Panyam Cements and Mineral Industries Limited vs State of Andhra Pradesh

Syed Shah Mohammed Quadri, J.—On interpretation of statutes the dicta of Parke B, which is oft quoted, is :

(Extracted from the book - "Maxwell on the Interpretation of Statutes", Twelfth Edition, Fourth Impression (1981) by p. St. J. Jangan at page 43.) "It is a very useful rule, in the construction of a statute, to adhere to the ordinary meaning of the words used and to the grammatical construction, unless that is at variance with the intention of the Legislature, to be collected from the statute itself, or leads to any manifest absurdity or repugnance, in which case the language may be varied or modified, so as to avoid such inconvenience, but no further."

It is the application of the above principle that is called for in this revision which is directed at the instance of the assessee-dealer against the order of the Sales Tax Appellate Tribunal, dated August 17, 1987, made in Tribunal Appeal No. 16 of 1983.

The question raised in this revision relates to interpretation of sub-section (6) of section 20 of the A.P. General Sales Tax Act, 1957 (for short "the Act"). The facts are a few and simple. The petitioner-assessee is a dealer in cement, registered under the Act. For the assessment year 1971-72 the Commercial Tax Officer, by his order of assessment dated August 17, 1972 allowed exemption on a turnover of Rs. 11,32,313 relating to freight charges and assessed a turnover of Rs. 6,75,352.92. The Deputy Commissioner of Commercial Taxes initiated revisional proceedings against the said order of assessment, by his proceedings dated February 19, 1976. On coming to know that the same question, as was involved in the revision, was pending consideration of the High Court in Writ petition No. 236 of 1976, the order on March 18, 1976, deferring the revision proceedings. That writ petition was disposed of on December 9, 1981. After the disposal of the said writ petition, the Deputy Commissioner passed the order dated June 19, 1982, bringing to tax the exempted turnover. Against the said order of the Deputy Commissioner, the assessee went in appeal to the Sales Tax Appellate Tribunal. The main contention that was urged by the assessee before the Tribunal, was that the exercise of revisional power by the Deputy Commissioner was beyond the period of limitation prescribed under sub-section (3) of section 20 of the Act. But the Tribunal accepted the contention of the Revenue that under sub-section (6) of Section 20 the period of limitation gets extended by the period which was taken for the disposal of the case in the High court awaiting whose decision the revision proceeding were deferred and held that the exercise of revisional power was not beyond the period of limitation.

Sri S. R. Ashok, the learned counsel for the petitioner, contends that sub-section (6) of section 20 cannot be so interpreted as to take the benefit of a longer period than the one during which the revision proceedings were deferred as it would not only be contrary to the intention of the Legislature but would also lead to an anomalous situation.

The learned Government Pleader, however, submits that the principle of liberal interpretation should be applied to the facts of this case and in so doing if the period of limitation gets extended, the benefit cannot be denied to the Revenue and that is what the Tribunal had done, as such the revision has to be dismissed.

To appreciate the contention raised before us, it would be necessary to read here the provisions of sub-sections (1), (3) and (6) of section 20 of the Act which read thus :

"20. Revision by Commissioner of Commercial Taxes and other 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-section (2) of if such order or proceeding recorded is prejudicial to the interests of Revenue, may make such enquiry, or cause such enquiry to be made and subject to the provision of this Act, may initiate proceedings to revise, modify or set aside such order or proceeding and any may pass such order in reference thereto as if thinks fit.

(2) and (2-A) .......

(3) In relation to an order of assessment passed under this Act, the powers conferred by sub-section (1) and (2) shall be exercisable only within such periods not exceeding four years from the date which the order was served on the dealer, as may be prescribed.

(4) and (5) ......

(6) Where any proceeding under this section has been deferred on account of any stay order granted by the Special Appellate Tribunal in any case, or by reason of the fact that an appeal or other proceeding is pending before the Special Appellate Tribunal or the Supreme Court involving a question of law having a direct bearing on the order or proceeding in question, the period during which the stay order was in force or such appeal or proceeding was pending shall be excluded in computing the period of four years specified in this section for the purposes of exercising the power under this section."

The fundamental principal of interpretation of a statute is to discover the intention of the Legislature and to give effect to it. The scheme of section 20, extracted above, inter alia, suggests that in case the revisional authority proposes to exercise jurisdiction under sub-section (1) and (3) of section 20, it should do so within such period not exceeding four years from the date on which the order was served on the dealer. In a series of decisions of this Court, the last of which we may note here (State of Andhra Pradesh v. Toshiba Anand Batteries Ltd. [1995] 96 STC 664) this Court held that the period of limitation is prescribed only to such orders which are in relation to assessment passed under the Act and that the period of limitation of four years does not apply if the revision is initiated in respect of any other order passed by the subordinate authority or in respect of proceeding recorded by the subordinate in respect of any other matter. Sub-section (6) of section 20, which is in the nature of a proviso to sub-section (3), provides that (i) if account of any stay order granted by the High Court in any case, or (ii) by reason of the fact that appeal or other proceeding is pending before the High Court or the Supreme Court involving a question of law which has a direct bearing on the order or proceeding in question, the proceeding u/s 20 may be deferred; it further provides that the period of limitation during which the stay order was in force or such appeal or proceeding was pending shall be excluded in computing the period of four years specified for the purposes of exercising power under sub-section (3) of section 20.

