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Judgment
K. Srinivasan, J.—These appeals are directed against the judgment of Veeraswami, J., rendered in applications under Article 226. The
matter arises thus. The respondent-company are dealers in cotton yarn, carrying on business with headquarters at Madras and branches in
Madurai and Coimbatore. The yarn in which they deal consists of yarn purchased locally as well as imported. For five assessment years 1948-49,
1949-50, 1950-51, 1951-52 and 1953-54, they submitted returns and were assessed to sales tax on those returns. Now, it appears that at the
time of the preparation of the appeal memorandum in connection with the order of assessment for 1954-55, the dealers discovered that their
returns for the years in question were erroneous, in that in the categories of sales that were brought to tax, the sales of yarn purchased by them
locally as well as the transfer of cotton yarn from headquarters to the branches were included. It is not in dispute that sale of cotton yarn is taxable
at a single point at the stage of the first sale. The first category of local purchases were accordingly second sales. The transfers of cotton yarn from
the headquarters to the branches involved no sale transaction at all. The dealers had, nevertheless, been charged to tax in respect of these two
categories of transactions, no doubt, based on their own erroneous returns. On the discovery of this fact, the respondents made an application to
the Board of Revenue. They pointed out that the inclusion of these transactions was an accidental error, that this inclusion was discovered only in
April, 1956, and that, since the payment of the tax in this regard was the result of a mistake and the dealers were not. in a position to claim refund
by way of appeal or otherwise, they sought the exercise of the powers of the Board of Revenue to examine the matter and direct a refund of the
tax paid in excess. In the annexures to the petition, the full details were furnished. The Board examined the petition and accepted the validity of the
contention of the petitioners, but, nevertheless, thought that the refund of excess tax should be limited to a period of three years prior to the date of
the petition. That was in respect of transfers of yarn from headquarters to the branches. With regard to the sales of yarn purchased locally, the
Board took the view that the accounts of the respondents-dealers did not disclose full details, so that the turnover which related to the second or
subsequent sales could be arrived at. The refund of tax in this regard was refused. Actually the Board made recommendations with regard to the
refund of tax to the Government, which accepted the views of the Board. The Board directed the Commercial Tax Officer to revise the
assessments for the relevant years suitably to these conclusions.
The respondents filed a further petition before the Board of Revenue. The result was that the respondents succeeded with regard to the local
purchases in respect of the years 1952-53 and 1953-54.
The writ petitions were filed seeking a direction of this Court to the State Government to grant a refund in respect of the claim which had been
disallowed by the Board and the Government.
Before the learned Judge, the State of Madras contested the petitions and claimed that the orders made in this connection were not orders made
in the exercise of the revisional jurisdiction of the Board u/s 12 of the Madras General Sales Tax Act, 1939. It was urged that such a petition
would not lie at all and that, in fact, the application made by the respondents was not treated as a revision application corning u/s 12 of the Act. It
was claimed on behalf of the State that it was more in the nature of ex gratia relief that was granted by the concerned authorities and in such an
event an application under Article 226 could not be maintained. Veeraswami, J., examined the scope and content of Section 12 of the Madras
General Sales Tax Act and came to the conclusion that the revisional jurisdiction of the Board of Revenue was very wide and could be exercised
against the orders and proceedings of any of its subordinate officers and that though the Board and the Government did not purport to act under
any particular provision of law, it was clearly the revisional power u/s 12 of the Act that was exercised by the Board. It was patent from the fact
that the Board gave partial relief to the respondents that the Board excused the delay caused in the making of the application u/s 12. Rejecting the
contention of the State that the matter was not one which came within the scope of Section 12 of the Act, the learned Judge allowed the petitions.
The State appeals.
Before us also, the same argument has been advanced. Firstly, it is claimed that it was not an application u/s 12 of the Act that the respondent-
dealer filed. It is even urged that u/s 12(3) of the Act, which confers a power of revision upon the Board, the power is not exercisable against the
order of the assessing authority but only against any order that might be passed or a proceeding recorded by the next lower authority to the Board,
viz., the Deputy Commissioner of Sales Tax. Lastly, it is contended that the relief granted to the respondents was purely of an ex gratia nature and
that in those circumstances, the respondents are not entitled to ask for a greater relief than what the authorities purported to grant.
The petition addressed by the dealers to the Board of Revenue sets out the facts and points out that by mistake certain sales and transfers of
yarn from the headquarters to the branches had been included in the returns and that transactions which were not taxable had been taxed. The
dealers also point out that this mistake was discovered in April, 1956, and by reason of this late discovery, the dealers were not in a position to
claim refund by way of appeal or otherwise. The petition concluded thus :
It is necessary in the interests of justice that the authorities may be pleased to look into the matter and direct a refund of such tax overpaid.
