISSIONER OF SALES-TAX, U.P., LUCKNOWversusSUPER COTTON BOWL REFILLING WORKS & ANR.
- Citation
- 1989 INSC 39
- Decided
- 2 February 1989
- Disposal
- Dismissed
- Bench
- SABYASACHI MUKHERJI
Holding
A decision of the Commissioner under section 35, being final subject to appeal to the Sales Tax Tribunal, is not open to further revision by the High Court under section 11.
Summary
The assessees, Super Cotton Bowl Refilling Works, repaired and refilled cotton bowls used in textile calendering machines and sought a declaration under section 35 of the Uttar Pradesh Sales Tax Act, 1948 that their activity did not constitute "manufacture" or "sale". The Commissioner of Sales Tax held that both questions were answered against the assessees; the Sales Tax Tribunal partially reversed, holding the activity was not a manufacture but amounted to a sale. The Commissioner then sought revision before the Allahabad High Court under section 11, which the High Court dismissed, holding that the Commissioner’s decision under section 35 is "final" subject to appeal to the Tribunal and not open to further revision. The Commissioner appealed to the Supreme Court. The Supreme Court examined the statutory scheme, the nature of the Commissioner’s quasi‑judicial function, and the meaning of "final" in section 35, concluding that the amendment replacing "High Court" with "Tribunal" made the Commissioner’s order final and barred any further revision by the High Court. Consequently, the Supreme Court dismissed the Commissioner’s appeals, affirming that no revision lies under section 11.
Issues considered
- Whether a revision under section 11 of the Uttar Pradesh Sales Tax Act, 1948 lies to the High Court against a decision of the Commissioner made under section 35 when that decision is already subject to appeal before the Sales Tax Tribunal.
- Whether the decision of the Commissioner under section 35 is quasi‑judicial/judicial or merely administrative for the purpose of determining its revisability.
Legislation cited
- Constitution of Indias. Article 226
- Limitation Act, 1963s. 5
- Uttar Pradesh Sales Tax Act, 1948s. 10(C), s. 11, s. 2(e-i), s. 2(h), s. 35(5)
- Uttar Pradesh Sales Tax (Amendment) Act, 1979
- Uttar Pradesh Sales Tax (Amendment) Act, 1984
- Uttar Pradesh Sales Tax (Amendment and Validation) Act, 1976
- Uttar Pradesh Sales Tax (Amendment and Validation) Act, 1985
Subjects
Sales TaxRevisionSection 35Sales Tax TribunalFinal orderQuasi‑judicialStatutory interpretationHigh Court revisionManufacture definitionSale definition
Judgment
COMMISSIONER OF SALES-TAX, U.P., LUCKNOW A
v.
SUPER COTTON BOWL REFILLING WORKS & ANR.
FEBRUARY 2, 1989
ISABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.] B
~
U.P. Sales Tax Act, 1948: Sections 2(e-i), 2(h), 10(C), 11 and
~
35(5)-Whether revision lies to High Court from decision of Commis-
sioner which has been subject matter of appeal before Tribunal-Effect
_.. of amendments of U. P. Act of 1979 and U. P. Act 22 of 1984.
Revision to High Court under section 11 lies on ground that case
c
involved a question of law.
·-t
Administrative Law: Order of Commissioner under section 35
U. P. Sales Tax Act 1948-Whether quasi-judicial, judicial or adminis-
trative in nature. D
Statutory Interpretation: Intention of legislature-A slippery
phrase-Intention to be ascertained from the words used and spirit and
reason of the law.
~
Words and Phrases: "Final" -Meaning of. E
The assessee-respondent in the appeals was engaged in the repair·
ing and relllllng of cotton bowls on the shafts which are used as part of
calendering machine in the textile industry. The cotton bowl is a shaft
made of steel on which a thick layer of cotton is pasted and affixed. It is
used in the textile finishing industries as an essential part of the F
calendering machine. In the course of its use the cotton pasted on the
shaft loses its thickness and shape and after sometime it requires repair-
ing and refilling.
The assessee moved an application under section 35 of the U.P.
Sales Tax Act, 1948 and the decision inter a/ia included the question G
whether the job of repairing and refilling of cotton bowl and the process
involved therein amounted to "manufacture" or "sale" within the
meaning of the Act.
The Commissioner of Sales Tax decided both these questions
against the assessee, and the assessee preferred an appeal before the H
421
422 SUPREME COURT REPORTS [1989] 1 S.C.R.
A Sales Tax Tribunal. The Tribunal allowed the appeal in part. It held ~
that the process of repairing and refilling of cotton bowl of the custom-
ers did not amount to "manufacture" as defined under section 2(e-i) of
the Act. It further held that such an activity of the assessee amounted to
"sale" as defined under section 2(h) of the Act as amended by the U .P.
