TaxTMI 
TaxTMI 
2015 (12) TMI 469
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....2) of the U.P. Value Added Tax Act, 2008; and 2. Whether the view expressed by the Division Benches of this Court in Dharma Rice Mill versus State of U.P. 2010 UPTC 648 and Kumar Rice Mills versus State of U.P. 2010 UPTC 1594 taking a contrary view lay down the correct law, having been expressed upon non-consideration of the judgments of the Supreme Court in the case of Hari Shanker versus Rao Girdhari Lal Chowdhury (supra) and Shiv Shakti Cooperative Housing Society versus Swaraj Developers (supra)." The facts in the context of which the revision arises fall in a narrow compass. During the period 1 April 2007 to 31 December 2007, comprised in assessment year 2007-08, the revisionist purchased wheat in the amount of Rs. 15,38,264/- for sale to a flour mill. The revisionist is engaged in the business of purchasing and selling food grains on retail and on commission. The flour mill for whom the revisionist had purchased the wheat opted for compounding its tax dues purportedly under a scheme floated by the State of Uttar Pradesh under Section 7-D of the Uttar Pradesh Trade Tax Act, 1948 UP Trade Tax Act. In the assessment proceedings, the purchases and sales made by the re....
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....ch was urged on behalf of the revisionist was that the view which was taken by the Division Benches of this Court in Dharma Rice Mill (supra) and Kumar Rice Mill (supra) failed to notice that the provision for a revision in Section 10-B of the UP Trade Tax Act was in the nature of an enabling provision and is not a substantive right. Reliance was sought to be placed on the ambit of the remedy of a revision as enunciated in the decisions of the Supreme Court in Hari Shankar Vs Rao Girdhari Lal Chowdhury AIR 1963 SC 698 and Shiv Shakti Co-op Housing Society Vs Swaraj Developers (2003) 6 SCC 659. The judgments of the Division Benches, it was submitted, having not examined the effect of the binding judgments of the Supreme Court, they did not constitute binding precedents. Consequently, it was urged that the provisions of Section 81 (2) of the UP VAT Act did not save the revisional remedy provided by Section 10-B of the Act. The learned Single Judge while adverting to this submission has formed the view that the decisions of the two Division Benches of this Court require reconsideration. On behalf of the revisionist, three submissions have been urged by learned Senior Counsel: (i....
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....rised in this behalf by the State Government by notification may call for and examine the record relating to any order (other than an order mentioned in section 10-A) passed by any officer subordinate to him, for the purpose of satisfying himself as to the legality or propriety of such order and may pass such order with respect thereof as he thinks fit. (2) No order under sub-section (1) affecting the interest of a party adversely shall be passed unless he has been given a reasonable opportunity of being heard. (3) No order under sub-section (1), shall be passed - (a) to revise an order, which is or has been the subject matter of an appeal under section 9, or an order passed by the Appellate Authority under that section: Explanation - Where the appeal against any order is withdrawn or is dismissed for non-payment of fee payable under section 32 or for non-compliance of sub- section (1) of section 9, the order shall not be deemed to have been the subject-matter of an appeal under section 9; (b) before the expiration of sixty days from the date of the order in question; (c) after the expiration of four years from the date of the o....
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.... and manner within thirty days from the date of the commencement of the Act: PROVIDED that, in appropriate cases, the assessing authority may extend the time for furnishing undertaking from sureties. (6) The mention of particular matters in this section shall not be held to prejudice or affect general application of Section 6 of the Uttar Pradesh General Clauses Act, 1904, with regard to the effect of repeals." Section 56 of the UP VAT Act provides for the remedy of a revision to the Commissioner and is in the following terms: "Section 56. Revision by the Commissioner.-- (1) The Commissioner or such other officer not below the rank of Joint Commissioner, as may be authorised in this behalf by the Commissioner may call for and examine the record relating to any order, passed by any officer subordinate to him, for the purpose of satisfying himself as to the legality or propriety of such order and may pass such order with respect thereto as he thinks fit. (2) No order under sub-section (1) affecting the interest of a party adversely shall be passed unless he has been given a reasonable opportunity of being heard. (3) No order un....
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....nder the provisions of the new Act. Clause (b) of sub-section (2) of Section 81 stipulates that a right, privilege, obligation or liability acquired, accrued or incurred under the repealed Act shall not be affected. The emphasis is on the expressions acquired, accrued or incurred. Sub-section (3) inter alia provides that an officer who has been authorized by the Commissioner under the repealed enactment to exercise powers under Section 10-B shall be deemed to have been authorized by the Commissioner to exercise such powers under Section 56. Sub-section (6) of Section 81 provides that the general application of Section 6 of the U P General Clauses Act 1904 with regard to the effect of repeals shall not be affected by the mentioning of particular matters in the section. Section 6 of the U P General Clauses Act, 1904 provides as follows: "6. Effect of repeal.--Where any Uttar Pradesh Act repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not-- (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment....
