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ORDINARY ORIGINAL CIVIL JURISDICTION
SALES TAX REFERENCE NO. 73 OF 2009
The Commissioner of Sales Tax, Mumbai … Appellant
None for the Respondent.
DATED : 11 September 2025
ORAL ORDER (Per- M. S. Sonak, J.)
JUDGMENT
1. Heard Ms. Chavan, the learned Addl.G.P., for the Appellant. The Respondent, though served, was neither present through any representative nor represented by any Advocate.
2. The Maharashtra Sales Tax Tribunal at Mumbai, by its Judgment and Order dated 12 June 2008, has referred the following questions to this Court: -
(i) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the entire assessment order has merged in the appeal order when the appeal involved only the penalty part of the composite order of assessment and penalty?
(ii) Whether, on the facts and in the circumstances of the case, and on the true and correct interpretation of Section-57 of the B.S.T. Act, 1959, the Tribunal was justified in holding that the revisiting authority being coordinate to the appellate authority is totally bereft of revisional jurisdiction under the said section?
(iii) Whether, on the facts and in the circumstances of the case, and on true and correct interpretation of Section 57 of B.S.T. Act, 1959, the Tribunal was justified in laws in allowing the Rectification Application of the Respondent (original Appellant) and setting aside the order of the Tribunal dated 5/10/1996?
3. The above questions came to be referred in the context of the following facts: - (A) M/s. Mardia Steel Ltd. (“MSL ”) was assisted by the Assistant Commissioner Sales Tax (Assessment) for the period from 01 January 1988 to 31 March 1989, which resulted in a refund of Rs. 48,000/-. However, since the payment of taxes was delayed, the Assessing Authority levied a penalty/interest under Section 36(3)(a) of the Bombay Sales Tax Act, amounting to Rs. 14,334/-. (B) Aggrieved by this levy of penalty and interest, MSL preferred an Appeal, which was allowed by the Deputy Commissioner of Sales Tax (Appeal) by order dated 19 January 1993. The penalty and the levy of interest/ penalty were quashed and set aside.
(C) The Deputy Commissioner (Administration), by purporting to exercise the revisional powers under Section 57(1)(a) of the Bombay Sales Tax Act, revised the Deputy Commissioner’s (Appeals) order dated 19 January 1993 and raised an additional demand on MSL to the extent of Rs. 1,40,070/-. The Deputy Commissioner (Administration) reasoned that the set off granted by the Assistant Commissioner (Assessment) was improper.
(D) Aggrieved by the Deputy Commissioner
(Administration) revisional order, MSL preferred Appeal NO. 101 of 1993 before the Maharashtra Sales Tax Tribunal (“Tribunal”). One of the grounds to urge was that the Deputy Commissioner (Administration) was not an officer or person subordinate to the Deputy Commissioner (Appeals). (E) The Tribunal did not accept MSL ’s contention but remanded the matter to the Deputy Commissioner (Administration) so that the revisional powers could be exercised after giving due hearing to MSL. (F) The MSL then filed a Rectification Application under Section 62 of the Bombay Sales Tax Act, alleging that there was an error apparent on the face of the record and binding decisions, though cited, were ignored by the Tribunal. (G) The Tribunal by its order dated 07 September 2002 allowed the Rectification Application and set aside the Deputy Commissioner’s (Administration) order dated 23 July 1993 and restored the original assessment order. (H) Aggrieved by the above order dated 07 September 2002, the Applicant sought a Reference under Section 61(1) of the Bombay Sales Tax Act, vide Reference Application NO. 132 of 2002.
(I) By the Judgment and order dated 12 June 2008, the
4. Ms. Chavan submitted that the entire assessment order made by the Assistant Commissioner had not merged with the orders made by the Deputy Commissioner (Appeals). She submitted that the Tribunal did not correctly appreciate this aspect in its order dated 07 September 2002.
5. Ms. Chavan submitted that there are sufficient powers under the Bombay Sales Tax Act, which enable the Commissioner to delegate powers. Pursuant to such delegation, the revisional powers vested in the Commissioner were delegated to the Deputy Commissioner (Administration). Since this was a valid delegation, there was no infirmity in the Deputy Commissioner (Administration) exercising revisional powers regarding orders made by the Deputy Commissioner (Appeals). She submitted that there was no breach of Section 57 of the Bombay Sales Tax Act involved, either in such delegation or in the exercise of the original powers by the Deputy Commissioner (Administration).
6. Ms. Chavan, without prejudice to the above submitted that the Tribunal was not justified in exercising the powers under Section 62 because this provision confers very limited powers upon the Tribunal. She submitted that this was not some case of an error apparent on the face of the record that could have been corrected in an Application for Rectification made under Section 62 of the Bombay Sales Tax Act. Accordingly, she submitted that the Tribunal’s order dated 05 October 1996 is ex facie without jurisdiction, null and void.
7. Based on the above submissions, Ms. Chavan submitted that all three questions referred by the Tribunal may be answered in favour of the Revenue and against the Assessee.