B Sales Tax Amendment and Validation Act, 1985.
The...Commissioner of Sales Tax preferred a revision to the High ~
Court ~hich went into the question whether a further revision lay to the ~
High Court. It came to the conclusion having regard to the scheme of
the provisions contained in section 35 and the amendment made by the,..
U.P. Act 12of1979, and the earlier Division Bench decision of the High
c Court in lndo Lube Refineries v. Sales Tax Officer, [1987] 66 S.T.C.145
(All) that no further revision lay to the High Court from the order of the
Tribunal. The High Court accordingly dismissed the revision.
The Commissioner appealed by special leave to this Court.
D
On the question: whethe.r a revision shall lie to the High Court
from the decision of the Commissioner under section 35 of the U.P.
Sales Tax Act which has been the subject matter of an appeal before the
Tribunal.
E Dismissing the Appeals, the Court,
HELD: I. The very language of section 35 of the U.P. Sales Tax
Act, 1948 which enjoins a decision by the Commissioner envisages that
the decision is quasi-judicial or judicial and cannot be characterised as
administrative. The question is whether on the language of the section a
F revision is entertainable from the decision of the Commissioner which
has been subjected to an appeal to the Tribunal. In view of the language
used specifically in the absence of a provision that such a revision will be
maintainable such revision will not be. [435C-E]
2. Sub-section (5) of section 35 after the amendment states that
G the decision of the Commissioner of Sales Tax under this section shall,
subject to an appeal to the Tribunal, be final. In view of the language of
that section, it cannot contemplate a further revision to the High Court
against a decision of the Tribunal. [435E-F]
lndo Lube Refineries v. Sales Tax Officer Sector-/. Gorakhpur,
H [1987] 66 STC 145, approved.
COMMR. OF SALES TAX v. COTTON BOWL WORKS 423
3. In the instant case, the right of appeal has been given under A
the Act not to any ordinary Court of the country under the .Code of
Civil Procedure but to the courts enumerated under the Sales Tax Act,
and the revision is contemplated under the provisions of the Sales Tax
Aci. [436B]
4. "Final" in section 35 means that it is final and under the Act B
subject to the limited procedure contemplated under the Act. The ex-
pression •final' prima facie means that an order passed under the Act
was conclusive and no further appeal lay. A right to revision under the
Act is a right given by the Act. [436C-D]
Kydd v. Vatch Committee of City of Liverpool, [1908] AC 327,
331-32; Maung Ba Thaw v. Ma Pin, [1933-34] 61 LR Indian Appeals
c
158; South Asia Industries Pvt. Ltd. v. S.B. Sarup Singh, [1965] 2 SCR
756 and M/s. Jetha Bai and Sons Jew and others v. M/s. Sunderdas
Ratheni and others, [1988] 1 SCC 722, referred to.
5. Revision to the High Court in special cases under section 11 D
is contemplated on the ground that the case involved a question of
law. [437B]
6. Having regard to the scheme of the U.P. Sales Tax Act, 1948
manifested from the amendment, to make the Commissioner's decision
final, subject to an appeal to the Tribunal where the Tribunal is E
enjoined to hear such as appeal by a Bench of three members and where
revision is provided only in special cases, it would be improper to
interpret the spirit and reason of that law in such a way as to enjoin that
a further revision lay to the High Court under section 11 of the Act. The
High Court was, therefore, right that no further revision in such a
situation would lie to the High Court. [437F-GJ F
7. This, however, does not eliminate correction by the High Court.
In an appropriate case by exercise of a writ of certiorari under Article
226 of the Constitution it exercises superintendence over all Courts and
Tribunals throughout the territory. I437G-H]
G
Re Gilmore's Application, [1957! I All England Reports 796, refer·
-~· red to.
8. The intention of the legislature is a slippery phrase. It is better
to find out the intention of the legislature from the words used by the
natural meaning of the words and the spirit and reason of the law. l437E I H
424 SUPREME COURT REPORTS [1989) 1 S.C.R.
A Aron Salomon v. A. Salomon and Company Ltd., [1897) AC.
22, 38; Lord Howard De Walden v. Inland Revenue Commissioners, .._.+
I 1948 I 2 All England Reports page 825, referred to.
Cross-Statutory Interpretation (Second Edn.) p. 21, referred to.
B CIVIL APPELLATE JURISDICTION: Civil Appeal No.
532(NT) of 1989.
From the Judgment and Order dated 4.2. 1987 of the Allahabad
High Court in S.T.R. No. 298 of 1986.
AND
c
Civil Appeal No. 533 (NT) of 1989.
From the Judgment and Order dated 26.3.1987 of the Allahabad
High Court in Sales Tax Revision No. 454 of 1986.
