Jharkhand High Court
Shivam Coke Industries And Rani Sati ... vs State Of Jharkhand And Ors. on 14 March, 2008
Equivalent citations: [2008(2)JCR267(JHR)]
Author: M.Y. Eqbal
Bench: M.Y. Eqbal
JUDGMENT M.Y. Eqbal, J.
1. In these writ petitions, since common questions of law and facts are involved, they have been heard together and are disposed of by this common judgment.
2. In W.P. (T) No. 6377 of 2007, the petitioner-assessee has prayed for quashing the notice dated 20.2.2007 issued by the Joint Commissioner of Commercial Taxes (Admn.), Dhanbad Division, Dhanbad whereby he has initiated suo motu revision proceedings under Section 46(4) of the Bihar Finance Act, 1981 and further for a declaration that the impugned notice issued by the Joint Commissioner is bad in law and does not fulfill the mandatory requirement of the Act. The petitioner also seeks a direction upon the respondents to refund the excess amount realized from it by the respondents for which refund applications of the petitioner are pending before them. By filing amendment petition, the petitioner also sought for quashing the order dated 26.11.2007 passed by respondent No. 3 Joint Commissioner of Commercial Taxes by which he has set aside the revised assessment order dated 26.12.2003.
3. In W.P. (T) No. 5892 of 2007, the petitioner has sought for a writ of mandamus directing the respondents to refund the entire amount in respect of the petitioner's claim under the provisions of Section 15B of the Central Sales Tax Act for the assessment years 1984-1985 to 2000-2001 and also for the grant of interest. Pending the writ petition, by filing interlocutory applications amendment was prayed for in the writ petition seeking further relief for quashing the notice dated 26.11.2007 issued by Joint Commissioner of Commercial Taxes. Dhanbad purported to be under Section 46(4) of the Bihar Finance Act, 1981 on the ground, inter alia, that the Joint Commissioner has no jurisdiction to entertain application under Section 46(4) of the Bihar Finance Act, 1981 and further for quashing the final order dated 18.12.2007 passed by respondent No. 3. The Joint Commissioner by which he has set aside the revised assessment order.
4. In W.P. (T) No. 5895 of 2007, similar relief has been sought for by the petitioner seeking direction upon the respondents to refund the excess amount realized from the petitioner under the provisions of the Bihar Finance Act, 1981 for the assessment years 1984-1985 to 2000-2001 together with interest @ 9% p.a. In this case also, by filing amendment petition, prayer has been made for quashing the order dated 26.11.2007 passed by Joint Commissioner on an application for revision filed by the Deputy Commissioner of Commercial Taxes, Dhanbad and further, for quashing the order dated 18.12.2007 by which the Joint Commissioner set aside the revised assessment order.
5. The brief facts of the case as pleased in all the writ petitions are as under:
W.P. (T) No. 6377 of 20076. In this case, the petitioner M/s. Shivam Coke Industries is a manufacturer of coal and was registered under the provisions of the Bihar Finance Act, 1981 (in short BFT Act 1981). and presently under the provisions of Jharkhand Value Added Tax, 2005. Petitioner's case is that aggrieved by the assessment order for the aforementioned assessment years petitioner filed appeals before the Joint Commissioner of Commercial Taxes (Appeals). The appellate authority passed order in respect of the financial years i.e. 1988-1989, 1992-1993 and 1996-1997. Thereafter revised assessment orders were passed on 26.12.2003 on the basis of guidelines issued by Joint Commissioner of Commercial Taxes (Appeals). On the same day Le. 26.12.2003, the Assessing Officer issued notice to the petitioner in respect of excess amount of tax paid by the petitioner for various financial years as well as notice of demand towards the tax amount payable by the petitioner in respect of various financial years. It is stated by the petitioner that on 10.3.2005 application was filed for refund of excess amount of tax after adjustment of the amount to be paid by the petitioner. Accordingly, on 21.8.2006 notice was issued by Deputy Commissioner of Commercial Taxes to the petitioner to file its refund application before the Joint Commissioner of Commercial Taxes since the amount refundable to the petitioner is above Rs. 25,000/-. After more than a month, another notice was issued on 9.10.2006 by the Deputy Commissioner of Commercial Taxes informing the petitioner that refund would be made only after the disposal of 46(4) proceedings which has been initiated against the petitioner. It is alleged by the petitioner that on 10.10.2006, the Deputy Commissioner of Commercial Taxes made an application before the Joint Commissioner for initiation of suo motu proceeding under Section 46(4) of the Act.
W.P. (T) No. 5895 of 20077. The case of the petitioner is that the petitioner is engaged in processing of coal to coke. This case also relates to financial years between 1984-1985 to 2000-2001. The revised assessment proceeding was initiated by the respondents which was completed and certain liability was fastened upon the petitioner. Aggrieved by the said reassessment proceedings, the petitioner challenged the said order before the Joint Commissioner of Commercial Taxes (Appeals) which was disposed of by him vide order dated 3.5.2004 remanding the matter to the Assessing Officer for fresh assessment. It is stated that pursuant to the order of remaned, the Assessing Officer passed final order on 14th and 29th December, 2005 determining the liability of the petitioner. Consequent thereto, the petitioner was served with various demand notices. The petitioner after receiving the demand notices to the satisfaction of the authorities, filed application on 2.5.2006 for refund of excess amount but in the meantime, revision proceeding was initiated by the Joint Commissioner for the assessment year in question and final order was passed on 18.12.2007 setting aside the revised assessment order.
W.P. (T) No. 5892 of 20078. In this case also, the assessment years relate to 1984-1985 to 2000-2001. In this case, the revised assessment proceedings were completed on 3.5.2004 and certain liability was fastened upon the petitioner. The petitioner moved the Joint Commissioner in appeal who remanded the matter of Assessing Officer for fresh assessment in terms of the orders dated 10.3.2005 and 27.4.2005. Pursuant to the order passed by the appellate authority, the Assessing Officer, vide orders dated 14th and 29th December, 2005 determined the liability of the petitioner in pursuance of the observations and directions made in the appellate order. After the revised assessment orders were passed, the petitioner made claim under Section 15(B) of the Central Sales Act, 1956 for the reimbursement of tax collected from it in course of inter-state trade and commerce which is said to have been allowed. On 2.5.2006 the petitioner received excess demand notice and refund application was filed. In the meantime, 46(4) proceeding was initiated by the Joint Commissioner of Commercial Taxes (Appeals).
