Supreme Court rules Commissioner acted illegally under M.P. Sales Tax Act

Commissioner of Sales Tax, Madhya Pradesh Versus Amarnath Ajitkumar of Bhind  

Commissioner of Sales Tax, Madhya Pradesh Versus Amarnath Ajitkumar of Bhind   - [1971] 28 STC 702 (SC)   Issues Involved:
1. Legality of the Commissioner's exercise of revision powers under section 39(2) of the Madhya Pradesh General Sales Tax Act, 1959.
2. Applicability of section 12(1) of the Madhya Bharat Sales Tax Act, Samv. 2007, versus section 39(2) of the Madhya Pradesh General Sales Tax Act, 1959, in revising the assessment.
3. Interpretation of section 52 of the Madhya Pradesh General Sales Tax Act, 1959, regarding the repeal and saving provisions.

Detailed Analysis:

1. Legality of the Commissioner's Exercise of Revision Powers under Section 39(2) of the Madhya Pradesh General Sales Tax Act, 1959:
The primary issue was whether the Commissioner of Sales Tax acted illegally by exercising his revision powers under section 39(2) of the M.P. Sales Tax Act, 1959, for an assessment order dated December 28, 1961. The High Court had determined that the Commissioner acted illegally, and the Supreme Court upheld this decision. The Court noted that the Commissioner initiated revision proceedings on October 30, 1964, and revised the assessment on April 15, 1965, enhancing it by Rs. 993.06 paise. The Court emphasized that the revision should have been governed by section 12(1) of the Madhya Bharat Act, not by section 39(2) of the M.P. Act, 1959.

2. Applicability of Section 12(1) of the Madhya Bharat Sales Tax Act, Samv. 2007, Versus Section 39(2) of the Madhya Pradesh General Sales Tax Act, 1959, in Revising the Assessment:
The Court examined whether section 12(1) of the Madhya Bharat Act or section 39(2) of the M.P. Act, 1959, governed the revision of the assessment. Section 12(1) of the Madhya Bharat Act stipulated that the Commissioner could not revise an order more than two years after it was made. In contrast, section 39(2) of the M.P. Act allowed revision within three years. The Court concluded that section 12(1) of the Madhya Bharat Act conferred a right on the assessee to prevent the revision of an assessment after two years, a right that should be preserved under the saving provisions of section 52 of the M.P. Act, 1959.

3. Interpretation of Section 52 of the Madhya Pradesh General Sales Tax Act, 1959, Regarding the Repeal and Saving Provisions:
Section 52 of the M.P. Act, 1959, repealed the Madhya Bharat Act but included a saving clause that protected rights, obligations, and liabilities accrued under the repealed Act. The Court noted that this saving clause meant that the limitations and rights established under the Madhya Bharat Act, including the prohibition on revising assessments after two years, remained in effect. The Court referenced previous decisions, such as Hanuman Prasad's case and Swastik Oil Mills' case, to support its interpretation that the repeal did not affect the rights and liabilities accrued under the repealed Act. The Court concluded that the governing provision for revising the assessment was section 12(1) of the Madhya Bharat Act, as it created a valuable right for the assessee.

Conclusion:
The Supreme Court upheld the High Court's decision, concluding that the Commissioner of Sales Tax acted illegally by exercising revision powers under section 39(2) of the M.P. Sales Tax Act, 1959, instead of being governed by section 12(1) of the Madhya Bharat Sales Tax Act, Samv. 2007. The appeal was dismissed, and no costs were awarded due to the respondent being ex parte.