D S.C. Manchanda, R.S. Rana and Ashok K. Srivastava for the
Appellant.
R.C. Mishra and Dr. Meera Aggarwal for the Respondent in
C.A. No. 532 of 1989.
E Raja Ram AggaTWal, Vijay Hansaria and Sunil K. Jain for the
Respondent in C.A. No. 533 of 1989.
The Judgment of the Court was delivered by
SABYASACHI MUKHARJI, J. Special leave granted and these _l._.
F appeals are disposed of by the judgment herein. ~·
These appeals are from the judgments and orders of the High
Court of Allahabad dated 4th February, 1987 and March 26, 1987
respectively. These involve a common question. The facts of the ap-
peal arising out of Special Leave Petition No. 1293 of 1988 and the
G facts of the appeal arising out of Special Leave Petition No. 1296 of
1988 are similar. In order to appreciate the contentions raised herein,
it would be appropriate to deal with the facts of the appeal arising out •--
of Special Leave Petition No. 1293 of 1988. The assessee is engaged in
repairing and refilling of cotton bowl on the shafts which are used as
part of calendering machine in the textile industry. The cotton bowl is
H a shaft made of steel on which a thick layer of cotton is pasted and
COMMR. OF SALES TAX .v. COTTON BOWL WORKS [MUKHARJI, J.1425
affixed. It is used in the textile finishing industries as an essential part A
of calendering machine. In the course of its use the cotton pasted on
the shaft loses its thickness and shape and after some time it requires
repairing and refilling. The assessee in this case moved an application
under section 35 of the U .P. Sales Tax Act, 1948 (hereinafter called
'the Act'). It may be mentioned that Section 35 was added by the U .P.
Sales Tax (Amendment and Validation) Act No. 23 of 1976. Section 35 B
of the said Act has been amended by Section 31 of the U .P. Act 12 of
1979.
Section 35 provides for determination of disputed questions by
moving an application before the Commissioner of Sales Tax. The
relevant part of the said section as it stood at the relevant time was as
follows: c
"35. Determination of disputed questions-
(1) If any question arises, otherwise than in a proceeding
pending before a court or before an Assessing Authority _D
under Section 7 or Section 21, whether, for the purposes of
this Act,-
(a) any person or association of persons, society, club,
firm company, corporation, undertaking or Govern-
ment Department is a dealer; or E
(b) any particular thing done to any goods amounts to or
results in the manufacture of goods within the meaning
of that term; or
(c) any transaction is a sale or purchase and, if so, the sale F
or purchase price, as the case may be, therefore; or
(d) any particular dealer is required to obtain, or to apply
for the renewal of registration; or
(e) any tax is payable in respect of any particular sale or G
purchase and, if so, the rate thereof,
the person or the dealer concerned may, after depositing
the fee specified in Section 32, submit an application to the
Commissioner of Sales Tax, along with such documenlli as
may be prescribed. H
426 SUPREME COURT REPORTS [19891 1 S.C.R.
(2) The Commissioner of Sales Tax shall, after giving the
A
applicant an opportunity of being heard, decide, as he
deems fit, the question so arising:
Provided that, before giving such decision, the Com-
missioner of Sales Tax may, in his discretion, ask an officer
B subordinate to him to make such inquiries as he considers
necessary for the decision of the question.
(3) No decision of the Commissioner of Sales Tax under
this section shall affect the validity or operation of any
order passed earlier by any Assessing Authority, Appellate
Authority, Revising Authority or the Tribunal.
c
(4) No question which arises from an order already passed,
in the case of the applicant, by any authority under this Act
or the Tribunal, shall be entertained for determination
under this section.
D
(5) A decision given by the Commissioner of Sales Tax
under this section shall, subject to an appeal to the Tri-
bunal, be final.
(6) xxx xxx XXX."