9. The common question of law involved in these writ applications are:
(i) Whether Joint Commissioner Commercial Taxes can initiate suo motu revision proceeding on the basis of application/letter received from Deputy Commissioner Commercial Taxes?
(ii) Whether after assessment order attained its finality, the same can be reopened by invoking power of suo motu revision by the Joint Commissioner Commercial Taxes under Section 46(4) of the Act?
(iii) Whether the action of Joint Commissioner Commercial Taxes in issuing notice and initiate suo motu revision is illegal, arbitrary, mala fide and without jurisdiction in the facts and circumstances of the case?
10. The main thrust of argument advanced by the counsel appearing for the petitioner-assessee are firstly that the Joint Commissioner of Commercial Taxes cannot initiate suo motu revision proceeding under Section 46(4) of the Act on the basis of application filed by the Revenue and secondly, that the assessment order which has attained finality long back, cannot be reopened on the basis of the Supreme Court decisions.
11. Mr. Mittal, learned Counsel appearing for the petitioner- assessee made the following submissions:
(i) The Joint Commissioner of Commercial Taxes (Admn.) (in short the Joint Commissioner) has been conferred jurisdiction to initiated suo motu revision against the orders of the Assessing Officer. The power has been delegated in terms of notification issued by the State of Bihar dated 28.6.1986. The said notification does not confer power upon the Joint Commissioner under Section 46(4) to exercise power of revision on an application.
(ii) The power to entertain application for initiating revision proceedings has been retained by the Commissioner Commercial Taxes and such power has not been delegated to Joint Commissioner.
(iii) Referring to Section 46(3) of Bihar Finance Act, 1981 which prescribes 90 days limitation for making an application for initiation of revision proceedings, learned Counsel submitted that if any application for revision under Section 46(4) of the Act is filed, the same has to be filed along with application for condonation of delay.
12. Learned Counsel further submitted that the original assessment orders were passed long back and being aggrieved by such orders, the assessees preferred appeals. After having been satisfied with the causes shown and abnormality pointed out, the appellate authority passed the order and pursuant to that revised assessment orders were passed in December 2003.
13. In order to show mala fide on the part of the respondents, in the initiation of revision proceedings, learned Counsel submitted that after the change of old set of officers who had carried out assessment proceedings, appeal proceedings and revised assessment proceedings, the new set of officers immediately after joining, reopened the file for the reasons best known to them.
14. Learned Counsel submitted that after the order attained finality, subsequently judgment cannot be made applicable to the case and the entire assessment cannot be reopened.
15. Mr. P. Modi, learned Counsel for the Revenue, on the other hand, firstly submitted that in view of decision of the Supreme Court in the case of Gall India Ltd. v. Sales Tax Officer, Gujarat (2006) 148 STC 1 (SC), this writ application is not maintainable having regard to the alternative remedy available to the petitioner. Learned Counsel submitted that in other cases, Division Bench of this Court in similar circumstances directed the writ petitioners to move the Commercial Taxes Tribunal by filing revision.
16. Learned Counsel then submitted that no limitation is provided for initiation of suo motu revision proceedings under Section 46(4) of the Bihar Finance Act. The limitation is 90 days for filing revision application is under Section 46(3) of the Act. Learned Counsel in this regard referred decision of the Supreme Court in the case of Swastick Oil Mills Ltd. v. H.B. Munshi (1968) 21 STC 383. Refuting the submission made by the assessee, Mr. Modi submitted that it is not the case where application was filed by the Deputy Commissioner for initiation of revision proceedings, rather only the illegality was brought to the notice of the Joint Commissioner and on such illegality having been brought to the notice of the Joint Commissioner proceeding under Section 46(4) was initiated. Learned Counsel relied upon decision of the Patna High Court in the case of Rakesh Kumar v. State of Bihar, 1995 BRLJ 152.
17. Before adverting to the rival contentions of the parties, it would be useful first to trace out the legislative history of Section 46(4) of the Act.
18. In the old 1959 Act i.e. Bihar Sales Tax Act, 1959, the power of revision was given under Section 31 of the said Act. Section 31 of 1959 Act reads as under:
(1) Subject to such rules as may be made by the State Government under this Act, an order passed on an appeal under Sub-section (1) or (2) of Section 30 may, on application, be revised--
(a) by the Deputy Commissioner, if the said order has been passed by the Appellate Assistant Commissioner, and
(b) by the Board, if the said order has been passed by the Deputy Commissioner or the Commissioner.
(2) Subject as aforesaid, any order passed by the Deputy Commissioner under Sub-section (1) or by the Commissioner under Sub-section (5) may on application be revised by the Board.
(3) Subject as aforesaid any order passed under this Act or the Rules made thereunder, other than an order passed by the Commissioner under Sub-section (5) of Section 8, or an order under Sub-section (1) or (2) or an order against which an appeal has been provided in Section 30, may, on application, be revised.
(a) by the Appellate Assistant Commissioner, if the said order has been passed by a Superintendent or Assistant Superintendent;
(b) by the Deputy Commissioner, if the said order has been passed by the Appellate Assistant Commissioner or Assistant; Commissioner; and
(c) by the Commissioner, if the said order has been passed by the Deputy Commissioner.
(4) Every application for revision under this section shall be filed within sixty days of the passing of the order which is sought to be revised, but the authority to whom the application lies may admit it after the expiry of the said period of six days if it is satisfied that the applicant had sufficient cause for not filing the application within the said period.
(5) The Commissioner may call for and examine the record of any proceeding under this Act in which any order has been passed by any other authority appointed under Section 8, for the purpose of satisfying "himself as to the legality or propriety of such order and may, after examining the record and making or causing to be made such enquiry as he may deem to be necessary, pass any order which he thinks proper:
Provided that no action under this section shall be initiated except before the expiry of four years from the date of the order which is the subject of scrutiny by Commissioner under this sub-section.
