Holding

Section 20 confers suo‑motu revisional power exclusively on the revenue authorities and cannot be invoked by an assessee; therefore a revision under Section 20(2) is not maintainable at the assessee’s instance.

Summary

The assessee, T.G. Lakshmaiah Setty & Sons, a dealer in groundnut oil and cotton seeds, was assessed under the Andhra Pradesh General Sales Tax Act, 1957 for the years 1967‑68, 1970‑71 and 1971‑72 on cotton lint at 3% as an unclassified good. Relying on Alimchand Topandas Oil Mills, they argued that cotton lint should be classified as cotton waste and taxed at 1% under Entry 69 of Schedule I, and therefore filed a revision application under Section 20(2) of the Act. The Deputy Commissioner dismissed the revision; the Sales Tax Appellate Tribunal allowed it, directing reassessment, while the High Court rejected the State’s revision. The State appealed to the Supreme Court questioning whether an assessee can invoke the suo‑motu revisional power under Section 20. The Court held that Section 20 confers suo‑motu power exclusively on the Commissioner (or Joint Commissioner, Deputy Commissioner, Commercial Tax Officer) and cannot be invoked by an assessee; the assessee must resort to the appeal and revision remedies expressly provided in the Act. Consequently, the revision under Section 20(2) was held not maintainable at the assessee’s instance, the orders of the High Court and the Tribunal were set aside, and the Deputy Commissioner’s order was restored.

Issues considered

Whether an assessee can invoke the suo‑motu revisional power under Section 20(2) of the Andhra Pradesh General Sales Tax Act, 1957 at its own instance
Whether the assessment on cotton lint should be taxed at 1% under Entry 69 Schedule I or at 3% as an unclassified good

Legislation cited

Andhra Pradesh General Sales Tax Act, 1957s. 14(4c), s. 19, s. 20(1), s. 20(2), s. 21, s. 22, s. 23, s. 5(1)
Income Tax Act, 1922s. 33

Subjects

General Sales TaxRevisionSuo Motu PowerSection 20AssessmentCotton LintTax RateStatutory Interpretation

Judgment

STATE OF ANDHRA PRADESH A
v.
T.G. LAKSHMAIAH SETTY AND SONS

APRIL 13, 1994

[K. RAMASWAMY AND N. VENKATACHALA, JJ.] B

L
Andhra Pradesh General Sales Tax Act, 1957: Sectio11 20 Assessme11t
~ •
Ordei--<:hallenge--Assessee-!11voking suo motu power of Revision-Pennis-
sibility of-Held assessee can11ot i11voke suo motu power under Section
20-Aggrieved assessee can only pursue remedies provided under the Act-He c
has no right to seek revision of the order of the assessment passed by the
original authorities.

The respondent..asseessee l\'3S carrying on business in groundnut oil
seeds and cotton seeds. For the assessment years 1967-68, 1970-71 and
1971-72 the respondent was assessed under section 5(1) of the Andhra D
Pradesh General Sales Tax Act, 1957 on the basis that "cotton lint" was
exigible to tax at 3% as unclassified general goods. Relaying on a decision
+ in Alimchand Topandas Oil Mills v. State of Andhra Pradesh, 37 STC 603,
wherein it was held that cotton lint comes under cotton waste and was
exigible to tax at 1% under Entry 69 Schedule I of the Act, the respondent E
represented, under Section 20(2) of the Act, to the Deputy Commissioner
to revise the assessments but he dismissed the revisions. The Sales Tax
Appellate Tribunal allowed the assessee's revision by applying the ratio in
Alim Chand's case and directed reassessment under Entry 69 of Schedule
I to the Act. The High Court rejected the State's revision in limi11e.
F
In State's appeals to this Court on the question whether a revision
• under Section 20(2) was maintainable at the instance of the assessee;

Allowing the appeals, this Court
G
HELD : 1. The validity of an assessment order must be tested In an
appeal or revision Hied by an assessee as provided for In the Act and In
no other way. The Act has given right and remedy of appeal or a revision
to the dealer, wherever It was so Intended. Section 20 Is a suo motu
revlslonal power exclusively given to the Commissioner or the Joint Com-
missioner or the Deputy Commissioner or the Commercial Tax Officer, H
523
__..,.,
I

