Holding

The Deputy Commissioner’s jurisdiction under Section 32 is not defeated by the lapse of the four‑year period if the application was filed within that period, a revision may be sought without a prior appeal, and Section 38 does not allow the High Court to disturb the Tribunal’s factual determinations.

Summary

The State of Tamil Nadu assessed Mahalakshmi Textile Mills Ltd. for sales tax. The assessee invoked the Deputy Commissioner’s suo motu powers under Section 32 of the Tamil Nadu General Sales Tax Act, 1959, questioning the assessment. After the Deputy Commissioner dismissed the petition, the High Court ordered a merits‑based revision, which again resulted in dismissal. The Tribunal allowed the assessee’s appeal, prompting the State to seek revision under Section 32. The Supreme Court held that the Deputy Commissioner’s jurisdiction is not barred by the four‑year limit if the application was filed within that period, that a revision may be filed without first invoking the appellate authority, and that Section 38 does not permit interference with the Tribunal’s factual findings. Consequently, the State’s appeal was dismissed.

Issues considered

The applicability of the four‑year time limit in Section 32(2) when the Deputy Commissioner passes an order after the period but the application was filed within it
Whether the assessee can invoke revision under Section 32 without having filed an appeal to the appellate authority
The scope of Section 38 of the Tamil Nadu General Sales Tax Act with respect to interfering with a Tribunal’s factual findings

Legislation cited

Tamil Nadu General Sales Tax Act, 1959s. 32, s. 38

Subjects

sales taxrevisionsuo motu powersSection 32Section 38Tribunalappellate jurisdictiontime limitfacts vs law

Judgment

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>
STATE OF TAMIL NADU A
v.
THE MAHALAKSHMI TEXTILE MILLS LTD .
...
FEBRUARY 3, 1999
).
Ir
(M. SRINIVASAN AND U.C. BANERJEE, JJ.] B

Tamil Nadu General Sales Tax Act, 1959 : Sections 32 and 38.

" Sales Tax-Revision-Assessee-Assessment of sales tax-Correctness
of assessment questioned by invoking suo motu powers of Deputy Commis-
sioner under Section 32--Dismissal of petition in limine-Writ filed by asses-
c
see-High Court directing that Deputy Commissioner should entertain
revision and decide it on merits-On remand Deputy Commissioner again
dismissed the petition on merits-Appeal preferred by assessee before
-~ Tribunal allowed-Revision-Contentions raised by assessee---R.ejection by
Hiqh Court-Appeal before Supreme Court-Held, Section 32(2) shows that
D
the time limit prescribed does not prevent the Deputy Commissioner from
passing an order on an application filed before him under Section 32 within
the period mentioned in the sub-section-Section itself contemplates a
revision being filed when there was no appeal before the appellate
authority-The mere fact that the assessee did not invoke the jurisdiction of E
rhe appellate authority will not prevent him from invoking the jurisdiction
under Section 32 of the Deputy Commissioner--Section 38 is limited to an

- erroneous decision of the Tribunal on any question of law and the failure to
decide a question of law-In this case, the Tribunal's decision is based upon
the facts of the case and the application of the law as laid down by this
Court-Hence, there was no erroneous decision on a question of law or failure
to decide a question of law.
F

K.G. Khosla & Co. (P) Ltd. v. Deputy Commissioner of Commercial
Taxes, Madras Division, Madras, (1966) 17 STC 473, referred to.
,.
,'"- ' G
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2281 of
1980.

From the Judgment and Order dated 27.6.77 of the Madras High
Court in T.C. No. 472 of 1974. H
371
372 SUPREME COURT REPORTS [1999] 1 S.C.R.
""
-.
A V. Krishnamurthy, V. Ramasubramanain and T. Harish Kumar for ~
the Appellant.

Dhruv Mehta (A.C.) Fazlin Anam for the Respondent.
(
The following Order of the Court was delivered :
B •..
The short facts leading to this appeal are as follows : The respon-
dent-assessee was assessed to sales tax by the Assessment Officer. After
some time, he invoked the suo motu powers of the Deputy Commissioner
under Section 32 of the Tamil Nadu General Sales Tax Act (for short "the
Act") questioning the correctness of the assessment. The Deputy Commis-
c sioner dismissed the petition in limine. The assessee filed a writ petition
challenging the said order in the High Court. The High Court held that
the Deputy Commissioner should entertain the revision and decide it on
its merits. The matter was thus remanded.