8. We have considered Ms. Chavan’s contentions in the context of the provisions of the Bombay Sales Tax Act.
9. Insofar as the first question referred, we note that the Assistant Commissioner of Sales Tax, upon completion of assessment, had ordered a refund of Rs. 48,000/- to the Assessee. However, the Assistant Commissioner also directed the Assessee to pay a penalty and interest of Rs. 14,334/-. Aggrieved by the levy of penalty and interest, the Assessee appealed to the Commissioner (Appeals). This Appeal was allowed by the Commissioner (Appeals), and the levy of penalty and interest was set aside. Clearly, therefore, there was a merger in the orders made by the Assistant Commissioner, and the Commissioner (Appeals) was concerned. Therefore, the first question will have to be answered accordingly.
10. Insofar as the second question is concerned, we referred to the provisions of Section 57 of the Bombay Sales Tax Act, which reads as follows: “57. Revision.– (1) Subject to the provisions of section 56 and to any rules which may be made in this behalf,– [(a) the Commissioner may, of his own motion, call for and examine the record of any order passed (including an order passed in appeal) under this Act or the rules made thereunder by any officer or person subordinate to him and pass such order thereon as he thinks just and proper: Provided that, no notice in the prescribed form shall be served by the Commissioner under this clause after the expiry of three years from the date of the communication of the order sought to be revised and no order in revision shall be made by him hereunder after the expiry of five years from such date] (b) [****] [Provided further that, the period of limitation of five years shall not apply in a case where the point or points involved in the revisions proceedings is the subject matter of any proceedings pending before the Tribunal, High Court or Supreme Court; and in such a case it shall be competent for the Commissioner to decide the revision proceedings within eighteen months from the date of notice of hearing served on the assessee after the conclusion of the proceedings in the Tribunal, High Court or, as the case may be, Supreme Court. [(1A) Notwithstanding anything contained in this section or any other provisions of this Act, where the State Government or the Commissioner has initiated any proceedings before an appropriate forum, against a point which is decided against the State by the judgment of the Tribunal, then the Commissioner may pass an order in revision or may issue a notice as provided in this section and pass an order in revision, as he thinks fit, as if the point was not so decided against the State, but shall stay the recovery of the dues including interest and penalty, if any, in so far as they relate to such point until the decision by the appropriate forum.] (2) [No] proceedings in revision under this section shall be entertained upon application. (3) No order shall be passed under this section which adversely affects any person unless such person has been given reasonable opportunity of being heard.”
11. In terms of the above provisions, primarily it is for the Commissioner to exercise revisional powers with regard to orders made by any officer or person subordinate to him. The Commissioner may have the power of delegation, though, in this matter, no such orders were shown to us. In particular, no order delegating the revisional powers to Deputy Commissioner (Administration) was shown to us.
12. In any event, even if we proceed on the basis that such a delegation was made, we are still satisfied that, based upon such a delegation, the provisions in Section 57(1)(a) could not have been contravened. Section 57(1)(a) clearly provides that revisional powers can be exercised in respect of orders made by any officer or person ‘subordinate to him’. This means that revisional powers can be exercised by an authority in relation to orders made by any officer or person who must be subordinate to him and not of coequal or coordinate rank. The Commissioner (Appeals) and the Commissioner (Administration) are the officers of coequal and coordinate rank. Therefore, based upon any alleged delegation, the statutory provisions in Section 57(1)(a) could not have been contravened. A delegate, in the exercise of delegated powers, cannot contravene any provisions of the parent Act. The exercise of delegation must be consistent with the requirements of the Parent Act.
13. Assuming that two interpretations are possible, still, the Courts and the Tribunals will have to prefer an interpretation which aligns with the statutory provisions and not adopt an interpretation which would contravene the statutory provisions. Thus, construed, even the second question will have to be answered against the Revenue and in favour of the Assessee.
14. Incidentally, we note that the Tribunal, in its order dated 05 October 1996, after relying on certain precedents, held that the Deputy Commissioner (Administration) could not have exercised any revisional jurisdiction qua the orders made by the Commissioner (Appeals) because the Commissioner (Appeal) could not be regarded as any officer or person subordinate to him.
15. Insofar as the third question is concerned, we referred to Section 62 of the Bombay Sales Tax Act, which empowers the Tribunal to rectify any mistake apparent from the record. In this case, the Tribunal, in its earlier order, had completely missed the point that Deputy Commissioner (Appeals) was not an officer or person subordinate to the Deputy Commissioner (Administration). Consequently, the Deputy Commissioner (Administration) could never have exercised revisional jurisdiction over the orders made by the Deputy Commissioner (Appeals). This was a glaring error. There were binding precedents which were also ignored by the Deputy Commissioner (Administration).
16. Therefore, even considering that the very limited jurisdiction is vested in the authority exercising powers under Section 62, we do not think that the Tribunal, in the facts of this case, has overstepped such limited powers. Accordingly, even the third question will have to be answered against the Revenue and in favour of the Assessee.
17. For all the above reasons, we answer all three questions referred to us against the Revenue and in favour of the Assessee. There is no case made out to interfere with the Tribunal’s order.
18. The Reference is disposed of in the above terms without any costs order. (Advait M. Sethna, J) (M.S. Sonak, J.)