State Of Andhra Pradesh v. S Toshiba Anand Batteries Ltd

AVINASH SOMAKANT BHATE, J.

( 1 ) THE questions of law sought to be agitated in all these revisions being identical, we propose to dispose them of by a common judgment.

( 2 ) IT may not be necessary to detail the facts but a brief background needs to be stated to understand the nature of revisions.

( 3 ) THE assessee-companies in all these revisions are manufacturing dry cell batteries. They were assessed on their turnover for the years 1978-79 and 1976-77 or 1977-78 as the case may be. The assessing authority treated the dry batteries as electrical goods under entry No. 38 of Schedule I of the A. P. General Sales Tax Act, 1957 ("the APGST Act", for short ). They were therefore taxed at 8 per cent on the turnover as per the said Schedule and made assessment accordingly. The revising authority thought that the articles fell under entry No. 137 and deserved to be taxed at 12 per cent. The revising authority therefore issued a notice dated 25/09/1981, to the assessee asking them as to why revision proceedings should not be initiated. The assessee however, made a request on 4/11/1981, not to proceed with the proposed revisions as certain tax appeals regarding the earlier assessment years in respect of same issue were pending before the Sales Tax Appellate Tribunal (S. T. A. T. ). Accordingly, the revising authority by order dated 7/11/1981, deferred the proceedings of the revisions till the disposal of the appeal. Later on the revising authority proceeded to decide the question after issuing fresh notices to the assessees on 20/12/1984. In the said revisions it was held that the article fell under entry No. 137 and deserved to be taxed at 12 per cent. The order in the revisions was passed by the Deputy Commissioner of Commercial Taxes on 15/04/1985 and served upon the parties subsequent thereto.

( 4 ) APPEALS were filed before the S. T. A. T. against the said decision by the assessee. The S. T. A. T. held that though on the merits the assessees had no case, the exercise of powers of revision by the Deputy Commissioner was barred by limitation as the Deputy Commissioner had passed orders after expiry of four years from that date of order of assessment by the assessing authority. Hence on this technical point of limitation, the appeals were allowed. These appeals were allowed in January, 1986.

( 5 ) THE State has now filed these revisions under section 22 (1) of the APGST Act.

( 6 ) THE question that arises for our determination is whether section 20 (3) of the APGST Act was not applicable in the instant case.

( 7 ) SECTION 20 of the APGST Act reads as follows :" (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-section (2) of this section, and if such order or proceeding recorded is prejudicial to the interests of revenue, may make such enquiry, or cause 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 proceeding and may pass such order in reference thereto as it thinks fit. (2) Powers of the nature referred to in sub-section (1) may also be exercised by the Joint Commissioner, the Deputy Commissioner and the Commercial Tax Officer in the case of orders passed or proceedings recorded by authorities, officers or persons subordinate to them. (2-A) The power under sub-section (1) or sub-section (2) shall not be exercised by the authority specified therein in respect of any issue or question, which is the subject-matter of an appeal before, or which was decided an appeal by, the Appellate Tribunal under section 21. (3) In relation to an order of assessment passed under this Act, the powers conferred by sub-sections (1) and (2) shall be exercisable only within such period not exceeding four years from the date on which the order was served on the dealer, as may be prescribed. (4) No order shall be passed under sub-section (1) or sub-section (2) enhancing any assessment unless an opportunity has been given to the assessee to show cause against the proposed enhancement. (5) Where an order passed under this section has been set aside by any court or other competent authority under this Act for any reason, the period between the date of such order and the date on which it has been so set aside shall be excluded in computing the period of four years specified in sub-section (3) for the purpose of making a fresh revision, if any, under this section. (6) Where any proceeding under this section has been deferred on account of any stay order granted by the High Court in any case, or by reason of the fact that an appeal or other proceeding is pending before the High Court or the Supreme Court involving a question of law having a direct bearing on the order or proceeding in question, the period during which the stay order was in force or such appeal or proceeding was pending shall be excluded in computing the period of four years specified in this section for the purposes of exercising the power under this section. "

( 8 ) FROM the perusal of the various relevant dates pointed out already it will be noticed that the assessing authority passed assessment orders some time in the month of May, 1980. In September, 1981, notice was issued for the first time for initiating revision proceeding under section 20. Final orders were passed in all the revisions some time in or, after January, 1986. Thus the orders were manifestly passed much beyond the period of four years from the date of assessment orders and service thereof.

