Holding

The Commissioner, being subordinate to the Sales Tax Tribunal, cannot invoke his revisional power under s.57(1)(a) to revise an appellate order of the Assistant Commissioner while a second appeal against that order is pending before the Tribunal.

Issues considered

Can the Commissioner of Sales Tax exercise revisional power under clause (a) of s.57(1) of the Bombay Sales Tax Act to revise an appellate order of the Assistant Commissioner when a second appeal against that order is pending before the Sales Tax Tribunal?
Does the Tribunal’s appellate and revisional jurisdiction preclude the Commissioner from interfering with orders pending before it?
Is the power to enhance assessment in a second appeal vested in the Tribunal, thereby obviating the need for Commissioner’s revision?

Legislation cited

Bombay Sales Tax Act, 1959s. 33, s. 51, s. 55, s. 57
Customs Act, 1962
Income Tax Act, 1961s. 251
Maharashtra Agriculture Income Tax Act, 1962s. 34

Subjects

sales taxrevisional jurisdictionappellate jurisdictionSales Tax Tribunalassessment enhancementsection 57section 55Bombay Sales Tax Actsecond appealtax law

Judgment

97 A
y

SANTOSHI TEL UTPADAK KENDRA
v.
DEPUTY COMMISSIONER OF SALES TAX
B
July 24, 1981.

[P.N. BHAGWATI AND R.S. PATHAK, JJ.)

- Bon1bay Sales Tax Act 1959, S. 51 (/) (a)-Scope of-Assess1nent order by
Sales Tax Officer-Assessee's first appeal before Assistant Commissioner disposed
of-Assessee's second appeal before Sales Tax Tribunal pending-Conu11issioner
of Sales Tax whether competent to revise the appellate order of Assistant Com~
missioner.
c

The appellant, a partnership firn1, was assessed by the Sales Tax Officer, who
estimated the turnover for the Calendar year 1971, and for the first six months of
the year 1972 and made two orders of assessment dated 26 i\.1arch 1973 under D
section 33 of the Bombay Sales Tax Act, 1959 levying Sales Tax and penalty.
Against the assessment and penalty orders for the two periods, the appellant
appealed under clause .(a) of sub-section (1) of section 55 of the Act to
the Assistant Commissioner. By a common order dated 29th September, 1973
the Assistant Commissioner reduced the quantum of the turnover and, conse.
quently, the tax liability for each of the periods. Not fully satisfied by the relief
granted, the appellant proceeded in second appeal to the Sales Tax Tribunal on
E
8th December, 1973. During the pendency of the appeals before the Tribunal,
the Deputy Commissioner, issued two notices to the appellant on 24th April,
1974 requiring it to show cause why the appellate orders dated 29th September,
1973 passed by the Assistant Co1nmissioner should not be revised under section
57 of the Act. The appellant objected to the exercise of revisional power by the
Deputy Cornn1issioner during the pendency of the appeals before the Tribunal. F
On 12th September 1975 the Deputy Commissioner rejected the objection.
Against the order of rejection the appeUant filed two appeals before the Tribunal,
and by its order da1ed 27th October, 1977 the Tribunal dis1nissed the appeals.
The Tribunal took the view that its deciding those appeals would result in
nullifying the revisional power vested in the Deputy Commissioner. The two
second appeals filed by the appellant against the appeliate orders dated 19th
September, 1973 passed by the Assistant Commissioner were adjourned.
G
The appellant filed a writ petition in the High Court against the order of
the Deputy Commissioner dated 12th September, 1975 rejecting its preliminary
objection and also against the Order passed by the Tribunal on 27th October, 1977
dismissing his appeals as well as the notices issued by the Deputy Con1mis~ioner
on 24th April, 1974 in the purported exercise of his revisional power., contending
tbat the Commissioner of Sales Tax could not exercise his revisional power fj
against the appeallate orde1 of the Assistant Comn1issioner when a second
appeal against that order was pending before the Tribunal.
98 SUPREME COURT REPORTS [1982] I S.C.R.

A The High Court rejected the appellant's contention observing that as the
statute did not provide any other forum or jurisdiction for protecting the
interests of the Revenue, it was always open to the Commissioner to interfere in
revision with an order prejudicial to the Revenue notwithstanding that such
order may be already under appeal before the Tribunal.