524 SUPREME COURT REPORTS [1994) 3 S.C.R.

A as the case may be, to revise the order or the proceedings of the officers
subordinate to the respective officers. The assessee cannot i111voke the suo
motu power of the authorities under section 20. Any order validly made
does not become void or illegal by ;ubsequent declaration of law. The suo
motu power was conferred on higher authorities to correct i~rrors of law
or to correct improper or irregular procedure or illegality in the proce-
B dure, to safeguard the interest of the revenue, as there was no express
power given to the State, to file an appeal against order of assessment.
(529-D-E; 526-H)
2. The Tribunal had wrongly held that the Commissioner could
exercise the revisional po,ver at the instance of the assessee under section
C 20(1) and (2) of the Act. (529-G)
3. The High Court has committed an error in rejectin1i the revision
by the State. The aggrieved assessee has only to pursue the remedies
provided in the Act and he has no right to make an appliication under
t
Section 20 of the Act seeking revision of the orders of assessments made
D under the Act by original authorities. Consequently the orde1Cs of the High
Court and Sales Tax Appellate Tribunal are set aside and the order of
the Dy. Commissioner is restored. (529-H, 530-A-B]

Alimchand Topandas Oil Mills v. State of Andhra Pradesh, 37 STC
E 603 and Commissioner of Income Tax v. Tribune Trnst, AIR (1948) Privy
Council 102, referred to.

Re. Kalluri Bheemalingam & Ors.,(1967) 19 STC 116 and Sree
Ramachandra Ginning & Oil Mills & Ors. v. The State of Andhra Pradesh,
19 STC 354, approved.
F The State of A.P. v. Lalitha Oil Mills & Ors., 42 STC 169, and Sri
Venkateswara Rice, Ginning and Grounding Oil Mill Contractors Co. v. State
of Andhra Pradesh, (1971) 28 STC 599, distinguished.

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 4857/89
G & 2798 of 1983.

From the Judgment and Order dated 4.4.85 of the Andhra Pradesh
High Court in T.R.C. No. 60 & 61 of 1985.

C. Sitaramaiah, T.V.S.N. Chari, Ms. Promila Choudhary and Nikhil
H N ayyar for the Appellants.
STATE OF A.P. v. T.G. LAKSHMAIAH SETTY & SONS. 525

The following Order of the Court was delivered by : A
C.A. No. 2798/83 is taken on board.

These two appeals relate to different assessments under the Andhra
Pradesh General Sales Tax Act, 1957 (Act No. VI of 1957), for short 'the
Act'. The respondent-assessee is a registered dealer carrying on business B
in ground nut oil seeds and cotton seeds. The appeals relate to "cotton lint".
The respondent was assessed under s.5(1) for the assessment years 1967-68,
1979-71 and 1971-72, the last of which was on November 29, 1975 as
11
cottonn unclassified general goods at 3%. In similar circumstances, when
the other assessees carried the matter in revision to the High Court in C
Alimchand Topandas Oil Mills v. State of Andhra Pradesh, 37 STC 603, the
High Court of A.P. held that cotton lint comes under "cotton waste" in
Entry 69 of the Schedule I and becomes exigible to tax at 1% at the relevant
time. Relying upon the decision, the respondent-assessee made a repre-
sentation in May 1976 under s.20(2) of the Act requesting the Dy. Com- D
missioner to revise the assessments. Initially even without numbering the
revisions the Dy. Commissioner had dismissed them. But, on appeal, the
Sales Tax Appellate Tribunal (STAT) by its order dated November 18,
1977 remitted the cases to the Dy. Commissioner directing to number the
cases and to dispose them of according to law. On receipt thereof, the Dy.
Commissioner by his order dated October 14, 1980 again dismi&.sed the E
revisions. The respondent-assessee carried in revision to the STAT which
by its order dated October 16, 1984, allowed the revisions applying the ratio
inAlimchand's case and directed reassessment under Entry 69 of Schedule
I. On revision, the High Court by impugned order dated 4.4.1985 dismissed
them in limine. Thus these appeals by special leave . F
• The primary question in these cases is whether a revision under
s.20(2) is maintainable at the instance of the assessee. Section 20 provides
at the relevant time thus:

"20.Revision by Commissioner of Commercial Taxes and other G
prescribed authorities : (1) The Commissioner of Commercial
Taxes may suo motu call for and examine the record of any order
passed or proceeding recorded by any authority, officer or person
subordinate to it, under the provisions of this Act, including sub-s.
(2) of this section* (and if such order or proceeding recorded is H
526 SUPREME COURT REPORTS [1994] 3 S.C.R.