( 9 ) THE argument of the learned Government Pleader is that the revision proceedings were initiated by issue of show cause notice in the months of September, 1981, itself. Thus the exercise of powers by the revising authority started within four years of passing of the order by the assessing authority. According to him it is immaterial as to when the orders were passed by the revising authority and were served upon the assessees. Further, it is stated that the proceedings were deferred on the specific request of the assessees and though they were decided in 1986, as the exercise of power under section 20 had begun within four years, the provisions of section 20 (3) would not come in the way. The argument of the learned Government Pleader is quite attractive but we feel that it is unacceptable. The Government Pleader has relied on certain authorities to which we will presently make a reference at an appropriate place.

( 10 ) THE learned Advocate Sri Jaiswal for the assessees on the other hand submits that not only initiation of the revision proceedings must take place within four years from the starting point but also the whole exercise including the passing of the order and its due intimation to the concerned authorities and the concerned parties must be completed within that period. There is no disputed as to the point from which period of four years prescribed in section 20 (3) is to be computed. Sri Jaiswal further submits that there was no necessity to defer the progress of the proceeding in the instant case, as section 20 (2-A) of the APGST Act was not applicable. Lastly it was urged that the S. T. A. T. was not justified in discussing or dealing with the merits of the case when that was not the point urged or raised by the assessee in the appeal before the S. T. A. T.

( 11 ) WE will examine the validity of all these arguments. Adverting first to the last point urged by Sri Jaiswal we think it is unnecessary to consider the said point in any details in this reference.

( 12 ) SRI Jaiswal has relied in the decision in State of Andhra Pradesh v. Sri Venkata Rama Lingeshwara Rice Mill [1977] 39 STC 57 (AP) [LQ/TelHC/1976/39] [fb] for the proposition that if appeal is not preferred for agitating a particular point then though the court of appeal is entitled to rehear the case its power to rehear is confined only to the subject-matter of the appeal and it cannot deal with the matters which are not the subject-matter of the appeal. According to Sri Jaiswal, the assessees had filed appeals before the S. T. A. T. only to urge the point that the exercise of powers by the Deputy Commissioner in the revision was bad as it was hit by limitation. The Tribunal need not have discussed the merits of the case when that was not the point open for discussion before the Tribunal. It is not necessary to deal with this point in these revisions which are preferred by Revenue for agitating a different point.

( 13 ) THE contention of the learned Government Pleader is that the revision proceedings having been initiated by issue of a show cause notice in the month of September, 1981, the question of limitation does not arise. The powers have thus been exercised by the revisional authority within four years as required by section 20 (3) of the APGST Act. In support of his contention the learned Government Pleader makes reference to certain cases. Firstly he relies on the decisions in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax [1963] 14 STC 976 [LQ/SC/1963/193] and Sales Tax Officer v. Sudarsanam Iyengar and Sons [1970] 25 STC 252. [LQ/SC/1969/269] Both of these cases are Supreme Court decisions. In these cases the point for determination was, "during what period the assessment proceedings must be completed under the relevant Sales Tax Act ". In Ghanshyamdass case [1963] 14 STC 976 (SC) limitation under section 11-A of the C. P. and Berar Sales Tax Act was considered while in Sales Tax Officers case [1970] 25 STC 252 (SC) the Travancore-Cochin General Sales Tax Rules were under consideration. It was in relation to the assessment proceedings that these decisions have been rendered. It was observed that the assessment is a comprehensive word and does not render the final order of assessment. It was on this reasoning that it was held that if the assessment proceedings are initiated and are pending within the time prescribed, they can be completed without any time-limit. These decisions have in our opinion no application to the facts and circumstances of the present cases. The next case relied on was N. V. S. Kadirvel Nadar v. State of Madras [1962] 46 ITR 251 (Mad. ). This was concerning the provisions of the Madras Agricultural Income-tax Act. The provisions of that Act were not in pari materia. What has been said in the decision is therefore not of use. In State of Gujarat v. Jamnagar Motor Stores case [1974] 33 STC 353 [LQ/GujHC/1973/68] the Gujarat High Court was dealing with the provisions of the Bombay Sales Tax Act. Section 57 (1) (a) of the said Act required the Commissioner of Sales Tax on his own motion within five years from the date of any order passed by any officer under section 20 to call for examining the record of any such order and pass such order thereon. It did not have any provision analogous to section 20 (3) of the APGST Act. Section 20 (3) makes it clear that the powers shall be exercisable within the period not exceeding four years. That is the main difference. Beyond four years the powers are not exercisable at all. While section 57 of the Bombay Sales Tax Act empowers calling of the record within five years and does not say that the powers are not exercisable beyond five years, we think that the provisions of that section cannot be compared to section 20 (3) of the APGST Act. Lastly the Government Pleader relied on the decisions in Subba Rao v. Commissioner of Commercial Taxes [1967] 19 STC 257 (Mys.), Busunur Industries v. State of Karnataka [1986] 61 STC 123 (Kar) [LQ/KarHC/1985/74] and Keshawa Trading Company v. Commissioner of Commercial Taxes [1986] 62 STC 102 (Kar) arising out of the provisions of the Mysore Sales Tax Act or the Karnataka Sales Tax Act as the case may be. No doubt, the decisions in these cases support the view sought to be pressed by the learned Government Pleader. In all these cases the interpretation of expression "shall be exercisable" has been made on the lines which the Government Pleader wants this Court to interpret the question of limitation in these cases. However, we are not inclined to accept the said interpretation. According to our view the exercise of powers of revision must come to an end within a period of four years from the date of passing of the order by the subordinate authority. The effect of section 20 (3) of the APGST Act in our opinion, is that the revising authority is powerless beyond the period of four years to deal with the revision. The exercise of powers as a whole cannot extend beyond the period of four years from the date on which the order of subordinate authority was served on the dealer.

