# COMMISSIONER OF SALES TAX, MADHYA PRADESH v. M/S. AMARNATH AJITKUMAR OF BHIND, MADHYA PRADESH

- **Citation:** [1972] 1 S.C.R. 828
- **Court:** Supreme Court of India
- **Decided:** 1971-09-20
- **Case number:** Civil Appeal No. 367 of 1969
- **Bench:** K. S. Hegde, A. N. Grover
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/commissioner-of-sales-tax-madhya-pradesh-v-m-s-amarnath-ajitkumar-of-bhind-5472
- **Pages:** 8

## Headnote

Madhya Bharat Sales Tax Act, Samv. 2007, s. 12(1) and Madhya Pradesh Sales Tax Act, 1959, ss. 39(2) and 52-Assessment under former Act
-Larger period for revision of ·assess1nent by Con1111issioner provided in
latter Act-If could be availed of.
Section 12(1) of the Madhya Bharat Sales Tax Act, Samv. 2007 prohibits the Commissioner of Sales·tax from revising an order of assessment
which had been made more than two years previously, whiles. 39(2), of
the Madhya Pradesh Sales Tax Act, 1959, which came into force on
April I, 1959 and which repealed the Madhya Bharat Act, permits the
C-Ommissioner to revise an order till the expiry of three years from the
date of the order sought to be 'revised.
The assessee was a registered dealer under the Madhya Bharat Act.
For the period from July 1, 1957 to 31st March, 1958 he submitted
returns.
The Assistant Commissioner of Sales Tax passed an assessment
order on November 28, 1961. On October 30, 1964, the Commissioner
of Sales Tax initiated proceedings under s. 39(2) of the Madhya Pradesh
Act for revising the assessment made.
The assessee contended that as
the assessment related to the period when the Madhya Bharat Act was in
force the revision of the assessment was governed bys. 12(1) of that Act,
.and therefore, the Commissioner could not have revised the order of
assessment after the expiry of two years after the assessment was made.
The High Court, in reference, held that, in view of s, 52 of the Madhya
Pradesh Act, the governing provision was s, 12(1) of the Madhya Bharat
Act.
Dismissing the appeal to this Court,
HELD: (1) The proviso to s. 52(1) of the Madhya Pradesh Act, provides that the repeal df the Madhya Bharat Act shall not affect any right
already acquired or accrued there.
The effect of s. 12(1) of the Madhya
Bharat Act is that after the time prescribed in that provision the Commissioner could not revise the order of assessment either to the prejudice
·of the assessee--0r of the Revenue.
The section thus conferred a right both
on the assessee as well as on the Department to see that an order of assessment is not revised to their prejudice after two years from the date of the
assessment order,
Therefore, the effect of s, 52( I) of the Madhya Pradesh Act, is that all assessments, which include reassessments, should be in
accordance with the repealed Act [835 B-E]
Sales Tax Offi«r Circle I, Jaba/pur v, Hanuman Prasad 19 S.T.C. 87
and Swastik Oil Mills Ltd. v, H, B, Munshi, Dy, Commissioner of Sales
Tax, Bombay, 21 S.T.C. 383, followed.
(2) The second part of the proviso no doubt provides that any action
1aken under the repealed Act shall, in so 'far as it is not inconsistent with
the provisions of the latter Act, be deemed to have been done under the
latter Act But there is undoubtedly a conflict between s. 12(1) of the
Madhya Bharat Act ands. 39(2) of the Madhya Pradesh Act. Therefore,
the Revenue cannot call in aid the second part of the proviso.
[835 E-HJ
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C.S.T. v. AMARNATH (Hegde, J.)
829
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## Text

828
COMMISSIONER OF SALES TAX, MADHYA PRADESH
A
v.
M/S. AMARNATH AJITKUMAR OF BHIND, MADHYA
PRADESH
September 20, 1971
[K. S. HEGDE AND A. N. GROVER, JJ.)
