The Judgment of the Court was delivered by

Panchapakesa Ayyar, J.:— This is an appeal by the State of Madras represented by the District Collector, Madurai, the defendant in O.S No. 108 of 1953 on the file of the Subordinate Judge of Madurai, against the judgment and decree therein.

2. The facts are briefly these: That was a suit filed by the Madura Knitting Company Ltd., respondent in this appeal, for a declaration that the order of the Commercial Tax Officer dated 30th March, 1951, sustained by the order of the. Deputy Commissioner of Commercial Taxes and the Board of Revenue, Madras, cancelling a rebate to the extent of over 22 lakhs granted originally by the Deputy Commercial Tax Officer on 6th December, 1949, in the turnover of the respondent company regarding their export of, hosiery goods outside the State was illegal, ultra vires and without jurisdiction, and for an injunction restraining the Deputy Commercial Tax Officer, Madurai Town III, from enforcing the order for the collection of Rs. 17,204-11-3 issued in pursuance of the cancelled rebate which was also attacked as passed without jurisdiction, and for costs. Under rule 9 of the Madras General Sales Tax Rules, which applies to this case, every person claiming a rebate under section 7 shall submit to the assessing authority an application in Form 8 within three months of the delivery of the articles outside the Province, and rule 10 says that on receipt of the application the assessing authority shall, after satisfying himself that the application is in order, and that the rebate is admissible, send to the applicant a refund order for the amount of the rebate due, if the tax has already been paid, or if the assessment had been provisionally made under rule 7 or 8 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, adjust the amount at the time of the final assessment under rule 11. The respondent in this case submitted an application under rule 9 in time only for the months of February and March, 1949. But it claimed a rebate on a turnover of more than 24 lakhs for the entire year 1948-49. The Deputy Commercial Tax Officer pointed to it that there was no application in Form 8 asking for rebate for the other ten months. Thereupon, the respondent seems to have told him that such applications had been sent in time, and would appear to have been missent or delivered to some other office, or mislaid somewhere, as those applications were not traceable in the Deputy Commercial Tax Officer. Then the Deputy Commercial Tax Officer took a statement, Ex. A-1, to that effect from the respondent's manager, Sundararajier, on 24th November, 1949. The respondent applied for rebate for those ten months also producing copies of alleged Form 8 originals sent to the Deputy Commercial Tax Officer. Without calling for any further proofs, like the despatch register, stamp register, etc., and without even observing that he believed that the originals had been sent in time and that he was accepting the copies as the originals were missent or mislaid, the then Deputy Commercial Tax Officer, Mr. Jagannatha Aiyangar, simply allowed the rebate on the turnover of Rs. 24,60,346, as claimed on 6th December, 1949. The then Commercial Tax Officer, Mr. K. Natesa Aiyar, the immediate superior officer of the Deputy Commercial Tax Officer, inspected the office of the Deputy Commercial Tax Officer, and found copies of Form 8 applications for rebate instead of the originals, as were required under the law and the rules so that the details in the applications regarding the export outside the Province, the date of the applications, the date of export etc., may be verified. He also saw that the Deputy Commercial Tax Officer had not recorded any reasons for admitting the copies instead of the originals. So in exercise of the powers vested in him under section 12(2) of the General Sales Tax Act, of calling for and examining the records for the purpose of satisfying himself as to the legality or propriety of such order, or as to the regularity of such proceeding and passing such orders as he thought fit, he ordered notice, Ex. A-6, on 25th October, 1950, to the respondent to file its objections, if any, as to why the rebate of Rs. 18,221-7-3 on the turnover of Rs. 24,60,349-4-3 not covered by the original Form 8 applications should not be cancelled. The respondent filed objections stating that it did send the Form 8 applications in time to the Deputy Commercial Tax Officer, and that the original applications must have been mislaid in his office (missending or mislaying to the other office alleged earlier was dropped). The Commercial Tax Officer did not accept as genuine the entries in the despatch register produced by the respondent-company for his inspection to prove that the original Form 8 applications were sent to the Deputy Commercial Tax Officer in time, as there were many interlineations, and there were no acknowledgment of any of the Form 8 applications of rebate, or any proof that anything was spent on postage for sending the applications for rebate. So, on 30th March, 1951, under Ex. A-8, he set aside the Deputy Commercial Tax Officer's order dated 13th December, 1949, allowing a rebate under section 7 on a turnover of Rs. 24,60,346-4-3, and allowed rebate only on a turnover of Rs. 2,58,143-10-0 and ordered the Deputy Commercial Tax Officer to issue a revised “B” notice immediately to the respondent. The succeeding Deputy Commercial Tax Officer, Mr. Rajagopala Aiyangar, acted with alacrity, and issued a notice on 31st March, 1951, itself to the respondent demanding the excess tax of Rs. 17,204-11-3 on the turnover disallowed for rebate.

