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2015 (12) TMI 469 - ALLAHABAD HIGH COURT

2015 (12) TMI 469 - ALLAHABAD HIGH COURT - TMI - Whether in view of the judgments of the Supreme Court in Hari Shanker versus Rao Girdhari Lal Chowdhury [1961 (12) TMI 87 - SUPREME COURT] and Shiv Shakti Cooperative Housing Society versus Swaraj Developers [2003 (4) TMI 563 - SUPREME COURT] declaring the power of revision as not a substantive right but merely an enabling provision, the provision for a revision under Section 10B of the U.P. Trade Tax Act, 1948 would on the repeal of that Act not .....

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of the new legislation for the purpose of determining whether they indicate a 'different intention' within the meaning of Section 6 of the General Clauses Act. The line of inquiry is not whether the new enactment expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them (State of Punjab Vs Mohar Singh [1954 (10) TMI 38 - SUPREME COURT OF INDIA] followed in Gammon India Ltd Vs Special Chief Secretary [2006 (2) TMI 278 - SUPREME COURT OF INDIA]. In oth .....

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a revisional power has been conferred on the Commissioner both under the erstwhile UP Trade Tax Act as well as under the UP VAT Act which repealed the former Act. Moreover, as we have noticed earlier, the revisional power in Section 56 of the UP VAT Act is pari materia with that which is contained in Section 10-B of the erstwhile Act save and except that now an authorisation for the exercise of the power by the Joint Commissioner is to be made by the Commissioner and not by the State Government .....

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ent and to pass such order with respect thereto as he thinks fit is, hence, unaffected by the repeal. This power is intrinsically connected with the right of the authority to ensure that the assessment has been carried out in accordance with law. This imposes a corresponding obligation and liability on the assessee where it is found that the assessment was otherwise than in accordance with law. One cannot be disassociated from the other.

There is a difference in the language of Sectio .....

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as they hold that the remedy of a revision against an order of assessment under the UP Trade Tax Act provided to the Commissioner under Section 10-B survives the repeal lay down the correct principle of law. The remedy is saved by virtue of the provisions of Section 81 of the Uttar Pradesh Value Added Tax Act 2008 read with Section 6 of the Uttar Pradesh General Clauses Act 1904. - Appeal disposed of. - Commercial Tax Revision No. 389 of 2014 - Dated:- 2-12-2015 - Hon'ble Dr Dhananjaya Yesh .....

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dhury AIR 1963 SC 698 and Shiv Shakti Cooperative Housing Society versus Swaraj Developers (2003) 6 SCC 659 declaring the power of revision as not a substantive right but merely an enabling provision, the provision for a revision under Section 10B of the U.P. Trade Tax Act, 1948 would on the repeal of that Act not be saved under Section 81 (2) of the U.P. Value Added Tax Act, 2008; and 2. Whether the view expressed by the Division Benches of this Court in Dharma Rice Mill versus State of U.P. 20 .....

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assessment year 2007-08, the revisionist purchased wheat in the amount of ₹ 15,38,264/- for sale to a flour mill. The revisionist is engaged in the business of purchasing and selling food grains on retail and on commission. The flour mill for whom the revisionist had purchased the wheat opted for compounding its tax dues purportedly under a scheme floated by the State of Uttar Pradesh under Section 7-D of the Uttar Pradesh Trade Tax Act, 1948 UP Trade Tax Act. In the assessment proceedings .....

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st filed a reply contending that Section 7-D superseded the other provisions of the Act because of which Section 10-B was not applicable. On 1 July 2010, the Joint Commissioner (Executive) declined to accept the submission of the revisionist and directed the Assessing Authority to reassess the transactions of the revisionist. In an appeal which the revisionist filed before the Commercial Tax Tribunal Tribunal against the order of the Joint Commissioner (Executive), its contention was that the UP .....

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ok effect. The revisionist also contended that upon repeal, Form-IIIB had lost its existence and hence the proceedings could not continue on the ground that it had failed to produce Form-IIIB in support of its transaction. By an order dated 27 March 2007, the Tribunal at Kanpur rejected the appeal filed by the revisionist. The Tribunal relied upon two decisions of the Division Benches of this Court in Dharma Rice Mill Vs State of U P 2010 UPTC 648 and in Kumar Rice Mill Private Limited Vs State .....

