TMI Blog1964 (10) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... vires is set aside, and the proceedings are remand- ed to the High Court to be dealt with according to law. - Civil Appeal No. 466 of 1962 - - - Dated:- 5-10-1964 - SUBBA RAO K., SHAH J.C. AND SIKRI S.M. JJ. A.V. Viswanatha Sastri, Senior Advocate (R. Gopalakrishnan with him), for the respondent. V.P. Gopalan Nambyar, Advocate-General for the State of Kerala (Dr. V.A. Seyid Muhammed with him), for the appellant. -------------------------------------------------- The judgment of SHAH and SIKRI, JJ., was delivered by SHAH, J. SUBBA RAO, J., delivered a separate judgment. SUBBA RAO, J. -I regret my inability to agree. The facts are fully stated in the judgment of my learned brother Shah, J. It would, therefore, be enough if only the relevant facts were stated. The respondents are dealers in pepper and other condiments. For the year 1950-51 they submitted their return under the Madras General Sales Tax Act, 1939, wherein they claimed exemption in respect of certain transactions on the ground that they were commission sales exempted under section 8 of the said Act. The Deputy Commercial Tax Officer, Cannanore (Rural) gave the exemption claimed and assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty may, after giving the appellant an opportunity of being heard, pass such orders on the appeal as such authority may think fit. Under section 12(2) of the Act, the revisional authority may suo motu "call for and examine the record of any order passed or proceeding recorded under the provisions of this Act by an 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 may pass such order with respect thereto as he thinks fit." When the Legislature confers a right of appeal in one case and a discretionary remedy of revision in another, it must be deemed to have created two jurisdictions different in scope and content. When it introduced the familiar concepts of appeal and revision, it is also reasonable to assume that the well-known distinction between these two jurisdictions was also accepted by the Legislature. There is an essential distinction between an appeal and a revision. The distinction is based on differences implicit in the said two expressions. An appeal is a continuation of the proceedings; in effect the entire proceedings are before the appellate authority and it ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t are the defects that are comprehended by the expression "legality", "propriety " and "regularity". They are well-known concepts. But the said defects can only be discovered from the said records and proceedings and not by a fresh enquiry. If so, it follows that rule 14-A in so far as it confers a power on the revising authority to make a fresh enquiry and to determine on the basis of the enquiry the correct amount of tax payable by an assessee is void. Therefore, the order of the High court is correct. In the result, the appeal fails and is dismissed with costs. SHAH, J.- The respondents are dealers in pepper and other condiments and have their place of business at Baliapatam, Malabar (North) District which formerly was part of the State of Madras, but since the reorganisation of States under the States Reorganisation Act, 1956, forms part of the State of Kerala. For the year 1950-51 the respondents submitted their return under the Madras General Sales Tax Act, 1939, showing a gross turnover of Rs. 67,38,710-10-11 in respect of their business, and claimed exemption in respect of turnover of the value of Rs. 50,83,441-14-4 on the plea that it represented commission sales whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct amount, thereby indicating that in rule 14-A the "emphasis is more on the arithmetical aspect rather than on the merits of an assessment". In the view of the Tribunal, rule 14-A was "much more restricted in scope than section 12 of the Act, and where a case is taken up under the general power of revision, one has to look at the scope of section 12 to find out the extent of the general power, and not rule 14-A". Against the order passed by the Tribunal, the State of Kerala which had acquired jurisdiction in respect of the sales tax assessment of the respondents by virtue of the States Reorganisation Act, 1956, applied to the High Court of Judicature, Kerala. It may suffice to observe that no question about the vires of rule 14-A was raised by the assessees before the taxing authorities, and the State was not interested in raising such a contention. But the High Court held that in dealing with a proceeding under section 12(2) of the Madras General Sales Tax Act the revising authority is restricted to the record before the assessing authority and his order passed on fresh evidence could not be sustained. In the view of the High Court the expression "the record of any order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcisable only within a period of four years from the date on which the order was communicated to the assessee. Sub-section (6) provides that no order may be passed under sub-section (1), (2) or (3) enhancing the assessment, without giving an opportunity to the assessee to show cause against the proposed enhancement. Sub-section (1) of section 19 authorises the State Government to make rules to carry out the purposes of the Act. By sub-section (2) it is provided: "In particular and without prejudice to the generality of the foregoing power, such rules may provide for- * * * (j) the duties and powers of officers appointed for the purpose of enforcing the provisions of this Act; (k) generally regulating the procedure to be followed and the forms to be adopted in proceedings under this Act; and (l) any other matter for which there is no provision or no sufficient provision in this Act and for which provision is, in the opinion of the State Government, necessary for giving effect to the purposes of this Act." Sub-section (5) of section 19 provides that all rules made under this section shall be published in the Fort St. George Gazette, and upon such publication sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o as he thinks fit" means such order as may in the circumstances of the case for rectifying the defect be regarded by him as just. Power to pass such order as the revising authority thinks fit may in some cases include power to make or direct such further enquiry as the Deputy Commissioner may find necessary for rectifying the illegality or impropriety of the order, or irregularity in the proceeding. 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. It must be noticed that the Act while conferring upon the prescribed authority power to entertain an appeal under section 11, and a petition in revision under section 12 does not prescribe the procedure to be followed by the authorities. It is left to the State Government by Rules framed under section 19 to prescribe the procedure of the appellate and the revising authorities and a provision authorising the making of a further enquiry for effectively exercising the appellate or revisional power, would in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Income- tax Officer. By section 33(4) the Appellate Tribunal was given power to pass such order in the appeal as it thought fit and that power included the power to direct additional evidence to be taken or to take evidence itself: M.L. Tewary v. Commissioner of Income- tax, Bihar and Orissa [1955] 27 I.T.R. 630. By section 33-A the Commissioner could on his own motion or on application presented within one year from the date of the order sought to be revised, call for the record of any proceeding under the Act in which an order had been passed by any authority subordinate to him and could make such inquiry or cause such inquiry to be made and subject to the provisions of the Act to pass such order thereon, as he thought fit. Similar provisions are now incorporated in the Income-tax Act (Act 43 of 1961). By section 250(4) of that Act the Appellate Assistant Commissioner is authorised before disposing of an appeal to make such further inquiry as he thinks fit or to direct the Income-tax Officer to make further inquiry and report the result of the same to him. Powers of the Income-tax Appellate Tribunal and the Commissioner are couched in the same terms as under the Act of 192 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only to cases of arithmetical errors or as the Tribunal called it "arithmetical aspect," there is no reason to assume that the power under rule 14-A to make such enquiry as the appellate or the revising authority considers it just to order or to make would be so restricted. But the power conferred by rule 14-A by the use of the expression "making such enquiry as such appellate or revising authority considers necessary" must be read subject to the scheme of the Act. 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 not be open to the revising ..... X X X X Extracts X X X X X X X X Extracts X X X X
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