( 14 ) THE learned Government Pleader was unable to bring to our notice any decision of this Court taking a view on the lines of the Karnataka High Court. The Government Pleader, however, brought to our notice the decision in Kedia Vanaspathi Ltd. v. Commissioner of Commercial Taxes [1993] 89 STC 555 (AP), to which one of us was a party. This decision is not very much relevant for the point urged by the learned Government Pleader. What has been decided in the said case is that the period of limitation prescribed under section 20 (3) of the APGST Act begins from the date on which the order was served on the dealer. As pointed out by us already, there is no dispute about the point from which the limitation starts.

( 15 ) ON the other hand, there are certain cases of this Court, as also of the Supreme Court, dealing with the APGST Act to show that the view which we are taking is in accord with the view which has been already consistently approved and was never in question. In Rajmal Multanmal and Company v. Commercial Tax Officer [1976] 37 STC 252 (AP) [LQ/APHC/1974/57] it was held that section 20 (3) provides that the powers of revision were to be exercised by the Deputy Commissioner within a specified period and if the jurisdiction was exercised by the Deputy Commissioner by passing the order within the specified period of limitation, even if the order was not communicated to the petitioner within four years it did not matter. This was obviously because communication of the order was really a sort of ministerial exercise and did not relate to the exercise of powers as such. Similarly in Khetmal Parekh and Company v. State of Andhra Pradesh [1976] 38 STC 531 (AP) [LQ/APHC/1976/27] this Court held that for the purposes of limitation it was sufficient if the Deputy Commissioner passed the order within four years from the date of service of the order sought to be revised and it was not necessary that the said order should be served on the assessee within that period. It will thus appear that the view taken in Rajmal Multanmals case [1976] 37 STC 252 (AP) [LQ/APHC/1974/57] is reaffirmed. Similar view about limitation has been taken in Ramakrishnaiah and Co. v. State of Andhra Pradesh [1976] 38 STC 537 (AP) [LQ/APHC/1976/28] , though in this case it was held further that the order in revision did not bind the assessee in view of the inordinate delay in serving the order of revision. In Meenakshi Corporation v. Deputy Commissioner of Commercial Taxes [1977] 40 STC 101 (AP) [LQ/APHC/1976/41] it was specifically held that if the order of Deputy Commissioner was passed within the period of four years it was not barred by limitation even though it was communicated to the petitioner after the period of four years was over. Lastly in State of Andhra Pradesh v. M. Ramakishtaiah and Co. [1994] 93 STC 406 [LQ/SC/1994/240] the apex Court affirmed the decisions of this Court in Khetmal Parekhs case [1976] 38 STC 531 [LQ/APHC/1976/27] and Ramakrishnaiahs case [1976] 38 STC 537 [LQ/APHC/1976/28] and held further that if the order of the revisional authority purporting to have been passed within four years is served upon the assessee after substantial delay, then the presumption would be that the order was not made within a period of four years as required and was therefore barred by limitation. From all these cases relied on by the learned Advocate for the assessees, Sri Jaiswal it will be found that a consistent view has been taken by this Court which has been affirmed by the apex Court that the period of limitation of four years prescribed by section 20 (3) of the APGST Act covers the whole proceedings of the revision including passing of the final order and of communicating the same promptly to the party concerned.

( 16 ) WE think, apart from the view taken by us, we are also bound by the consistent view taken by this Court which has been affirmed by the Supreme Court. It is true that in all these cases it was never urged by any one that mere initiation of revisional proceedings within four years would save the limitation of revisional proceedings yet, the observations are clear and emphatic in all these cases that the order has to be passed within four year period of limitation. The view which we are taking finds support from some other provisions in the APGST Act. Section 20 (5) (extracted already) makes it clear that for computing the period of four years, if the order passed in revision has been set aside by superior competent authority under the for any reason then, the period between the date of such order (. e. , the order in revision) and the date on which it has been set aside, shall be excluded in computing the period of four years specified in section 20 (3) for the purpose of making a fresh revision if any, under this section. The fact that the period to be excluded commences from the date of order passed in the revision proceedings goes to show that the period of four years referred to extends up to and includes the date of passing of the order.

