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Judgment
Padmanabhan, J.—The writ petition is directed against an order passed by the Board of Revenue, Commercial Taxes, on 14th December,
1977, u/s 34 of the Tamil Nadu General Sales Tax Act, hereinafter referred to as the Act. The petitioner is a registered dealer for the purposes of
the Act. He is a dealer in battery plates. For the assessment year 1970-71 the Sales Tax Officer levied sales tax at the rate of 3 per cent on a
multi-point basis. The Deputy Commissioner of Commercial Taxes exercised suo motu powers conferred on him u/s 32 of the Act and revised the
order of the Sales Tax Officer by levying sales tax at the rate of 9 per cent under item 41 of the First Schedule to the Act. Against this order of the
Deputy Commissioner, the petitioner preferred an appeal before the Appellate Tribunal. The appeal was dismissed as time-barred. Thereafter, the
petitioner invoked the suo motu powers of revision conferred on the Board of Revenue u/s 34 of the Act. The Commissioner for Land Revenue
and Commercial Taxes, by his order dated 14th December, 1977, has dismissed the revision petition and hence this writ petition.
Section 34 of the Act reads as follows :
(1) The Board of Revenue may, of its own motion, call for and examine an order passed or proceeding recorded by the appropriate authority u/s
4-A, section 12, section 14, section 15 or sub-section (1) or (2) of section 16 or an order passed by the Appellate Assistant Commissioner under
sub-section (3) of section 31 or by the Deputy Commissioner under sub-section (1) of section 32 and may make such inquiry or cause such
inquiry to be made and subject to the provisions of this Act may pass such order thereon as it thinks fit.
(2) The Board of Revenue shall not pass any order under sub-section (1) if -
(a) the time for appeal against that order has not expired; or
(b) the order has been made the subject of an appeal to the Appellate Tribunal or of a revision in the High Court; or
(c) more than five years have expired after the passing of the order.
(3) No order under this section adversely affecting a person shall be passed unless that person has had a reasonable opportunity of being heard.
(4) In computing the period referred to in clause (c) of sub-section (2), the time during which the proceedings before the Board of Revenue
remained stayed under the orders of a civil court or other competent authority shall be excluded.
The argument of Mr. Inbarajan, the counsel for the petitioner, is inasmuch as the appeal before the Tribunal was dismissed on the ground of bar
of limitation, there was no effective appeal before the Tribunal. Consequently there was no bar on the part of the Commissioner for Land Revenue
and Commercial Taxes in dealing with the revision petition filed by the petitioner on the merits.
A similar question arose for consideration before the Supreme Court in The Board of Revenue, Madras Vs. Raj Brothers Agencies, . The head-
note of the decision reads as follows :
The power of revision u/s 34 of the Madras General Sales Tax Act, 1959, is conferred on the Board to remedy any injustice. It is, therefore,
open to an assessee or the revenue to brings to the notice of the Board any error made by the subordinate authorities.
In Erode Yarn Stores v. State of Madras [1963] 14 S.T.C. 724the Madras High Court accepted the State''s contention that before the jurisdiction
of the Board to exercise its powers u/s 34(2)(b) of the Madras General Sales Tax Act, 1959, can be held to be taken away, the appeal filed
before the Appellate Tribunal must have been an effective appeal and that an appeal which was dismissed by the Tribunal on the ground of
limitation was not an effective appeal, and held that the expression ''subject of an appeal'' in section 34(2)(b) meant ''subject of an effective
appeal''. That decision was rendered in 1963 and though the Act had been subjected to several amendments the legislature had not thought it fit to
amend section 34. The State had asked for and obtained that particular interpretation of section 34 and it had accepted that interpretation to be
correct ever since 1963.
A similar though not identical situation came up for consideration before a Full Bench of this Court in Arunachalam Pillai & Sons v. State of
Tamil Nadu [1980]45S.T.C. 109 F.B.The Full Bench was concerned with the extent of the power conferred on the Deputy Commissioner u/s 32
of the Act. The head-note of the said decision reads as follows :
The suo motu power of revision of the Deputy Commissioner u/s 32 of the Tamil Nadu General Sales Tax Act, 1959, can be invoked by an
assessee.
The suo motu power of revision u/s 32 is conferred on the Deputy Commissioner to ensure that injustice to the assessee or to the revenue is
avoided. The exercise of that power is not discretionary, and if conditions for exercise of that power are shown to exist, the Deputy Commissioner
cannot decline to exercise that power. Otherwise, he can be compelled to exercise that power by issue of a writ of mandamus by the High Court.
Such being the scope, extent and width of that power, it is incorrect to state that the power can be exercised only by the authority vested with that
power. If the Deputy Commissioner fails to exercise his jurisdiction u/s 32, any person aggrieved could move the Deputy Commissioner to
exercise the suo motu power of revision.
