STATE OF ANDHRA PRADESH v. T.G. LAKSHMAIAH SETTY AND SONS

The following Order of the Court was delivered by : A C.A. No. 2798/83 is taken on board.

These two appeals relate to different assessments under the Andhra Pradesh General Sales Tax Act, 1957 (Act No. VI of 1957), for short 'the Act'. The respondent-assessee is a registered dealer carrying on business B in ground nut oil seeds and cotton seeds. The appeals relate to "cotton lint". The respondent was assessed under s.5(1) for the assessment years 1967-68, 1979-71 and 1971-72, the last of which was on November 29, 1975 as 11 cottonn unclassified general goods at 3%. In similar circumstances, when the other assessees carried the matter in revision to the High Court in C Alimchand Topandas Oil Mills v. State of Andhra Pradesh, 37 STC 603, the High Court of A.P. held that cotton lint comes under "cotton waste" in Entry 69 of the Schedule I and becomes exigible to tax at 1% at the relevant time. Relying upon the decision, the respondent-assessee made a repre- sentation in May 1976 under s.20(2) of the Act requesting the Dy. Com- D missioner to revise the assessments. Initially even without numbering the revisions the Dy. Commissioner had dismissed them. But, on appeal, the Sales Tax Appellate Tribunal (STAT) by its order dated November 18, 1977 remitted the cases to the Dy. Commissioner directing to number the cases and to dispose them of according to law. On receipt thereof, the Dy. Commissioner by his order dated October 14, 1980 again dismi&.sed the E revisions. The respondent-assessee carried in revision to the STAT which by its order dated October 16, 1984, allowed the revisions applying the ratio inAlimchand's case and directed reassessment under Entry 69 of Schedule I. On revision, the High Court by impugned order dated 4.4.1985 dismissed them in limine. Thus these appeals by special leave . F • The primary question in these cases is whether a revision under s.20(2) is maintainable at the instance of the assessee. Section 20 provides at the relevant time thus:

"20.Revision by Commissioner of Commercial Taxes and other G prescribed authorities : (1) The Commissioner of Commercial Taxes may suo motu call for and examine the record of any order passed or proceeding recorded by any authority, officer or person subordinate to it, under the provisions of this Act, including sub-s. (2) of this section* (and if such order or proceeding recorded is H

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A (prejudicial to the interests of revenue), may take such enquiry to .•. be made and subject to the provisions of this Act, may initiate proceedings to revise, modify or set aside such order or proceed- ing) and may pass such order in reference thereto as it thinks fit.

*Sub-S. for the words for the purpose of satisfying itself as to the B legality or propriety of such order as to the regularity of such proceeding by Act 18 of 1985, w.e.f. 1.7.1985."

Sub-section (2) of s.20 gives power similar to that in sub-s. (1), to the joint Commissioner, Dy. Commissioner and the Commercial Tax Officer in the c case of orders passed or proceedings recorded by the authorities or officers or persons subordinate to them.

The question whether the assessee has a right to make an application for the exercise of suo motu power by the Commissioner calls for con- D sideration in the light of the other provisions in the Act, expressly providing for a right of appeal to the assessee. Under s.19 of the Act a right to appeal to the appellate authority against original orders or proceedings of certain authorities, has been given tu the aggrieved dea]er. Section 21 also gives a right of appeal, to the aggrieved dealer to the Appellate Tribunal postulat- E ing that any dealer objecting to an order passed or proceeding recorded by any prescribed aufhority on appeal under s.19, 14(4c) or s.20(2) may appeal to the appellate tribunal within 60 days from the date on which the order or proceeding was served on him. Thus the statute itself has given a right to the dealer to object to an order passed or proceeding recorded under the Act, which is prejudicial to him, by filing on appeal against such order, under s.14 or s.19 or s.21 revision under s.22 of the Act to the Appellate Tribunal. As stated earlier, against the original order an appeal shall lie to the appellate authority within a period of 30 days from the date of the receipt of the notice served on the dealer and a further appeal to the Appellate Tribunal. The order under s.20(1) could also be appealable again to the STAT by the aggrieved dealer and a further revision under s.23 to the High Court under the Act. Thus, the Act has given right and remedy of appeal or a revision to the dealer, wherever it was so intended. As seen, s.20 is a suo motu revisional power exclusively given to the Commissioner or the Joint Commissioner or the Dy. Commissioner or the H Commercial Tax officer, as the case may be, to revise the orders or the

STATE OF AP. v. T.G. LAKSHMAJAH SETTY &SONS. 527

proceedings of the officers subordinate to the respective officers. Whether A suo motu power under s.20 of the Act could have been invoked by an assessee is the question. The Judicial Committee of the Privy Council in Commr. of Income-tax v. Tribune Trust, AIR (1948) Privy Council 102 had considered similar question. It was a case where an Income-tax assessment order in respect of an assessment year had reached finally by reason of an order made by the Judicial Committee of the Privy Council dated June 13,

1939. On August 13, 1939, suo motu power of the Commissioner was, ~ , however, sought to be invoked by the asses see to revise the orders of assessments relating to previous years, which had become final. The High Court, following the decision of the Privy Council which was in favour of the assessee, directed the Commissioner to exercise the power of revision and revise the earlier orders of assessment. Section 33 of the Indian Income-tax Act, 1922 reads thus:

"(1) The Commissioner may of his own motion call for the record of any proceeding under this Act which has been taken by any authority subordinate to him or by himself when exercising the power of an Assistant Commissioner under sub-s.(4) of s.5.

