# ') GURBAKSH SINGH v. UNION OF INDIA & OTHERS

- **Citation:** [1976] 3 S.C.R. 247
- **Court:** Supreme Court of India
- **Decided:** 1973-05-10
- **Case number:** Civil Appeal Nos. 66_7-668 of 1975
- **Bench:** V. R. Krishna Iyer, A. C. Gupta, N. L. Untwalia
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/gurbaksh-singh-v-union-of-india-others-6760
- **Pages:** 8

## Headnote

8
Bengal Finance (Sales Tax) Act, 1941 as extended to the Union Territory
of Dcliu-Sections 11, llA and 20-Scope of.
Section 11 of the Bengal Finance (Sales Tax) Act, 1941 as extended to the
Union Territory of Delhi provides for assessment of tax. Section 1 lA provides for assessment or reassessment in case of escaped or under-assessment.
Section 20 provides for appeals and revision.
In 1959 the assessee was assessed by the Sales Tax Officer for the assessment
year 1955-56. The appellate authority remanded the matter holding that the
assessment for the first two quarters \Vas invalid having been made out of time.
The Sales Tax Officer passed a fresh assessment order in respect of the third
and fourth quarter of the assessment year.
In July, 1960, the Commissioner
under s. 20(3) revised the appellate order holding that no part of the assessment was barred by limitatjon and
directed fresh
assessment. Appellant's
challenge; to the order of the CommiS~ioner and the assessment order by the
a'isessing Ltuthority was unsuccessful in the High Court.
c
D
On appeal to this Court, it \Vas contended : (i) that the revisional authority
n1ust exercise his powers within the pericxl of four years prescribed under s.
11(2) (a) \Vhether the order \Vas a final order of assessment by him or a remand
order for fresh assessment by the assessing authority: (ii) while exercising the
rower of revision the Commissioner cannot ignore the period of limitation of
three ycays._provi~eJ ins. llA; (iii) even when the Commissioner was exercising
the revisional power under s. 20(3), his power is subject to the periods of limitaE
tion p:·ovidcd because, in ss. l l. 11 A and 20. the .authority mentionr.LI is the Co1nmissicner and (iv) the Revisional authority in the exercise of hi<> power suo
111oto mu:::t exercise it within a reasonable time and not after a long lapse of
time.
Dismissing the appeals,
1-fbLD : The Legislature has not provided any period within which an order
is to be rn.ade by an appellant or revisional. authority or a court. [250 E]
F
. (l )(a) If the appeal.is filed in time for the exercise of the appellate power
either to assess or to direct assessment under s. 20(2), there is no limitation
of time. The limits of the revisional power in s. 20(3) are akin to the power of
the "ppellatc "uthority in'· 20(2). [250 F·Hl
(b) No limitation has been provided for the suo 1noto exerci'Se of the revisional power similar to the one provided in rule 66(2) of the Delhi Sales Tax
Rule<; for filing an application in revision.
[251 D]
G
( c) It will be wholly unreasonable-almost impossible-to say that all orders
in appeal, revision or reference must be passed within four
years of the end
of the period of assessment and that otherwise they would be
barred
The
contention that there would be anomaly because of s. 11 (2a) in that fr
the
apMllate or revisional authority made a remand order, the assessing authority
could pass <I fresh assessment order within four years
of the remand
order
whereas if the appellate or revisional authority itself passed
an
order of
assessment. H .shout? ~e done within four ye~r.s; and that such an anomaly
\vould be avoided 1£ 1t was held that the rev1s1ng authority must exercise its
powers within four years in all cases is not warranted by the language of the
provision.
Further, it does not solve the anomaly because even if the order
H
248
SUPREME COURT REPORTS
[1976] 3 S.C.R.
A
of remand is made just on the last day of the period of four years it would be
competent to the assessing authority to make a- fresh asscssn1ent within the further period of four years.
[252 D; B-C]
B
c
D
E
F
G
H
(d) The State of Orissa v. Debki Debi [15 STC, 153 (SC] is distinguishable
because the period of limitation in that case
applied to assessment made
in
exercise of the appellate or revisional power also; whereas in the present case
there is no period of limitation for the exercise of appellate or revisional power.
f252 Fl
(2) While correcting a mistak

## Text

')
GURBAKSH SINGH
v.