It seems to us clear that though the petition was not so worded, it was an application intended to invoke the revisional jurisdiction of the Board,
and sufficient material had been furnished to induce the Board to excuse the delay caused in making the petition. Section 12 of the Madras General
Sales Tax Act confers revisional powers upon the Commercial Tax Officer, the Deputy Commissioner and the Board of Revenue. The power of
each of these authorities is exercisable either suo motu or on application. There are certain limitations imposed by Sub-section (4) in the case of
suo motu exercise of the power. The Commercial Tax Officer cannot exercise suo motu power of revision beyond a period of three years from the
date on which the order sought to be revised was communicated to the assessee. In like manner, the Deputy Commissioner and the Board of
Revenue are incompetent to exercise suo motu powers of revision beyond a period of four years from the date referred to. In the case of a revision
on application by the assessee, such an application shall be preferred within 60 days from the date of communication of the order or proceeding
sought to be revised, and the proviso to Sub-section (5) enables the authority to admit an application after the period of 60 days, if the authority is
satisfied that the applicant had sufficient cause for not preferring the application within that period. In contrast with the limitation on the exercise of a
suo motu power of revision, no period within which an order can be revised on application is set down in the section. The learned Additional
Government Pleader concedes that on an application for revision being admitted, the relevant authority has the power to revise the order without
any limit of time. From the facts that have been set out, it is, therefore, clear that the Board of Revenue if it otherwise had the power to revise the
order, could grant the prayer of the dealer in respect of any previous year and that the limitation imposed by Sub-section (4) in regard to the suo
motu exercise of the power does not affect the exercise of the power of revision on an application by the assessee.
The contention of Mr. Ramaswami, learned Additional Government Pleader, is however, that the Board of Revenue has no power to revise the
order of the assessing authority. That argument is supported by the following reasoning. Section 12(1) empowers the Commercial Tax Officer to
call for and examine the record of any order passed or proceeding recorded under the provisions of this Act by any officer subordinate to him
either suo motu or on application, and pass such order with respect thereto as he thinks fit. In a case where the assessee makes an application in
this regard, such an application is maintainable only in a case where an appeal does not lie to the Commercial Tax Officer from the order of such
subordinate authority. Likewise, the Deputy Commissioner and the Board of Revenue are conferred suo motu powers of revision. In the case of an
application made by an assessee to revise an order, the Deputy Commissioner can pass such order
in respect of any order passed or proceeding recorded by the Commercial Tax Officer under Sub-section (1) or any other provision of this Act
and against which no appeal has been preferred to the Appellate Tribunal u/s 12-A.
In the case of similar applications, the Board of Revenue is conferred the power in respect of any order passed or proceeding recorded by the
Deputy Commissioner under Sub-section (2) or any other provision of this Act and against which no appeal has been preferred to the Appellate
Tribunal u/s 12-A. The Board in such a case may
call for and examine the record of any order passed or proceeding recorded under the provisions of the Act by any officer subordinate to it for the
purpose of satisfying itself as to the legality or propriety of such order or as to the regularity of such proceeding and may pass such order with
respect thereto as it thinks fit.
The learned Additional Government Pleader contends that an application can u/s 12(3)(ii) be only in respect of any order or proceeding
recorded by the Deputy Commissioner under Sub-section (2) or any other provisions of the Act, and in dealing with such an application it is open
to the Board to call for and examine the record of any order passed or proceeding recorded by any officer subordinate to it. It is urged that the
order of any officer subordinate to the Board is generally speaking immune from the revisional jurisdiction of the Board by way of application from
the assessee, except where it is called for and examined on an application made against the order passed by the Deputy Commissioner; that is to
say, where a party has moved the Deputy Commissioner under Sub-section (2) of Section 12, or the Deputy Commissioner has passed an order
or recorded a proceeding under any other provisions of the Act, the party may on application u/s 12(3)(ii) invoke the jurisdiction of the Revenue
Board for revision thereof, and unless an application is in respect of the order of the Deputy Commissioner the Board cannot call for and examine
the record of any officer subordinate to it. It is stated on this reasoning that the Board derives its jurisdiction to interfere with an order passed by
any officer subordinate to it only through the avenue of an order passed by the Deputy Commissioner under certain circumstances. It is also
pointed out that while the suo motu powers of the Board are unlimited, that is to say, the Board of Revenue may suo motu call for and examine the
record of any order, etc., of any officer subordinate to it, when it seeks to exercise its powers of revision on application, it can do so only in
respect of any order passed or proceeding recorded by the Deputy Commissioner and in doing so, it is enabled to call for and examine the record
of any order passed by any officer subordinate to it. This contention did not, however, find favour with the learned Judge. The learned Judge
observed that the ambit and content of the power of revision contained in the latter part of Sub-section (3) is common to both cases of suo motu
revision and revision on application. While the scheme of Sub-sections (1) to (3) appears to suggest a revision from the order of one authority to
the next superior authority, that is to say, from the Deputy Commercial Tax Officer to the Commercial Tax Officer, from the Commercial Tax
Officer to the Deputy Commissioner and from the Deputy Commissioner to the Board of Revenue, this feature did not, in the opinion of the
learned Judge, limit the wide ambit of the revisional power of the highest authority, the Board of Revenue, against the orders or proceedings of any
of its subordinate officers. In effect, the learned Judge read this part of the relevant provision in this manner:
The Board of Revenue may (i) in respect of any order passed or proceeding recorded by the Deputy Commissioner under Sub-section (2) and
against which no appeal has been preferred to the Appellate Tribunal u/s 12-A, on application, call for and examine the record of any order
passed or proceeding recorded under the provisions of this Act by any officer subordinate to it for the purpose of satisfying itself as to the legality
or propriety of such order or as to the regularity of such proceeding and may pass such order with respect thereto as it thinks fit.