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ch was taken by the Division Benches of this Court in Dharma Rice Mill (supra) and Kumar Rice Mill (supra) failed to notice that the provision for a revision in Section 10-B of the UP Trade Tax Act was in the nature of an enabling provision and is not a substantive right. Reliance was sought to be placed on the ambit of the remedy of a revision as enunciated in the decisions of the Supreme Court in Hari Shankar Vs Rao Girdhari Lal Chowdhury AIR 1963 SC 698 and Shiv Shakti Co-op Housing Society V .....

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f this Court require reconsideration. On behalf of the revisionist, three submissions have been urged by learned Senior Counsel: (i) The revisional power under Section 10-B of the UP Trade Tax Act is not a right which is conferred in favour of the department or revenue but is an enabling provision. Being merely in the nature of an enabling power, Section 10-B did not survive the repeal of the UP Trade Tax Act by the UP VAT Act; (ii) In the alternative, before the repeal and saving provision cont .....

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s "commenced before the repealing Act shall have come into operation" in the state legislation do not find place in the central enactment. Hence, it is only where the power under Section 10-B had been invoked prior to the date of repeal, that the remedy would stand saved. On the other hand, the following submissions have been urged on behalf of the respondent: (i) In view of the provisions of Section 6 of the U P General Clauses Act 1904 read with the savings clause contained in Sectio .....

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revision is part and parcel of the process of rendering a correct assessment and if any illegality remains, it can be cured in the form of the exercise of the revisional power by the Commissioner. These submissions fall for consideration. Section 10-B of the UP Trade Tax Act provides for a revision by the Commissioner. Section 10B was in the following terms: "Section 10-B. Revision by Commissioner. (1) The Commissioner or such other Officer not below the rank of Deputy Commissioner as may b .....

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rtunity of being heard. (3) No order under sub-section (1), shall be passed - (a) to revise an order, which is or has been the subject matter of an appeal under section 9, or an order passed by the Appellate Authority under that section: Explanation - Where the appeal against any order is withdrawn or is dismissed for non-payment of fee payable under section 32 or for non-compliance of sub- section (1) of section 9, the order shall not be deemed to have been the subject-matter of an appeal under .....

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on 81. Repeal and saving.- (1) The Uttar Pradesh Trade Tax Act, 1948 (U.P. Act No. XV of 1948) (hereinafter in this section referred to as the repealed enactment) is hereby repealed. (2) Notwithstanding such repeal, - (a) any notification, rule, regulation, order or notice issued, or any appointment or declaration made, or confiscation made, or any penalty or fine imposed, any forfeiture, cancellation or any other thing done or any action taken under the repealed enactment, and in force immediat .....

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ent of tax under Section 8(2-A) of the said Act shall be entitled to claim moratorium for payment of tax in accordance with provisions of Section 42. (3) Any officer, authorised by the Commissioner under the repealed enactment, to exercise powers under Section 10-B and sub-section (6) of Section 13-A thereof, shall be deemed to have been authorised by the Commissioner to exercise such powers under Section 56 and sub-section (7) of Section 48 respectively. (4) Any order made or direction issued b .....

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within thirty days from the date of the commencement of the Act: PROVIDED that, in appropriate cases, the assessing authority may extend the time for furnishing undertaking from sureties. (6) The mention of particular matters in this section shall not be held to prejudice or affect general application of Section 6 of the Uttar Pradesh General Clauses Act, 1904, with regard to the effect of repeals." Section 56 of the UP VAT Act provides for the remedy of a revision to the Commissioner and i .....

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ffecting the interest of a party adversely shall be passed unless he has been given a reasonable opportunity of being heard. (3) No order under sub-section (1), shall be passed- (a) to revise an order, which is or has been the subject matter of an appeal under section 55, or an order passed by the appellate authority under that section. (b) before the expiration of sixty days from the date of the order in question; (c) after expiration of four years from the date of the order in question. EXPLAN .....