E
The question that arises in these appeals before us is the true
interpretation of sub-section (5) of section 35 of the Act, namely,
whether a revision shall lie to the High Court from the decision of the
Commissioner under section 35 of the Act which has been the subject-
matter of an appeal before the Tribunal. The respondent-dealer _.t
F moved an application under section 35 of the Act and the decision was 'II
rendered in terms of the said section. The decision, inter alia, included
the questions whether the job of repairing and refilling of cotton bowl
and the process involved therein amounted to "manufacture" or
"sale" within the meaning of the Act. The Commissioner of Sales Tax
by his order dated 10th June, 1985 decided both the questions against
G the assessee. Aggrieved thereby the assessee had preferred an appeal
before the Sales Tax Tribunal. The Tribunal by its order dated 14th
November, 1985 allowed the appeal in part. The Tribunal held that the ~
process of repairing and refilling of cotton bowls of the customers did
not amount to "manufacture" as defined under section 2(e-i) of the
Act. It further held that such an activity of the assessee amounted to
"sale" as defined under section 2(h) of the Act as amended by the
COMMR. OF SALES TAX v. COTTON BOWL WORKS [MUKHARJI, J.[ 427
~- U.P. Sales Tax Amendment and Validation Act, 1985. It is against this
A
decision of the Sales Tax Tribunal that the Commissioner of Sales Tax
had preferred revision to the High Court. The High Court went into
the question whether further revision lay to the High Court. The High
Court, noticed of the terms of section 35 noted hereinbefore which
provided by sub-section 5 of section 35 that a decision given by the
--¥ Commissioner of Sales Tax under that section, subject to an appeal to 8
the Tribunal, shall be final. (Emphasis supplied). The High Court
examined the question whether further revision lay and answered it in
~
the negative. Therefore, we were concerned in these appeals with the
question whether at the relevant time in terms of section 35 of the Act
any further revision lay to the High Court from the decision of the
Commissioner which has been the subject-matter of appeal before the
Tribunal. The High Court came to the conclusion that having regard to
c
~ the scheme of the provisions and the amendment made by the U .P.
Act 12 of 1979 and in view of the decision of the Division Bench of the
High Court in /ndo Lube Refineries v. Sales Tax Officer, Sector-I,
Gorakhpur, I1987] 66 STC 145 no further revision lay to the High
Court from the order of the Tribunal. In that view of the matter, the D
High Court dismissed the revision. Aggrieved thereby, the Commis-
sioner has come up in appeal before this Court in these two appeals.
+ for theShrirespondents
Manchanda for the appellants and Shri Raja Ram Agarwal
both submitted that the judgment under appeal is
not correct though for different reasons. It is necessary to refer to the E
scheme of the Act and the amendments :om time to time effected
therein. Broadly speaking, the assessment is made by the Sales Tax
Officer in terms of section 3 and other allied sections. Section 9 of the
t'
Act deals with appeals and provides that any dealer or other person
aggrieved by the order made by the Assessing Authority other than an
order mentioned in section 10-A, may, within 30 days from the date of F
the service of the copy of the order or appeal to such authority, as may
be prescribed, request the appellate authority in writing for summary
disposal of his appeal. The other consequential provisions of law need
not at the present moment be examined in detail. Section 10 provides
for Sales Tax Tribunal. The section was substituted at first by Act 12 of
1979 and thereafter by Act 22 of 1984. After the substitution by the G
~ Act 12 of 1979 the Act has provided that there shall be a Sales Tax
Tribunal consisting of a President and such other members as the State
Government may from time to time deem it necessary to appoint from
amongst persons who have been, or who are qualified to be judges of
the High Court and persons who hold or have held a post not below
the rank of Deputy Commissioner of Sales Tax provided that when the H
428 SUPREME COURT REPORTS I1989] 1 S.C.R.
Tribunal consisted of one or more persons who have been judges of a
A
High Court then he or one of them should be appointed the President.
Sub-section (5) of Section 10 authorises the Tribunal, as the case may
be, to confirm, cancel or vary such order. Sub-section (2) of Section 10
stipulates that any person aggrieved by an order passed by an appellate
authority under section 9 or by the revising authority under section
B 10-B or by a decision given by the Commissioner of Sales Tax under
section 35 may, within six months from the date of service of the copy
of such order or decision on him, prefer an appeal to the Tribunal.
Sub-section lO(a) of Section 10 provides that an appeal against the
order of the Appellate Authority under section 9 shall be heard and
disposed of, inter alia, (i) by a bench of one member, whether such
order is passed by an Assistant Commissioner (Judicial), the amount
c of the tax, fee or penalty in dispute does not exceed five thousand
rupees; and (ii) by a bench of two members, in any other case. An
appeal against the order passed under section 10-B should be heard
and disposed of by a bench of two members. An appeal against an
order passed under section 35 shall be heard and disposed of by a
D bench of three members. The President has the power to direct an
appeal to be heard and decided by a larger bench and transfer an
appeal from one bench to another.
There was a subsequent amendment by section 10 of the U .P.
Act 22 of 1984. Section 10 as it stands after amendment by Act 22 of
E 1984 is as follows:
"10. Sales Tax Tribunal-(1) There shall be a Sales Tax
Tribunal consisting of such members, including a Presi-
dent, as the State Government may, from time to time,
deem it necessary to appoint from amongst-
F
(a) the persons who are qualified to be Judges of the High
Court; and
(b) the persons belonging to the Uttar Pradesh Sales Tax
Service who hold or have held a post not below the
G rank of Deputy Commissioner of Sales Tax:
Provided that:
(i) where the Tribunal consists of one or more persons
who is or are members of the Uttar Pradesh Higher
H Judicial Service, then he or the senior-most amongst
them shall be appointed President;
COMMR. OF SALES TAX v. COTTON BOWL WORKS [MUKHARJI, J.1429
(ii) no person shall be appointed from .amongst advocates
A
unless he has paid income tax on income from such
profession (exclusive of all other incomes) in each of
the five consecutive years preceding such appoint-
ment.
