Commissioner empowered to delegate his powers under GST: HC

Studycafe | Feb 18, 2020 |

Commissioner empowered to delegate his powers under GST: HC

Commissioner empowered to delegate his powers under GST: HC

Relevant Extract of Order is given below:

53. In the case on hand, Section 5(3) of the Act specifically confers power upon the Commissioner to delegate his functions.

54. We also have to our benefit, a Division Bench decision of the Madhya Pradesh High Court in the case of Raghunath v. Indore Municipal Corporation, Indore, reported in AIR 1987 (MP) 181. In the said case before the Madhya Pradesh High Court, the petitioner, being dissatisfied with the valuation of the property made for the purpose of property tax, filed his objections under Section 147 of the Madhya Pradesh Municipal Corporation Act, 1956. Those objections were heard and rejected by the Assessment Officer of the respondent Corporation in pursuance of the powers conferred upon him by the Commissioner of the Corporation. The petitioner argued before the High Court that the respondent no.2, i.e. the Commissioner of the Corporation, had no power to delegate the powers conferred upon him by Section 148 of the Act to any other officer of the Corporation, and consequently, the orders passed by the Assessment Officer overruling the objections submitted by the petitioner could be termed as without jurisdiction or null and void. On the other hand, on behalf of the Corporation, it was contended that the Commissioner is empowered under the provisions of Section 69(4) of the Act, 1956, to delegate any of the powers, duties or functions conferred upon him by the Act to any officer of the Municipal Corporation and that in pursuance of that power the Commissioner had delegated the power conferred upon him by Section 148 of the Act. It was argued on behalf of the Corporation that the orders passed by the Assessment Officer overruling the objections of the petitioner cannot be held to be without jurisdiction or null and void.

55. The following questions fell for the consideration of the Division Bench of the Madhya Pradesh High Court :

“Whether the power to determine objections to valuation made under the Act, conferred by Section 148 of the Act, could be delegated by the Commissioner to any officer of the Corporation under the provisions of Section 69(4) of the Act.”

56. The court proceeded to observe as under :

“5. To appreciate the contentions advanced by the learned counsel for the parties, it is necessary to refer to the relevant provision of the Act. Sub-Sec. (ii) of S.5 of the Act defines the expression ‘Commissioner’ as follows:

“’Commissioner’ means the Municipal Commissioner for the city appointed under S.54 and includes an acting Commissioner appointed under Sub-Sec. (2) of S.57 and any Minicipal Officer empowered under this Act to exercise, perform or discharge any of the powers, duties or functions of the Commissioner to the extent to which such officer is so empowered.”

Section 69(4) of the Act empowering the Commissioner to delegate his functions to any officer of the Corporation, reads as follows :

“Municipal Officers may be empowered to exercise the powers of Commissioner. (4) Any of the powers, duties or functions conferred or imposed upon or vested in the Commissioner by this Act may be exercised, performed or discharged under the Commissioner’s control, and subject to his superintendence and to such conditions and limitations, if any, as he may thank fit to prescribe, by any Municipal Officer, whom the Commissioner may generally or specially empower in writing in this behalf.”

Now, power to determine objections to valuation is conferred on the Commissioner by S.148 of the Act. That this power, under S.148 of the Act to decide objections is a quasi-judicial power” was not disputed before us on behalf of the respondents. The contention urged on behalf of the petitioners was that the Commissioner had no power to delegate the quasi-judicial power conferred upon him by S.148 of the Act.

6. As held by the Supreme Court in Bombay Municipal Corpn. v. Dhondu Narayan Chowdhary, AIR 1965 SC 1486, it is well settled that judicial power cannot ordinarily be delegated unless the law expressly or by clear implication, permits it. S.69(4) of the Act, in our opinion, is a provision, which expressly permits the Commissioner to delegate any power conferred upon him by the Act. In absence of the provisions of S.69(4) of the Act, the Commissioner could not have delegated the quasi-judicial powers conferred upon him by the Act.