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e UP VAT Act is pari materia with sub-section (1) of Section 10-B of the erstwhile Trade Tax Act save and except for the modification that the authorisation for an officer not below the rank of Joint Commissioner to exercise the power of revision is now to be issued by the Commissioner (as distinct from an authorisation of the State Government which was required by the erstwhile Act). Section 81 is the repeal and saving provision. Sub section 1 repeals the UP Trade Tax Act. Sub-section (2) ensur .....

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or notices issued; (ii) any appointment or declaration made; (iii) a confiscation made; and (iv) any penalty or fine imposed under the Trade Tax Act. Clause (a) also stipulates that any forfeiture, cancellation or any other thing done or action taken under the repealed enactment which is in force immediately before the commencement of the UP VAT Act shall, insofar as it is not inconsistent with the provisions of the latter Act, be deemed to have been issued, made, granted, done or taken under t .....

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o exercise such powers under Section 56. Sub-section (6) of Section 81 provides that the general application of Section 6 of the U P General Clauses Act 1904 with regard to the effect of repeals shall not be affected by the mentioning of particular matters in the section. Section 6 of the U P General Clauses Act, 1904 provides as follows: "6. Effect of repeal.-Where any Uttar Pradesh Act repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, .....

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emedy, or any investigation or legal proceeding commenced before the repealing Act shall have come into operation in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid; and any such remedy may be enforced any any such investigation or legal, proceedings may be continued and concluded, and any such penalty, forfeiture or punishment imposed as if the repealing Act had not been passed." Section 6 of the U P General Clause Act 1904 provid .....

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efore the repealing Act came into operation in respect of any such right, privilege, obligation or liability and a penalty, forfeiture or punishment. The reference to "such" right, privilege, obligation or liability is in the context of those expressions in clause (c). Similarly "such" penalty, forfeiture or punishment is that which is adverted to in clause (d). Any such remedy may be enforced and investigation or legal proceeding may be continued and concluded and a penalty, .....

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in his seminal treatise on the Interpretation of Statutes observes that: "The effect of clauses (c) to (e) of Section 6, General Clauses Act is, speaking briefly, to prevent the obliteration of a statute in spite of its repeal to keep intact rights acquired or accrued and liabilities incurred during its operation and permit continuance or institution of any legal proceedings or recourse to any remedy which may have been available before the repeal for enforcement of such rights and liabilit .....

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en if the provisions of the earlier Act were held to have been saved, neither had a right accrued in favour of the state nor was any liability incurred by the landholders in the determination of the ceiling area so as to attract to their cases the provisions of the old law. Hon'ble Mr Justice M N Venkatachaliah (as the learned Chief Justice of India then was) explained the difference between what is and what is not a right preserved by Section 6 of the General Clauses Act in the following ob .....

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t para 30 p 570 and 571 The Constitution Bench held that the right of the state to take over excess land vested in it as on the appointed date and only a quantification remained to be worked out. In the circumstances, the view of the High Court was upheld to the effect that the right of the state to the excess land "was not merely an inchoate right" At para 39 p 574 but was a right accrued within the meaning of Section 6 (c) of the Rajasthan General Clauses Act 1955 and the liability o .....

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ad accrued: "There is a distinction between right acquired or accrued, and privilege, hope and expectation to get a right, as rightly pointed out by the High Court in the impugned judgment. A right to apply for renewal and to get a favourable order would not e deemed to be a right accrued unless some positive acts are done, before repeal of Act 4 of 1939 or corresponding law to secure that right of renewal." At para 42 p 672 In Ambalal Sarabhai Enterprises Ltd Vs Amrit Lal & Co (20 .....

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jurisdiction after the amendment and not the Rent Controller. The Supreme Court held as follows: "At the most, such a provision can be said to be granting a privilege to the landlord to seek intervention of the Controller for eviction of the tenant under the statute. Such a privilege is not a benefit vested in general but is a benefit granted and may be enforced by approaching the Controller in the manner prescribed under the statute. On filing the petition for eviction of the tenant the p .....