An appeal contemplated u/s 32(2)(b) must be an effective appeal and not one which was rejected or refused to be entertained on the ground of
limitation. Where, therefore, an appeal before the Appellate Assistant Commissioner and the Tribunal against an assessment order was dismissed
on the ground of limitation it could not be said that the order had been made the subject of an appeal to the Appellate Assistant Commissioner or
the Appellate Tribunal within the meaning of section 32(2)(b) and the Deputy Commissioner would have jurisdiction u/s 32 to entertain a revision
against the assessment order.
The Deputy Commissioner could not decline to exercise his revisional jurisdiction u/s 32 on the ground that the assessee was not diligent in filing an
appeal. If he was diligent in preferring an appeal, there would have been no occasion or need for the assessee to invoke the jurisdiction of the
Deputy Commissioner u/s 32. As an appeal excludes the jurisdiction of the Deputy Commissioner u/s 32, and as the appellate power and
revisional power of the Deputy Commissioner are mutually exclusive, the exercise of revisional power u/s 32 cannot be declined on the ground of
lack of diligence in filing an appeal.
The above two decisions are clear authorities for the position that an appeal which has been dismissed on the ground of limitation by either the
Appellate Assistant Commissioner or the Appellate Tribunal cannot be said to be an effective appeal for the purpose of section 32 or section 34 of
the Act. It is not disputed before me that sections 32 and 34 are identical for all material purposes. Therefore, the present case is squarely
governed by the principles laid down by the Supreme Court in The Board of Revenue, Madras Vs. Raj Brothers Agencies, as well as in
Arunachalam Pillai v. State of Tamil Nadu [1980]45S.T.C.109 F.B.
However, Mr. Bakthavatsalam, though would agree that the Full Bench decision would squarely apply to the facts of this case, would argue that
the decision in The Board of Revenue, Madras Vs. Raj Brothers Agencies, has ruled that in cases where an Appellate Tribunal has dismissed an
appeal on the ground that it was barred by limitation, the Commissioner could exercise his discretion not to interfere with the order sought to be
revised if he found that the matter was not fit for his interference. The learned counsel further argued that this aspect of the matter was not placed
before the Full Bench. In this context, the learned counsel refers to the following passage found in The Board of Revenue, Madras Vs. Raj
Brothers Agencies, :
It was contended on behalf of the State that the assessee had no right to invoke the jurisdiction of the Board to exercise its revisional power. This
contention too has to be rejected. The power is conferred on the Board to remedy any injustice. It is open to an assessee or the revenue to bring
to the notice of the Board any error made by the subordinate authorities. It is up to the Board to consider whether the case is a fit case for
exercising its revisional jurisdiction. If the Board had gone into the case and come to the conclusion that there was no justification for exercising its
jurisdiction u/s 34, then in the absence of any vitiating circumstance recognised by law, the High Court would not have interfered with the discretion
of the Board. But what has happened in this case is that the Board had refused to exercise its jurisdiction under the erroneous view that in view of
the dismissal of the assessee''s appeal it was not competent to entertain the petition.
I am unable to understand this passage to mean that the Supreme Court intended that it would be open to the revisional authority to dismiss or
to decline to interfere with the order sought to be revised if it felt that the assessee had no justification in not filing the appeal before the Appellate
Tribunal within the period of limitation. I understand this passage to mean that the Supreme Court ruled that it was the duty of the Commissioner to
go into the merits of the case and interfere with the order if it found that the justice of the case required such interference. I fully agree with great
respect in this context with the observation of Venugopal, J., in the Full Bench decision in Arunachalam Pillai v. State of Tamil Nadu
[1980]45S.T.C.109 F.B. to the following effect :
The Deputy Commissioner could not decline to exercise his revisional jurisdiction u/s 32 on the ground that the assessee was not diligent in filing
an appeal. If he was diligent in preferring an appeal, there would have been no occasion or need for the assessee to invoke the jurisdiction of the
Deputy Commissioner u/s 32.
On the same principle, if the assessee in this case had approached the Appellate Tribunal within the period of limitation, there would have been
no necessity at all for the assessee to have approached the Commissioner invoking the latter''s suo motu powers u/s 34 of the Act. A reading of
section 34 would show that the Commissioner has no power to decide the question whether there was sufficient cause for an assessee in not filing
the appeal before the Tribunal in time. u/s 34(c) the revisional powers can be exercised up to a period of five years from the date of the passing of
the order. Consequently the fact that the assessee did not file an appeal in time before the Appellate Tribunal could not be made a ground for
declining to exercise the revisional powers u/s 34. Otherwise the ratio that the fact that an appeal has been dismissed by the Appellate Tribunal on
the ground of limitation will not bar the exercise of revisional powers u/s 34 will have no meaning.
The impugned order of the Board of Revenue clearly shows that though the Commissioner has realised the fact that the dismissal of appeal by
the Appellate Tribunal on the ground of limitation would not bar his powers, he had declined to interfere on the ground of laches on the part of the
assessee in going before the Tribunal. The order is patently erroneous and cannot be sustained, with the result, his order is set aside and the writ
petition is allowed. The matter is remitted back to the Commissioner for Commercial Taxes for fresh disposal according to law. No costs.
Petition allowed.