(6) No order under this section shall be passed without giving the dealer as also the authority whose order is sought to be revised or their representatives, a reasonable opportunity of being heard.
19. From bare reading of the aforesaid provision, it is manifestly clear that under Section 31 of the 1959 Act, no restriction was put on the power of the revisional authority under Sub-section (1), Sub-section (2) or Sub-section (3) of Section 31 of the Act. Under Sub-section (5), the Commissioner was vested with the power of calling for and examining any record of any proceeding under the Act for the purposes of satisfying himself as to the legality or propriety of an order passed by any subordinate authority. Sub-section (5) of Section 31, however, provided that the Commissioner cannot initiate such revision proceedings after the expiry of four years from the date of the order.
20. In 1976, an Ordinance was promulgated by which the Commissioner was vested with the power to call for and examine any record of proceeding and pass any order thereon. The statute did not specify whether this power of Commissioner could be invoked on application by an assessee or any other person. However, the position was made clear in 1977 Ordinance according to which powers could be invoked even on application, provided the application was made within 90 days of the order challenged. A limitation of four years from the date of impugned order prescribed by 1959 Act and 1976 Ordinance for intervention by Commissioner was omitted in the 1977 ordinance. For better appreciation, firstly we shall quote Section 41 of the Bihar Sales Tax Ordinance, 1976 which reads as under:
41. Revision.--(1) Subject to such rules as may be made by the State Government under this Ordinance, an order passed on an application under Sub-section (1) or (2) of Section 40 may. on application, be, revised
(a) by the Deputy Commissioner, if the said order has been passed by the Appellate Assistant Commissioner; and
(b) by the Tribunal if the said order has been passed by the Deputy Commissioner or the Commissioner.
(2) Subject as aforesaid, any order passed by the Deputy Commissioner under Sub-section (1) or by the Commissioner under Sub-section (5) may, on application, be revised by the Tribunal.
(3) Subject as aforesaid, any order passed under this Ordinance or the rules made thereunder, other than an order passed by the Commissioner under Sub-section (5) of Section 8, or an order under Sub-section (1) or (2) or an order against which an appeal has been provided in Section 40, may, on application, be revised.
(a) by the Appellate Assistant Commissioner, if the said order has been passed by a Superintendent or Assistant Superintendent:
(b) by the Deputy Commissioner, if the said order has been passed by the Appellate Assistant Commissioner or Assistant Commissioner; and
(c) by the Commissioner, if the said order has been passed by the Deputy Commissioner.
(4) Every application for revision under this section shall be filed within 60 days of the communication of the order which is sought to be revised, but the authority to whom, the application lies may admit it after the expiry of the said period of 60 days if it is satisfied that the applicant had sufficient cause for not filing the application within the said period.
(5) The Commissioner may call for the and examine the record of any proceeding under this ordinance, in which any order has been passed by any other authority appointed under Section 8 for the purpose of satisfying himself as to the legality or propriety ®f such order and may, after examining record and making or causing to be made such enquiry as he may deem to be necessary, pass any order which he thinks proper:
Provided that no action under this section shall be initiated except before the expiry of four years from the date of the order which is the subject of scrutiny by Commissioner under this sub-section.
(6) No order under this section shall be passed without giving the dealer as also the authority whose order is sought to be revised or their representatives a reasonable opportunity of being heard.
21. A consolidated Act was passed amending the law relating to levy of tax for sale and purchase of goods called Bihar Finance Act, 1981. In the said Act, Section 45 lays down the provision of appeal and Section 46 of the Act lays the provision of revision. Section 46 reads as under:
46. Revision.--(I) Subject to such rules as may be made by the State Government an order passed on an appeal under Sub-section (1) or (2) of Section 45 may, on application, be revised by the Tribunal.
(2) Subject as aforesaid any order passed under this part or the rules made there under, other than an order passed by the Commissioner under Sub-section (5) of Section 9 or an order against which an appeal has been provided in Section 45 may, on application be revised
(a) by the Joint Commissioner, if the said order has been passed by an authority not above the rank of Deputy Commissioner; and
(b) by the Tribunal if the said order, has been passed by the Joint Commissioner or Commissioner.
(3) Every application for revision under this section shall be filed within sixty days of the communication of the order which is sought to be revised, but where the authority to whom the application lies is satisfied that the applicant had sufficient cause for not applying within time, it may condone the delay.
(4) The Commissioner may at any time but before the expiry of four years from the date of the order, either on his motion or on application, call for and examine the record of any proceeding in which any order has been passed by any other authority appointed under Section 9, for the purpose of satisfying himself as to the legality or propriety of such order and may, after examining the record and making or causing to be made such enquiry as he may deem to be necessary, pass any order which he thinks proper:
Provided that where an application is filed seeking revision of any order, such an application shall be entertained only if made within ninety days of the communication of the order sought to be revised.
(5) No order under this section shall be passed without giving the appellant as also the authority whose order is sought to be revised or their representative, a reasonable opportunity of being heard.
(6) Any revision against an appellate order filed and pending before the Joint Commissioner or a revision against any other order filed and pending before the Deputy Commissioner since before the enforcement of this part shall be deemed to have been filed and/or transferred respectively to the Tribunal and Joint Commissioner; and any revision relating to a period prior to the enforcement of this part against an appellate order, or against any other order passed by an authority not above the rank of Deputy Commissioner shall, after the enforcement of this part, be respectively filed before the Tribunal and the Joint Commissioner.
22. In 1984, Section 46 of 1981 Act was substituted by Section 10(2) of the Amendment Act, 1984. Section 10 of the Bihar Finance (Amendment) Act, 1984 reads as under:
(10) Amendment of Section 46 of Bihar Act V. 1981 (Part I).--(1) In Subsection (3) of Section 46 of the said Act for the word "sixty" the word "ninety" shall be substituted.