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ding when the repeal came in. In State of Punjab Vs Bhajan Kaur (2008) 12 SCC 112, the Supreme Court held that the existing right of a party which is saved under Section 6 of the General Clauses Act has to be determined on the basis of the statute which was applicable and not under the new statute. When a repeal is followed by fresh legislation on the same subject, it is necessary to consider the provisions of the new legislation for the purpose of determining whether they indicate a 'differ .....

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n relation to the State of Uttar Pradesh - will follow unless a different intention appears in the repealing statute. Where the repeal has been followed by fresh legislation on the same subject, the purpose of considering the provisions of the new legislation is to determine whether they indicate a different intention. As the Supreme Court held in Gammon India Ltd (supra) "the question is not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an in .....

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fresh legislation on the same subject, the court would undoubtedly have to look to the provisions of the new Act only for the purpose of determining whether the new Act indicates different intention. The object of repeal and re-enactment is to obliterate the repealed Act and to get rid of certain obsolete matters." Applying this principle, the Supreme Court made a distinction between a situation where the effect of a repeal is to obliterate the statute and to destroy its operation in future .....

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ot culminated in a final judgment prior to the repeal are abated at the consummation of the repeal. When, however, the repeal does not contemplate either a substantive common law or statutory right, but merely the procedure prescribed to secure the enforcement of the right, the right itself is not annulled but remains in existence enforced by applying the new procedure." In Gammon India, the appellant after obtaining a construction contract in the State of Andhra Pradesh obtained the benefi .....

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the imposition of a penalty and the Assistant Commissioner of Commercial Taxes confirmed the demand of additional tax and penalty. The High Court dismissed the writ petition. Section 80 (3) of the Andhra Pradesh VAT Act provided for the application of Section 8 of the Andhra Pradesh General Clauses Act, 1891, which dealt with the consequences of a repeal of an Act. The Supreme Court held that in that case there was a simultaneous repeal and re-enactment and the VAT Act had saved the earlier pro .....

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nd a revision is a real one. A right of appeal carries with it a right of rehearing on law as well as fact, unless the statute conferring the right of appeal limits the rehearing in some way as, we find, has been done in second appeals arising under the Code of Civil Procedure. The power to hear a revision is generally given to a superior Court so that it may satisfy itself that a particular case has been decided according to law. Under s. 115 of the Code of Civil Procedure. the High Court's .....

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pass such orders in relation to the case, as it thinks fit." (emphasis supplied) The same principle was enunciated in a subsequent decision in Shiv Shakti Co-op Housing Society (supra) where it was held that whereas the right of appeal is a substantive right, there is no such substantive right under Section 115 of the Code of Civil Procedure. Section 115, it was held, is essentially a source of power for the High Court to supervise the subordinate courts and does not confer a right on a lit .....

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person to file a suit and for its maintainability it requires no authority of law, appeal requires so. As was observed in State of Kerala v. K.M. Charia Abdulla and Co AIR 1965 SC 1585. The distinction between right of appeal and revision is based on differences implicit in the two expressions. An appeal is continuation of the proceedings; in effect the entire proceedings are before the appellate authority and it has power to review the evidence subject to statutory limitations prescribed. But .....

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ng in some way, as has been done in second appeals arising under the Code. The power of hearing revision is generally given to a superior Court so that it may satisfy itself that a particular case has been decided according to law. Reference was made to Section 115 of the Code to hold that the High Court's powers under the said provision are limited to certain particular categories of cases. The right there is confined to jurisdiction and jurisdiction alone." These decisions were render .....

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e decisions lay down that a revision is in the nature of an enabling provision and is not in the nature of a substantive right. In every case where a legislation has been repealed by a subsequent enactment and the nature and ambit of a savings provision in the later enactment falls for construction, it is necessary to have due regard to the intent expressed by the legislature while enacting the subsequent legislation. The intent of the legislature is gathered from the statutory provisions. An in .....

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ion Bench set aside both the orders and directed the Commissioner to pass appropriate orders on the refund application. The Commissioner passed an order by which he came to the conclusion that the original order of assessment was erroneous and prejudicial to the interest of the revenue and directed the Assistant Commissioner to revise the assessment order under Section 46. In the meanwhile, on 31 March 2005, the Delhi Sales Tax Act was repealed and on 1 April 2005 the Delhi VAT Act was brought i .....