A (prejudicial to the interests of revenue), may take such enquiry to .•.
be made and subject to the provisions of this Act, may initiate
proceedings to revise, modify or set aside such order or proceed-
ing) and may pass such order in reference thereto as it thinks fit.

*Sub-S. for the words for the purpose of satisfying itself as to the
B legality or propriety of such order as to the regularity of such
proceeding by Act 18 of 1985, w.e.f. 1.7.1985."

Sub-section (2) of s.20 gives power similar to that in sub-s. (1), to the joint
Commissioner, Dy. Commissioner and the Commercial Tax Officer in the
c case of orders passed or proceedings recorded by the authorities or officers
or persons subordinate to them.

The question whether the assessee has a right to make an application
for the exercise of suo motu power by the Commissioner calls for con-
D sideration in the light of the other provisions in the Act, expressly providing
for a right of appeal to the assessee. Under s.19 of the Act a right to appeal
to the appellate authority against original orders or proceedings of certain
authorities, has been given tu the aggrieved dea]er. Section 21 also gives a
right of appeal, to the aggrieved dealer to the Appellate Tribunal postulat-
E ing that any dealer objecting to an order passed or proceeding recorded
by any prescribed aufhority on appeal under s.19, 14(4c) or s.20(2) may
appeal to the appellate tribunal within 60 days from the date on which the
order or proceeding was served on him. Thus the statute itself has given a
right to the dealer to object to an order passed or proceeding recorded
under the Act, which is prejudicial to him, by filing on appeal against such
F order, under s.14 or s.19 or s.21 revision under s.22 of the Act to the
Appellate Tribunal. As stated earlier, against the original order an appeal
shall lie to the appellate authority within a period of 30 days from the date
of the receipt of the notice served on the dealer and a further appeal to
the Appellate Tribunal. The order under s.20(1) could also be appealable
G again to the STAT by the aggrieved dealer and a further revision under
s.23 to the High Court under the Act. Thus, the Act has given right and
remedy of appeal or a revision to the dealer, wherever it was so intended.
As seen, s.20 is a suo motu revisional power exclusively given to the
Commissioner or the Joint Commissioner or the Dy. Commissioner or the
H Commercial Tax officer, as the case may be, to revise the orders or the

>
I
STATE OF AP. v. T.G. LAKSHMAJAH SETTY &SONS. 527

proceedings of the officers subordinate to the respective officers. Whether A
suo motu power under s.20 of the Act could have been invoked by an
assessee is the question. The Judicial Committee of the Privy Council in
Commr. of Income-tax v. Tribune Trust, AIR (1948) Privy Council 102 had
considered similar question. It was a case where an Income-tax assessment
order in respect of an assessment year had reached finally by reason of an B
order made by the Judicial Committee of the Privy Council dated June 13,
1939. On August 13, 1939, suo motu power of the Commissioner was,
~ , however, sought to be invoked by the asses see to revise the orders of
assessments relating to previous years, which had become final. The High
Court, following the decision of the Privy Council which was in favour of C
the assessee, directed the Commissioner to exercise the power of revision
and revise the earlier orders of assessment. Section 33 of the Indian
Income-tax Act, 1922 reads thus:

"(1) The Commissioner may of his own motion call for the record
of any proceeding under this Act which has been taken by any D
authority subordinate to him or by himself when exercising the
power of an Assistant Commissioner under sub-s.(4) of s.5.

(2) On receipt of the record the Commissioner may make such
enquiry or cause such enquiry to be made and, subject to the E
provisions of this Act, may pass such orders thereon as he thinks
fit: Provided that he shall not pass any order prejudicial to an
assessee without hearing him or giving him a reasonable oppor-
tunity of being heard."

F
When the matter was carried in appeal, the Judicial Committee which
considered the scope and ambit of suo motu power of the Commissioner
• under s.33 of the Income-tax Act held thus :

"The fallacy implicit in this question has been ll?ade clear in the
discussion of the first two questions. It assumes that s.33 creates a G
right in the assessee. In their Lordships' opinion it creates no such
right. On behalf of the respondent the well known principle which
was discussed in (1880) 5 A.C. 214, was invoked and it was urged
that the section which opens with the words, "The Commissioner
may of his own motion" imposed upon him a duty which he was H
528 SUPREME COURT REPORTS (1994) 3 S.C.R.