(2) For Sub-section (4) the following sub-section shall be substituted namely : "(4) (a) The Commissioner may, on his own motion call for and examine the records of any proceeding in which any order has been passed by any other authority appointed under Section 9, for the purpose of satisfying himself as to the legality or propriety of such order and may, after examining the record and making or causing to be made such enquiry as he may be deem necessary, pass such order as he thinks proper.
(b) The Commissioner may also revise any order passed by any authority appointed under Section 9 on application seeking revision or such order:
Provided that where an application is filed seeking revision of any order, such an application shall be entertained only if made within ninety days of the date of communication of the order sought to be revised Provided further that where the Commissioner is satisfied that the applicant had sufficient cause for not applying within time, he may condone the delay.
23. In Section 7 of the Bihar Finance (Amendment) Ordinance, 1989, Clause (b) of Sub-section (4) has been deleted with effect from May, 1989. The position now stand is that Section 46 provides for a revision of all appellate and other orders passed by the various authorities under the Act. The power of revision is vested with the Tribunal and the Joint Commissioner which power shall be exercised only on application by any person aggrieved, but subject to time limit prescribed in Sub-section (3) Le. 90 days of the communication of the order. By the said provision, Commissioner has also been vested extraordinary power to initiate suo motu revision proceeding at any time and no limitation has been prescribed.
24. However, power of the Commissioner to initiate suo motu revision proceeding has been delegated to the Joint Commissioner Commercial Taxes (Admn) against the orders of the Officers lower than his rank. Such power has been delegated in terms of notification issued by the then State of Bihar vide S.O. No. 795 dated 28th June, 1986. It is, therefore, clear that under Section 46(4) of the Act, the Commissioner may, on his own motion or on an application, revise the order passed by any authority subordinate to him. But under the delegated power, the Joint Commissioner Commercial Taxes can initiate revision proceedings on his own motion only and not on an application. In other words, the power to entertain application for initiating revision proceeding has been retained by the Commissioner and such power has not been delegated to the Joint Commissioner Commercial Taxes who has been delegated power to Initiate proceeding on his own motion only and not on an application.
25. The question, therefore, that falls for consideration is as to whether the power of initiation of suo motu revision proceeding by the Commissioner is unlimited or he must exercise that suo motu revision proceeding within reasonable time.
26. First of all, we would like to discuss the revisional power both on his own motion or on an application, conferred to the authority under different State Legislation dealing with sales tax.
27. Section 57 of Bombay Sales Tax Act, 1959 lays down the provisions of revision. Under this section Commissioner may, of his own motion, call far and examine the record of any order passed under the Act by any officer or person subordinate to him and pass such order thereon as he thinks just and proper. Proviso to the aforesaid section prescribes limitation of three years only for exercising power from the date of communication of the order sought to be revised. It further provides that no order in revision, shall be made by him after expiry of five years from such date. The proviso further provides that period of limitation of five years shall not apply incase where the point or points involved in the revision proceedings is the subject matter of any proceedings pending before the Tribunal, High Court or Supreme Court and in such case the Commissioner can decide the revision proceedings within eighteen months from the date of notice of hearing served on the assessee. It would be proper to quote Section 57 of the Bombay Sales Act, 1959, which reads as under:
57. Revision.--(1) Subject to the provisions of Section 56 and to any rules which may be made in this behalf,
(a) the Commissioner may, of his own motion, call for and examine the record of any order passed (including an order passed in appeal) under this Act or the rules made thereunder by any officer or person subordinate to him and pass such order thereon as he thinks just and proper:
Provided that no notice in the prescribed form shall be served by the Commissioner under this clause after the expiry of three years from the date of the communication of the order sought to be revised and no order in revision, shall be made by him hereunder after the expiry of five years from such date.
Provided further that the period of limitation of five years shall not apply in a case where the point or points involved in the revision proceedings is the subject-matter of any proceedings pending before the Tribunal, High Court or Supreme Court; and in such a case it shall be competent for the Commissioner to decide the revision proceedings within eighteen months from the date of notice of hearing served on the assessee after the conclusion of the proceeding in the Tribunal, High Court, or as the case may be, Supreme Court.
(1-A) Notwithstanding anything contained in the section or any other provisions of this Act, where the State Government or the Commissioner has initiated any proceedings before an appropriate Forum, against, a point, which is decided against the State by the judgment of the Tribunal, then the Commissioner may pass an order in revision or may issue a notice as provided in this section and pass an order in revision, as he thinks fit, as if the point was not so decided against the State, but shall stay the recovery of the dues including interest and penalty, if any, in so far as they relate to such point until the decision by the appropriate Forum.
(2) No proceedings in revision under this section shall be entertained upon application.
(3) No order shall be passed under this section which adversely affects any person, unless such person has been given reasonable opportunity of being heard.
(4) omitted.
28. Similarly Section 47 of the Delhi Sales Act, 1975 confers power upon the Commissioner to exercise power of revision. Under this section, Commissioner may, either of his own motion or on an application filed in accordance with such rules as may be prescribed, call for the records of any proceeding under this Act in which any such order has been passed and may make such inquiry or cause such inquiry to be made and, subject to the provisions of the Act, may pass such order thereon not being an order prejudicial to the dealer, as he thinks fit. Proviso to Section 47 provides that Commissioner shall not revise any order where an appeal against the order is pending before the Appellate Authority under or where if such appeal lies, the time within which it may be filed has not expired or where in the case of second appeal, the dealer has not waived his right of appeal. Sub-section (2) of Section 47 prescribes limitation of two years to exercise that power from the date of the order sought to be revised. Section 48 of the Delhi Sales Tax Act confers power to the Commissioner for rectification of mistakes. Section 48 reads as under:
48. Rectification of mistakes.--(1) The Commissioner or any person appointed under Sub-section (2) of Section 9 to assist him, may at any time within two years from the date of any order passed by the Commissioner or by that person, as the case may be, on his own motion, rectify any mistake apparent from the record and shall within a like period rectify any such mistake which has been brought to his notice by any person affected by such order:
Provided that no such rectification shall be made, if it has the effect of enhancing the tax or reducing the amount of refund, unless the Commissioner or the person appointed under Sub-section (2) of Section 9 to assist him, as the case may be, has given notice in writing to the person likely to be affected by the order of his intention to do so and has allowed such person a reasonable opportunity of being heard.