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....utes observes that: "The effect of clauses (c) to (e) of Section 6, General Clauses Act is, speaking briefly, to prevent the obliteration of a statute in spite of its repeal to keep intact rights acquired or accrued and liabilities incurred during its operation and permit continuance or institution of any legal proceedings or recourse to any remedy which may have been available before the repeal for enforcement of such rights and liabilities." 13th edition 2012 p. 710 In Bansidhar Vs State of Rajasthan (1989) 2 SCC 557, a Constitution Bench of the Supreme Court considered the question as to whether proceedings for fixation of a ceiling area with reference to the appointed date under Chapter III-B of the Rajasthan Tenancy Act 1955 could be initiated and continued after the Rajasthan Imposition of Ceiling on Agricultural Holdings Act 1973 repealed Chapter III-B of the earlier Act. It was urged before the Supreme Court that even if the provisions of the earlier Act were held to have been saved, neither had a right accrued in favour of the state nor was any liability incurred by the landholders in the determination of the ceiling area so as to attract to their cases the pro....
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.... tenant on the ground of subletting. During the pendency of the petition, an amendment was made which excluded the jurisdiction of the Rent Controller with respect to tenancies fetching a monthly rent exceeding Rs. 35,000/-. Following this, the tenant contended that it was only the civil court which had the jurisdiction after the amendment and not the Rent Controller. The Supreme Court held as follows: "At the most, such a provision can be said to be granting a privilege to the landlord to seek intervention of the Controller for eviction of the tenant under the statute. Such a privilege is not a benefit vested in general but is a benefit granted and may be enforced by approaching the Controller in the manner prescribed under the statute. On filing the petition for eviction of the tenant the privilege accrued with the landlord is not affected by repeal of the Act in view of Section 6(c) and the pending proceeding is saved under Section 6(c) of the Act." At para 27 p 410 In other words, it was held that since the proceeding for eviction was pending when the repealing Act came into operation, Section 6 of the General Clauses Act would be applicable. The words "any right ac....
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....te matters." Applying this principle, the Supreme Court made a distinction between a situation where the effect of a repeal is to obliterate the statute and to destroy its operation in future or to suspend the operation of the common law on the one hand and on the other hand a situation where a repeal does not contemplate either a substantive common law or statutory right but merely a procedure is prescribed. The Supreme Court held as follows: "Since the effect of a repeal is to obliterate the statute and to destroy its effective operation in future, or to suspend the operation of the common law, when it is a common law principle which is abrogated, any proceedings which have not culminated in a final judgment prior to the repeal are abated at the consummation of the repeal. When, however, the repeal does not contemplate either a substantive common law or statutory right, but merely the procedure prescribed to secure the enforcement of the right, the right itself is not annulled but remains in existence enforced by applying the new procedure." In Gammon India, the appellant after obtaining a construction contract in the State of Andhra Pradesh obtained the benefit of....
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....o call for the record of a case to satisfy itself that the decision therein is according to law and to pass such orders in relation to the case, as it thinks fit." (emphasis supplied) The same principle was enunciated in a subsequent decision in Shiv Shakti Co-op Housing Society (supra) where it was held that whereas the right of appeal is a substantive right, there is no such substantive right under Section 115 of the Code of Civil Procedure. Section 115, it was held, is essentially a source of power for the High Court to supervise the subordinate courts and does not confer a right on a litigant aggrieved by an order of a subordinate court to approach the High Court for relief. The scope for making a revision under Section 115 was held not to be linked with a substantive right. In that context, the Supreme Court observed as follows: "Right of appeal is statutory. Right of appeal inherits in no one. When conferred by statute it becomes a vested right. In this regard there is essential distinction between right of appeal and right of suit. Where there is inherent right in every person to file a suit and for its maintainability it requires no authority of law, appeal requ....
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.... An instance where this came up for consideration was before the Delhi High Court in International Metro Civil Contractors Vs Commissioner of Sales Tax/VAT [2008] 16 VST 329 (Delhi). Following an order of assessment under the Delhi Sales Tax Act, the assessee applied for a refund which was rejected. A notice of reassessment was issued following which an order of reassessment was passed. The rejection of the refund application and order of reassessment were challenged before a Division Bench. The Division Bench set aside both the orders and directed the Commissioner to pass appropriate orders on the refund application. The Commissioner passed an order by which he came to the conclusion that the original order of assessment was erroneous and prejudicial to the interest of the revenue and directed the Assistant Commissioner to revise the assessment order under Section 46. In the meanwhile, on 31 March 2005, the Delhi Sales Tax Act was repealed and on 1 April 2005 the Delhi VAT Act was brought into force. Section 106 of the Delhi VAT Act made a repeal and savings provision. The Delhi High Court noticed that no power of revision was conferred upon the Commissioner of Value Added Tax und....