Madhya Bharat Sales Tax Act, Samv. 2007, s. 12(1) and Madhya Pradesh Sales Tax Act, 1959, ss. 39(2) and 52-Assessment under former Act
-Larger period for revision of ·assess1nent by Con1111issioner provided in
latter Act-If could be availed of.
Section 12(1) of the Madhya Bharat Sales Tax Act, Samv. 2007 prohibits the Commissioner of Sales·tax from revising an order of assessment
which had been made more than two years previously, whiles. 39(2), of
the Madhya Pradesh Sales Tax Act, 1959, which came into force on
April I, 1959 and which repealed the Madhya Bharat Act, permits the
C-Ommissioner to revise an order till the expiry of three years from the
date of the order sought to be 'revised.
The assessee was a registered dealer under the Madhya Bharat Act.
For the period from July 1, 1957 to 31st March, 1958 he submitted
returns.
The Assistant Commissioner of Sales Tax passed an assessment
order on November 28, 1961. On October 30, 1964, the Commissioner
of Sales Tax initiated proceedings under s. 39(2) of the Madhya Pradesh
Act for revising the assessment made.
The assessee contended that as
the assessment related to the period when the Madhya Bharat Act was in
force the revision of the assessment was governed bys. 12(1) of that Act,
.and therefore, the Commissioner could not have revised the order of
assessment after the expiry of two years after the assessment was made.
The High Court, in reference, held that, in view of s, 52 of the Madhya
Pradesh Act, the governing provision was s, 12(1) of the Madhya Bharat
Act.
Dismissing the appeal to this Court,
HELD: (1) The proviso to s. 52(1) of the Madhya Pradesh Act, provides that the repeal df the Madhya Bharat Act shall not affect any right
already acquired or accrued there.
The effect of s. 12(1) of the Madhya
Bharat Act is that after the time prescribed in that provision the Commissioner could not revise the order of assessment either to the prejudice
·of the assessee--0r of the Revenue.
The section thus conferred a right both
on the assessee as well as on the Department to see that an order of assessment is not revised to their prejudice after two years from the date of the
assessment order,
Therefore, the effect of s, 52( I) of the Madhya Pradesh Act, is that all assessments, which include reassessments, should be in
accordance with the repealed Act [835 B-E]
Sales Tax Offi«r Circle I, Jaba/pur v, Hanuman Prasad 19 S.T.C. 87
and Swastik Oil Mills Ltd. v, H, B, Munshi, Dy, Commissioner of Sales
Tax, Bombay, 21 S.T.C. 383, followed.
(2) The second part of the proviso no doubt provides that any action
1aken under the repealed Act shall, in so 'far as it is not inconsistent with
the provisions of the latter Act, be deemed to have been done under the
latter Act But there is undoubtedly a conflict between s. 12(1) of the
Madhya Bharat Act ands. 39(2) of the Madhya Pradesh Act. Therefore,
the Revenue cannot call in aid the second part of the proviso.
[835 E-HJ
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C.S.T. v. AMARNATH (Hegde, J.)
829
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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 367 of
1969.
B
Appeal by special leave from the judgment and order dated
October 28, 1968 of the Madhya Pradesh High Court in Misc.
Civil Case No. 188 of 1967.
I. N. Shroff, tor the appellant.
The respondent did not appear.
The Judgment of the Court was delivered by
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Hegde, J.
This appeal by special leave arises from the decision of the Madhya Pradesh High Court in a reference under s. 44
of the Madhya Pradesh Sales Tax Act, 1959.
The reference was
made by the Board of Revenue.
After stating the ,case, the Board
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of Revenue referred the following question to the High Court for
its opinion.
"Whether on the facts and circumstances of the case
the Commissioner of Sales Tax acted illegally in exercising his powers of revision under section 39(2) of the
Madhya Pradesh General Sales-Tax Act, 1958 in respect
of the assessment order dated 28-12-1961 which was
passed in respect of the returns submitted on 30-1-1958
and 17-6-1958 and on the basis of the notice in form
XI issued on 29-8-1961 ?"