(2) The provisions of Sub-section (1) shall apply to the rectification of a mistake by an Appellate Authority under Section 43 as they apply to the rectification of a mistake by the Commissioner.
(3) Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in Sub-section (1) or Sub-section (2) the authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under Sub-section (1) or Sub-section (2), as the case may be, in relation to any matter other than the matter which has been so considered and decided.
(4) Where any such rectification has the effect of reducing the amount of the tax or penalty, the Commissioner shall, in the prescribed manner, refund any amount due to such person.
(5) Where any such rectification has the effect of enhancing the amount of the tax or penalty or reducing the amount of refund, the Commissioner shall recover the amount due from such person in the manner provided for in Chapter V. (6) Save as provided in the foregoing sub-sections, and subject to such rules as may be prescribed, any assessment made or order passed under this Act or the rules made thereunder by any person appointed under Section 9 or by the Appellate Tribunal may be reviewed by such person or by the Appellate Tribunal, as the case may be, suo motu or on an application made in that behalf.
(7) Before any order is passed under Sub-section (6) which is likely to affect any person adversely, such person shall be given a reasonable opportunity of being heard.
29. Section 67 of the Gujarat Sales Tax Act, 1969 lays down the provision of revision. Under this section, the Commissioner of his own motion within three years or an application made to him within one year from the date of any order passed by any officer, may call for and examine the record of any such order and pass such order as he thinks just and proper within twelve months from the date of service of notice for revision. This section also confers power to the Tribunal to call for and examine the record on application made to it against the order of Commissioner and pass such order as he thinks just and proper.
30. Section 40 of Haryana General Sales Tax Act, 1973 lays down the provision of revision. Under this section, Commissioner may of his own motion call for the record of any case pending before, or disposed of by any officer appointed under Sub-section (1) of Section 3 of the Act other than the order of Tribunal, for the purpose of satisfying himself as to the legality or to propriety of any proceedings or any order made therein and may pass such order as he may think fit. It further provides that no order shall be revised after the expiry of a period of five years from the date of the order.
31. Section 31 of the Himachal Pradesh General Sales Tax, 1968 confers power of revision. According to this section, the Commissioner may of his own motion call for the record of any proceeding which is pending before or have been disposed of by" any authority subordinate to him for the purpose of satisfying himself so as to the legality or propriety of such proceedings or order made therein and may pass such order in relation thereto as he may think fit. Similarly, Sub-section (3) of Section 31 confers power upon the Tribunal to entertain revision on an application made to him against the order of Commissioner within ninety days from the date of communication of the order and may call for and examine the record and pass such order as he thinks just and proper.
32. Section 21 of the Karnataka Sales Tax Act, 1957 confers power to the Joint Commissioner who may of his own motion call for and examine the record of any order passed or proceeding recorded under the provisions of this Act by any officer not above the rank of a Deputy Commissioner for the purpose of satisfying himself as to the legality or propriety of such order. Such power shall be exercised within a period of four years from the date on which order was passed. It further provides that the power under this section shall not be exercisable in respect of matters subject to appeal under Section 20 of the Act.
33. Section 35 of the Kerala General Sales Tax Act, 1963 confers power upon the Deputy Commissioner to call for and examine of his own motion, any order passed by the officer subordinate to him other than an Appellate Assistant Commissioner. However, the Deputy Commissioner shall not pass any order under this section after the expiry of four years from the date of passing of the order sought to be revised. Section 36 confers power of revision on application filed by any person of an order against which no appeal is provided. Section 37 confers power of revision to the Board of Revenue suo motu. According to this section, Board of Revenue may suo motu call for and examine any order or proceedings recorded under this Act by any officer subordinate to him.
34. Section 62 of Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 lays down the provision of revision. Under this section, the Commissioner either on his own motion or on an application by a dealer, call for the record of the proceeding and make such inquiry as he considers necessary and pass such order not being an order prejudicial to the dealer or person, as he thinks fit. Further, the Commissioner shall not revise any order where an appeal against the order is pending before any authority or where a second appeal against the order has been filed. It further provides that no revision shall lie against the order determining the liability of a dealer to pay tax or against a notice issued under after assessment. For better appreciation, Section 62 of the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 is reproduced herein below:
62. Power of revision by Commissioner.--(1) The Commissioner,
(a) either on his own motion, may; or
(b) on an application by a dealer or person made within the prescribed period from the date of order, shall, call for the record of the proceeding in which any order was passed and on receipt of the record may make such enquiry or cause such enquiry to be made, as he considers necessary and subject to the provisions of this Act may pass such order thereon, not being an order prejudicial to the dealer or person, as he thinks fit.
Provided that the Commissioner shall not revise any order under this sub-section
(a) where an appeal against the order is pending before any authority specified in Sub-section (1) of Section 61 or where, if such appeal lies, the time within which it may be filed has not expired; or
(b) where a second appeal against the order has been filed : Provided further, that no revision shall lie
(i) against an order determining the liability of a dealer to pay tax or against a notice issued under this Act for assessment except after an assessment order is passed; and
(ii) against an order passed under Section 72.
Explanation : An order by the Commissioner, declining interference shall not be deemed to be an order prejudicial to the dealer or person.
(2) The Commissioner may on his own motion call for the record of any proceeding in which any order under Sub-section (1) has been passed by an order to whom the Commissioner has delegated his powers under Section 62 in pursuance of the provisions of Section 46 and on receipt of the record may make such enquiry or cause such enquiry to be made he considers necessary and subject to the other provisions of this Act may pass such order thereon not being an order prejudicial to the dealer or person as he thinks fit.