(2) On receipt of the record the Commissioner may make such enquiry or cause such enquiry to be made and, subject to the provisions of this Act, may pass such orders thereon as he thinks fit: Provided that he shall not pass any order prejudicial to an assessee without hearing him or giving him a reasonable oppor- tunity of being heard."

F When the matter was carried in appeal, the Judicial Committee which considered the scope and ambit of suo motu power of the Commissioner • under s.33 of the Income-tax Act held thus :

"The fallacy implicit in this question has been ll?ade clear in the discussion of the first two questions. It assumes that s.33 creates a G right in the assessee. In their Lordships' opinion it creates no such right. On behalf of the respondent the well known principle which was discussed in (1880) 5 A.C. 214, was invoked and it was urged that the section which opens with the words, "The Commissioner may of his own motion" imposed upon him a duty which he was H

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A bound to perform upon the application of an assessee. It is possible that there might be a contest in which words so inapt for that purpose would create a duty. But in the present case there is no such context. On the contrary, s.33 follows upon a number of sections which determine the rights of the assessee and is itself, as B its language clearly indicates, intended to provide administrative machinery by which a higher executive officer may review the acts of his subordinates and take the necessary action upon rnch review. it appears that as a matter of convenience a practice has grown • • up under which the Commissioner has been invited to act "of his own motion 11 under the section and where thls occurs a certain c degree of formality has been adopted. But the language of the section does not support the contention, which lies at the root of the third question and is vital to the respondent's case, that it affords a claim to relief. As has been already pointed out, ap- propriate relief is specifically given by other sections; it is not D possible to interpret s.33, as c0nferring general relief.

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It appears to them that an order made by the Commissioner under E s.33, can only be said to be prejudicial to the assessee when he is, as a result of it, in a different and worse position than that in which he was placed by the order under review. It the assessee has a complaint against any assessment. or order made by a subordinate officer, he has the appropriate and specific remedy which the Act F provides. The Commissioner may act under s.33, with or without the invitation of the assessee; if he does so without invitation, it is clear that, if he does nothing to worsen the position of the assessee, the latter can acquire no right; the review may be a purely departn1ental 1uatter of which the assessee knows nothing. If on the other hand the Commissioner acts at the invitation of the assessee and again does nothing to worsen his position, there is no justification for giving right of appeal against the assessment or order of the subordinate officer, which is subject to its own time limit that he cannot enlarge by taking a course which is on his part purely voluntary. This view of the section is confirmed by the

STATE OF AP. v. T.G. LAKSHMAIAH SETI'Y & SONS. 529

exception. 11 A

The High Court of Andhra Pradesh had occasion to consider the scope of s.20 of the Act in two of its judgments. In Re. Kalluri Bheemalin- gam & 01>., (1967) 19 STC 116, the assessec had sought to file an appeal to the High Court under s.23 of the Act against the order of the Board of B Revenue (at that time the revisional power was exercised by the Board of Revenue) revising the assessment under s.20(1) of the Act, which the Board had rejected as being not maintainable. The High Court upheld the order of the Board of Revenue holding that s.20(1) of the Act does not provide a right of revision at the instance of the assessee, but only provides suo motu power of revision to the Commissioner and under s.23(1) a c revision does lie to the High Court against the order passed by the Board. Therefore, the appeals were held not maintainable. The same view was reiterated in Sree Ramachandra Ginning & Oil Mills & Ors. v. 17te State of Andhra Pradesh, 19 STC 354. It must therefore, be held that the validity of an assessment order must be tested in an appeal or revision filed by an assessee as provided for in the Act and in no other way. The assessee cannot invoke the suo motu power of the authorities under s.20. Any order validly made does not become void or illegal by subsequent declaration of law. The suo motu power was conferred on higher authorities to correct errors of law or to correct improper or irregular procedure or illegality in the procedure, to safeguard the interest of the revenue, as there was no express power given to the statei to file an appeal against order of assess- ment.

The Tribunal had placed reliance on the decision of another division Bench reported in The State of A.P. v. Lalitha Oil Mills & 01'., 42 STC F

169. In· that case following the decision of this Court in Sri Venkateswara Rice, Ginning and Grounding Oil Mill Contractors Co. v. State of Andhra Pradesh,· (1971) 28 STC 599 the Commissioner exercising suo motu power under .s.20(1) had revised the assessment made in accordance with the law laid down by this Court. It was not a case where the Commissioner had G exercised the power at the instance of an assessee. The Tribunal had wrongly held that the Commission could exercise the revisional power at the instance of the assessee under s.20(1) & (2) of the Act.

We have, therefore, no hesitation to hold that the High Court has H

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A committed an error in rejecting the revision by the State. Accordingly we hold that the aggrieved assessee has only to pursue the remedies provided in the Act and he has no right to make an application under s.20 of the Act seeking revision of the orders of assessments made under the Act by original authorities. The appeals are accordingly allowed. The orders of the B High Court and STAT are set aside and the orders of the Dy. Commis- sioner is restored. But ir.. the circumstances, there shall be no orders as to costs.

T.N.A. Appeals allowed.