,,a-
D 2. After remand, the Deputy Commissioner once again dismissed the
petition on merits. The assessee filed an appeal to the Tribunal which went
into the merits and found that the assessee's contention was correct.
Consequently, the appeal was allowed. The said judgment of the Tribunal
was challenged by the appellant in revision under the Act.

E 3. In the revision petition, following three contentions were urged :
(1) that the time limit of four years for exercising the suo motu powers of
the Deputy Commissioner under Section 32 had expired by the time he
passed his order on 19th February, 1968, and the order of assessment could
not be revised at that stage; (2) that the assessee not having filed an appeal
F against the order of assessment could not invoke the revisional jurisdiction
of the Deputy Commissioner; and (3) that as the exemption of the sales
from tax was already available under the Jaw and the assessee having shown
the amount of turnover in its return and got the same assessed without
protest could not later contest the liability and invoke the jurisdiction under
Section 32. All the three contentions were rejected by the High Court and
G the appellant is before us in this appeal.
..
,_....,.

4. In our opinion, none of the contentions has any merit. Section
32(2) prescribes three conditions for the Deputy Commissioner to pass an
order under sub-section (1) of the said Section - (a) the time for appeal
H against the order had expired; (b) the order had not been made the subject
.... --1 STATE v. MAHALAKSHMITEXTILEMILLSLTD. [SHAH,J.] 373

of an appeal to the Appellate Assistant Commissioner or the Appellate A
Tribunal, or of a revision in the High Court; and (c) more than four years
had not expired after the passing of the assessment order.

5. The above Section shows that the time limit prescribed does not
prevent the Deputy Commissioner from passing an order on an application
). B
,.. filed before him under Section 32 within the period mentioned in the
sub-section. Here the revision petition under Section 32 was filed by the
assessee within a period of four years and he passed an order on a later
date. As the High Court has rightly pointed out, just because the Deputy
Commissioner took time to pass the order on the application of the
assessee, it cannot be said that the time limit of four years prescribed by c
the Section had expired and he had no jurisdiction to pass the order. We
agree with the reasoning of the High Court and reject the first contention.

6. As regards the second contention, the Section itself contemplates
a revision being filed when there was no appeal before the appellate
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D
authority. In fact, sub-section 2(a) says that a revision could be filed only
after the time for appeal against the order had expired. That means, if the
assessee had not filed an appeal within the time prescribed therefor, he
could invoke the jurisdiction of the Deputy Commissioner under Section
32. That is what has been done in the present case by the assessee. The
mere fact that he did not invoke the jurisdiction of the appellate authority E
will not prevent the assessee from invoking the jurisdiction under Section
32 of the Deputy Commissioner.

7. The third contention is based on the facts of the case. According
--4--
to learned counsel for the appellant, the position in law was not settled for F
the first time in KG. Khosla and Co. (P) Ltd. v. Deputy Commissioner of
Commercial Taxes, Madras Division, Madras, (1966) 17 STC 473, by the
Supreme Court. What all was done in that case was only to clarify that a
sale need not precede ·an import in order to bring it within the scope of
Section 5(2) of the Central Sales Tax Act. Learned counsel submits that

-.... ,'
the earlier decisions of this Court had laid down the same principle and G
nothing new was set out in the decision of this Court in KG. Khosla's case.
It may be so, but that does not prevent the revisional authority when it
entertained the revision petition on merits pursuant to the direction given
,. by the High Court in the writ petition filed by the assessee to apply the law
as declared by the Supreme Court. When the revisional authority dealt with H
374 SUPREME COURT REPORTS (1999) 1 S.C.R. ,.. '

A the revision petition under Section 32 pursuant to the order of the High i
Court, the law had been reiterated by the Supreme Court in KG. Khosla's
case clarifying the position with regard to the question of a sale preceding
an import. The Tribunal after going into the facts of the case came to the
conclusion that Section 5(2) of the Central Sales Tax Act would apply in
B this case and the assessee cannot be taxed under the Tamil Nadu General
Sales Tax Act. The decision of the Tribunal on the facts cannot be
interfered with by the High Court in a revision petition under Section 38
of the Act. The scope of Section 38 was limited to an erroneous decision
of the Tribunal on any question of law and the failure to decide a question
of law. In this case, the Tribunal's decision is based upon the facts of the
C case and the application of the law as laid down by this Court. Hence, there
was no erroneous decision on a question of law or failure to decide a
question of law.

8. Consequently, the judgment of the High Court in the revision filed
by the State is correct. The appeal fails and is dismissed with no order as
D to costs.
T.N.A. Appeal dismissed.

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