Sushil Kumar Paricha vs Commissioner, Commercial Tax

Heard Sri M.M. Rai and Sri Rishi Raj Kapoor for the revisionists and Sri A.C. Tripathi, learned Standing Counsel for the respondents.

These revisions have raised the issue of the validity of orders passed by the Joint Commissioner (Executive) in purported exercise of powers conferred by Section 10B of the U.P. Trade Tax Act 1948, 1948 Act

The issue itself which has been canvassed for consideration before this Court was that the said Joint Commissioner (Executive) was not empowered or authorised to exercise the revisional powers as comprised in Section 10B. In order to appreciate the submissions which have been advanced, it would be apposite to extract Section 10B as it stood in its original form. Section 10B prior to its various amendments which shall be referred to hereinafter originally read thus:"

Section 10B. Revision by Commissioner of Sales Tax. (1) The Commissioner of Sales Tax or such other Officer not below the rank of Deputy Commissioner of Sales Tax as may be authorised in this behalf by the State Government by notification may call for and examine the record relating to any order (other than an order mentioned in section 10A) passed by any officer subordinate to him, for the purpose of satisfying himself as to the legality or propriety of such order and may pass such order with respect thereto as he thinks fit."

The provision extracted above would evidence that the statute conferred a power on the Commissioner of Sales Tax "or such other officer not below the rank of Deputy Commissioner of Sales Tax" to call for and examine the records relating to any orders passed by any officer subordinate to him. The provision insofar as it dealt with officers other than the Commissioners of Sales Tax mandated that theses officers would not be below the rank of Deputy Commissioner of Sales Tax as may be authorised in this behalf by a notification of the State Government. It is also not disputed that on 31 March 1982, the State Government exercising powers conferred by Section 10B authorised all Deputy Commissioners (Executive) Sales Tax to exercise the powers under the aforesaid section. The relevant extract of the said notifications read thus: "Not. No. ST29529/ X4 (3)/81U. P. Act 15/48order82, dated 31st March, 1982. In exercise of the powers under subsection (1) of section 10B of the U.P. Sales Tax Act, 1948 (U.P. Act No. XV of 1948), the Governor is pleased to authorise, with effect from April 1, 1982, all Deputy Commissioners (Executive) Sales Tax to exercise the powers under the aforesaid section."

Section 10B thereafter came to be amended by U.P. Act No. 31 of 1995 and in terms of Section 25 of the Amending Act, the words "of Sales Tax" as suffixed to the words "Deputy Commissioner" stood deleted. Thereafter came the 2003 Amendment which was brought into force by U.P. Act No. 11 of 2003. In terms of Section 1(2) of the said Amending Act, it was provided that Sections 2 to 9 and clauses (i) and (ii) of Section 10 as also Sections 11 to 15 would be deemed to have come into force on 18 October 2002, whereas clause (iii) of Section 10 would be deemed to have come into force on 6 May 2003.

It is also pertinent to note here that the Act which defined the expression "Commissioner" in Section 2(b) also underwent a change. Although initially it was defined to mean the Commissioner of Trade Tax and to also include a Joint Commissioner or a Deputy Commissioner, it was amended to read only as a Commissioner of Trade Tax and a Joint Commissioner. Section 10B was also amended by virtue of Section 11 of the 2003 Amending Act and in place of the words "Deputy Commissioner", the words "the Joint Commissioner" was substituted. The Rules framed under the 1948 Act also underwent a consequential amendment in terms of which the "Assistant Commissioner" was redefined to mean a "Deputy Commissioner", while a "Deputy Commissioner" was redefined and described as a "Joint Commissioner".

The primary submissions advanced in support of these revisions was that there was no notification issued by the State Government conferring authority on the Joint Commissioner to exercise powers embodied in Section 10B of the 1948 Act. Stress was laid upon the fact that the only notification by which authority came to be conferred upon an officer other than the Commissioner of Sales Tax was the notification dated 31 March 1982 and which specifically made reference and conferred authority only upon Deputy Commissioners (Executive) Sales Tax. The thrust of the submission was that no notification had been issued by the State Government under the colour of authority of which the Joint Commissioner (Executive) could exercise powers conferred by Section 10B. When this issue was raised before the Tribunal, it noted the contention advanced on behalf of the respondents that the words "Deputy Commissioner" stood duly substituted by the words "Joint Commissioner" in terms of the 2003 Amendment effected to the Rules and that therefore, no separate authorisation or notification was required. This contention has also found acceptance by the Tribunal.

