ASHOK LEYLAND LIMITED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THIS appeal has been filed against the order of the Board of Revenue dated 26th August, 1974 , passed in a suo motu revision. The assessee was assessed to sales tax by the joint Commercial Tax Officer, Red Hills Division. The turnover determined by the assessing officer included the turnover relating to supply of raw materials covered by debit notes, sales of empty gunnies by the canteen, sales of discarded goods and sales in the fair price shop. Aggrieved by that order, the assessee filed an appeal before the Appellate Assistant Commissioner. The appellate Commissioner held that the supply of raw materials to ancillary industries covered by debit notes was liable to be taxed. He held that the sale of empty gunnies, the sale of discarded goods and the sales in the fair price shop were not liable to tax and in taking this view, he followed a decision of this Court, which was overruled by the Supreme Court in State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Co. of India Ltd. The assessee filed an appeal against the order of the Appellate Assistant Commissioner only in respect of the item on which it had lost. During the pendency of this appeal, there was no petition for any enhancement filed before the Tribunal on behalf of the State. The Tribunal disposed of the appeal in favour of the assessee. But with reference to the items on which the Appellate assistant Commissioner had passed an order in favour of the assessee, the Board took up suo motu revision proceedings and held that these items were liable to be taxed in view of the decision of the Supreme Court in State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Company of India Ltd. In the present appeal, the assessee challenges this order of the Board of Revenue on the ground that the Board had no jurisdiction to revise the order of the Appellate assistant Commissioner when once the order of the Appellate Assistant commissioner was made the subject of appeal to the Sales Tax Appellate tribunal. The learned counsel for the assessee relied on a decision of this court in Jeewanlal (1929) Ltd. v. State of Tamil Nadu THIS decision was rendered on 7th December, 1977. In that case, it was held that after an appeal had been filed by an assessee before the Tribunal under the Tamil Nadu General Sales Tax Act, 1959, from an order of the Appellate assistant Commissioner, in regard to matters held against the assessee by the appellate Assistant Commissioner, the Board had no jurisdiction to revise the order of the Appellate Assistant Commissioner with reference to matters in which the assessee had succeeded before the Appellate Assistant commissioner. The learned Additional Government Pleader pointed out that there is another decision of this Court in Puthuthotam Estates (1943) Limited, pollachi v. State of Tamil Nadu represented by the Commissioner of Agricultural income-tax, Madras ([1978] 2 I. T. J. 243; In that decision, to which both of us were parties, it was held that the provisions of section 34 of the Agricultural income-tax Act were so widely framed that they supported the view that the commissioner had absolute powers of revision even in matters that had gone before the Tribunal subject only to the restrictions contained in sub-section (2) of section 34. In that case, none of the three restrictions contained in sub-section (2) of section 34 had any application and, therefore, the powers of revision were held to be available for exercise by the Commissioner. Though the language of section 34 of the Agricultural Income-tax Act is slightly verbally different from the language in section 34 of the Tamil Nadu General Sales Tax act, still they appear to be substantially similar. There is thus an apparent conflict in the matter of jurisdiction of the Board in regard to matters which had been subject of appeal before the Appellate Tribunal. The decision in puthuthotam Estates (1943) Limited, Pollachi v. State of Tamil Nadu represented by the Commissioner of Agricultural Income-tax, Madras ([1978] 2 I. T. J. 243; which was rendered on 17th June, 1977, had not been brought to the notice of the Division Bench which decided the subsequent case in Jeewanlal (1929) Ltd. v. State of Tamil Nadu on 7th December, 1977. It is necessary that this apparent conflict should be considered and resolved by a Full Bench. We, therefore, place the matter before the Honourable the Chief Justice for orders as to the constitution of a Full Bench. In pursuance of the abovesaid order of reference the case came on for hearing before the Full Bench. JUDGMENT The Judgment was delivered by ISMAIL, J.-