(1-A) The State Government may prescribe such other B
qualifications or conditions for the appointment of the
President and other members of the Tribunal as it may
deem fit.
(1-B) The provmons of Rule 56 of the Uttar Pradesh
Fundamental Rules shall continue to apply to every
member of the Tribunal including the President, whether c
appointed before or after the commencement of the Uttar
Pradesh Sales· Tax (Amendment and Validation) Act,
1983, as they apply to any other Government servant:
Provided that a member of the Tribunal including the D
President, appointed before the commence of the Uttar
Pradesh Sales Tax (Amendment and Validation) Act,
1983, may continue as such till he attains the age of sixty
years.
(2) Any person aggrieved by an order passed by an Appel- E
late Authority under Section 9, other than an order refer-
red to in sub-section (4-A) of that said section, or by the
Revising Authority under section 10-B or by the Commis-
sioner of Sales Tax under sub-section (3) of section 4-A or
by a decision given. by the Commissioner of Sales Tax un-
der Section 35 may, within six months from the date of F
service of the copy of such order or decision on him, prefer
an appeal to the Tribunal:
Provided that where the disputed amount of tax, fee
or penalty does not exceed one thousand rupees, the appel-
lant may, at his option, request the Tribunal in writing for G
summary disposal of his appeal, whereupon the Tribunal
may decide the appeal accordingly.
Explanation-For the purpose of this sub-sectiQn, the
expression 'any person' in relation to any order passei:! l;>y
an &uthority other than the Commissioner of Sales Tax, H
430 SUPREME COURT REPORTS I1989] 1 S.C.R.
includes the Commissioner of Sales Tax.
A
(2-A) The manner and procedure of summary disposal of
appeal shall be such as may be prescribed.
(3) Section 5 of the Limitation Act, 1963, shall apply to
.B appeals or other applications under this section .
(4) The Tribunal may at any stage, after giving the appel-
lant a reasonable opportunity of being heard, dismiss the
appeal.
(5) The Tribunal may, if it has not already dismissed the
c appeal under sub-section (4), after calling for and examin-
ing the relevant records, and after giving the parties a
reasonable opportunity of being heard or as the case may
be, after following the procedure prescribed under sub-
section (2-A)-
D
(a) confirm, cancel or vary such order, or
(b) set aside the order and direct the assessing or appellate
or revisional authority or the Commissioner of Sales
Tax, as the case may be, to pass a fresh order after such
E further inquiry, if any, as may be specified, or
(c) order such amount of tax, fee or penalty or other
money as may have been realised in excess of the due
amount to be refunded according to the provisions of
this Act.
F
Explanation-The power to vary an order referred to in
clause (a) includes the power to vary the order by reducing
or enhancing the amount of assessment or .penalty.
(6) Where an appeal under this section has been filed, the
G Tribunal may, on the application of the appellant moved
within thirty days from the filing of such appeal, after
giving the parties a reasonable opportunity of being heard,
stay the operation of the order appealed against or the
recovery of the disputed amount of any tax, fee or penalty
payable,or refund of the amount due, or proceedings for
H re-assessment, under the order appealed against till the
disposal of the appeal:
COMMR. OF SALES TAX v. COTTON BOWL WORKS IMUKHARJI, J.1431
. Provided that:
A
(i) no application for stay of recovery of any disputed
amount of tax, fee or penalty shall be entertained
unless the applicant has furnished satisfactory proof of
the payment of not less than one-third of such disputed
amount in addition to the amount required to be B
~·
deposited under sub-section ( 1) of Section 9;
(ii) the Tribunal may, or special and adequate reasons to
~- be recorded in writing, waive or relax the requirement
of clause (i) regarding payment of one-third of such
disputed amount.
c
~ (8) No order passed under this section for the stay of re-
covery of tax, fee or penalty shall remain in force for more
than thirty days unless the appellant furnishes adequate
security to the satisfaction of assessing authority concerned
for payment of the outstanding amount. D
(9) The members of the Tribunal shall sit in such benches
of one, two or more members as may be constituted from
time to time, and do such work of the Tribunal as may,
subject to sub-section (1) and the rules, be allotted to them
by order, or in accordance with the directions of the Presi- E
dent of the Tribunal.
(IO)( a) An appeal against the order of appellate authority
under section 9 shall be heard and disposed of-
(i) by a bench of two members, where such order is passed F
by a Deputy Commissioner (Appeals) or the amount of
tax, fee or penalty in dispute exceeds ten thousand
rupees;
(ii) by a single member in any other case.