Reverting to the submissions advanced in support of the revisions, it would also be relevant to note that it was contended that the acts and decisions of the Joint Commissioner cannot be validated or saved by application of the "de facto" doctrine since there was no appointment made in his favour and that he was therefore, liable to be viewed as a mere usurper of office. Additionally Sri Rai who has appeared in some of the revisions submitted that the exercise of powers by the Joint Commissioner (Executive) was clearly illegal since there was no specific conferment of authority on a particular Joint Commissioner. This submission rested upon Rule 2(b) of the Rules as amended in 2003 in which various categories of Joint Commissioners find mention. According to Sri Rai in order for a valid conferment of power being recognised, it was incumbent upon the respondents to bestow authority on a particular or specified class or category of Joint Commissioners and that even if the submissions advanced by the respondents were accepted, the exercise of power by the Joint Commissioner (Executive) was invalid.

Sri Tripathi, learned Standing Counsel has on the other hand contended that the issue of conferring power by way of a separate notification does not arise at all since a "Joint Commissioner" already stood included in the expression "Commissioner" as defined by Section 2(b). He submitted that the requirement of authorisation by the State Government by way of notification would arise only in cases where officers below the rank of a Joint Commissioner were to be conferred the authority to exercise powers embodied in Section 10B. Sri Tripathi also referred to the amended Rules to submit that the words "Deputy Commissioner" stood substituted by the expression "Joint Commissioner" and therefore, also it cannot be said that there was a patent lack of authority or for that matter a blatant usurpation of jurisdiction. It is these contentions which now fall for determination.

A careful reading of Section 10B would clearly establish that initially the provision empowered the Commissioner or such other officer not below the rank of Deputy Commissioner to exercise powers of revision. The words "Deputy Commissioner" was later on amended and substituted by the words "Joint Commissioner".

Essentially therefore, it recognised two classes of officers who could possibly exercise the powers of revision. The first class of course was the Commissioner while the second class was to comprise of such other officers not below the rank of Deputy Commissioner /Joint Commissioner as may have been authorised in this behalf by the State Government by notification. The recognition of a revisional power vesting in the Commissioner is not an issue on which there can possibly be any doubt. The fact that the Commissioner did not require a separate authorisation by the State Government or a notification of such authorization is evident from a plain construct of Section 10B.

This then takes the Court to consider as to which officers would be liable to be recognised as the Commissioner. This too is not a vexed issue and stands answered clearly by the provisions of Section 2(b) of the 1948 Act. Clause (b) defines the expression "Commissioner" to mean the Commissioner of Trade Tax appointed by the State Government and includes an Additional Commissioner or a Joint Commissioner of Trade Tax appointed by the State Government. Prior to the amendment of Section 2(b), the only difference in position was that the words employed were "Joint Commissioner or a Deputy Commissioner". Once Section 2(b) mandates the recognition and inclusion of a Joint Commissioner in the expression "Commissioner", there is, in the opinion and considered view of this Court, no requirement of a separate authorisation or notification of conferment of such authority. Since section 10B always recognized and conferred powers upon a "Commissioner" all classes of officers and authorities who fell within the ambit of the expression "Commissioner" would have to necessarily be recognized as being statutorily empowered and clothed with the jurisdiction to exercise the powers of revision. Undisputedly, a Joint Commissioner stood included in the expression "Commissioner" as per section 2 (b). In view of the above findings, it is evident and apparent that the challenge to the authority of the Joint Commissioner to exercise powers conferred by Section 10B is misconceived and is liable to be negatived.

In view of the finding of the Court on this issue, the question of whether the decisions rendered by the Joint Commissioner should be saved by application of the "de facto" doctrine clearly does not arise.

That leaves the Court to only consider the additional submission of Sri Rai that in order for the power under Section 10B to be validly exercised, there must be a specific conferment of authority on a particular class or category of Joint Commissioners. The Court finds itself unable to strike down the decision impugned on the basis of this submission for the reason that Section 2(b) makes no distinction between different classes or categories of Joint Commissioners. By the very nature of the language employed by Section 2(b) all Joint Commissioners are to be understood as being included in the expression "Commissioner". The classification or the description of different categories in the Rules framed under the 1948 Act clearly can neither control nor be determinative of the authority which may exercise powers under Section 10B. The acceptance of this submission would mean that Section 10B of the parent statute must be read as subservient to or at least subject to the Rules. Such an interpretation cannot possibly be accorded to a parent statutory provision based upon rules which are framed in the exercise of delegated legislative powers. The challenge to the authority of the Joint Commissioner on the grounds stated are therefore negatived.

The revisions are therefore dismissed.