The Board of Revenue may...(ii) in respect of any order passed or proceeding recorded under any other provisions of this Act and against which
no appeal has been preferred to the Appellate Tribunal u/s 12-A, on application, call for and examine....
This method of reading the provision disjunctively has been attacked as incorrect by the learned Additional Government Pleader. On the other
hand, Mr. M.K. Nambiar, appearing for the respondents, points out that nowhere is there any provision in the Act which enables the Deputy
Commissioner to pass any order or record any proceeding except under Sub-section (2) of Section 12, so that if the reference to any other
provision in this Act is to an order passed or proceeding recorded by the Deputy Commissioner, then that reference has no meaning. According to
the learned counsel, reading this provision, disjunctively is the only way of giving any sense to the provision, and if it is so read, there is no dispute
that the Board would be enabled to deal in revision with an order made by any officer subordinate to it. It seems to us that this argument is well-
founded. It also seems to us that if the Board has the suo motu power of revision of any order passed by any officer subordinate to it, it cannot be
rationally explained why that power should be taken away only in cases where the matter comes before the Board by way of an application from
the party.
We are accordingly of the vie that though the language employed in Section 12(3)(ii) of the Act is somewhat infelicitous, the real intention
underlying the provision is that the Board of Revenue, as the highest authority in the hierarchy of the Tribunals constituted under the Act, is
undoubtedly conferred the power of revising the order passed or proceeding recorded by any officer subordinate to it. The entire argument of the
learned Additional Government Pleader is based upon this contention that the Board has no power u/s 12(3)(ii) to deal directly with the order of
the assessing authority, and if that contention fails, there is no doubt that the Board could examine and revise the order of the assessing authority.
Some argument was advanced on the basis of Section 12-A which deals with the appellate jurisdiction of the Appellate Tribunal. Broadly
stated, an order relating to assessment passed by the Commercial Tax Officer, whether on appeal u/s 11 or suo motu u/s 12(1), can be taken in
appeal to the Appellate Tribunal, but that is subject to the condition that the assessee had not preferred an application for the revision of the order
u/s 12(2) to the Deputy Commissioner. Likewise, an order passed by the Deputy Commissioner suo motu u/s 12(2) can be appealed from before
the Appellate Tribunal if the assessee had not sought to have that order revised by moving the Board u/s 12(3). This provision only emphasises the
fact that an assessee has one of two alternative remedies open to him, one by way of revision to the appropriate authority or by way of appeal to
the Appellate Tribunal, and seeks to prevent him from resorting to both. We can dra no assistance from this provision to enable us to interpret the
proper scope of the revisional jurisdiction of the Board of Revenue u/s 12(3) of the Act.
We entirely agree with Veeraswami, J., that there seems to be no doubt that the Board itself looked upon the application as, one u/s 12(3) of
the Act, and when once it is granted that the Board has the necessary power to deal with the petition u/s 12(3), it would be unreasonable to say
that the petition is not one under that provision. We have also pointed out that it is not denied by the learned Additional Government Pleader that if
once the Board excuses the delay in the filing of the application, there is no limitation upon its power to grant the relief. The power of revision
exercised on application is not limited in the same manner as the suo motu power, and the Board is competent to grant the relief for any number of
years, not only within a limit of four years prescribed in respect of the suo motu power.
The argument that is an ex gratia relief that was granted to the petitioners cannot for a moment be accepted. If the Government granted the ex
gratia relief, they were certainly acting outside the ambit of the Act. It was not, therefore, necessary that the assessment itself should be revised. On
the other hand, the order of the Government, which is virtually the recommendation made by the Board directed the revision of the assessment. A
revision of the assessment by the assessing authority under the directions of the statutory authority is necessitated as a consequence of an order
made in the exercise of the appellate or revisional power. The fact that the assessments in these cases were revised under the directions of the
Board of Revenue clearly emphasises the position that it was not the grant of an ex gratia relief but a relief within the four corners of the Act.
As we agree with the learned Judge in his interpretation of Section 12(3) of the Act, these appeals fail and are dismissed with costs.