UNION OF INDIA & OTHERS
January 27, l'i76
247
A
[V. R. KRISHNA IYER, A. C. GUPTA AND N. L. UNTWALIA, JJ.]
8
Bengal Finance (Sales Tax) Act, 1941 as extended to the Union Territory
of Dcliu-Sections 11, llA and 20-Scope of.
Section 11 of the Bengal Finance (Sales Tax) Act, 1941 as extended to the
Union Territory of Delhi provides for assessment of tax. Section 1 lA provides for assessment or reassessment in case of escaped or under-assessment.
Section 20 provides for appeals and revision.
In 1959 the assessee was assessed by the Sales Tax Officer for the assessment
year 1955-56. The appellate authority remanded the matter holding that the
assessment for the first two quarters \Vas invalid having been made out of time.
The Sales Tax Officer passed a fresh assessment order in respect of the third
and fourth quarter of the assessment year.
In July, 1960, the Commissioner
under s. 20(3) revised the appellate order holding that no part of the assessment was barred by limitatjon and
directed fresh
assessment. Appellant's
challenge; to the order of the CommiS~ioner and the assessment order by the
a'isessing Ltuthority was unsuccessful in the High Court.
c
D
On appeal to this Court, it \Vas contended : (i) that the revisional authority
n1ust exercise his powers within the pericxl of four years prescribed under s.
11(2) (a) \Vhether the order \Vas a final order of assessment by him or a remand
order for fresh assessment by the assessing authority: (ii) while exercising the
rower of revision the Commissioner cannot ignore the period of limitation of
three ycays._provi~eJ ins. llA; (iii) even when the Commissioner was exercising
the revisional power under s. 20(3), his power is subject to the periods of limitaE
tion p:·ovidcd because, in ss. l l. 11 A and 20. the .authority mentionr.LI is the Co1nmissicner and (iv) the Revisional authority in the exercise of hi<> power suo
111oto mu:::t exercise it within a reasonable time and not after a long lapse of
time.
Dismissing the appeals,
1-fbLD : The Legislature has not provided any period within which an order
is to be rn.ade by an appellant or revisional. authority or a court. [250 E]
F
. (l )(a) If the appeal.is filed in time for the exercise of the appellate power
either to assess or to direct assessment under s. 20(2), there is no limitation
of time. The limits of the revisional power in s. 20(3) are akin to the power of
the "ppellatc "uthority in'· 20(2). [250 F·Hl
(b) No limitation has been provided for the suo 1noto exerci'Se of the revisional power similar to the one provided in rule 66(2) of the Delhi Sales Tax
Rule<; for filing an application in revision.
[251 D]
G
( c) It will be wholly unreasonable-almost impossible-to say that all orders
in appeal, revision or reference must be passed within four
years of the end
of the period of assessment and that otherwise they would be
barred
The
contention that there would be anomaly because of s. 11 (2a) in that fr
the
apMllate or revisional authority made a remand order, the assessing authority
could pass <I fresh assessment order within four years
of the remand
order
whereas if the appellate or revisional authority itself passed
an
order of
assessment. H .shout? ~e done within four ye~r.s; and that such an anomaly
\vould be avoided 1£ 1t was held that the rev1s1ng authority must exercise its
powers within four years in all cases is not warranted by the language of the
provision.
Further, it does not solve the anomaly because even if the order
H
248
SUPREME COURT REPORTS
[1976] 3 S.C.R.
A
of remand is made just on the last day of the period of four years it would be
competent to the assessing authority to make a- fresh asscssn1ent within the further period of four years.
[252 D; B-C]
B
c
D
E
F
G
H
(d) The State of Orissa v. Debki Debi [15 STC, 153 (SC] is distinguishable
because the period of limitation in that case
applied to assessment made
in
exercise of the appellate or revisional power also; whereas in the present case
there is no period of limitation for the exercise of appellate or revisional power.
f252 Fl
(2) While correcting a mistake in exercise of his revisional power the Comniissioner \Vas merely setting right the illegality in the appellate order, nnd was
not doing anything which the Sales Tax Officer was empowered to do under
s. 1 J A au<l so was not bound by the period of limitation mentioned in that
section.
f253 Fl
The State of Kera/a v. K. M. Cheria Abdulla a11d Con1pany, 16 Sales Tax
Cases, 87 5, referred to.