The High Court answered that question in the affirmative and
in favour of the assessee.
Aggrieved by that order, the Commissioner of Sales Tax, Madhya Pradesh has come up in appeal
to this Court.
The assessee, M/s. Amarnath Ajitkumar was a registered
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dealer under the Madhya Bharat Sales Tax Act, Samv. 2007.
For the period from July 1, 1957 to 31st March, 1958, the
period with which we are concerned in this appeal, the assessee
submiUed its return for the second and third quarters on January
30, 1958 and for the fourth quarter on 17th June 1958. These
returns were made under s. 9(3) of the Central Sales Tax Act,
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1956.
The sales tax concerned in the present case was that
leviable under the Central Sales Tax Act, 1956.
But the procedure to Q_e adopted in the matter of assessment and collection was
that prescribed in the Madhya Bharat Sales Tax Act Samv. 2007.
The Madhya Bharat Act was repealed by the Madhya Pradesh
General Sales Tax Act, 1959, which came into force on April 1,
1959.
Thereafter the Assistant Commissioner of Sales Tax,
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issued a notice in form XI of the Madhya Pradesh Sales Tax
(Central) Rules, 1959 on August 29, 1961. That Qfficer passed
the assessment order on November 28, 1961.
On October 30,
830
SUPREME COURT REPORTS
[1972] l S.C.R.
1964, the Commissioner of Sales Tax initiated proceedings under
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s. 39(2) of the M.P. Sales Tax Act, 1959 for revising the assessment made.
After notice to the dealer the Commissioner on
April 15, 1965 revised the assessment and enchanced the same by
a sum of Rs. 993.06 paise. The assessee's appeal to the Board
of Revenue was dismissed on June 20, 1966.
Both before the
Commissioner as well as the .Board of Revenue, the assessee conB
tended that as the assessment related to the period when Madhya
Bha.rat Sales Tax Act, Samv. 2007 was in force, the revision of
that assessment is governed bys. 12(1) of that Act and not
s. 39(2) of the M.P. Act, 1959.
It was urged on its behalf that
under the Madhya Bharat Act, the Commissioner could not have
revised the order of assessment after the expiry of two years after c
the assessment was made.
Hence the Commissioner was not
competent to revise the assessment.
The Commissioner as well
as the Board of Revenue rejected that contention.
They came to
the conclusion that it was open to the Commissioner to take action
under s. 39(2) of the M.P. General Sales Tax Act, 1959 in the
matter of revising the assessment.
The High Court did not agree
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with that view.
It held that in view of s. 52 of the 1959 Act,
the governing provision in the matter of revising the assessment
was s. 12 (1) of the Madhya Bharat Act.
The only question that we have to decide is whether in the
facts and circumstances of the case, the Commissioner could have
exercised his power under s. 39(2) of the M.P. Sales Tax Act,
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1959.
Section 12 ( 1) of the Madhya Bharat Act provides :
"The Commissioner may in his discretion at any
time suo moto or being moved by the assessing authority, call for and examine the records of any proceedF
ings under this Act and if he considers any order is
illegal or improper or erroneous in so far as it is prejudicial to the interests of the revenue he may pass
orders as he thinks fit :
Provided that no order shall be passed prejudicial
to a dealer without giving him an opportunity of
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hearing;
Provided further that the Commissioner shall not
revise an order which has been made more than two
years previously."
F;om the second proviso, it is clear that the Commissioner is
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precluded from revising an order which had been made more than
two years previously.
That proviso did not lay down a!lY. rule
of limitation.
But it took away the power of the Comm1ss10ner
C.S.T. v. AMARNATH (Hegde, !.)
831
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the assessment became final and conclusive as against the Department as well as the assessee, unless it was liable to be changed
under some other provision of the Madhya Bharat Act.