Allowing the appeal to this Court,
B HELD: l. It is not open to the Com1nissioner to invoke bis power under
clause (a) of sub-section (1) of sec~ion 57 and summon the record of an order over
which the Tribunal has already assumed appellate jurisdiction. The subordinate
status of the Commifsioner precludes that. [102 G]

2. An assessment order 11nder the Bombay Sales Tax Act is
appealable under section 55 of the Act. When the order is made by the Sales
c Tax Officer an appeal goes to the Assistant Commissioner. If the order is made
by the Assistant Commissioner an appeal goes to the Commissioner and if
it has been made by the Con1missioner or Deputy Cornmissioner or Additional
Commissioner an appeal lies before the Tribunal. Sub-section (2) or section 55
provides for a second appeal against the appellate order of the Assistant Com-
missioner. The second appeal lies at the option or the appellant to the Com-
missioner or the Tribunal. The Tribunal exercises appellate jurisdiction by way
D of second appeal in respect of an assessment order made by the Sales Tax Officer.
It also exercises by way of first appeal, appellate jurisdiction over an assessment
order made by the Commissioner. lt is at the apex of the appellate hierarchy,
the Sales Tax Officer, the Assistant Commissioner and .the Commissioner all of
them being, subordinate to it. [101 C-E]

3. While the Commissioner exercises revisional jurisdiction over an order
E passed by any officer or person subordinate to him, the Tribunal is the revisional
authority over an order of the Comn1issioner. The Act constitutes the Tribunal
an appellate as well as a rcvisional authority over the Commissioner. In quasi·
judicial matters the Comn1issioner is therefore subordinate to the Tribunal.
[102 DJ

4. The Tribunal is the supreme appellate and n:visional authority under
F the statute. It cannot be divested of its jurisdictioo to decide on the correctness
of an order, it cannot be frustrated in the exercise or that jurisdiction, merely,
because a subordinate authority, the Commissioner, has also been vested with
jurisdiction over that order. Unless the statute plainly provides to the contrary
that appears to be incontrovertible- [102 F]

5. The High Court was in error in concluding that the power to enhance
an assessn1ent can be discovered only in the revisional jurisdiction of the Com-
G missioner and nowhere else. [104 H-105 A]

6. In a second appeal under sub-section (2) of s~ction 55 of the Bombay
Sales Tax Act, the Tribunal has power to enhance the assessment. That being so,
it is open to the Revenue to invoke that power in a pending second appeal filed
by the dealer before the Tribunal. [104 G]

7. The Commissioner being a subordinate authority to the Tribunal cannot
interfere with an order pending in appeal before the Tribunal, especially when
SANTOSHI TEL KENDRA v. C.S.T. (Pathak, J.) 99

the interest of the Revenue is protected by the power of enhancement vested in A
the Tribunal while disposing of a second appeal filed by a dealer. [105 G]

Con1missioner of Sales Tax v. Motor and lvfachinery .i'vfanufact11rers Ltd.,
(1976) 38 STC 78 over-ruled.

Conzmissioner of Income Ta.\ v. Amritlal BhogUal (1958) 34 JTR 130 (SC)
distinguished. B
Ramlal Onkarmal v. Commissioner of Income Tax, Assa1n (1962) 44 ITR
578, Kelpunj Enterprises v. Cotnmissioner vf lnco1ne Tax Kera/a. (1977) 108
!TR 294, Russell Properries (P.) Lid. v. A. Chowdhury, (1977) 109 !TR 229

- inapplicable.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1968 of
c
1978.

Appeal by special leave from the judgment and order dated
22nd 123rd June; 5th July 1978 of the High Court of Bombay (Nagpur
Bench) in Special Civil Application No. 238 of 1978.
D
V. S. Desai, P. H. Parekh, C. B. Singh, B, L. Verma &
Miss V. Caprihan for the Appellant.

R.H. Dhebur & M.N. Shrojj for the Respondent.

The Judgment of the Court was delivered by E
PATHAK, J. This appeal by special leave raises the important
question whether the Commissioner of Sales Tax can revise under
cl. (a) of snb-s. (I) of s. 57 of the Bombay Sales Tax Act, 1959, an
appellate order passed by the Assistant Commissioner when the
assessee's second appeal against that order is pending before the F
Maharashtra Sales Tax Tribunal.

The appellant is a partnership firm, carrying on the business
of manufacturing and selling vegetao.i Ible The Sales Tax Officer
estimated the turnover for the calendar year 1971 and made an
order dated 26th March, 1973 levying Sales Tax at Rs. 73,198.62 G
and a penalty of Rs. 36, 197.64. On the same date, another assess-
ment order was made for the first six months of the year 1972, where
again on the basis of an estimate the Sales Tax Officer computed the
tax Rs. 81,745.71 and levied a penalry of Rs. 37,572.26. The two
assessment orders were apparently made under s.33 of the Bombay H
Sales Tax Act, 1959. Against the assessment and penalty orders for
JOO ~UPREME COURT REPORTS [1982] 1 S.C.R.