(3) The order of assessment was that of the Sales Tax Officer acting as an
officer to assist the Commissioner for the purpose of assessment.
The term
"'Comniissioner" is merely descriptive and includes the various officers appointed
under s. 3 to assist the Commissioner. There is a hierarchy of officer's and all
· l
cannrit be treated as "Commissioner" for the purpose of different powers exer-
~
cised by them.
[253 G-Hl
( 4) A:;sun1ing that the revisional power could not be exercised suo 1noto
after a long and unreasonable delay, in the instant case there was no undue delay.
\Vhat is reasonable time will depend upon the facts of each case.
[254 A
8 B]
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 66_7-668 of
1975.
From the Judgment and Order dated the 10-5-1973 of the Delhi
High Court in Letter Patent Appeal Nos. 65 and 103 of 1969.
F. S. Nariman, Randhir Chawla, G. C. Sharma_, Mrs. A. K. Verma,
Talat Ansari, Ravinder Narain, and 0. C. Mathur for the Appellant.
G. L. Sanghi, R. N. Sachthey and Girish Chandra for the Respondents.
The Judgment of the Court was delivered by
UNTWALIA, J. In these appeals by certificate the question for
determination is whether the exercise of the power of revision under
sub-section (3) of section 20 of the Bengal Finance (Sales Tax) Act,
1941 as extended to the Union Territory of Delhi-hereinafter called
the Act-is subject to the period of limitation provided in sub-section
(2a) of section 11 or section llA of the said Act.
The requisite
facts lie in a narrow compass and may usefully be stated at the
outset.
The appellant who was carrying on the business of execution of
building contracts was asses~ed to sales tax under the Act by the Sales
Tax Officer for the year 1955-56 by an order of assessment made on
November 23, 1959.
The appellant's appeal before the
Assistant
Commissioner of Sales Tax succeeded in part.
He held that the assessment for the first two quarters of the year 1955-56 was invalid having
been made out of time.
The case was, ti)erefore, remanded to the
Sales Tax Officer for a fresh assessment in respect of the 3rd and 4th
I
GURHAKSH SINGH v. UNION ( Untwalia, J.)
24 9
quarters of the year.
The Sales Tax Officer in pursuance of the
appellate order of remand dated February 11, 1960 passed a fresh
assessment order on March 21, 1960.
The Commissioner, however.
after notice dated July 21, 1960 to the appellant, by his order dated
July 29, 1960 revised the appellate order of the Assistant Commis-
'ioner in exercise of his power under section 20(3) of the Act.
He
held that no part of the assessment for the year 1955-56 was barred
an,;_ directed a fresh assessment to be made.
A fresh assessment for
all the four quarters was accordingly made by the Sales Tax Officer
on September 24, 1960.
The appellant filed two writ petitions in the
Delhi High Court challenging the order made in revision by the Commissioner and the fresh assessment order passed by the Sales Tax
Officer in pursuance thereof.
A learned single Judge of the High
Court allowed the writ applications on April 2, 1969 and quashed the
impugned orders. The respondents took up the matter in letters patent
appeal and succeeded before a Bench of the High Court. Hence these
appeals by the assessees
Mr. F. S. Nariman appearing for the appellant contended :
(1) That the appellate and the revisional authorities must
A
B
c
exercise their appellate or revisional power within the.
D
period prescribed under sub-section (2a) of section
11 of the Act. If their orders are final orders of
assessment
then directly they are exercising their
powers under sub-sections ( 1) or (2) of section 11.
In case their orders are of remand for fresh assessment to the assessing authority then also they must
pass their orders within the periods aforesaid although
E
under the proviso added in 1959 the assessing authority may have a further period of 4 years or 6 years,
as the case may be, for passing a fresh assessment.
(2) That the Commissioner while exercising the power in
revision cannot overstep and ignore the period of
limitation of 3 years provided in section I IA of the
F
Act.
( 3) That the authority mentioned in sections I I, 11 A
and 20( 3) being the Commissioner, the Commis-
~ioner ~s subject to the period of limitation provided
m sections 11 and llA even when exercising the
revisional power under section 20(3).
( 4) That in any view of the matter the revisional authority must exercise the power in a reasonable manner
and within a reasonable time.
