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1987 DIGILAW 618 (KER)

DY. COMMR. v. BALACHANDRAN

1987-11-30

FATHIMA BEEVI, PARIPOORNAN

body1987
Judgment :- 1. The Revenue is the appellant in this Writ Appeal. The respondent in the Writ Appeal was the petitioner in the O. P. He is running a small printing press. He gets printed letter-heads, bill books, etc. For the assessment years 1980-81,1981-82 and 1982-83 the returns filed by him were accepted. The assessments were made treating the goods delivered, like letter-heads, bill books, account books, invitation cards, etc. as "paper products" and taxed at 8 per cent. The assessment orders are Exts. P1 to P3. dated 2-8-1983. This Court in P. K. Dewar v. State of Kerala (33 STC. 73) and in subsequent cases categorically held that such materials, as those printed by the petitioner, cannot be treated as "paper products", but could be taxed only as general goods, The Board of Revenue has also clarified the position in Ext. P4, dated 1-8-1983. The petitioner filed a petition for rectification of the assessments for the three years praying for reduction of tax from that of 8 per cent single point, to the general rate. Stating that the question involves disputed questions of fact, the assessing authority negatived the prayer. The petitioner moved the Deputy Commissioner of Agricultural Income Tax and Sales Tax, Palghat (in short, Deputy Commissioner), the 2nd respondent in the O.P., invoking h is sue motu powers of revision under S.35 of the Kerala General Sales Tax Act, (in short the Act) to cure the illegality in the assessments, Exts. P1 to P3, by setting aside the same and directing fresh assessments, applying the correct rate of tax. The 2nd respondent (Deputy Commissioner) rejected the said prayer and dismissed the petition by Ext. P8, dated 11-9-1986. Thereupon the petitioner filed O.P. No. 7646 of 1986 and assailed Ext. P8. Viswanatha Iyer J. by judgment dated 25-5-1987, quashed Ext. P8 and directed the 2nd respondent to deal with Exts. P5 to P7 on the merits and in accordance with law. The Revenue has come up in appeal. 2. We heard counsel for the appellant (Revenue). The sole question that arises for consideration is whether the Deputy Commissioner was bound to consider and dispose of Exts. P5 to P7 on the merits, in exercise of the powers vested in him under S.35 of the Act. The Revenue has come up in appeal. 2. We heard counsel for the appellant (Revenue). The sole question that arises for consideration is whether the Deputy Commissioner was bound to consider and dispose of Exts. P5 to P7 on the merits, in exercise of the powers vested in him under S.35 of the Act. The main plea of the Revenue before the learned Single Judge and before us, was that the powers vested in the Deputy Commissioner under S.35 of the Act is to be exercised suo motu and not at the instance of an assessee. The learned Single Judge repelled that plea. In order to understand the scope of S.35 we may also bear in mind S.36 of the Act. They are as follows: "35. Powers of revision of the Deputy Commissioner suo mote: (1) The Deputy Commissioner may, of his own motion, call for and examine any order passed or proceedings recorded under this Act by any officer of authority subordinate to him other than an Appellate Assistant Commissioner and may make such enquiry or cause such enquiry to be made and, subject to the provisions of this Act, may pass such order thereon as he thinks fit: (2) The Deputy Commissioner shall not pass any order under sub-section (1) if (a) the time for appeal against the order has not expired. (b) The order has been made the subject of an appeal to the Appellate Assistant Commissioner or the Appellate Tribunal or of a revision in the High Court; or (c) more than four years have expired after the passing of the order referred to therein. (2A) Notwithstanding anything contained in sub-section (2), the Deputy Commissioner may pass an order under sub-section (I) on any point which has not been decided in an appeal or revision referred to in clause (b) of sub-section (2), before the expiry of a period of one year from the date of the order in such appeal or revision or before the expiry of the period of four years referred to in clause (c) of that sub-section, whichever is later. (3) No order under this section adversely affecting a person shall be passed unless that person has had a reasonable opportunity of being heard. 36. (3) No order under this section adversely affecting a person shall be passed unless that person has had a reasonable opportunity of being heard. 36. Powers of revision of Deputy Commissioner on application: (1) Any person objecting to an order passed or proceeding recorded under the Act for which an appeal has not been provided for in S 34 or S 39 may, within a period of thirty days from the date on which a copy of the order or proceeding was served on him in the manner prescribed, file an application for revision of such order or proceeding to the Deputy Commissioner. Provided that the Deputy Commissioner may admit an application for revision presented after the expiration of the said period, if he is satisfied that the applicant had sufficient cause for not presenting the application within the said period. (2) An application for revision shall be in the prescribed form and shall be verified in the prescribed manner. (3) On admitting an application for revision, the Deputy Commissioner may call for and examine the record of the order or proceeding against which the application has been preferred and may make