G
(b) An appeal against an order passed under Section 10-B
shall be heard and disposed of by a bench of two members.
(c) An appeal against an order passed under sub-section
(3) of Section 4-A or a decision given under Section 35,
which shall be filed before the President shall be heard and H
432 SUPREME COURT REPORTS l1989J 1 S.C.R.
A disposed of by a bench of three members. -+
(d) The President may, ifhe so thinks fit-
(i) direct an appeal to be heard and decided by a larger
bench;
B
(ii) transfer an appeal from one bench to another bench.
(11) The place of sitting and procedure of, and the manner
of presenting appeals and other documents to the Tribunal
shall, subject to the rules, be such as the Tribunal may
deem fit to adopt.
c
(12) The decision of case heard by a bench shall be in ,.ly
accordance with the opinion of the majority. Where the
members are equally divided the President of the Tribunal
may-
D
(a) if he was not a member of such bench, give his own
opinion or refer the case for the opinion of another
member, whereupon the case shall be decided in
accordance with such opinions, or
E (b) from a larger bench."
The section has been set out in exteno in order to appreciate the
contentions raised.
As will be apparent from the aforesaid sub-section 10(c) that an
F appeal against an order passed or a decision given under section 35
shall be filed before the President and shall be heard and disposed of by
a bench of three members. So far as revision is concerned, this was the
subject-matter of section 11 of the Act. The Sales Tax Ac1 of 1948
underwent an amendment in 1984 so far as revision is concerned and as
it stands today and so far as it is material for the present purpose, is as
G follows:
"11. Revision by High Court in special cases-
( 1) Any person aggrieved by an order made under sub-
section (4) or sub-section (5) of section JO, other than an
H order under sub-section (2) of that section summarily dis-
COMMR. OF SALES TAX v. COTTON BOWL WORKS [MUKHARJI, J.J 433
t- posing of the appeal, or by an order passed under Section A
22 by the Tribunal may, within ninety days from the date of
service of such order, apply to the High Court for revision
of such order on the ground that the case involves any
question of law:
Provided that,. where such order was served on the B
~-
person concerned at any time before the date of comm-
,,
I
encement of this section, as substituted by the Uttar
Pradesh Taxation Laws (Amendment and Validation) Act,
1978 (hereinafter in this section referred to as the _said
date), and the period of one hundred and twenty days for
making the application as referred to in this sub-section, as
it existed before the said date, had not expired on the sajd
c
date the person aggrieved may apply for revision within
sixty days from the said date."
The other sub-sections are riot relevant for the present purpose.
D
Section 10-A deals with orders against which no appeal or revi-
sion lies and Section 10-B stands for revision by the Commissioner of
Sales Tax. Section 11, as mentioned hereinbefore, stands for revision
. by the High Court and has beeen amended from time to time .
In the aforesaid background the question posed in these appeals E
will have to be examined in the light of the decision of the High Court.
The High Court in its judgment under appeal after analysing the provi-
sions of Section 35 observed that the Commissioner entered into the
I determination of the disputed questions. Sub-clause (2) of Section 35
r- of the Act, according to the High Court, enjoins on the Commissioner
to decide the questions referred to him as he deems fit after giving the F
applicant an opportunity of being heard. Under sub-clause (5) of Sec-
lion 35 it has been stated that the decision given by the Commissioner
of Sales Tax shall subject to an appeal to the Tribunal, be final. The
High Court while examining the section noticed that when an appeal
against the order passed under Section 35 of the Act is before the
Tribunal, the appeal is to be heard and disposed of by a bench of three G
members, although in regard to other appeals before the Tribunal
• these can be disposed of even by a single member or by a bench
consisting of two members. The High Court note,d that uµder sub-
clause (5) of section 35 of the Act prior to its ameµdment J>rought out
by U.P. Act No, 12 of 1979, an appeal used to lie t\) \he fligli Cpµrt
against the order of the Commissioner of the Sales Tax.- By. the H
.
434 SUPREME COURT REPORTS [1989) 1 S.C.R.
aforesaid amendment brought out by U .P. Act No. 12 of 1979 under
A
clause (5) of section 35 the words "High Court" have been deleted and
substituted by the word "Tribunal". The learned Judge of the High
Court observed that an appeal before the Tribunal was specially
treated by the legislature and it was enjoined that it should be disposed
of by a bench of not less than three members. The learned Judge noted
B that the Division Bench of the High Court in the case of lndo Lube )I
Refineries v. Sales Tax Officer, Sector-/, Gorakhpur, · [1987) 66 STC
145 had taken the view that an order passed by the Commissioner
under Section 35 of the Act was an administrative order and in so
doing he did not act as a Tribunal.