It cannot exercise
the power of revision, suo moto, after a long lapse
of time at its sweet will and pleasure.
. Under section 3. of the A~t,. a hierarchy of officers has been cons!Jtuted by the Chief Comnuss10ner-namely, the Commissioner of
Sales Tax, Sales Tax Officers and others to assist him. Section 11
of the Act deals with assessment of tax.
The Sales Tax Officer
G
H
A
B
2 50
SUPREME COURT REPORTS.
[1976) 3 S.C.R.
exercising the powers as an officer to assist the Commissioner under
section 11 (1) of the Act can proceed to assess the amount of the tax
due from a registered dealer within 18 months of the expiry of a
particular period.
A dealer who has been liable to pay tax under the
Act but has failed to get himself registered can be assessed to tax
under sub-section (2).
Then sub-section 2(a) says:
"No assessment under sub-section (1) shall be made after
the expiry of four years and no assessment
under
subsection (2) shall be made after the expiry of six years from
the end of the year in respect of which or part of which
the assessment is made : "
A proviso was added to sub-section (2a) w.e.f. October 1, 1959
\
C
by the Amending Act of 1959 and it reads as follows :
D
E
F
G
H
"Provided that where such assessment is made in consequence of or to give effect to any order of an appellate or
-1
revisional authority or. of a court, the period of four years
""I
or six years, as the case·may be, shall be reckoned from the
date of such order."
It is to be noticed that a period of limitation has been provided
in section 11 (2a) and no assessment either under sub-section (I) er
sub-section (2) can be made after the expiry of the specified period .
. But where such an assessment is made by the assessing authority i'1
consequence of or to give effect to any order of an appellate· er
revisional authority or any order of a court made in reference, wt·;t
or in any other proceeding then under the proviso the period of limitation is to be reckoned from the date of such order.
The Legislature
has not provided any period witbin which an order is to be n1ade bv
an appellate or revisional authority or a court.
Obviously it would
have been unpractical and unworkable to do so.
Section 20 deals with an appeal, revision or review.
I.f the appeal
is filed in time the appellate authority in disposing of any appeal filed
under sub-section (l) may-
"(a) confirm, reduce, enhance or annul the assessment,
or;
(b) set aside the assessment and direct the
assessing
authority to make a fresh
assessment
after
such
further inquiry as may be directed."
For exercise of the appellate power in any of the manners mentioned
above, there is no limitation of time.
If a.ssessn1ent can be reduced
in appeal at any time it can be enhanced also without the fetter of
. time.
If the assessment is set aside and the case remanded to the
assessing authority to make a fresh assessment then the authority,
because of the proviso to section 11 (2a), is obliged to make the fresh
assessment within four years of the appellate order.
Sub-section (3)
of section 20 reads thus :
·
"Subject to snch rules as may be prescribed and for
reasons to be recorded in writing, the Commissioner upon
(
•
} ... _ •
(
)
I
I
GURBAKSH SINGH v. UNION (Untwalia, !.)
251
application or of his own motion may revise any assessment
made or order passed under this Act or the rules thereunder by a person appointed under section 3 to assist him,
and sub_iect as aforesaid. the Chief Commissioner may, in
like manner, revise any order passed by the Commissioner."
A
The Commissioner can revise any assessment made or order passed
under the Act including the order of the appellate authority.
The
B
limits of the revisional power are not circumscribed in sub-section ( 3),
but it goes without saying that they will be akin to the power of the
appellate authority as mentioned in sub-section (2). The revisional
authority obviously, as pointed out by this Court in the case of The
State of Kerahi v. K. M. Cheria Abdulla and Company(') should not
trench upon the power expressly reserved by the Act or the rules to
othe1 authorities and cannot ignore the limits inherent in exercise of
C
those powers. Section 11 A is one such power which deals with assessment and re-assessment of tax in case of an escaped assessment or
under-assessment.
Exercise of that power is subject to the limitations
provided therein.
In Rule 66(2) of the Delhi Sales Tax Rules, 1951
a period of limitation of 60 days has been provided for the filing of
an application in revision which can be extended under the proviso
appended to that rule on sufficient cause being shown. But no such
D
limitation has been provided for the suo moto, exercise of the revisional
power.