such enquiry or cause such enquiry to be made and subject to the provisions of this Act pass such order thereon as he thinks fit (4) Notwithstanding that an application has been preferred under sub-section (1), the tax, fee or other amount shall be paid in accordance with the order or proceeding against which the application has been preferred: Provided that the Deputy Commissioner may, in his discretion, give such directions as be thinks fit in regard to the payment of such tax fee or other amount if the applicant furnishes sufficient security to his satisfaction in such form and in such manner as may be prescribed. (5) No order under this section adversely affecting a person shall be passed unless that person has bad a reasonable opportunity of being heard." Simitar powers of revision are vested in the Board of Revenue under S.37 and 38 of the Act. Substantially identical provisions are contained in the Tamil Nadu General Sales Tax Act. The powers of revision in the corresponding authorities in the Tamil Nadu Act are S.32.33.34 and 35. S.32 and 33 deal with the powers of the Deputy Commissioner and S.34 and 35 deal with the powers of the Board of Revenue in the Tamil Nadu Act. Substantially identical provisions are contained in the Tamil Nadu General Sales Tax Act. The powers of revision in the corresponding authorities in the Tamil Nadu Act are S.32.33.34 and 35. S.32 and 33 deal with the powers of the Deputy Commissioner and S.34 and 35 deal with the powers of the Board of Revenue in the Tamil Nadu Act. The Madras High Court, as well as the Supreme Court, had occasion to consider the scope of the above provisions of the Tamil Nadu Sales Tax Act. The said decisions are reported in: East Asiatic Company (India) Ltd. v. State of Madras (7 STC. 299), Raj Brothers Agencies v. Board of Revenue (30 STC 410), Mahalakshmi Textile Mills Ltd. v. Deputy Commercial Tax Officer (30 STC 412), Board of Revenue v. Raj. Brothers Agencies (31 STC 434), (SC), Bombay Ammonia Pvt. Ltd. v. State of Tamil Nadu (37 STC 517-SC) and Arunachalam Pillai and Sons v. State of Tamil Nadu (45 STC 109): After making elaborate references to these, decisions, Viswanatha Iyer J. held that in order to exercise the powers vested in the Deputy Commissioner, under S.35 of the Kerala Act. an order sought to be revised need not be prejudicial to the Revenue and the fact that the Section states that no order adverse to a person can be passed without giving an opportunity to him, implies that orders favourable to the assessee are also contemplated. The learned judge further took the view that S.35 of the Act is intended to set right the error or illegality or impropriety of a subordinate authority and it can be exercised for or against the assessee. On a fair interpretation of S.35 and 36 of the Kerala Act, in the light of the various decisions mentioned above, we are of the view that the power of revision is conferred on the Deputy Commissioner to remedy injustice. The power is couched in very wide terms. The purpose for which the power of such amplitude is given is to safeguard the interest of the Revenue and also that of the assessee. It is open to the assessee or to the Revenue to bring it to the notice of the authority (Deputy Commissioner) any error made by a subordinate authority and it is for the Deputy Commissioner to consider whether the case is a fit one, in exercise of the revisional jurisdiction. It is open to the assessee or to the Revenue to bring it to the notice of the authority (Deputy Commissioner) any error made by a subordinate authority and it is for the Deputy Commissioner to consider whether the case is a fit one, in exercise of the revisional jurisdiction. Since the power of revision can be exercised to set right the error or illegality of a subordinate authority and it could be exercised for or against the assessee, such power can be exercised, even if the assessee has not filed an appeal against the order, for the purpose of setting right the improper or the illegal order. It is true that the language of S.35 literally states that the power has to be exercised suo motu. When circumstances warranting the exercise of the power comes to the notice of the concerned authority, the mere fact that the circumstances for the exercise of that power are shown to exist, by the assessee in a particular case, cannot be a factor or reason for the non-exercise or refusal to exercise the said power. In this view of the matter, we concur with the learned Single Judge and hold that the 2nd respondent was in error in passing Ext. P8 in declining to exercise the jurisdiction vested in him under law. The 2nd respondent should have considered Exts. P5 to P7 on the merits and in accordance with law. The learned Single Judge was justified in quashing Ext. P8 and directing the 2nd respondent to dispose of Exts. P5 to P7 on the merits and in accordance with law. 3. It now remains to consider the Division Bench decision of the Calcutta High Court, brought to our notice in State of West Bengal v. Paper Products Ltd. (61 STC. 42). The Division Bench has not referred to the decisions of the Supreme Court in Raj Brothers Agencies case (31 STC. 434), Bombay Ammonia Pvt. Ltd. case (37 STC. 517) and other relevant decisions. With great respect to the learned judges, who decided the case, we are unable to persuade ourselves to accept the dictum laid down in the said case as laying down the correct position in law. We respectfully dissent from the said decision. 4. There is no merit in this Writ Appeal. It is dismissed. Dismissed.