(3) The Commissioner may on his own motion or on information received call for and examine the record of any proceeding under this Act if he considers that any order passed therein by any person appointed under Section 3 to assist him including any officer to whom he has delegated his powers under Sub-section (1) in pursuance of the provisions of Section 46, is erroneous insofar as it is prejudicial to the interest of the revenue, he may after giving the dealer or person a reasonable opportunity of being heard, after making or causing to be made such enquiry as he deems necessary pass such orders thereon, within one calendar year from the date of initiation of proceeding as the circumstances of the case justify, including an order enhancing or modifying the assessment or canceling the assessment and directing a fresh assessment:
Provided that no proceeding shall be initiated under this sub-section after the expiry of five calendar years from the date of the order sought to be revised.
Provided further that the Commissioner shall not revise any order under this sub-section where a second appeal against such order is pending or such appeal has been decided on merits.
(4) Any dealer or person objecting to an order passed by the Commissioner under Sub-section (3) may appeal to the Tribunal within sixty days of the date on which the order is communicated to him.
(5) The provisions of sub-sections (4) and (6) of Section 61 shall, mutatis mutandis, apply to appeals filed under Sub-section (4).
(6) Where the Commissioner considers that any order passed under Subsection (1) by his predecessor or any Additional Commissioner of Commercial Tax is erroneous insofar as it is prejudicial to the interest of revenue, he may file an appeal against such order before the Tribunal within two years from the date of such order. The provisions of Section 61 shall mutatis mutandis apply to the appeal filed under this sub-section.
(7) Notwithstanding anything contained in Sub-section (1), but subject to such restrictions and conditions as may be prescribed, where on an application made by a dealer the State Government is of the opinion that hardship is being caused to such dealer due to any order passed under any of the provisions of this Act other than an order under Section 32 or an order passed in pursuance or in consequence of an order by the Tribunal or the Civil Court, High Court, or Supreme Court, the State Government may direct the Commissioner to initiate proceedings under Sub-section (1) in respect of such order and on such direction to the Commissioner shall dispose of such proceeding according to law as if the proceedings had been initiated by him under Clause (b) of Subsection (1):
Provided that no such direction shall be given unless
(a) the dealer has exhausted the remedies available to him under Section 61, Sub-section (1) of this section, Section 71 or Section 72 as the case may be, or the period within which any remedy under the aforesaid provisions can be sought has expired; and, or
(b) his application for revision under Sub-section (1) has been rejected on merits : Provided further that such an application shall be entertained by the State Government only once.
35. Section 23 of the Orissa Sales Tax, 1947 deals with appeal and revision. Sub-section (1) of Section 23 prescribes for preferring appeal against the order of assessment. Sub-section (2) of Section 23 prescribes the power of the appellate authority. Sub-section (3) of Section 23 provides that any dealer or the State Government, dissatisfied with an appellate order, may within sixty days from, the date of receipt of such order, prefer an appeal to the Tribunal. Sub-section (4)of Section 23 confers power upon the Commissioner to revise, on his own motion, any order passed by any other authority other than the Tribunal. Proviso to Sub-section (4) provides that Commissioner shall not entertain any such application for revision, if the dealer or persons filing the same is having remedy by way of appeal.
36. Section 21 of the Punjab General Sale Tax Act, 1948 confers power of revision upon the Commissioner, who, may of his own motion, call for the record of any proceedings which are pending before, or have been disposed of by any authority subordinate to him, for the purpose of satisfying himself as to the legality or propriety of such proceedings. Sub-section (3) of Section 21 confers power upon the Tribunal to entertain application for revision against the order of Commission within ninety days from the date of communication of the order. Section 21A lays down provision of rectification of mistakes which is worth to be quoted herein below:
21A. Rectification of mistakes.--(1) The Commissioner or the officer on whom powers of the Commissioner under Sub-section (1) of Section 21 have been conferred by the State Government may, at any time within two years from the date of any order passed by him, of his own motion, rectify any mistake apparent from the record, and shall within a like period rectify any such mistake which has been brought to his notice by any person affected by such order.
Provided that no such rectification shall be made if it has the effect of enhancing the tax or reducing the amount of refund, unless the Commissioner or the officer on whom the powers of the Commissioner under Sub-section (1) of Section 21 have been conferred by the State Government has given notice in writing to such person of his intention to do so and has allowed such person a reasonable opportunity of being heard.
(2) The provisions of Sub-section (1) shall apply to the rectification of a mistake a Tribunal as they apply to the rectification of a mistake by the Commissioner.
(3) Where any such rectification has the effect of reducing the amount of the tax or penalty the Commissioner shall in the prescribed manner order the refund of the amount so due to such person.
(4) Where any such rectification has the effect of enhancing the amount of the tax or penalty or reducing the amount of the refund, the Commissioner shall order the recovery of the amount due from such person in the manner provided for in Sections 11 and 11B.
37. Section 87 of the Rajasthan Sales Tax Act, 1994 confers power of revision upon the Commissioner. According to this section, the Commissioner may call for and examine the record of any proceeding under this Act and if he considers that any order passed therein by Assistant Commissioner, Commercial Taxes Officer, Assistant Commercial Taxes Officer or incharge of a check post is erroneous and is prejudicial to the interest of the State revenue, he may, after having made or after having caused to be made such inquiry as he considers necessary, and having given to the dealer a reasonable opportunity of being heard, pass such order or issue such direction as he deems proper under the circumstances of the case. Sub-section (2) of Section 87 prescribes limitation of five years after expiry of which, the Commissioner cannot exercise that power.