A bound to perform upon the application of an assessee. It is possible
that there might be a contest in which words so inapt for that
purpose would create a duty. But in the present case there is no
such context. On the contrary, s.33 follows upon a number of
sections which determine the rights of the assessee and is itself, as
B its language clearly indicates, intended to provide administrative
machinery by which a higher executive officer may review the acts
of his subordinates and take the necessary action upon rnch review.
it appears that as a matter of convenience a practice has grown • •
up under which the Commissioner has been invited to act "of his
own motion 11 under the section and where thls occurs a certain
c degree of formality has been adopted. But the language of the
section does not support the contention, which lies at the root of
the third question and is vital to the respondent's case, that it
affords a claim to relief. As has been already pointed out, ap-
propriate relief is specifically given by other sections; it is not
D
possible to interpret s.33, as c0nferring general relief.

xxx xxx xxx

It appears to them that an order made by the Commissioner under
E s.33, can only be said to be prejudicial to the assessee when he is,
as a result of it, in a different and worse position than that in which
he was placed by the order under review. It the assessee has a
complaint against any assessment. or order made by a subordinate
officer, he has the appropriate and specific remedy which the Act
F provides. The Commissioner may act under s.33, with or without
the invitation of the assessee; if he does so without invitation, it is
clear that, if he does nothing to worsen the position of the assessee,
the latter can acquire no right; the review may be a purely
departn1ental 1uatter of which the assessee knows nothing. If on
G the other hand the Commissioner acts at the invitation of the
assessee and again does nothing to worsen his position, there is no
justification for giving right of appeal against the assessment or
order of the subordinate officer, which is subject to its own time
limit that he cannot enlarge by taking a course which is on his part
H purely voluntary. This view of the section is confirmed by the
STATE OF AP. v. T.G. LAKSHMAIAH SETI'Y & SONS. 529

exception. 11
A

The High Court of Andhra Pradesh had occasion to consider the
scope of s.20 of the Act in two of its judgments. In Re. Kalluri Bheemalin-
gam & 01>., (1967) 19 STC 116, the assessec had sought to file an appeal
to the High Court under s.23 of the Act against the order of the Board of
B
Revenue (at that time the revisional power was exercised by the Board of
Revenue) revising the assessment under s.20(1) of the Act, which the
Board had rejected as being not maintainable. The High Court upheld the
order of the Board of Revenue holding that s.20(1) of the Act does not
provide a right of revision at the instance of the assessee, but only provides
suo motu power of revision to the Commissioner and under s.23(1) a c
revision does lie to the High Court against the order passed by the Board.
Therefore, the appeals were held not maintainable. The same view was
reiterated in Sree Ramachandra Ginning & Oil Mills & Ors. v. 17te State of
Andhra Pradesh, 19 STC 354. It must therefore, be held that the validity of
an assessment order must be tested in an appeal or revision filed by an D
assessee as provided for in the Act and in no other way. The assessee
cannot invoke the suo motu power of the authorities under s.20. Any order
validly made does not become void or illegal by subsequent declaration of
law. The suo motu power was conferred on higher authorities to correct
errors of law or to correct improper or irregular procedure or illegality in E
the procedure, to safeguard the interest of the revenue, as there was no
express power given to the statei to file an appeal against order of assess-
ment.

The Tribunal had placed reliance on the decision of another division
Bench reported in The State of A.P. v. Lalitha Oil Mills & 01'., 42 STC
F
169. In· that case following the decision of this Court in Sri Venkateswara
Rice, Ginning and Grounding Oil Mill Contractors Co. v. State of Andhra
Pradesh,· (1971) 28 STC 599 the Commissioner exercising suo motu power
under .s.20(1) had revised the assessment made in accordance with the law
laid down by this Court. It was not a case where the Commissioner had G
exercised the power at the instance of an assessee. The Tribunal had
wrongly held that the Commission could exercise the revisional power at
the instance of the assessee under s.20(1) & (2) of the Act.

We have, therefore, no hesitation to hold that the High Court has H
530 SUPREME COURT REPORTS [1994] 3 S.C.R.

A committed an error in rejecting the revision by the State. Accordingly we
hold that the aggrieved assessee has only to pursue the remedies provided
in the Act and he has no right to make an application under s.20 of the
Act seeking revision of the orders of assessments made under the Act by
original authorities. The appeals are accordingly allowed. The orders of the
B High Court and STAT are set aside and the orders of the Dy. Commis-
sioner is restored. But ir.. the circumstances, there shall be no orders as to
costs.

T.N.A. Appeals allowed.