A the two periods, the appellant appealed under cl. (a) of su)>-s. (I) of
s. 55 of the Act to the Assistant Commissioner. By a common order
dated 29th September, 1973 the Assistant Commissioner reduced the
quantum of the turnover and, consequently, the tax liability to
Rs. 30,494.67 and the penalty to Rs. 11, 745.71 for the first period
and a tax liability of Rs. 16,447.33 and penalty of Rs. 5,572.26 for
B the second period. Not fully satisfied by the relief granted, the
appellant proceeded in second appeal to the Maharashtra Sales Tax
Tribunal on 8th December, 1973. During the pendency of the
appeals before the Tribunal, the Deputy Commissioner, Nagpur
issued two notices to the appellant on 24th April, 1974 requiring it
to show cause why the appellate orders dated 29th September, 1973
c passed by the Assistant Commissioner should not be revised under
s. 57 of the Act. The appellant objected to the exercise of revisional
power by the Deputy Commissioner during the pendency of the
appeals before the Tribunal. On 12th September. 1975 the Deputy
Commissioner rejected the objection. Against the order of rejection
the appellant filed two appeals before the Tribunal, and by its order
0 dated 27th October, 1977 the Tribunal dismissed the appeals. At
the same time, the Tribunal adjourned the two second appeals filed
by the appellant against the appellate orders dated 29th September,
1973 passed by the Assistant Commissioner. The Tribunal took the
view that its deciding those appeals would result in nullifying the
revisional power vested in the Deputy Commissioner.
E
The appellant filed a writ petition in the High Court of Bombay
against the order of tl1e Deputy Commissioner dated 12th September
1975 rejecting its preliminary objection and also against the order
passed bv the Tribunal on 27th October, 1977 dismissing his appeals,
as well as the notices issued by the Deputy Commissioner on 24th
F
April, 1974 in the purported exercise of his revisional power.

The only point pressed by the appellant before the High Court
""as tLat the Com111issioner of Sales Tax could not exercise his
revisional power against the appellate - order of the Assistant Com-
G missioner when a second appeal against that order was pending
before the Tribunal. The High Court turned down the plea by its
order dated 5th July, 1978, observing that it was always open to the
Commissioner to interfere in revision with an order prejudicial to
the Revenue notwithstanding that such order may be already under
H appeal before the Tribunal. The High Court felt compelled to take
this view because, in its opinion, the statute did not provide any
SANTOSHI TEL KENDRA v. C.S.T. (Pathak, J.) 101

other forum or jurisdiction for protecting the interests of the A
Revenue. It relied on its earlier judgment in Commissioner of Sales
Tax v. Motor and Machinery Manufactures Ltd., (1) and also sought
support from the observations of this Court in Commisiioner of
Income Tax v. Amritlal Bhogilal. (2 ) It spoke further of "the anomaly
of overlapping jurisdiction"' between the Commissioner and the
Tribunal, and referred with approval to an earlier decision of the B
High Court in H. B. Munshi v. Oriental Rubber Industries Pvt.
Ltd. (').

An assessment order under the Bombay Sales Tax Act is
appealable under s.55 of the Act, and we may mention only that
when the order is made by the Sales Tax Officer an appeal lies to c
the Assistant Commissioner, if the order is made by the Assistant
Commissioner an appeal goes to the Commissioner and if it has been
made by the Commissioner (or Deputy Commissioner or Additional
Commissioner) an appeal lies before the Tribunal. Sub-s. (2) of s.55
provides for a s<cond appeal against the appellate order of the
Assistant Commissioner. The second appeal lies at the option of D
the appellant, to the Commissioner or the Tribunal. The Tribunal,
it will be noticed, exercises appellate jurisdiction by way of second
appeal in respect of an assessment order made by the Sales Tax
Officer. It also exercises, by way of first appeal, appellate jurisdic-
tion over an assessment order made by the Commissioner. It is at
the apex of the appellate hierarchy, the Sales Tax Officer, the Assistant E
Commissioner and the Commissioner all of them being, therefore,
subordinate to it.