38. Similarly, Section 33 of the Tamil Nadu General Sales Act, 1959 confers power of revision upon the Deputy Commissioner. Section 34 prescribes special power of Joint Commissioner of Commercial Taxes. According to this section, the Joint Commissioner of Commercial Taxes, may, of his own motion, call for and examine an order passed by the authority prescribed in different sections or order passed by the Deputy Commissioner under Section 33 of the Act if the order is prejudicial to the interest of the Revenue. He may initiate proceedings to revise, modify or set aside such order or proceeding as he may think fit. Sub-section (2) of Section 34, however, provides that the Joint Commissioner shall not initiate such proceeding if the time for appeal against the order has not expired or the order has been made the subject of an appeal to the appellate Tribunal, or of a revision of the special Tribunal, and further that more than five years have expired after the passing of the order. Section 34 is an important section which is worth to be quoted herein below:
34. Special powers of Joint Commissioner of Commercial Taxes.--(1) The Joint Commissioner of Commercial Taxes may, of his own motion, call for and examine an order passed or proceeding recorded by the appropriate authority Section 4-A, Section 12, Section 12-A, Section 14, Section 15 or Sub-section (1) or (2) of Section 16 or an order passed by the Deputy Commissioner under Sub-section (1) of Section 32 or Sub-section (3) of Section 33 and if such order or proceeding recorded is prejudicial to the interests of revenue, may make such inquiry or cause such Inquiry to be made and, subject to the provisions of this Act. may initiate proceedings to revise, modify or set aside such order or proceeding and may pass such order thereon as he thinks fit.
(2) The Joint Commissioner of Commercial Taxes shall not initiate proceedings against any such order or proceedings referred to in Sub-section (1), if--
(a) the time for appeal against the order has not expired; or
(b) the order has been made the subject of an appeal to the Appellate Tribunal or of a revision in the Special Tribunal; or
(c) more than five years have expired after the passing of the order:
Provided that if the order passed or proceeding recorded by the appropriate authority, or Deputy Commissioner referred to in Sub-section (1) involves an issue on which Special Tribunal has given its decision adverse to the revenue in any other proceedings, and an appeal to the Supreme Court against the order of the Special Tribunal is pending, the period of time between the date of the above said order of the special Tribunal and the date of the order of the Supreme Court shall be excluded in computing the period referred to in Clause (c).
(3) No order under this section adversely affecting a person shall be passed unless that person has/had a reasonable opportunity of being heard.
(4) In computing the period referred to in Clause (c) of Sub-section (2), the time during which the proceedings before the Joint Commissioner of Commercial Taxes remained stayed under the order of a Civil Court or other competent authority shall be excluded.
39. Section 10-B of the Uttar Pradesh Trade Act, 1948 lays down the provision of revision which reads as under:
10-B. Revision by Commissioner.--(1) The Commissioner or such other officer not below the rank of Deputy Commissioner as may be authorised in this behalf by the State Government by notification may call for and examine the record relating to any order (other than an order mentioned in Section 10-A) passed by any officer subordinate to him, for the purpose of satisfying himself as to the legality or propriety of such order and may pass such order with respect thereto as he thinks fit.
(2) No order under Sub-section (1) affecting the interest of a party adversely shall be passed unless he has been given a reasonable opportunity of being heard.
(3) No order under Sub-section (1), shall be passed--
(a) to revise an order, which is or has been the subject-matter of an appeal under Section 9, or an order passed by the appellate authority under that section; Explanation : Where the appeal against any order is withdrawn or is dismissed for non-payment of fee payable under Section 32 or for non-compliance of Sub-section (1) of Section 9, the order shall not be deemed to have been the subject-matter of an appeal under Section 9;
(b) before the expiration of sixty days from the date of the order in question;
(c) after the expiration of four years from the date of the order in question or after the expiration of two years from the date of commencement of Section 19 of the UP Sales Tax (Amendment and Validation) Act, 1978. whichever is later.
40. Last but not the least, Section 80 of the West Bengal Sales Tax Act, 1984 confers power of suo motu revision by the Commissioner, According to this section, the Commissioner may, of his own motion, revise any assessment order or orders passed by a person appointed under Sub-section (1) of Section 3 to assist him. Section 81 provides that the Commissioner may, upon application, revise any order other than the order referred to in Section 82 and an order of assessment against which an appeal lies under Section 79. Section 82 confers power upon the appellate authority and Revisional Board to revise any final appellate or Revisional order from an order of assessment upon application filed by the person concerned.
41. From perusal of relevant provisions of the statutes of different States, it is manifestly clear that the authorities have been conferred jurisdiction not only to revise the orders passed by the authorities subordinate to it, but also initiate suo motu revision for seeing the correctness, legality and validity of the order passed by the authorities under the Act. But there are limitations prescribed under the Act.
42. As noticed above, under the Bombay Sales Tax Act, the Commissioner can exercise his power of suo motu revision before the expiry of three years from the date of communication of the order sought to be revised. Sub-section (2) of Section 57 categorically provides that such proceeding should not be entertained upon application. The Delhi Sales Tax Act empower the Commissioner to rectify any mistake apparent from the record within two years from the date of the order. The Karnataka Sales Tax Act confers power to the Joint Commissioner to suo motu revise the order passed by any authority subordinate to him within four years from the date on which order was passed. However, it has been categorically made clear that such power shall not be exercised in respect of matters subject to appeal under Section 20 of the Act. In the same line, the Madhya Pradesh Act although confers power upon the Commissioner to suo motu initiate proceeding and make enquiry and pass order, but such order may not be prejudicial to the dealer. The Orissa Sales Tax Act also put a restriction that such application for revision shall not be entertained by the Commissioner if the dealer or person filing such application having remedy by way of appeal. Section 34 of the Tamil Nadu General Sales Tax Act, 1959 although confers power upon the Joint Commissioner to revise or modify the order passed by any authority subordinate to him of his own motion, but the Joint Commissioner shall not initiate such proceeding if the order has been made subject of an appeal to the Appellate Tribunal or of a revision in the Special Tribunal.
43. Coming back to the provisions of the Act in question Le. Bihar Finance Act, 1981, the power conferred upon Commissioner under Section 46(4) of the Act has been delegated to the Joint Commissioner. Sub-section (1) of Section 46 provides that the order passed on an appeal under Section 45 shall, on application, be revised by the Tribunal. According to Sub-section (2), any order passed by an authority other than the Commissioner shall be revised by the Joint Commissioner, if the said order has been passed by an authority not above the rank of Deputy Commissioner. Similarly, if the order is passed by the Joint Commissioner or the Commissioner, the same shall be revised by the Tribunal. The power of revision shall be exercised by the Tribunal or by the Commissioner or by the Joint Commissioner only on an application within ninety days from the date of communication of the order sought to be revised. Sub-section (4) of Section 46, however, confers power to the Commissioner to exercise power of revision suo motu or an application passed by any authority appointed under Section 9 of the Act. However, the power to initiate suo motu revision under Section 46(4) has been delegated to the Joint Commissioner Commercial Taxes.