3. The respondent-company felt aggrieved. It filed a revision before the Deputy Commissioner of Commercial Taxes. That revision was dismissed by him on 31st March, 1952, under Ex. A-12, on the ground that the despatch registers were unworthy of credit, and that the Form 8 applications for rebate were not sent in time, and there was no discretion vested in the authorities to condone the delay. The respondent-company then filed a revision petition before the Board of Revenue. The Board of Revenue dismissed that revision petition on 29th April, 1953 (See Ex. A-16).

4. Then the respondent filed the suit before the Subordinate Judge against the State of Madras, represented by the Collector of Madurai. It was hotly contested by the State of Madras. The learned Subordinate Judge overruled the contention of the State of Madras that no suit would lie. He also held that the Commercial Tax Officer had no powers under section 12(2) to examine the correctness of the rebate allowed by the Deputy Commercial Tax Officer in his order dated 6th December, 1949. In that view, he granted a decree in favour of the plaintiff-respondent declaring the order of the Commercial Tax Officer dated 30th March, 1951, revising the order of the Deputy Commercial Tax Officer, and directing the respondent to pay a sum of Rs. 17,204-11-3 to be illegal except with regard to a sum of Rs. 171-8-0, a petty amount with which we are not concerned in this appeal, and also directing the State of Madras to pay the plaintiff-respondent a sum of Rs. 2,136-14-0 for the proportionate costs, and to bear its own costs of Rs. 1,185-0-2. The learned Subordinate Judge refused to grant an injunction against the State of Madras, as prayed for by the plaintiff-respondent, because in his opinion that was not necessary. The State of Madras has filed this appeal.

5. We have perused the records and heard the learned Additional Government Pleader, for the appellant, and Mr. Padmanabhan. The learned Additional Government Pleader contented himself with arguing about the incorrectness of the lower court's finding that the Commercial Tax Officer had no power under section 12(2) to examine the correctness of the order of the Deputy Commercial Tax Officer for the purpose of satisfying himself as to the legality or propriety of such order or as to the regularity of such proceeding, and passing his order dated 30th March, 1951. He reserved the question whether the suit was maintainable for argument if this argument failed.

6. He urged that the powers of the Commercial Tax Officer under section 12(2) would entitle him to call for and examine the records of any order passed by the Deputy Commercial Tax Officer in order to satisfy himself as to the legality or propriety of such order or as to the regularity of such proceedings, and to pass suitable orders in the matter if the Deputy Commercial Tax Officer's orders were found to be not legal, proper or regular. Mr. Padmanabhan contested this hotly. According to him, a Commercial Tax Officer could only interfere with the orders passed by a Deputy Commercial Tax Officer if they were patently illegal or outside his jurisdiction, or there was impropriety in the sense of misconduct like bribery or inducement by immorality being the cause for the order, and irregularity in the sense that the procedure was not followed and not even copies of Form 8 applications were given. We are unable to agree. It will be meaningless, in our opinion, to have a hierarchy of officers inspecting the subordinate offices and examining the records and orders passed by the subordinate officers in money matters involving public revenue if these superior officers are not allowed to examine the correctness of those orders, which correctness will certainly, in our opinion, be one of the factors for determining the propriety of passing the orders, as held by the Supreme Court in Raman and Raman Ltd. v. Government of Madras 1956 S.C.J 368 at page 372., where the word “propriety” has in an analogous enactment using the same expression, been defined as fitness; appropriateness, aptitude, suitability, appropriateness to the circumstances or conditions; conformity with requirements, rules or principle; Tightness, correctness, justness, accuracy. We may also add that a single Judge of this Court, Krishnaswami Nayudu, J., has in C.P Azeez Haji v. Government of Madras, held that the legality or propriety or regularity of the order of the Deputy Commercial Tax Officer can be examined by the revising authorities, namely, the Commercial Tax Officer, the Deputy Commissioner and the Board of Revenue and that ruling has not been overruled and is still valid. It is obvious that if the Form 8 applications for rebate are not sent in time, the law and the rules do not provide any power to condone the delay, and it will be illegal, improper and irregular to allow the rebate if those returns were not proved to have been sent in time. It will also be highly irregular for the Deputy Commercial Tax Officer to accept copies without recording reasons for not insisting on the production of the originals. Before passing his order dated 13th December, 1949, the Deputy Commercial Tax Officer did not record his reasons for accepting the copies, instead of insisting on the originals, and did not follow the procedure prescribed by the law and the rules, and passed an erroneous and improper and illegal and irregular order of rebate to the extent disallowed by the Commercial Tax Officer. It is certainly not necessary to prove that the Deputy Commercial Tax Officer was lured by gold or woman to prove the impropriety of the order. That is only the popular meaning attached to the word, impropriety. The legal meaning of the word, as laid down authoritatively by the Supreme Court, has a far wider connotation. Lure of gold or woman, if proved to be the cause of the order, will not only entail the cancellation of the order but also the dismissal of the Deputy Commercial Tax Officer who passed it.