In this connection reference may be made to the Division Bench
c decision of the High Court of Allahabad in lndo Lube Refineries
(supra). There the petitioner filed a writ petition contending that as
the order of the Commissioner of Sales Tax had become final under
sub-section (5) of section 35 of the U.P. Sales Tax Act, 1948, it was
binding on the Revenue as well as the petitioner and it was open to the
D Sales Tax Officer who was inferior in hierarchy to ignore the order of
the Commissioner in passing the assessment order. Dismissing the
petition, it was held by the High Court that the Sales Tax Act had
made a clear distinction between judicial proceedings which had to be
conducted and concluded in accordance with sections 7, 9, 10, 10-B, 21
and 35 and the High Court noted that the proceedings under sections 7
E to 10-B were of different character than the one contemplated under
section 35, and it excluded a proceeding pending before a court or
before an assessing authority under section 7 or section 21. It was a
type of miscellaneous jurisdiction, it was held, to be exercised only in
given circumstances or situations. In respect of proceedings under sec-
tion 7, which will take within itself an appeal and revision, the legisla- 1
F ture had not made the Commissioner a final arbiter. The Sales Tax
Officers or the assessing authority while determining the turnover with
a view to assess tax liability acts as a tribunal. Likewise, the appellant
authority under section 9 and the Tribunal under section 10 of the Act
are tribunals. The Commissioner did not act as a tribunal while dealing
with an application under section 35. The nature of his jurisdiction is
G administrative according to the High Court. The legislature, according
to the High Court, has used the language "otherwise than in a pro-
ceeding pending before a court or before an assessing authority under
section 7 or 21" deliberately with a view to maintain and preserve the
sanctity of the judicial proceedings under the Act. The word "final"
used in sub-section (5) of section 35 is only with regard to the proceed-
H ings contemplated by that section and the order of the Commissioner
COMMR. OF SALES TAX v. COTTON BOWL WORKS IMUKHARJI, J.J 435
would be final. But this will not bar the other authorities under the Act A
+ from deciding the controversy before it on its own by looking to the
evidence and considering the question of law which comes before it.
Therefore, the High Court rejected the submission that the order of
the Commissioner of Sales Tax is binding in the assessment proceed-
ings and those proceedings have to be decided in accordance with the
B
same.
It is difficult to accept the position that under section 35 which
empowers the Commissioner to determine disputed questions and the
Commissioner under sub-section (2) after giving the parties opportu-
nity of being heard, decides a question, his order can be called to be an
administrative order. In our opinion, the very language of the section
c
which enjoins a decision by the Commissioner envisages that the deci-
sion is quasi-judicial or judicial and cannot be characterised as
administrative. Whether that decision will be binding on other party
and what will be the effect of the decision of the Commissioner of Sales
Tax in pending assessment proceedings is another matter and we are D
not concerned in these appeals with that question. We are concerned
with the question whether on the language of the section a revision is
entertainable from the decision of the Commissioner which has been
subjected to an appeal to the Tribunal. In our opinion, in view of the
language used specifically in the absence of a provision that such a
revision will be maintainable, such revision will not be. Sub-section (5) E
of section 35 after the amendment states that the decision of the Com-
missioner of Sales Tax under this section shall, subject to an appeal to
the Tribunal, be final. In view of the language of that section, in our
opinion, it cannot contemplated a further revision to the High Court
against a decision of the Tribunal. In Kydd v. Watch Committee of City
of Liverpool, [1908] AC 327, 331-32, Lord Loreburn, L.C., construing F
the provisions of section 11 of the Police Act, 1890 of England which
provided an appeal to quarter sessions as to the amount of a const-
able's pension, and also stipulated that the court shall make an order
which shall be just and final, observed:
G
"Where it says, speaking of such an order, that it is to be
final, I think it means there is to be an end of the business
at quarter sessions ..... "
The Judicial Committee in Maung Ba Thaw v. Ma Pin, [1933-34] 61
LR Indian Appeals 158 while dealing with the Provincial Insolvency H
436 SUPREME COURT REPORTS 11989] 1 S.C.R.
A Act observed that when a right of appeal was given to any of the ~
ordinary courts of the country, the procedure, orders and decrees of
that court would be governed .by the ordinary rules of the Civil Proce-
dure Code and therefore an appeal to Privy Council was maintainable
by the decision of the High Court. Here in the instant case the right of
B appeal has been given under the Act not to any ordinary court of the
country under the Code of Civil Procedure but to the courts ,enume- )i
rated under the Sales Tax Act and the revision is contemplated under
the provisions of the Sales Tax Act. 'Final' in the section means that it
is final and under the Act subject to the limited procedure contemp-
lated under the Act. The intention of the legislature, in our opinion, in -~
the amended scheme of the Act is clear and manifest and meaningful
C and the scheme of the Act is to regulate the determination of the
question as to the assessability and liability and questions in connec-
tion thereto. The observations of Lord Loreburn, L.C. were referred ~
to in South Asia Industries Pvt. Ltd. v. S.B. Sarup Singh, [1965] 2 SCR
756, where this Court observed at page 766 of the report that the
D expression "final" prima facie meant that an order passed on appeal
under the Act was conclusive and no further appeal lay. A right to
revision under the Act is a right given by the Act. In this connection,
observations in M/s. Jetha Bai and Sons, Jew and others v. Mis.