(2.) THIS is an appeal under section 37 of the tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959), against the order of the Board of Revenue dated 26th August, 1974, suo motu revising the order of the Appellate Assistant Commissioner. When the matter came up for hearing before a Bench of this Court consisting of Sethuraman and balasubrahmanyan, JJ. , the learned counsel for the appellant-assessee contended that since against the order of the Appellate Assistant Commissioner, the appellant-assessee itself had preferred an appeal and that appeal had been disposed of, the Board of Revenue has no jurisdiction under section 34 of Act 1 of 1959 to revise the order of the Appellate Assistant Commissioner. For this purpose, the appellant relied on a Bench decision of this Court in Jeewanlal (1929)Ltd. v. State of Tamil Nadu The Bench was of the opinion that there was an apparent conflict between the decision of the Bench referred to above and its own decision in Puthuthotam Estates (1943) Ltd. v. State of Tamil Nadu ([1978] 2 I. T. J. 243; dealing with the scope of the revisional powers of the commissioner of Agricultural Income-tax under the Tamil Nadu Agricultural income-tax Act, 1955, and, therefore, referred the case to a Full Bench. That is how the matter comes up before the Full Bench. As far as the facts of the present case are concerned, they lie within a very narrow compass. The appellant was assessed by the Joint commercial Tax Officer, Red Hills Division, to general sales tax for the assessment year 1967-68. The appellant preferred an appeal to the Appellate assistant Commissioner (Commercial Taxes) V. Madras, challenging the liability of four items of turnover to general sales tax. The four items were :1. Supply of raw materials to ancillary industries covered by debit notes Rs. 6, 49, 493. 592. Sale of empty gunnies in the canteen Rs. 3, 941. 483. Sale of discarded goods Rs. 6, 36, 048. 864. Sales in the fair price shop Rs. 68, 126. 62

(3.) WE are of the opinion that on the language of section 34 (2) (b) of Act 1 of 1959, if we may say so with respect, the decision of the bench was correct. The ban under section 34 (2) (b) is a complete one, namely, the moment the order of Appellate Assistant Commissioner has been made the subject of an effective appeal, the power of the Board of Revenue to interfere with the order of the Appellate Assistant Commissioner comes to an end. The statute itself does not contemplate the order of the Appellate Assistant commissioner being split up into different orders dealing with different items of reliefs claimed by the dealer and granted or rejected by the Appellate assistant Commissioner; the statute treats the order of the Appellate Assistant commissioner as a single order not capable of being dissected into different pieces. Apart from this, we are also of the opinion that there is, on principle, every justification for imposing such a ban on the Board of Revenue in interfering with the order of the Appellate Assistant Commissioner, once the said order has been made the subject of an appeal before the Tribunal. WE have already extracted section 36 of Act 1 of 1959 dealing with the powers of the tribunal in hearing appeals and section 36 (3) (a) (i) contemplates the Tribunal enhancing the assessment or penalty. Such enhancement certainly cannot take place at the instance of the dealer who prefers an appeal, but can take place only at the instance of the department. Thus it is clear that in an appeal preferred by a dealer, there is scope for the department intervening and calling upon the Tribunal to enhance the assessment or the penalty and in view of this there is no justification to confer an independent power of revision on the Board of Revenue after the order of the Appellate Assistant Commissioner has been made the subject of an appeal. Therefore, on the language of section 34 of the Act, we are clearly of the opinion that the Bench was right in holding that once the order of the Appellate Assistant Commissioner has been made the subject of an appeal, the Board loses its power to interfere with the order of the Appellate Assistant Commissioner under section 34 (1) of the Act. Now we shall consider the language of the Tamil Nadu agricultural Income-tax Act. The relevant section is section 34 of the Act which deals with the revisional power of the Commissioner. Section 34 (1) and (2) read as follows "34. (1) The Commissioner may, of his own motion or on application by an assessee, call for the record of any proceeding under this act which has been taken by any authority subordinate to him and 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 :rovided that he shall not pass any order prejudicial to an assessee without hearing him or giving him a reasonable opportunity of being heard : Provided further that an order passed declining to interfere shall not be deemed to be an order prejudicial to the assessee. (2) The Commissioner shall not revise any order under sub-section (1) if - (a) where an appeal against an order lies to the appellate Tribunal, the time within which such appeal may be made has not expired; or (b) where an appeal against the order has been made to the Appellate Tribunal, the appeal is pending before it; or (c) the order has been made more than three years previously. " *