SANTOSHI TEL UTPADAK KENDRA vs. DEPUTY COMMISSIONER OF SALES TAX

CIVIL APPEAL No. 1968/1978Supreme Court[1982] 1 S.C.R. 9724 July 1981Bench: 2 JudgesAuthor: P.N. BHAGWATI, R.S. PATHAK JTR10 pages
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What were the facts?

The appellant, Santoshi Tel Utpadak Kendra, a partnership firm, was assessed for the calendar year 1971 and the first six months of 1972 by the Sales Tax Officer, with assessment and penalty orders issued on March 26, 1973. The appellant appealed to the Assistant Commissioner, who, by an order dated September 29, 1973, reduced the turnover and tax liability. The appellant filed a second appeal to the Sales Tax Tribunal on December 8, 1973. During the pendency of this appeal, the Deputy Commissioner issued notices on April 24, 1974, proposing to revise the Assistant Commissioner's appellate orders under Section 57 of the Bombay Sales Tax Act, 1959. The appellant objected, but the Deputy Commissioner rejected the objection on September 12, 1975. The appellant appealed this rejection to the Tribunal, which dismissed the appeals on October 27, 1977, holding that its decision would nullify the Deputy Commissioner's revisional power. The appellant then filed a writ petition in the High Court, which was dismissed. The present appeal is against the High Court's judgment.

What did the Supreme Court hold?

The Supreme Court held that it is not open to the Commissioner to invoke his revisional power under Section 57(1)(a) of the Bombay Sales Tax Act, 1959, and summon the record of an order over which the Tribunal has already assumed appellate jurisdiction. The subordinate status of the Commissioner precludes this. The Tribunal is at the apex of the appellate hierarchy and exercises appellate jurisdiction by way of second appeal. While the Commissioner exercises revisional jurisdiction over subordinate officers, the Tribunal is the revisional authority over the Commissioner. The Tribunal, as the supreme appellate and revisional authority, cannot be divested of its jurisdiction. The High Court was in error in concluding that the power to enhance an assessment can only be found in the revisional jurisdiction of the Commissioner. In a second appeal under Section 55(2), the Tribunal has the power to enhance the assessment, thus protecting the Revenue's interest. The Commissioner, being subordinate to the Tribunal, cannot interfere with an order pending in appeal before it. The appeal was allowed, setting aside the High Court's judgment and quashing the revisional proceedings and orders.

What were the issues?

1. Whether the Commissioner of Sales Tax (represented by the Deputy Commissioner) is competent to revise an appellate order passed by the Assistant Commissioner when a second appeal against that order is pending before the Sales Tax Tribunal, under Section 57(1)(a) of the Bombay Sales Tax Act, 1959. Assessee's Contention: The Commissioner of Sales Tax cannot exercise revisional power against an appellate order of the Assistant Commissioner when a second appeal against that order is pending before the Tribunal. The High Court erred in allowing the revisional power to be exercised in such circumstances. Revenue's Contention: The statute does not provide any other forum or jurisdiction for protecting the interests of the Revenue, thus it is always open to the Commissioner to interfere in revision with an order prejudicial to the Revenue, notwithstanding that such order may be already under appeal before the Tribunal. The High Court's conclusion that the power to enhance an assessment can only be found in revisional jurisdiction was also implicitly supported.

Which sections of the Income-tax Act were involved?

Section 57(1)(a),Section 55(2),Section 33,Section 55

AI-generated summary — verify with the full judgment below

y - 97 A SANTOSHI TEL UTPADAK KENDRA v. DEPUTY COMMISSIONER OF SALES TAX July 24, 1981. [P.N. BHAGWATI AND R.S. PATHAK, JJ.)

Bon1bay Sales Tax Act 1959, S. 51 (/) (a)-Scope of-Assess1nent order by Sales Tax Officer-Assessee's first appeal before Assistant Commissioner disposed of-Assessee's second appeal before Sales Tax Tribunal pending-Conu11issioner of Sales Tax whether competent to revise the appellate order of Assistant Com~ missioner.

The appellant, a partnership firn1, was assessed by the Sales Tax Officer, who estimated the turnover for the Calendar year 1971, and for the first six months of the year 1972 and made two orders of assessment dated 26 i\.1arch 1973 under section 33 of the Bombay Sales Tax Act, 1959 levying Sales Tax and penalty.

Against the assessment and penalty orders for the two periods, the appellant appealed under clause .(a) of sub-section (1) of section 55 of the Act to the Assistant Commissioner.

By a common order dated 29th September, 1973 the Assistant Commissioner reduced the quantum of the turnover and, conse. quently, the tax liability for each of the periods. Not fully satisfied by the relief granted, the appellant proceed

The order continues below.

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