S.57 of the Act provides for revisional jurisdiction.
F
' 57 (I) Subject to the provisions of section 56 and to
any rules which may be made in this behalf:--

(a) the Commissioner may, of his own motion, call for
and examine the record of any order p.issed (including
an order passed in appeal) under this Act or the rules G
made thereunder by any officer or person subordinate
to him, and pass such order thereon as he thinks just
and proper;

(I) [1976] 38 STC 78 H
(2) [1958] 34 !TR 130 (SC)
(3) [1974] 34 STC 113.
102 SUPREME COURT REPORTS [1982] I S.C.R.

A Provided that, no notice in the prescribed form shall
be served by the Commissioner under this clause after the
expiry of three years from the date of the communication
of the order sought to be revised, and no order in revision
shall be made by him hereunder after the expiry of five
years from such date;
B
(b) the Tribunal, on application made to it against an
order of the Commissioner (not being an order passed
under sub-section (2) 0f s.55 in second appeal) within
four months from the date of the communication of
the order, may call for and examine the record of any
such order, and pass such order thereon as it thinks
just and proper.

It will be noticed that while the Commissioner exercises
revisional jurisdiction over an order passed by any officer or person
subordinate to him, the Tribunal is the revisional authority over an
D order of the Commissioner (not being an order passed by the Com-
missioner disposing of a second appeal). The Act thus constitutes
the Tribunal an appellate as well as a revisional authority over the
Commissioner. Plainly, therefore, in quasi-judicial matters the
Commissioner is subordinate to the Tribunal.

Now it seems to us past question that when the appellate
E
jurisdiction of superior authority is invoked against an order and
that authority is seized of the case, it is inconceivable for a sub-
ordinate authority to claim to exercise jurisdiction to revise that very
order. The Tribunal is the supreme appellate and revisional authority
under the statute . . lt cannot be divested of its jurisdiction to decide
F on the correctness of an order, it cannot be frustrated in the exercise
of that jurisdiction, merely because a subordinate authority, the
Commissioner, has also been vested with jurisdiction over that order.
Unless the statute plainly provides to the contrary, that appears to
us to be incontrovertible. It is not open to the Commissioner to
invoke his power under cl. (a) of sub-s. (I) of s. 57 and summon the
G record of an order over which the Tribunal has already assumed
appellate jurisdiction. The subordinate status of the Commissioner
precludes that.

The High Court felt burdened by the compulsion that unless
a contemporaneous exercise of con<;urrent jurisdiction \Vas read into
H sub-s. (I) of s.57, so that both the Tribunal and the Commissioner
SANTOSHI TEL KENDRA v. C.S.T. (Pathak, J.) 103

could be regarded as simultaneously enjoying "overlapping jurisdic- A
tion" in respect of the same order, it would be impossible to safe·
guard the interests of the Revenue; for, says the High Court, a second
appeal is available only to a dealer and not to the Revenue, and an
enterprising dealer could, by expeditiously filing a second appeal
before the Tribunal eflectively shut out the Commissioner from
interfering with the order in the interests of the Revenue. The High B
Court found itself driven to the conclusion that the Commissioner
was entitled to revise an order at any stage, otherwise there could
be cases where the assessment could not be enhanced. The High
Court, we think, has overlooked an important provision of the Act.

- In our opinion, the appellate powers elaborated in sub-s. (6) of s.55
take account of such a need. Their comprehensive sweep can be
judged from the tet ms of the sub-section.
c

"(6) Subject to such rules of procedure as may be
prescribed, every appellate authority (both in the first appeal D
and the second appeal) shall have the following powers:

(a) in an appeal against an order of assessment, it may
confirm, reduce, enhance or annul the assessment; or
it may set aside the assessment and refer the case back E
to the assessing authority for making a fresh assessment
in accordance with the direction given by it and after
... making such further inquiry as may be necessary; and
the assessing authority shall thereupon proceed to
make such fresh assessment and determine where
necessary, the amount of tax, payable on the basis of F
such fresh assessment;

(b) in an appeal against an order imposing a penalty, the
appellate authority may confirm or cancelsuch order or
vary it so as either to enhance or reduce the penalty. G

(c) In any other case, the appellate authority may pass
such orders in the appeal as it deems just and proper;

Provided that, the appellate authority shall not
enhance an assessment or a penalty or reduce the amount H
104 SUPREME COURT REPORTS [1982] 1 s.C.R.

A of draw-back, set off or refund of the tax, unless the
appellant has had a reasonable opportunity of showing
cause against such enhancement or reduction".

