TMI Blog1991 (7) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid orders were passed by the Sales Tax Officer on May 18, 1957. Against the aforesaid assessment orders, the dealer filed four different appeals before the Assistant Commissioner of Sales Tax. It was contended in the appeals that in view of the decision of the Supreme Court in the case of State of Punjab v. Jullundur Vegetables Syndicate reported in [1966] 17 STC 326, a dissolved firm cannot be assessed. The Assistant Commissioner of Sales Tax followed the aforesaid decision and by his order dated November 29, 1967, set aside the order of assessment passed by the Sales Tax Officer. 2.. Thereafter things remained quiet up to March 20, 1976, on which date the Deputy Commissioner of Sales Tax issued a notice to the dealer stating that the matters were being taken up in suo motu revisions. It appears that this action was taken on account of the decision of the Supreme Court in the case of Murarilal Mahabir Prasad v. B.R. Vad reported in [1976] 37 STC 77. In that decision, the Supreme Court held that under the Bombay Sales Tax Act, 1953, a dissolved firm could be assessed or reassessed in respect of its turnover up to the date of its dissolution. In view of this decision, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les Tax Act, 1953? 3.. Whether, on the facts and in the In negative, in favour circumstances of the case, the Tribunal is right in of the assessee and holding that the requirement of the exercise of the against the Revenue. power of suo motu revision within a reasonable time as laid down by the Supreme Court in the case of State of Gujarat v. Patel Raghav Natha AIR 1969 SC 1297 would not be applicable to the provisions of the Bombay Sales Tax Act, 1953? 4.. Whether, on the facts and in the In negative, in favour circumstances of the case, the Tribunal was right in of the assessee and holding that the power of suo motu revision cannot against the Revenue. be said to be unreasonably exercised in the case of the applicant? 5.. Whether, on the facts and in the In view of the answer circumstances of the case, the suo motu revision to questions Nos. 1 orders passed without making all the ex-partners and 4 this question of the dissolved firm parties to the proceedings of does not survive. revision, are legal and valid? Hence not answered. 5.. As indicated hereinabove, the assessment period covered by the orders passed by the Sales Tax Officer which culminated into revision by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uo motu exercise of revisional powers because the statute has not provided any such limitation. While in the case of Patel Raghav Natha AIR 1969 SC 1297 the Supreme Court has in terms held that the revisional powers must be exercised in reasonable time and the length of the reasonable time must be determined by the facts of the case and nature of the order which is being revised. It is true that the Supreme Court has made these observations while considering the provisions of section 211 of the Bombay Land Revenue Code. But it should not be forgotten that in section 211 of the Bombay Land Revenue Code, no period of limitation has been prescribed. The Supreme Court was aware of this fact. As a matter of fact, this fact has been noted by the Supreme Court. Even so, the Supreme Court observed to the following effect: "....... it seems to us plain that this power must be exercised in reasonable time and the length of the reasonable time must be determined by the facts of the case and the nature of the order which is being revised." The applicability of the aforesaid principle laid down by the Supreme Court cannot be restricted to the cases falling under the provisions of section 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was intimated that the Deputy Commissioner of Sales Tax proposed to suo motu revise the orders passed by the Assistant Commissioner of Sales Tax in appeal. It was proposed that the deduction in respect of the entire goods despatched to branches in other States outside Maharashtra was not proper inasmuch as certain provisions of the Act were overlooked by the Assistant Commissioner of Sales Tax. On receipt of this notice, the company had preferred writ petition in the High Court of Bombay challenging the legality and validity of the notice on various grounds including the ground regarding limitation. The Bombay High Court rejected the petition. The matter was carried before the Supreme Court. Before the Supreme Court one of the contentions raised was that it should be held that the proceedings sought to be initiated were barred by time because the limitation of reasonable time within which the revisional powers are to be exercised must be implied in the statute itself. The Supreme Court refused to read such limitation and observed as follows: "....... when a revisional power is to be exercised, we think that the only limitations, to which that power is subject, are those indicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is also a settled principle of law entrenched in our jurisprudence that a power conferred upon any statutory authority should be exercised genuinely. Genuine exercise of powers takes within its sweep the concept of reasonableness. 9.. While considering the reasonableness or otherwise of the exercise of power, time element enters into it. If the time gap is such that the exercise of power can be said to be unreasonable and therefore not genuine, then the element of time becomes relevant. In this context reference may be made to a decision of the Supreme Court in the case of Mansaram v. S.P. Pathak reported in AIR 1983 SC 1239. In that case a tenant was sought to be evicted after a period of about 22 years on the alleged ground that his initial entry in the premises was unauthorised. The question arose in the context of the provisions of the C.P. and Berar Letting of Houses and Rent Control Order [1949] and the Supreme Court observed as follows: "............. power is conferred on the Collector to see that the provisions of the Rent Control Order which disclosed a public policy are effectively implemented and if the Collector therefore, comes across information that there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in mind