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....arified, however, that it was not necessary to go to that extent because the next issue which required consideration was whether the right or entitlement of the revenue, if any, to revise an order of assessment was saved by the Delhi VAT Act. This was answered in the negative, relying upon the decisions of the Supreme Court in Hari Shankar (supra) and Shiv Shakti Co-op Housing Society (supra). The Delhi High Court held as follows: "The power of revision is an enabling power available to a superior authority to correct an error committed by a subordinate authority. Shiv Shakti [2003] 6 SCC 659 is not limited in its application to Section 115 of the Code of Civil Procedure but follows the law earlier laid down, generally, on the revisionary power of an authority. The power of revision being only an enabling power and not a substantive right, it is not saved by Section 106(2) of the DVAT Act, which only saves a "right" or an "entitlement", both being synonymous. Consequently, whichever way one considers the problem, the assessment order dated March 31, 2003 could not have been re-opened by the Revenue in the manner that we are concerned with." At paras 77 and 78 p 35....
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....56 of the UP VAT Act. In Delhi, until the legislature intervened to incorporate it under Section 74A subsequently, there was no conferment of a revisional power on the Commissioner. In the State of Uttar Pradesh, a revisional power has been conferred on the Commissioner both under the erstwhile UP Trade Tax Act as well as under the UP VAT Act which repealed the former Act. Moreover, as we have noticed earlier, the revisional power in Section 56 of the UP VAT Act is pari materia with that which is contained in Section 10-B of the erstwhile Act save and except that now an authorisation for the exercise of the power by the Joint Commissioner is to be made by the Commissioner and not by the State Government as was the case under the previous legislation. Both the erstwhile legislation as well as the new legislation provide for a remedy of a revision to the Commissioner. The intent of the new Act was evidently not to abrogate that remedy of a revision. As we have observed above, the crucial issue in each case is the nature of the provision which has been made in the repealing legislation. In a case which fell for consideration before a Division Bench of the Punjab and Haryana High Co....
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....bject matter of the present case is that rendered by three Hon'ble Judges of the Supreme Court in Swastik Oil Mills Ltd Vs H B Munshi, Deputy Commissioner of Sales Tax, Bombay AIR 1968 SC 843. The appellant was registered as a dealer under various Sales Tax Acts which were in force in Bombay and was assessed to sales tax on its turnover. The appellant claimed an exemption from tax in respect of its turnover representing the despatches or transfers of goods from its head office to various depots or branches in other States and in respect of sales allegedly in the course of inter-state trade after 26 January 1950. Both the claims were rejected by the Assessing Officer but were partially allowed by the first appellate authority. Revisions filed by the appellant against the rejection of its claim in respect of inter-state sales were pending when a notice was issued by the Deputy Commissioner intimating the appellant that he proposed to revise suo motu the appellate order of the Assistant Commissioner, Sales Tax insofar as he had allowed a deduction in respect of goods despatched to branches in other States outside Maharashtra. The appellant filed a writ petition challenging the not....
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....igation or liability which is acquired, accrued or incurred. We must proceed on the basis that the remedy of a revision is in the nature of an enabling provision and is not in the nature of a substantive right, as has been held in the judgments of the Supreme Court in Hari Shankar (supra) and Shiv Shakti Co-op Housing Society (supra). That, however, is not conclusive of the matter because the remedy which is saved by Section 6(e) is also in respect of a privilege, obligation or liability which is acquired, accrued or incurred. Under the provisions of the UP Trade Tax Act, Section 3(1) imposes upon every dealer for each assessment year the liability to pay tax at the rates provided by or under Sections 3-A, 3-D or Section 3-H on the turnover of sales or purchases or both, as the case may be. Under Section 7(1), every dealer, who is liable to pay tax under the Act, was required to submit returns of his turnover at such intervals, within such period, in such form and verified in such manner as may be prescribed. Under sub-section (2) of Section 7, the Assessing Authority is empowered to assess the tax on the basis of returns submitted if, after such enquiry as it considers necessary, ....
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....ave been done before the Act was repealed, but it would be enough if it was integrally connected with and was a legal consequence of a thing done before the said repeal..." The nature of the power of revision in such cases involving fiscal legislation has fallen for consideration before the Supreme Court in Raymond Ltd Vs State of Chhattisgarh (2007) 3 SCC 79 in the context of Section 56 of the Stamp Act 1899 as amended, in relation to the State of Madhya Pradesh. Under sub-section (2) of Section 56, if any Collector acting under stipulated provisions has a doubt as to the amount of duty with which any instrument is chargeable, he can draw up a statement of the case and refer it with his own opinion for the decision of the Chief Controlling Revenue Authority. Under sub-section (4), which was introduced by a state amendment, the Chief Controlling Revenue Authority is, on its own motion or on the application of any party, empowered to call for and examine the record of any case disposed of by the Collector and to pass such order in reference thereto as it thinks fit for the purpose of satisfying itself as to the amount with which the instrument is chargeable with duty. The Supreme....