7. We are not concerned in this appeal with the merits of the findings of the Commercial Tax Officer, the Deputy Commissioner, and the Board of Revenue, against the respondent's contention that it had sent the original Form 8 applications in time, and that they had been mislaid by the Deputy Commercial Tax Office. Mr. Padmanabhan did not also want to canvass the merits. He only urged that when the Commercial Tax Officer, the Deputy Commissioner and the Board of Revenue suspected the despatch registers to contain forged interpolations regarding these entries, full proof was required in such quasi-criminal findings. But that will only apply to a prosecution for forgery, and not to disbelief of the story. We are not now concerned with the merits of the orders of the Commercial Tax Officer, the Deputy Commissioner and the Board of Revenue.

8. Then Mr. Padmanabhan contended that the powers given to the Commercial Tax Officer, the Deputy Commissioner and the Board of Revenue under section 12(2) of the Madras General Sales Tax Act were confined only to errors patent on the face of the records, and would not extend to probing further into the records like calling for despatch registers and other evidence. This contention must be rejected forthwith, in view of the fact that section 12(2) does not lay down any such limitation, and in view of the Full Bench decision of this Court in State of Madras v. Louis Dreyfus and Co., Ltd., which gives the quietus to any such contention. We see no need to go into the question of the maintainability of this suit in view of our above findings. The judgment and decree of the lower court are set aside, and the suit dismissed, but, in the circumstances, and seeing that the law has been clarified only after the lower court's decision and the filing of this appeal, we direct all the parties to bear their costs throughout.

Basheer Ahmed Sayeed, J.:— I have heard the judgment of my learned brother delivered just now, and I entirely agree with the conclusions arrived at by him. The facts of the case have been fully set out by him, and it is not necessary for me to repeat them.

9. The only question that we are called upon to decide is whether the learned Subordinate Judge was right in holding that the Commercial Tax Officer had no jurisdiction to interfere with the order of the Deputy Commercial Tax Officer. This involves in the main the true construction to be placed upon section 12(2) of the Madras General Sales Tax Act of 1939. A plain reading of section 12 and rule 14 seems to indicate that ample discretion is vested in the superior authorities subject, of course, to certain limitations mentioned therein, to call for and examine the record of any order passed or proceedings recorded by any inferior authority, officer or persons for the purpose of satisfying itself as to the legality or propriety or regularity of such order or proceeding as the case may be. The section also gives power to the superior authority to pass such orders in reference thereto as it thinks fit. To my mind a provision like this seems to be necessary to prevent lapses and abuses, intentional or otherwise, in the matter of assessment to sales tax. When the provisions of the Act and Rules framed thereunder provide elaborately for the aggrieved assessee to agitate against the orders of the various assessing authorities, a provision enabling the superior taxing officers to set right defects found in the orders of the inferior taxing authorities cannot but be reasonable and this is served by the provision contained in section 12 and rule 14. If the narrow interpretation of the lower court is to be accepted, then there will be no scope for the departmental authority to rectify the vagaries of its subordinate offices. The language of the section does not warrant that the order of the inferior authority should be improper, irregular or illegal on the face of the record to justify the exercise of revisional jurisdiction conferred on the superior taxing authorities. This will be straining the plain language of the section to an uncalled for extent. The decisions referred to by my learned brother are sufficient authority for the position that the powers given to the superior authority can be exercised suo motu and such exercise need not depend upon the fact that there should be actual discovery of corruption or that the existence of other extreme causes alone could justify the exercise of such revisional jurisdiction. It appears to me that the section and the rules have been framed with the object of safeguarding the interests of the proper administration of the fiscal law and the prevention of loss of taxes payable to the Government. I, therefore, agree that this appeal has to be allowed and the order of the learned Subordinate Judge set aside.

10. Appeal allowed.