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Section 39(2) of the M.P. Sales Tax Act of 1959 sa)'s:
'The Commissioner may of his own motion or on
information received call for and examine the record of
any proceeding under this Act if he considers that any
order passed therein by any person appointed under
section 3 to assist him is erroneous in so far as it is prejudicial to the interests of the revenue, he may after
giving the dealer an opportunity of being heard and
after making or causing to be made such inquiry as he
deems necessary, pass such order thereon as the circumstances of the case justify including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment;
Provided that no proceedings shall be initiated under
this sub-section after the expiry of three years from
the date of the order sought to be revised ........ "
The M.P. Sales Tax Act, 1959 which repealed the Madhya
Bharat Act by s. 52 therein provided the following repeal and
saving provisions.
"52 (1). The Central Provinces and Berar Sales
Tax Act, 194 7, the Madhya Bharat Sales Tax Act, Samv.
2007, the Central Provinces and Berar Sales Tax Act,
194 7 as extended to Vindhya Pradesh and Bhopal
region and as in force in those regions immediately
before the commencement of this Act and the Rajasthan
Sales Tax Act, 1954, as in force in Sironj region, are
hereby repealed :
Provided that such repeal shall not affect the previous operation of the said Acts or any right, title,
obligation or liability already acquired,
accrued,
or
incurred thereunder, and subject thereto, anything
done or any action taken (including any appointment,
notification, notice, order, rule, form, regulation, certificate or licence) in the exercise of any power conferred
by or under the said Acts shall, in so far as it is not
inconsistent with the provisions of this Act, be deemed
to have been done or taken in the exercise of the ·
powers c9nferred by or under this Act, as if this Act
were in force on the date on which such thing was done
or action was taken; and all arrears of taxes and other
SUPREMB COURT REPORTS
[1972) 1 S.C.R.
amounts due at the commencement of this Act may be
recovered as if they had accrued under this Act."
The High Court came to the conclusion that in view of the
-decisions of this Court in The Sales Tax Officer Circle 1, Jabalpur
v. Hanuinan Prasad(') and The Swastik Oil Mills Ltd. v. H. B.
Munshi, Dy. Commissioner of Sales Tax, Bombay,(') the Commissioner was incompetent to revise the order because of s. 12 ( 1)
of the Madhya Bharat Act read withs. 52(1) of the M.P. Sales
Tax Act, 1959.
Hanuman Prasad's case (supra) arose out of M.P. Sales Tax
Act, 1959.
Therein in respect of a period governed by the Cen-
.tral Provinces and Berar Sales Tax Act, 194 7, the assessee therein
filed its return and a notice in form XII was issued to him on
March 10, 1959.
The assessee's turnover was assessed by an
order dated May 23, 1959.
But in the meantime, M.P. Sales
Tax Act, 1959 came into force on April 1, 1959.
The Commissioner sought to revise the order of assessment on the ground that
a portign of assessee's turnover had escaped assessment.
The
question arose whether he had to exercise his powers within the
time fixed by the Berar Sales Tax Act, 194 7 or that fixed under
M.P. Sales Tax Act, 1959.
The specific question that arose for
decision in that case was whether the Commissioner's power to
revise had to be exercised in accordance with s. llA ( 1) of the
Central Provinces and Berar Sales Tax Act, 1947, as contended
by the assessee or under s. 19(1) of the M.P. Sales Tax Act, 1959
as contended by the Department.
That question was examined
by this Court from several angles.
One of the tests applied was
what is the effect of s. 52 of the M.P. Sales Tax Act, 1959. Deal-
:ing with that aspect, this Court observed at p. 90 of the report :
"It was under section 52 of the new Act that the
repealed Act was repealed, and that section itself, under
the proviso laid down that such repe.al shall not affect
the previous operation of the said Act or any right,
title, obligation or liability already acquired, accrued or
incurred thereunder.