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ther after the Delhi Value Added Tax Act had come into force, the revenue could have issued a notice to show cause seeking to revise the assessment order. The absence of a provision for revision was an important circumstance which was emphasised in the judgment of the Division Bench of the Delhi High Court. In paragraph 15, this important circumstance was noted by the Division Bench in the following terms: "Secondly (and this is important in so far as the petitioner is concerned) no power o .....

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er only on November 16, 2005." At para 15 p 339 Again, after adverting to the decisions of the Supreme Court, the Delhi High Court held as follows: "Applying the law laid down by the Supreme Court, it must be held that by virtue of Section 106(2) of the DVAT Act since the previous operation of the DST Act and the Works Contract Act was saved, the assessment order being a transaction past and closed under those statutes, was also saved. As far as Section 106(3) of the DVAT Act is concer .....

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he deeming fiction is taken to its logical conclusion." At para 67 p 352 The Court clarified, however, that it was not necessary to go to that extent because the next issue which required consideration was whether the right or entitlement of the revenue, if any, to revise an order of assessment was saved by the Delhi VAT Act. This was answered in the negative, relying upon the decisions of the Supreme Court in Hari Shankar (supra) and Shiv Shakti Co-op Housing Society (supra). The Delhi Hig .....

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ich only saves a "right" or an "entitlement", both being synonymous. Consequently, whichever way one considers the problem, the assessment order dated March 31, 2003 could not have been re-opened by the Revenue in the manner that we are concerned with." At paras 77 and 78 p 355 The judgment of the Delhi High Court in the aforesaid case, as a close reading of the judgment would indicate, places a considerable degree of reliance on what was described as "the effect of .....

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e repeal of the DST Act and the Works Contract Act coupled with the omission of the revisionary power of the Commissioner under the new enactment, that is, the DVAT Act completely obliterated or effaced that power such that it did not survive after April 1, 2005. There is nothing in the DVAT Act to suggest that the power was intended to survive or be acted upon." At paras 89 and 91 p 358 The Delhi High Court held that while a revisional power was brought in by way of an amendment by introdu .....

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not conferred a revisional power on the Commissioner. The conferment of a revisional power came in much later on 16 November 2005 but this, as was noted in the judgment, was not with retrospective effect. The provisions of the Delhi Value Added Tax Act which fell for consideration before the Division Bench of the Delhi High Court in International Metro Civil Contractors (supra) must clearly be distinguished from the provisions contained under the UP VAT Act which applies in the State of Uttar P .....

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e UP Trade Tax Act as well as under the UP VAT Act which repealed the former Act. Moreover, as we have noticed earlier, the revisional power in Section 56 of the UP VAT Act is pari materia with that which is contained in Section 10-B of the erstwhile Act save and except that now an authorisation for the exercise of the power by the Joint Commissioner is to be made by the Commissioner and not by the State Government as was the case under the previous legislation. Both the erstwhile legislation as .....

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Haryana General Sales Tax Act 1973 had been repealed by the Haryana Value Added Tax Act, 2003. Section 61(2)(a) of the repealing Act saved any application, appeal, revision or other proceedings which were pending at the commencement of the repealing Act which could be then disposed of by the officer or authority who would have had the jurisdiction to entertain it under the new Act. The Division Bench of the Punjab and Haryana High Court held as follows: "....By virtue of section 61 of the V .....

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clause clearly excludes operation of section 4 of the General Clauses Act..." At para 24 p 141 These observations would indicate that in the view of the High Court, the provisions of Section 4 of the General Clauses Act had been excluded because while enacting the VAT Act and repealing the earlier Act, the legislature had saved only pending applications, appeals, revisions and other proceedings. This was held to amount to the expression of "a different intention" by the legislatur .....

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of a "different intention" by the legislature to exclude the application of the Uttar Pradesh General Clauses Act but, on the contrary, a specific provision has been made in Section 81(6) to protect the application of the U P General Clauses Act, 1904. A decision which has an important bearing on the subject matter of the present case is that rendered by three Hon'ble Judges of the Supreme Court in Swastik Oil Mills Ltd Vs H B Munshi, Deputy Commissioner of Sales Tax, Bombay AIR 1 .....