the facts of each case and the nature of the order. Is the exercise of power in consonance with the object of the Act and does it serve the purpose for which the same is conferred? In the instant case, the power of suo motu revision is conferred to see that tax imposed is properly collected and wherever there is concealment and tax is escaped, the same is disclosed and brought within the taxation net. After examining this question, one has to consider the nature of the order under revision and consequences of the order, that may be passed in revision. Are the consequences such which are normally contemplated by the working of the Act? Are the consequences such that there is likelihood of conflict of interest between a private individual and the interest of the society? These are some of the considerations which should be taken into consideration while determining the nature of the order and while examining the facts of each case. In short all the relevant aspects of the facts of the case and that of the order under revision should be taken into consideration. Therefore one may say that length of time would depend upon the facts of each case. 12.. It may be noted that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o time-limit for such action is provided, the question of reasonable time comes into play without which the exercise of power may be exposed to arbitrariness. 14.. If one examines the scheme of the Act even if there is concealment and the dealer has escaped the assessment, such cases should be taken into consideration by the appropriate tax authorities within a period of eight years from the year in question. Applying this yardstick in this case, the period can be stretched maximum up to the year 1975. However, one may take the starting point from November 29, 1967, the date of the order passed by the Assistant Commissioner of Sales Tax. Even so, the period of limitation of eight years would expire sometime in November, 1975. It may be noted that this could be done in case where there is concealment and thereby the payment of tax is evaded. 15.. In the instant case, there is no such question. Everyone believed the position of law as declared by the Supreme Court in the case of Jullundur Vegetables Syndicate [1966] 17 STC 326 to be the correct law. Thereafter the Supreme Court in the case of Murarilal Mahabir Prasad [1976] 37 STC 77 explained its earlier decision and indicated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll-gotten fruits reaped by him. In cases where there may be fraud or a systematic well planned design to defraud the Revenue and thereby the society at large is made to suffer the loss, the power may be exercised even after a period of two, three or four years or even after more years because in such cases the consequences would be to disgorge the illgotten fruits reaped by a person who has committed fraud upon the society. This is the reason why in the case of Patel Raghav Natha AIR 1969 SC 1297 the Supreme Court has said that the reasonableness of the length of time would depend upon the facts of the case and the nature of the order sought to be revised. In the instant case, having regard to the overall facts and circumstances of the case and the nature of the consequences which are likely to follow, we are of the opinion that it was not reasonable on the part of the Deputy Commissioner to invoke the powers under section 31 of the Bombay Sales Tax Act, 1953. 18.. The learned counsel for the Revenue has drawn our attention to a decision of single Judge Bench of this Court rendered in the case of Minish v. State of Gujarat reported in [1985] 26 GLR 202. Relying on this decision i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s laid down and with what is stated in the case of Minish [1985] 26 GLR 202. But as far as the facts of the case and the nature of the order sought to be revised in the instant case is concerned, the period of little over eight years cannot be said to be reasonable for the reasons indicated hereinabove. In view of this position, the decision rendered by one of us (A.P. Ravani, J.) in the case of Minish [1985] 26 GLR 202 is of no help to the Revenue. 19.. The learned counsel for the Revenue submitted that in the Bombay Sales Tax Act, 1953, the Revenue had no right to file appeal or revision against the appellate order of the Assistant Commissioner of Sales Tax and therefore the revisional power should be permitted to be exercised without placing any. limitation as regards time. The contention cannot be accepted for the simple reason that in such a situation one has to ask a question-"Had the Legislature intended to confer such right of appeal or revision on the Revenue, how much time would have been prescribed for filing appeal or revision?" It would not be more than sixty days or ninety days or at the most six months. But in any case, it would not be little over eight years. Even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otu power, it may amount to trenching upon the powers of appellate authority. Similarly in a case where rectification proceedings are pending in the same proceedings the revisional authority may not be free to exercise its revisional powers conferred upon it. Only in such a situation the exercise of revisional power amounts to trenching upon the powers of appellate authority and/or the authority exercising the powers of rectification. Where no such proceedings are pending before the appellate authority or before the authority exercising powers of rectification, the exercise of powers by the revisional authority would not amount to trenching upon the powers of appellate authority or that of rectification authority. If such limitation-constraints are to be read on the powers of the revisional authority as contended by the learned counsel for the assessee then the power of the revisional authority would be illusory. No such limitation as is sought to be canvassed by the learned counsel for the assessee can be read on this power. 21.. For the reasons stated hereinabove, the reference is answered as indicated in para 4 of the judgment. Reference stands disposed of accordingly with no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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