There was also the further addition that subject thereto, anything done or any action
taken (including any appointment, notification, notice,
order, rule, form, regulation, certificate or licence) in
the exercise of any power conferred by or under the said
Act, shall, in so far as it is not inconsistent with the
provisions of this Act. be deemed to have been done or
taken in exercise of the powers conferred by or under
this Act, as if this. Act were in force on the date on
view of this proviso it has to be held that when this new
which such thing was done or action was taken.
In
. (2) 21 S.T.C. 383.
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C.S.T. v. AMARNATH (Hegde, J.)
833.
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Act came into force on 1st April, 1959, all rights, title,
obligation or liability already acquired, accrued or incurred under the repealed Act by the respondent remained unaffected and intact.
The rights and liabilities.
y;hich had been acquired or incurred under the repealed
Act, included the right or liability to be assessed in
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accordance with the provisions of the repealed Act in
respect of turnover of sales effected during the time
when that Act was in force."
Agreeing with the High Court this Court held in Hanuman·
Prasad"s(') case that the Commissioner could not have revised the
order of asssessment after the period prescribed in the repealed'
c Act.
One of the reasons given in support of that conclusion is
that "the rights and liabilities, which had been acquired or incurred
under the repealed Act, included the right or liability to be·
assessed in accordance with the provisions of the repealed Act, in
respect of turnover of sales effected during the time when that Act
was in force".
The expression assessment includes re-assessment..
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Swastik Oil Mills( 2 ) case is a converse case.
Therein the
assessee was assessed to sales tax under the Bombay Sales Tax
Act, 1946, for the periods 1st April 1948 to March 31, 1950 and·
April 1, 1950 to March 31, 1951.
On January 7, 1963, Deputy
Commissioner initiated proceedings under s. 31 of the Bombay
Sales Tax Act, 1953 proposing to revise the order of the Assistant
Collector of Sales Tax in so far as he had allowed deduction in·
E · respect of the entire goods despatched by the assessee to its
branches in other states overlooking the provisions of proviso (b)
to rule 1 (ii) under section 6 ( 3) of the Act of 1946 as amended.
in 1949. The question was whether the Deputy Commissioner
could. take advantage of the longer period prescribed under the
Bombay Sales Tax Act, 1946 or whether he wiis required to·
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exercise his powers within the shorter period fixed under the 1953
Act.
Bombay High Court as well as this Court came to the conclusion by applying the provisions in s. 7 of the Bombay General
. Clauses Act ( l of 1904) that the Deputy Commissioner was
entitled to exercise his power of revision within the period prescribed under the repealed Act.
Section 7 of the Bombay General
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Clauses Act provides "where this Act or any Bombay Act or
Maharashtra Act, made after the commencement of this Act,
repeals any enactment hitherto made or hereafter to be made, then,.
unless a different intention appears, the repeal shall not :
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( c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment
so repealed.
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(t) 19 S.T.C. 87.
(2) 21 S.T.C. 383 ..
834
SUPREME COURT REPORTS
(1972] l S.C.R.
( e) _affect any investigation, legal proceeding or
remedy m respect of any such right, privilege, obligation, liability, penalty, forfeiture
or punishment
as
aforesaid, and any such investigation, legal proceeding
or remedy may be instituted, continued or enforced,
and any such penalty, forfeiture or punishment may be
imposed as if the repealing Act had not been passed"
Dealing with the scope of those provisions this is what this Court
observed:
·
"Very clearly, the repeal of the Act of 1953 by the
Act of 1959 did not affect the rights and liabilities of the
assessee to tax under the Act of 1953 or the Act or
1946 in respect of the turnover which became liable to
sales tax under the Act of
1946.
The effect of
clause ( e) of section 7 of the Bombay General Clauses
Act further is that any legal proceeding in respect of
levy, imposition or recovery of that tax is to continue
and any fresh investigation, legal proceeding or remedy
could be instituted as if there had been no repeal by the
Act of 1959.