7. It is, however, urged on behalf of the petitioner that S. 69(4) of the Act refers only to the administrative powers under the Act and not to any other power under the Act. There is no warrant for construing the provisions of S.69(4) of the Act in such a way as to confine it to delegation of administrative powers only. S.69(4) of the Act enables delegation of all powers conferred upon the Commissioner by the Act, irrespective of the nature of the power. When an officer of the Corporation decides the objections under S.148 of the Act, in pursuance of the powers conferred upon by the Commissioner, the order passed by that officer is tantamount to an order passed by the Commissioner by virtue of S.5(11) of the Act and is appealable to the District Court under S.149 of the Act. While conferring power on the Commissioner to delegate his functions under the Act, the legislature has not chosen to limit that power to administrative functions only. S.69(4) of the Act expressly confers upon the Commissioner the power to delegate any power conferred upon him by the Act, to any Municipal Officer. That the control and superintendence envisaged in S.69(4) of the Act cannot bear the meaning, which they in delegation of administrative functions, is clear from the decision of the Supreme Court in AIR 1965 SC 1486 (supra). In that case, while construing a similar provision in the Bombay Municipal Corporation Act, the Supreme Court observed as follows :-

“What is objected to is the provisions both in the Section as well as in the order of delegation that ‘Commissioner’s control’ and ‘subject to his revision’. These words are really appropriate to delegation of administrative functions where the control may be deeper than in judicial matters, in respect of judicial or quasi judicial functions, these words cannot, of course, bear the meaning, which they in the delegation of administrative functions. When the Commissioner stated that his functions were delegated subject to his control and revision, it did not mean that he reserved to himself the right to intervene to impose his own decision upon his delegate. What those words meant was that the Commissioner could control the exercise administratively as to the kinds of cases, in which the delegate could take action or the period or time, during which the power might be exercised and so on and so forth. In other words, the administrative side of the delegate’s duties was to be the subject of control and revision but not the essential power to decide whether to take action or not in a particular case. This is also the intention of S.68 as interpreted in the context of the several delegated powers. This is apparent from the fact that the order of the delegate amounts to an order by the Commissioner and is appealable as such.”

In view of the aforesaid decision of the Supreme Court, it cannot be held that the fact that the power delegated under S.69(4) of the Act by the Commissioner is to be exercised subject to the control and superintendence of the Commissioner, rules out delegation of quasi-judicial power conferred upon the Commissioner by S.148 of the Act. Such a construction would also not be reasonable because the legislature has chosen to confer power upon the Commissioner by S.69(4) of the Act, to delegate any of his functions under the Act, without any reservation, presumably because, in a city, where a Corporation is established, the Commissioner cannot possibly exercise each and every power conferred upon him by the Act. Under the circumstances, it cannot be held that the objections to the valuation preferred by the petitioners have been decided by a person, who had no jurisdiction to decide those objections.”

57. Thus, the dictum as laid in the aforesaid decision is that, be it quasi-judicial or administrative power, the same can be delegated provided the law expressly or by clear implication permits it to be delegated. The Bench took the view that having regard to Section 69(4) of the Act referred to above, the Commissioner has been empowered to delegate any of his powers. The Bench also clarified that in the absence of the provisions of Section 69(4) of the Act, the Commissioner could not have delegated the quasi-judicial powers conferred upon him by the Act.

58. One important observation made by the Division Bench of the Madhya Pradesh High Court is, “where a Corporation is established the Commissioner cannot possibly exercise each and every power conferred upon him by the Act”. In such circumstances, the statute has permitted the Commissioner to delegate his powers to any of his subordinate authority.

59. The last contention of Mr.Pandya is that although the Commissioner of Tax has been empowered by the statute to delegate his powers, yet, at the same time, Section 69 of the Act mandates that the reasonable belief should be that of the Commissioner. The argument proceeds on the footing that whenever a power is to be exercised based on the reasonable belief of the authority upon whom such power has been conferred, the same cannot be delegated though the statute empowers the statutory authority to do so. In short, Mr.Pandya is trying to draw a distinction between a particular power to be exercised and power to be exercised based on the reasonable belief of the authority. In our opinion, it does not make any difference. The very same reasonable belief will be that of the authority upon whom the power is delegated. The power under Section 69 of the Act can be exercised by the authority upon whom the power is delegated provided the delegatee has reasons to believe that the assessee has committed offence under Section 132 of the Act. Therefore, the condition precedent, i.e. ‘reasonable belief’, for the purpose of exercise of power under Section 69 of the Act remains the same.

60. In the result, these writ-applications fail and are hereby rejected. Rule stands discharged.

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Tags : Judgement, High Court, GST

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