M/S KANPUR EDIBLES PVT. LTD. versus COMMISSIONER, TRADE TAX, U.P.

Citation: [2008] 14 S.C.R. 1237 · Decided: 24-10-2008 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2008] 14 S.CJi. 1237 
M/S. KANPUR EDIBLES PVT. LTD. 
A 
II. 
COMMISSIONER, TRADE TAX, U.P. 
(Civil Appeal No. 6276 of 2008) 
OCTOBER 24, 2008 
B 
) 
[DR. ARIJIT PASAYAT AND DR. MUKUNDAKAM 
SHARMA, JJ.] 
U. P Sales Tax Act, 1948 - ss. 10-8 and '21 - Notices for 
re-assessment of assessment order u/s.21(1) - Cancellation 
bf - Notices uls. 10-8 for revision of cancellation order - Or- c 
der of ass_essment by Commissioner holding notices to be 
within /imitation - Set aside by tribunal, however, reversed by 
High Court - Justification of~- Held: Not justified - Revisional 
authority substituted original orders of assessment in garb of 
testing legality or propriety of order cancelling notices u/s. D 
21 (1) - Such course has no legal basis - Revisional author-
ity was not empowered to make order of assessment - Ex-
pression 'with respect thereof' makes it clear that for testing 
legality or propriety of the order, an order was to be passed 
with respect thereof - More so, original orders could not be 
E 
varied after limitation period,- Thus, order of High Court set 
aside. 
. For assessment years 1997-98 and 1998-99, orders. 
of assessrl)_ent were passed on 27 .02.1999 and 17.06.2000 
. respectively. On 21.08.2001 notice was issued for re-as-
F 
sessment in terms of s.21 of the U.P. Sales Tax Act, 1948. 
By order dated 29.05.2003 the notice was cancelled. On 
31.01.2006 and 08.02.2006 notices were issued u/s.10-B 
for revision of order dated 29.05.2003. The appellant raised 
objections ~egarding the period of limitation which were G 
,,,-
~ 
rejected. In appeal, the tribunal set aside the order of the 
Commissioner and held that the notice u/s.10 was issued 
beyond the period of limitation. Respondent-Department 
filed Revision. High Court set aside the order of the tribu-
1237 
H 
1238 
SUPREME COURT REPORTS 
[2008] 14 S.C.R. 
·A nal. It held that the order of the Commissioner u/s.10-B 
was within the period of limitation and thus, the order 
passed by the tribunal for assessment years was con-
trary to law. Hence the present appeal. 
B 
Allowing the appeals, the Court 
HELD: 1.1 Explanation Ill to sub-Section (1) of s. 21 
of the U.P. Sales Tax Act; 1948 makes the position clear 
~. 
that an order of assessment or re-assessment which was 
in existence at the point of time the notice was issued, 
c continues to be effective unless it is varied by an. orcJ_er of 
assessment or re-assessment made u/s. 21 in pursuance 
of that notice. If it is not varied it goes without saying that 
it continues to be operative and effective. The period for 
making assessment or re-assessment is provided in sub-
section (2) of Section 21. The maximum period available 
D for making assessment or re-assessment is 4 years from 
the end of the a~sessment year in question. That is no 
exception to this position·because sub-section (2) of sec-
tion 21 itself provides that such assessment or re-asse~s-
ment may be made under any provision of the Act which 
E includes Section 10-B. [Para 8] (1247-A, B,· E, F). 
1.2 The power of revision by the Commissioner or 
such officer not below the rank of Deputy Commissioner 
as may be authorized in this behalf by the State Govern-
r· 
ment by the notification, can be exercised by calling for 
'· 
F 
and examining the records relating to any order other than 
an order mentioned in Section 1 OA passed by any officer 
subordinate to him for the purpos~ of satisfying himself 
as to the legality or propriety of su'ch order. The Commis-
sioner or the authorized officer is empowered to pass 
G such order with respect thereof as he thinks fit. The cru-
cial expressions in Section 108(1) are "for the purpose 
+-
'· 
of satisfying himself as to the legality or propriety of such 
order" and "with respect thereof". [Para 8] (1247-F, G, H; 
1248-A) 
H 
1.3 In the instant case, what the revisional authority 
' 
M/S. KANPUR EDIBLES PVT. LTD. v. COMMI-
1239 
SSIONER, TRADE TAX, U.P. 
was empowered to test was the legality or propriety of A 
the order cancelling the notices issued u/s. 21 (1) by or-
der dated 29.5.2003. Such an exercise cannot encompass 
an order of assessment. It is of significance to note that 
the original orders have not been varied and could not 
have been varied after the period of limitation. What could B 
not have been directly achieved has been attempted to 
be done in an indirect manner. If the revisional authority 
was of the view that the order dated 29.5.2003 was not 
legal, then that order

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