Mr. Nariman very strongly relied upon the majority decision of this
Court in The State of Orissa v. Debaki Debi and others (') and submitted that the power of revision exercised by.the Commissioners in this
case beyond the period of four years prescribed in sub-section (2a)
E
of section 11 was illegal and ultra vireo'.
A close scrutiny of
the
argument will result in its rejection.
In the Orissa ease all the orders made by the Collector in exercise
of his power of revision under section 23 of the Orissa Sales Tax
Act were passed later than 36 months from the expiry of the period
in respect of which the assessment was made.
The High Court's view
that they were in contravention of section 12(7) which was a power
of assessment or re-assessment in case of an escaped or under-assessment was not upheld.
But it was found that the proviso to section
12( 6) was. in general t~rms. It was not only a proviso providing
for the penod of hm1tat10n for the first assessment but it governed
the assessment made in exercise of the appellate or the revisional
pow~r. The m~in. ratio ~ecidendi of the case is that the proviso in
sect10n 12(6) _is m reality an independent legislative provision unrelated to section 12(6).
Therefore, its operation was not confined
to assessment under section 12 but applied to any assessment made
under the Act.. In the alter~ative it was also opined that assessment
made m exercise of the rev1s1onal power was an assessment made
un~e! section 1~. It was so said because if the appellate or the
rev1s10nal authonty would have directed the assessing authority to make
a fresh assessment it could do so only under section 12 and then it
(1) 16 Sales Tax Cases, 875.
(2) 15 Sales Tax Cases, 153.
F
G
H
A
B
c.
D
E
F
G
H
252
SUPREME COURT REPORTS
[1976] 3 S.C.R.
would be subject to the period of limitation of 36 months.
ft was
pointed out in the majority decision of this Court that there would
be an anomalous situation. If the appellate authority set aside the
assessment and remanded it for fresh orders, no fresh assessment could
be made because of the period of limitation. But if instead of doing
so the appellate authority affected the same assessment there would be
no bar of limitation.
In the present case iu view o[ the proviso added
to section 11 (2a) the anomaly flows in the reverse direction. If the
appellate or the revisional authority made a re111and order the as~essing
authority could pass a fresh order of assessment within 4 years of such
order.
But if the higher authority itself revised the assessment then
it would be barred by the rule of limitation provided in section 11 (2a).
To avoid such an anomaly Mr. Nariman suggested a construction to
be put which neither solves the anomaly nor is warranted by the language of the provisions of the Act.
Counsel submitted that in all
cases the powers must be exercised within 4 years of the period in
respect of which an assessment was being made on a registered dealer.
It will be wholly unreasonable-almost impossible--to say that all
orders in appeal, revision or reference must be passed within four
years of the end of the period of assessment. otherwise they will be
barred. It does not solve the anomaly either.
Even if the order of
remand is made, say, just on the last day of the period of four years,·
it will oe competent to the assessing authority to make a fresh assessment within the further period of four years. The ratio of the case
in Debaki Debi's (supra) must be confined within its four
corners
and cannot be extended to the facts of the instant case.
In The Swastik Oil Mills Ltd. v. H. B. Munshi, Deputy Cmmnissioner of ·sales Tax, Bombay ( 1) the decision of this Court in Debaki
Debi's case was distinguished on the ground that the provision of
limitation of 36 months in substance was not a real proviso to the
section in which it was placed but was in fact a period of limitation
for all orders of assessment made under any other provision of the
Orissa Act, while in the Bombay Acts there was no such general provision prescribing a period of limitation for making an assessment.
Reference to the period of limitation in section 1 !A of the Bombay
Act \Vhich is a power of making _assessment or re-assessn1ent in case
of an escaped or under-assessed assessments was also rejected.
Our attention was also drawn to the decision of a single Judge of
the Punjab High Court, Delhi Bench, in Sir Sabha Singlz & Compwzy
v. Conunissioner of Sales Tax, Delhi (!.!) wherein foJlo\ving the decision
of this Court in Debaki Debi's case it was held that an order oi review
made by the Commissioner under section 20( 4) of the Act in effect
is an order of assessment under section 11 (I) and cannot be made
after tbe expiry of the period prescribed under section 11(2a).