( 17 ) SECTION 20 (6) which has been inserted by amendment in 1968, makes this position further clear. This provision says that if the revision proceedings are deferred on account of stay order granted by the High Court or the Supreme Court or due to that proceedings are pending in the Supreme Court or the High Court involving a question of law having direct bearing on proceedings of revision in question, then the period during which the stay order remains in force, or the period during which the proceedings referred to above, were pending, shall be excluded in computing the period of four years specified in this section for the purpose of exercising the power. If the construction sought to be placed by the learned Government Pleader is to be accepted then it would mean that the Legislature has inserted sub-section (6) as an act of futility. If the initiation of proceedings of revision within four years is a sufficient compliance in a case like this then there was no necessity to exclude the period of stay or the period during which appeal is pending in the High Court or Supreme Court, when the deferment is on that ground. To repeat in different words, if the revisional exercise began within four years it would be disposed of after any length of time thereafter as per the argument advanced by the learned Government Pleader. If that be the real position, it was futile for the Legislature to add by this sub-section that the intervening period from the date on which deferment takes place till the operation of the stay order, is to be excluded. It is well-known canon of interpretation of statutes that the Legislature does not enact futile provisions in an enactment. The purpose of bringing sub-section (6) on the statute book must therefore be to save the period of actual stay from the computation of total period of four years in deciding the revision which is in addition to order of assessment.

( 18 ) IT is however to be made clear at this juncture that section 20 (3) which prescribes the outer limit of four years concerns only of the revisions "in relation to order of assessment passed under the". On the other hand, under section 20 (1) the Commissioner has power to initiate revisions not only in relation to orders of assessment but also in relation to "any order passed or any proceeding recorded by authorities subordinate to it". Therefore, the reading of section 20 (1) and section 20 (3) will show that the period of limitation of prescribed only to such orders which are in relation to assessment passed under the. The period of limitation of four years does not apply if the revision is initiated in respect of any other order passed by the subordinate authority or in respect of proceedings recorded by the subordinate authority in respect of any other matter. This also tends to give indication of the intent of the Legislature that revisions in relation to order of assessment are to be expedited and it was therefore that four years limit has been prescribed for deciding the same. It could not be the intent that the initiation of the revision proceedings even in relation to order of assessment may be done within a period of four years which itself a very pretty long and then the decision may be rendered after length of time thereafter.

( 19 ) THIS brings us to the conclusion of section 20 (2-A ). This provisions fetters exercise of powers by the Commissioner, etc. , in respect of any issue or question, which is a subject-matter of appeal, before, or which was decided on appeal by, the Appellate Tribunal under section 21. Now this sub-section will make it clear that if an issue or question which was already decided on appeal by the Tribunal then, the Commissioner or other competent authority would be bound by such decision and therefore, may not exercise revisional powers afresh. However, we are of the opinion that in a case where the Commissioner or the other competent authority has initiated proceedings in a revision in ignorance of an appeal which is pending before the Tribunal already in respect of an identical issue or question, then the Commissioner will have to stay his hands from exercising the power and the revision will have to be deferred, if it is in relation to an order of assessment during that period. In such a case the period during which the appeal is actually pending before the Tribunal will have to be excluded in computing the period of four years specified in section 20 (3 ). This would be on parity of reasoning on which section 20 (6) has been brought in the statute book. Unless such a harmonious construction is given to section 20 (2-A) anamolous position is likely to result. A revision which was initiated but, was required to be held up due to section 20 (2-A) would become infructuous if the period of stay is not excluded. We therefore, think that in such a case,. e. , where appeal before the Tribunal is actually pending and the revision was already initiated, the period of pendency of the appeal will have to be excluded from the ultimate calculation of four years period.

( 20 ) IT is brought to our notice now that in Indo National Ltd. v. State of Andhra Pradesh [1987] 64 STC 382 [LQ/TelHC/1986/197] ; (1986) 3 APSTJ 200 it has been held by this Court that the dry cell batteries would fall under entry No. 38 till the date of coming into force of entry No. 152. Entry No. 152 is subsequently added entry. The court held that dry battery cells did not fall in any event, under entry No. 137. This decision renders the view on the merits by the S. T. A. T. futile.

( 21 ) FOR the reasons given above, we are of the opinion that the view taken by the Tribunal is in consonance with the consistent view taken by this Court. We affirm the same and as a result dismiss the T. R. C. Nos. 70, 80, 96 and 130 of 1987. No costs.

( 22 ) PETITIONS dismissed.