Sunderdas Rathenai and others, 11988] 1SCC72 may be relied on.
E We have noted that section 11 of the Act after the amendment
stipulated that any person being aggrieved by an order made under
sub-section (4) or sub-section (5) of Section 10, other than an order
under sub-section (2) of that section summarily disposing of the ap-
peal, or by an order passed under Section 22 by the Tribunal, may
apply for revision. Where an appeal is not disposed of summarily but
F by a decision, as in this case, and where the appeal is contemplated in 1
such a situation, to be heard by a bench of three Judges, in our opi-
nion, if any further revision would have laid from the decision of the
Tribunal then such decision of the Commissioner would not have been
made final by sub-section (5) of Section 35. It may be mentioned that
the Tribunal after exhaustively considering the contentions of the case
G allowed the appeal in part and the order of the Commissioner of Sales
Tax was modified by holding that the process of repairing and refilling
of the cotton bowls of the customers did not amount to "manufacture"
as defined in Section 2(e-1) of the Act, as amended by the U.P. Sales
Tax (Amendment and Validation) Act, 1985 with effect from 2nd
February, 1985. In the scheme of the Act, in our opinion, it was
H en joined that such an appeal is to be heard by a bench of three judges.
COMMR. OF SALES TAX v. COTTON BOWL WORKS [MUKHARJI, J.!437
Where it was provided that the decision of the Commissioner would be
~ final subject to an appeal to the Tribunal, in our opinion, it would be
A
incorrect to contemplate that in such a situation a further revision
under Section 17 lay to the High Court. Revision to the High Court in
special cases under Section 11 is contemplated on the ground that the
case involved a question of law. It may be mentioned that the High
Court had mentioned that under sub-clause (5) of section 35 of the Act B
' p~ior to its amendment that an appeal used to lie to the High Court
against an order of the Commissioner of Sales Tax. By the aforesaid
amendment brought forward by the U.P. Act 12 of 1979 under clause
I~ (5) of Section 35 the words "High Court" have been deleted and
substituted by the word "Tribunal". It appears that the High Court
was right, therefore, in holding that an appeal to the Tribunal against
an order of the Commissioner lies. So far as the appeal before the
c
Tribunal against the order passed under section 35 is concerned, spe-
l
cial treatment has been provided for by the legislature. The Tribunal
has come in place of the High Court in hearing the appeal. In such a
situation to contemplate when the language of the section envisages
that the order of the Commissioner would be final, subject to an ap- D
peal to the Tribunal that a further revision lay to the High Court would
be unwarranted. As mentioned hereinbefore, we have to find out the
intention of the Legislature in such a situation. The intention of. the
Legislature is a slippery phrase as observed in Aron Salomon v. A.
~ Salomon and Company Ltd., [1897] AC, 22, 38 see also observations
in Lord Howard De Walden v. Inland Revenue Commissioners, [1948] E
2 All England Reports page 825. In such cases it is better to find out
the intention of the legislature from the words used by the natural
meaning of the words and spirit and reason of the law. See Cross on
Statutory Interpretation, Second Edition, page 21.
~ F
Having regard to the scheme manifested from the amendment,
that is to say, to make the Commissioner's decision final, subject to an
appeal to the Tribunal where the Tribunal is enjoined to hear such an
appeal by a bench of three members and where revision is provided
only in special cases, in our opinion, it would be improper to interpret
the spirit and reason of that law in such a way as to enjoin that a
G
further revision lay to the High Court under section 11 of the Act. In
our opinion, therefore, the High Court was right that no further revi-
sion in such a situation lies to the High Court. This, however, does not
eliminate the correction by the High Court. In an appropriate case by
exercise of a writ of certiora under Article ·226 of the Constitution it
exercises superintendence over all courts and tribunals throughout the H
438 SUPREME COURT REPORTS [1989[ 1 S.C.R.
A territory. See in this connection Re Gilmore's Application, I1957] l All
England Reports 796. We are not concerned with that situation in these
appeals. In that view of the matter it appears to us that the High Court
is right in so far as it held that no revision lay to the High Court.
These appeals, therefore, fail and are dismissed. Parties will pay
B
and bear their own costs.
N.V.K. Appeals dismissed.
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "Sales Tax"Sign in to search