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re partially allowed by the first appellate authority. Revisions filed by the appellant against the rejection of its claim in respect of inter-state sales were pending when a notice was issued by the Deputy Commissioner intimating the appellant that he proposed to revise suo motu the appellate order of the Assistant Commissioner, Sales Tax insofar as he had allowed a deduction in respect of goods despatched to branches in other States outside Maharashtra. The appellant filed a writ petition chal .....

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the repeal of the earlier legislation, the power of the Deputy Commissioner to institute proceedings for revision suo motu was saved: "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 Section 7 of the Bombay General Clauses Act further is that any legal proceedin .....

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o the construction of the provisions of Section 6 of the Uttar Pradesh General Clauses Act 1904. Section 6(c), inter alia, provides that the repeal of an enactment by state legislation shall not, unless a different intention appears, affect any right, privilege, obligation or liability which is acquired, accrued or incurred under any enactment so repealed. Under Section 6(e), the repeal is not to affect, inter alia, any remedy in respect of any such right, privilege, obligation or liability as a .....

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on the basis that the remedy of a revision is in the nature of an enabling provision and is not in the nature of a substantive right, as has been held in the judgments of the Supreme Court in Hari Shankar (supra) and Shiv Shakti Co-op Housing Society (supra). That, however, is not conclusive of the matter because the remedy which is saved by Section 6(e) is also in respect of a privilege, obligation or liability which is acquired, accrued or incurred. Under the provisions of the UP Trade Tax Act .....

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thority is empowered to assess the tax on the basis of returns submitted if, after such enquiry as it considers necessary, it is satisfied that the returns submitted are correct and complete. If no return is submitted or if the authority believes it to be incorrect or incomplete, a best judgment assessment can be made under sub-section (3). Section 7-D provides for composition of tax liability. Section 9 provides for the remedy of an appeal to a dealer or other person aggrieved by an order made .....

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ch are available both to him and to the State, as the case may be, against an assessment which has been made. Against an assessment made, the dealer would be entitled to pursue remedies which have been provided and these remedies would not be affected by the repeal of the Act by the UP VAT Act. Similarly, the remedy which is available to the revenue under Section 10-B is not abrogated upon the repeal of the UP Trade Tax Act by the UP VAT Act. In fact, the provisions of Section 56 of the repealin .....

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there are sufficient provisions in the repealing enactment to indicate that the remedy of a revision in respect of an assessment made under the UP Trade Tax Act is saved notwithstanding the repeal. In Universal Imports Agency Vs Chief Controller of Imports and Exports AIR 1961 SC 41, a Constitution Bench of the Supreme Court, while considering the ambit of repealing and saving legislation, has held that: "...This case illustrates the point that it is not necessary that an impugned thing in .....

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section (2) of Section 56, if any Collector acting under stipulated provisions has a doubt as to the amount of duty with which any instrument is chargeable, he can draw up a statement of the case and refer it with his own opinion for the decision of the Chief Controlling Revenue Authority. Under sub-section (4), which was introduced by a state amendment, the Chief Controlling Revenue Authority is, on its own motion or on the application of any party, empowered to call for and examine the record .....

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ue. .. The revisional power is to be exercised by the Board so as to enable it to satisfy itself in regard to the amount with which the instrument is chargeable with duty. The revisional proceeding has a direct nexus with determination of an instrument being charged with duty and not the endorsement made thereupon at a subsequent stage." At para 16 p 85 & 86 The principle which has been laid down is that a revisional proceeding of this nature in the context of revenue legislation has a .....

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al authority is one which has a direct nexus with the order of assessment and is in the nature of a final determination over the order of the Assessing Officer. The object and purpose is to ensure that the assessment has been made in accordance with law. In the present case, it must be emphasised, even the assessment that took place was after 1 January 2008, on 9 November 2009. The power of the revisional authority to call for and examine the records for the purpose of satisfying himself as to t .....

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