S.58 UPVAT | In Revisional Jurisdiction, HC Must Uphold Sanctity Of Judgments/Orders, Must Intervene Only When There Are Compelling Reasons: Allahabad HC

While elaborating the difference between 'appeal' and 'revision', the Allahabad High Court has held that in exercise of its revisional jurisdiction, the High court must uphold the sanctity of judgments and orders and intervene only when there are compelling reasons to do so.

“High Courts, in their capacity as revisional bodies, are entrusted with the solemn duty of upholding the sanctity of such judgments and orders, and such, should not lightly disturb them unless compelling reasons of paramount significance necessitate such intervention,” held Justice Shekhar B. Saraf.

The Court held that 'appeals' includes a comprehensive review encompassing both law and fact whereas 'revision' is similar to the power of superintendence of the High Court where the Court can only see if the decision was passed in accordance with law.

“Appeal can be seen as a judicial examination seeking the reversal of a lower authority's decision by the superior court. Meanwhile, revision empowers the superior court to scrutinize the records of an appeal to assess its legality, propriety, or regularity of procedure, and to issue orders accordingly.”

The Court held that revisions must not be treated as a vehicle for reappreciation of facts which have already be exhaustively adjudicated by the Tribunals or Trial Courts. The Court held that revision is mechanism to cure the jurisdictional or other legal errors which may have vitiated the adjudication to ensure equitable and efficacious administrative of justice.

Factual Background

On 2^nd July 2012, survey was conducted on the production unit of assesee, M/s Godfrey Philips India Limited, where 480 cartons were found less than the number mentioned in books of accounts. The rate of tax on cigarette was enhanced to 50% from July 1, 2012. Accordingly, the assessing authority held that 480 cartons were sold on 1^st & 2^nd July 2012 and no sale invoices were generated on them to escape the actual sales. The books of accounts of the petitioner were rejected and the turnover was enhanced to Rs. 6 crores besides the packaging material determined at Rs. 2.55 crores. Accordingly, additional tax liability was imposed on the assesee.

Assessee filed an appeal against the order of the assessing authority which was rejected by the first appellate authority. A second appeal was filed before the Commercial Tax Tribunal which was allowed. The Tribunal held that there was no difference in the stock of the cigarettes and the stock found was in accordance with the stock ledger. It was held that the surveying authority had erred in counting the number of cartons.

Department filed a revision against the order of the Tribunal under Section 58 of the UPVAT Act.

Section 58 of the Uttar Pradesh Value Added Tax Act, 2008 provides for revisions to the High Court by a person aggrieved against an order passed by Tribunal under Section 57 of the Act. Such revision can be preferred on grounds that it involves certain questions of law.

Counsel for the revisionist-Department argued that Deputy General Manager (Accounts) was present at the time of counting of boxes and never objected to the count when it was recorded. It was submitted that no attempt was made by the assesee to reconcile the shortage in cartons at the time of survey. It was argued that 456 old cartons of cigarettes which were kept in the godown were not counted.

It was argued that the tribunal had erred in holding that evasion of sales was not possible as the goods were excisable and thus controlled by the Excise Department. Lastly, it was argued that the books of accounts were rejected on valid grounds.

High Court Verdict

The Court relied on Hindustan Petroleum Corporation Limited v. Dilbahar Singh where the Supreme Court had held that the use of 'revision' in a statute narrows the power compared to 'appeal'. It was held that revisional jurisdiction cannot be exercised in a manner to make the High Court a second court of appeal.

The Apex Court held that “Whether or not a finding of fact recorded by the subordinate court/tribunal is according to law, is required to be seen on the touchstone whether such finding of fact is based on some legal evidence or it suffers from any illegality like misreading of the evidence or overlooking and ignoring the material evidence altogether or suffers from perversity or any such illegality or such finding has resulted in gross miscarriage of justice.”

Further reliance was placed on Vinod Kumar Tiwari v. State of U.P. and others where the Allahabad High Court held that exercise of appellate jurisdiction involves both appreciation of facts and law whereas in revisional jurisdiction, the High Court has to see if the Tribunal acted in accordance with law. It was held that revisional jurisdiction is included in the appellate jurisdiction but the vice versa does not apply.

The Court observed that the Tribunal is the fact-finding body and the High Court in its revisional jurisdiction cannot re-examine facts already adjudicated upon by the Tribunal. The Court held that the revisional jurisdiction is limited to “jurisdictional errors, perversity and procedural irregularities.”

The Court observed that fresh inquiry into the facts must be avoided unless there are compelling reasons which necessitate such an intervention by the High Court

Regarding the revisional jurisdiction under Section 58 of the UPVAT Act, the Court observed that it has been “meticulously tailored to address jurisdictional errors and excesses of law that may have permeated the adjudicative process at lower echelons of the judicial hierarchy.”

The Court held that there was no perversity or illegality in the order of Tribunal which warranted interference by the Court under Section 58 of the UPVAT Act. The Court held that the arguments advanced by the revisionist were a repetition of the arguments raised before the Tribunal, which could not be permitted in revisional jurisdiction.

Accordingly, the revision was dismissed.

Case Title: The Commissioner, Commercial Tax U.P. V. M/S Godfrey Philips India Limited [SALES/TRADE TAX REVISION NO.150 OF 2023]

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