The
learned Judge in the course of his judgment made it clear that he was
concerned with the construction of the Act as it stood before 1959
and was not obliged to consider the effect of the proviso added to
section 11 (2a) in 1959. It is not necessary to decide in this case
whether without the aid of the proviso aforesaid the decision of the
(I) 21 Sales fax Cases, 383.
(2) 18 S. T. C. 416.
(
GURBAKS!I SINGH v. UNION ( Untwa/ia, J.)
253
learned single Judge was correct or not but surely in face of the proviso
it cannot hold good.
In Commissioner of Commercial Taxes, Biluir, Patna v. Sheodutta
Prasad Chandeshwar Singh ( 1) the review proceedings initiated by the
assessing authority was held to be barred under the proviso to section
13(6) of the Bihar Sales Tax Act, 1947.
But distinguishing the said
decision another Bench of the Patna High Court held in Commissioner
of Commercial Taxes, Bihar v. Ashoka Marketing Ltd. (') that the
order of review passed by the Deputy Commissioner was not barred
by time.
The decision of the Patna High Court in Commissioner of
Cummercial Taxes, Bihar. Patna v. Sheodutta Prasad Chandeshwar
Singh (supra) on identical facts was followed in
Commissioner of
Commercial Taxes, Bihar v. Shiva Pujan Prasad Bhagat ('). But the
principle decided in those cases cannot help the appellant. It may
well be that if the assessing authority itself exercises the power of
review it cannot circumscribe the bar of limitation provided in section
11 (2a). But it will be unjust, unreasonable and impracticable to say
that the said bar of limitation must also continue to run at all stages
of the proceedings, namely, the appellate, rcvisional, reference, writ or
any other stage.
It was pointed out by this Court in Swastik Oil Mills' case (supra)
that the Deputy Commissioner when seeking to exercise his revisional
powers was not encroaching upon the powers reserved to other authorities.
The powers were not exercised for the purpose of assessing or
re-assessing an escaped turn over.
The revisional powers were sought
to be exercised to correct what appeared to be an incorrect order passed
by an Assistant Commissioner and for such a purpose proceedings could
hat possibly have been taken under section l lA. In the instant case
also it could not be disputed that the view taken by the Assistant
Commissioner in appeal was obviously wrong.
The Commissioner
while correcting that mistake in exercise of his revisional power was
not doing anything which the Sales Tax Officer was empowered to do
under section 11 A.
He was merely setting right the illegality in the
appellate order.
The third point urged by the appellant is too obviously wrong to
merit any detailed discussion. It was not the Commissioner who had
passed the assessment order under section 11.
That order was of the
Sales. Tax Officer acting as an officer to assist the Commissioner for the
purpose of assessment.
The assessment order was interfered with by
the appellate authority, the Assistant Commissioner and the Commissioner was revising the order of the Assistant Commissioner.
All
cannot be treated as Commissioners for the purpose of the different
powers exercised by the three different authorities.
The use of the
term "Commissioner" in the sections is merely for the purpose of describing and, at any rate, including the officer assisting the Commissioner
as Commissioner.
(1) 25 S.T.C. 114.
(2) 33 S.T.C'. 24,
(3) 33 S.T.C. 466.
A
B
c
D
E
F
G
H
A
B
c
254
SUPREME COURT REPORTS
[1976] 3 S.C.R.
Apropos the fourth and the last submission of the appellant, suffice
it to say that even assuming that the revisional power cannot be exercised suo mo to after 'an unduly long delay, 01,1 the facts of this case
it is plain that it was not so done.
Within a few months of the
passing of the appellate order by the Assistant Commissioner, the
Commissioner proceeded to revise and revised the said order.
There
was no undue or unreasonable delay made by the Commissioner.
It
may be stated here that an appeal has to be filed by an assessee
within the prescribed time and so also a time limit has been prescribed
for the assessee to move in revision.
The appellate or the rcvisional
powers in an appeal or revision filed by an asscssec can be exercised
in due course. No time limit has been prescribed for it. It may well be
that for an exercise of the suo moto power of revision
also,
the
revisional authority has to initiate the proceeding within a reasonable
time.
Any unreasonable delay in exercise may affect its validity.
What is a reasonable time, however, will depend upon the facts of
each case.
For the reasons stated above the appeals fail and are dismissed
with costs.
One set of hearing fee.
P.B.R.
Appeals dismissed.