Three distinct categories of cases are enumerated An appeal
against an assessment order, an appeal against a penalty order and
B an appeal in any other case. The power to enhance the liability is
given to the appellate authority in the first two categories only. We
are concerned with one of them, an appeal against an order of
assessment.

c
Now the sub-section speaks of an "appellate authority both
in the first appeal and the second appeal". It is quite clear, there-
fore, that the appellate powers detailed in cl. (a) have the same
amplitude in a second appeal as in a first appeal. An appellate
-
"

authority disposing of a first appeal has power to enhance the
assessment. So has appellate authority in a second appeal. We
may also point out that when an appellate authority is considering
D a second appeal a "first appellate'' order, it is examining an order
which can be broadly described as an order of assessment. It is a
final order disposing of an appeal which, in a sense, is a continuation
of the assessment. A second appeal against such an order is an
appeal against an order of assessment.''

En passant, it will be noticed that sub-s. (6) of s.55 of the
Bombay Sales Tax Act is in pari materia with sub-s. (I) of s. 251 of
the Income Tax Act, 1961. The language is almost identical. Sub-s.
(1) of s. 251 sets for_th the same three categories and the power to
enhance is confined to an order of assessment and an order imposing
a penalty. But in the case of a second appeal under the Income-tax
F Act, there is a distinct departure from the scheme under the Bombay
Sales Tax Act. S.253 does not expressly speak of the "power to
enhance'·, and makes no distinction in regard to the extent of the "
appellate power between any of the cases in which a second appeal
lies from an order under s.251.
G
It is evident then that in a second appeal under sub-s. (2) of
s.55 of the Bombay Sales Tax Act. the Tribunal has power to enhance
the assessment. That being so, plainly it is open to the Revenue to
invoke that power in a pending second appeal filed by the dealer
H. before the Tribunal. The High Court is in error in concluding that
the power to enhance an assessment can be discovered only in the
SANTOSHI TEL KENDRA v. C.S.T. (Pathak, J.) 105

revisional jurisdiction of the Commissioner and nowhere else. The A
compulsion which drove the High Court to the construction placed
by it on sub-s. (1) of s.57 of the Act does not have substance, and
the entire sub-stratum underlying the High Court judgment must
give way.

On the view which finds favour with us we cannot approve of B
the law laid down on the point in Motor and Manufacturers Ltd.
• (supra) nor do we see any overlapping of, or conflict in, the powers
of the Commissioner and the Tribunal inferred in Oriental Rubber
lndustries Pvt. Ltd. (supra). As regards the observation of this
Court in Amritlal Bhogila (supra), that was not a case where a
subordinate authority sought to exercise its revisional jurisdiction c
over an order pending in appeal before a superior authority. No
support can be derived by the respondent from that case. For the
same reason, Ram/al Onkarma/ v. Commissioner of Income-tax,
Assam (1) decided by the Assam High Court Kelpunj Enterprises v.
Commissioner of Income-tax, Kera/a, (') decided by the Kerala High
Court and Russell Properties (P) Ltd. v. A. Chowdhury, (') decided D
by the Calcutta High Court, placed before us by the respondent
have no relevance.

Our attention has been invited to s.34 of the Maharashtra
Agriculture Income Tax Act, 1962 where when defining the revisional
• power of the Commissioner the Legislature has expressly incorporated E
.. a provision prohibiting the Commissioner from exercising his
revisional power against an order pending in appeal before the
Assistant Commissioner or Tribunal. It is urged that if a similar
prohibition was intended against the Commissioner under the Bombay
Sales Tax Act, an express provision to that effect would have been
made. Reference has also been made to the provisions in the F
Customs Act, 1962 conferring revisional jurisdiction. We are not
impressed by the contention. The absence of an express provision
cannot detract from the conclusion reached by us • a conclusion
flowing from the necessary intendment of the statute . that the
Commissioner being a subordinate authority to the Tribunal, cannot
interfere with an order pending in appeal before the Tribunal, and G
further that the interest of the Revenue is protected by the power of
enhancement vested in the Tribunal while disposing of a second
appeal filed by a dealer.

(I) (1962] 44 !TR 578. H
(2) (1977] 108 !TR 294.
(3) (1977] 109 !TR 229.
106 SUPREME COURT REPORTS (1982] J S.C.R.

A In the result, the appeal is allowed, the judgment dated 5th
July, 1978 of the High Court is set aside, and the order dated 29th
October, 1977 of the Tribunal and the revisional proceedings before
the Deputy Commissioner, including the orders made by him, are ....
sahqued. The appellant is entitled to its costs.

B
N.V.K. Appeal allowed. ~

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