From the above narration of the facts, it can be notice that the writ petition which was filed in 1976, was disposed of an December 9, 1981. It may also be noticed that the order of deferment was passed in March, 1976. At the time when the order of deferment was passed the revisional authority has about 5 months 5 days to pass the final order of revision to save order from the mischief of sub-section (3) of section 20 but the order of revision was passed on June 19, 1982, that is after about 3 years and 10 months. The writ petition came to be filed after about 4 years of the passing of the order of assessment after three years of the order of deferment. If the contention of the learned counsel for the petitioner is to be accepted, the order should have been passed within 5 months and 5 days of the dismissal of the writ petition on December 9, 1981, that is, on or before January 13, 1982 but, in fact, it was passed on June 19, 1982, therefore, the revisional order was beyond limitation. But, if the contention of the learned Government Pleader were to be accepted, the revisional authority would get extension of period from the date of filing of the writ petition till the date of disposal of the writ petition and not merely from the data of deferment of the revision proceeding and the date of dismissal of the writ petition.

If sub-section (6) 20 is interpreted literally it follows that the contention of the learned Government Pleader, which was accepted by the Tribunal, would have to be upheld and we do so. It is here we have to discover the intention of the Legislature in enacting the provisions of sub-section (6) of section 20. Having prescribed an outer-limit of four years for passing the order of revision from the date of the assessment (service of last assessment order) the Legislature intended to provided or cases where the revising authority could not pass the order reason beyond his control, viz., where revisional proceedings were stayed by the High Court in which case it thought it fit to extend the period of limitation for the period during which the stay order was in force. It also extended the same rule to a situation on the broader principle of avoidance of multiplicity of proceedings. Where the question, which is involved in revision, was the subject-matter of an appeal or other proceeding before the High Court or the Supreme Court whose judgments are binding on the revisional authority, the Legislature thought it fit to empower the revising authority to defer the proceeding and await the orders of the High Court or the Supreme Court, as the case may be. For this purpose it enables the authority to defer the revisional proceedings. It applied the same principle as in the case of grant of stay order, to this situation and provided that the period taken in the said appeal or stay proceeding shall be excluded. In our view, the Legislature only wanted to extend the period of limitation by the period during the authority was disabled from proceeding with the revision. It did not, in our view, intend to extend the period of limitation by making sub-section (3) of section 20 nugatory. If that is the intention and we think it to be so, then giving effect to the submission of the learned Government Pleader that the whole period taken for the disposal of the appeal or stay proceedings should be excluded, would have the effect of giving a go-by to the principle of limitation contained in sub-section (3) of section 20 of the Act. The period during which the appeal or other proceedings are pending before the order of deferment was passed by the revision authority is irrelevant because that period would have had no effect on the exercise of jurisdiction by the revising authority before initiation of proceedings or even before the revising authority was apprised of the fact that a similar question, as is involved in the revision, was pending in an appeal or other proceeding before the High Court or the Supreme Court. It is the conscious decision taken by the authority by deferring the proceeding that is material and the period would run from the date of the order of deferment.

It is true thus interpreting the provision of sub-section (6) of section 20 would amount to reading in sub-section the period "from the date of the order of deferment such appeal or proceeding was pending" and that, it is submitted may not be permissible. Once we have discovered the intention of the Legislature, we are entitled to read the provision in such a way as to give effect to the intention. This is the principle quoted above and this is what is laid down by the Supreme Court in Commissioner of Income Tax v. J. H. Gotla wherein it was held :

"Where the plain literal interpretation of a statutory provision produces a manifestly unjust result which could never have been intended by the Legislature the court might modify the language used by the Legislature so as to achieve the intention of the Legislature and produce a retional result."

The period of limitation in any statute confers a very valuable right on any litigant. Interpreting the provision, as contended by the learned Government Pleader, would take away that right of the limitation from the litigant and thus produces unjust result. In this view of the matter we are unable to sustain the orders under revision. The order of the Tribunal dated August 17, 1987, in Tribunal Appeal No. 16 of 1983 is set aside and the order of revision passed by the Deputy Commissioner is held to be beyond the period of limitation.

The tax revision case is accordingly allowed but, in the circumstances of the case, without costs.

Petition allowed.