Consequently, the repeal of the Act of
1953 did not in any way affect the power of the Deputy
Commissioner to institute proceedings for revision
suo motu against the appellate order of the Assistant
Collector which had been passed in exercise of his
powers under the Act of 1946.
It is true, as urged by
Mr. Desai in the alternative, that, in fact, the proceedings should have been taken not under section 31 of the
Act of 1953, but under section 22 of the Act of 1946.
That is so, because, when the Act of 1946 was repealed
by the Act of 1953, similar provisions were made in the
Act of 1953 to continue in force the provisions of the
Act of 1946 in respect of rights and liabilities which
may have accrued or have been incurred under the Act
of 1946.
Section 48(2) and section 49(1) clearly
contained provisions indicating that, in respect of a liability to tax under the Act of 1946, the rights and liabilities of the assessee had to be determined in
accordance with the provisions of the Act of 1946 and all
legal proceedings or remedies in respect thereof had also
to be taken under the same Act.
Consequently the
Deputy Commissioner in seeking to exercise revisional
powers against the order of the Assistant Collector
passed under the Act of 1946, had to proceed
~nder
section 22 of the Act of 1946. That, however, 1s not
at all material, because the provisions of section 22 of
the Act of· 1946 are quite similar to those of section 31
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C.S.T. v. AMARNATH (Hegde, l.)
of the Act of 1953.
The mere incorrect mention of
section 31 of the Act of 195.3 in the notice is immaterial.
The Deputy Commissioner has the jurisdiction
and power to revise the order under section 22 of the
Act of 1946 ·and, consequently the proceedings initiated
by him are not without jurisdiction."
835
Now corning back to s. 52 of the M.P. Sales Act of 1959, the.
proviso to s. 52 ( 1) provides that the repeal of the Madhya Bharat
Act shall not affect any right already acquired or accrued thereunder.
T11e question' is whether the bar on the power of the
Commissioner from exercising the powers under s. 12 (I ) of the
Madhya Bharat Act after the prescribed period did create a right
C in favour of the asse~ee ? The effect of that provision is that
after the time prescribed in that provision,
the Commissioner
could not revise the order of assessment to the prejudice of theassessee.
Similarly h~ could not revise the order of assessment to
the prejudice of the Revenue.
Section 12 ( 1) conferred a right
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both on the assessee as well as on the Department to see that an
order of assessment is not revised to their prejudice after a particular date.
We fail to see why s. 12(1) of the Madhya Bharat
Act should not· be considered as conferring on the assessee a right
to see that the assessment made against him is not altered to his
prejudice after a particular date.
That is a valuable right.
Theelfect of s. 52( 1) of M.P. Sales Tax Act, as seen earlier is that all
assessments, which includes reassessments should be in accorE dance with the repealed Act.
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The second part of that proviso says that su~ect to what has.
been provided in the first part of the proviso, anything done or
any action taken i·ncluding an order in the exercise of any of the
powers conferred by or under the repealed Act, shall, in so far as
it is not inconsistent with the provisions of the M.P. Sales Tax Act,
1959 be deemed to have been done in the exercise of powers conferred by or under that Act as if that Act were in force on the date'
on which such thing was done.
There is undoubtedly a conflict
betweens. 12(1) of the Madhya Bharat Act ands. 39(2) of the·
M.P. Sales Tax Act, 1959.
The former provision prohibits the
Commissioner from revising an order which has been made more·
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than two years previously and the latter provision permits him to
revise the order till the: expiry of three years from the date of the
order sought to be revised.
Therefore the Revenue cannot call
into aid the second part of the proviso.
The resulting position is'
that the governing provision would continue to be s. 12 (1) of theMadhya Bharat Act.
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For the reasons mentioned above this appeal fails and the sameis dismissed.
Respondent is ex-parte.
No costs.
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V.P.S.
Appeal dismissed.