44. The extent and power of revision conferred upon the revisional authority under different statute, referred to herein above, came for consideration before the Supreme Court and different High Courts.
45. In the case of Swastick Oil Mills Ltd. v. H.B. Munshi , the Supreme Court considered the power of revision under the provisions of Bombay Sales Tax Act, 1959. On the question of power of revisional authority, the Supreme Court held that whenever a power is conferred on an authority to revise an order, the authority is entitled to examine the correctness, legality and propriety of the order and to pass such suitable orders as the authority may thing fit in the circumstances of the particular case before it. Their Lordships held that the proceedings for revision, if started suo motu, must not, of course, be based on a mere conjecture and there should be some ground for invoking the revisional powers. Once those powers are involved, the actual interference must be based on sufficient grounds and if it is considered necessary that some additional enquiry should be made to arrive at a proper and just decision, there can be no bar to the revising authority holding a further enquiry or directing such an inquiry to be held by some other appropriate authority. On the question regarding limitation of time within which such power should be exercise, their Lordship held:
7. The last submission made by Mr. Desai was that, if it be held that the revisional powers are sought to be exercised under the Act of 1946, it should be held that the proceedings sought to be instituted are barred by time, because limitation of a reasonable time, within which the revisional powers are to be exercised, must be implied in the statute itself. Section 22 of the Act of 1946 and Section 31 of the Act of 1953 do not lay down any limitation for exercise of the power of revision by a Deputy Commissioner suo motu, and we are not prepared to accept that any such limitation must be necessarily read in the two Acts. In support of his proposition that such a limitation must be read by us, Mr. Desai referred to the decision of this Court in the State of Orissa v. Debakl Debi. That case, however, has no relevance at all, because, in the Orissa Sales Tax Act, there was a proviso in general terms laying down that no order "assessing the amount of tax shall be passed after the lapse of 36 months from the expiry of the period", and it was held that this provision was. in substance, not a real proviso to the section in which it was placed, but was, in fact, a period of limitation prescribed for all orders of assessment made under any other provision of the Act. In the Bombay Sales Tax Acts of 1946 and 1953, there is no such general provision prescribing a period of limitation for making an assessment and, even though the effect of the order of the Deputy Commissioner passed in revision may be to bring about an assessment to tax of turnover which was set aside by the Assistant Collector in appeal, such an assessment does not come under any provision relating to limitation.
46. In the case of State of Kerala v. K.M.C. Abdulla & Co. , the facts of the case was that the respondent assessee submitted returns for the year 1950-1951 under the Madras General Sales Tax Act, 1939 showing a gross turnover in respect of their business and claimed exemption in respect of turnover on the plea that it represented commission sales which were exempted from tax under the Act. The Deputy Commercial Tax Officer granted exemption from tax on the commission sales by order dated 19.2.1952 and assessed the tax payable on the taxable turnover of the respondent. Sometime before February, 1956, the Deputy Commissioner of Commercial Taxes, Coimbatore Division called for the record of the case of the respondent for the assessment year in question in exercise of power under Section 12(2) of the Act and directed an enquiry into the validity of the claim about exemption in respect of the commission sales under Section 8 of the Act. The Deputy Commissioner accordingly issued show cause notice which ultimately resulted in enhancement of tax and revised the order. In appeal filed by the assessee, the Sales Tax Appellate Tribunal, Madras held that the Assessing Officer had acted in excess of his jurisdiction. Against the order passed by the Tribunal, the State of Kerala moved the High Court. The High Court held that in dealing with the proceedings under Section 12(2) of the Madras General Sales Tax Act, the revising authority is restricted to the record before the Assessing Authority and his order passed on fresh evidence could not be sustained. The State of Kerala then moved the Supreme Court against the order of the Kerala High Court. The Supreme Court considering the jurisdiction of the revising authority, held as under:
15. Turning then to the jurisdiction which the revising authority may exercise under Section 12(2), attention must first be directed to the phraseology used by the legislature. The Deputy Commissioner is thereby invested with power to satisfy himself about the legality or propriety of any order passed or proceeding recorded by any officer subordinate to him, or the regularity of any proceeding of such officer, and to pass such orders with respect thereto as he thinks fit. For exercising this power, he may suo motu or an application call for and examine the record of any proceeding or order. There is no doubt that the revising authority may only call for the record of the order or the proceeding, and the record alone may be scrutinised for ascertaining the legality or propriety of an order or regularity of the proceeding. But there is nothing in the Act that for passing an order in exercise of his revisional jurisdiction, if the revising authority is satisfied that the subordinate officer has committed an illegality or impropriety in the order or Impropriety of the order or irregularity in the proceeding, he cannot make or direct any further enquiry. The words of Sub-section (2) of Section 12 that Deputy Commissioner "may pass such order with respect thereto as he thinks fit" mean such order as may in the circumstances of the case for rectifying the defect be regarded by him as just. Power to pass such order as the revising authority thinks fit may in some cases include power to make or direct such further enquiry as the Deputy Commissioner may find necessary for rectifying the illegality or impropriety of the order or irregularity in the proceeding. It is therefore not right baldly to propound that in passing an order in the exercise of his revisional jurisdiction, the Deputy Commissioner must in all cases be restricted to the record maintained by the officer subordinate to him, and can never make enquiry outside that record.
47. In the case of Gyani Ram Bhagat Ram v. State of Bihar 1996 BLJR 878, the contention of the assessee before the assessing officer was that the dispatch of chillis was a sale which took place outside the State of Bihar and was, therefore, not taxable under the Bihar Sales Tax. When the Assessing Officer rejected the contention and included the said amount in his turnover, he went in appeal against to the Assistant Commissioner of Sales Tax, Patna Division, Patna, who held that the sale of chillis was exempted from taxation as that was sale outside the State of Bihar. On some other points, the dealer failed to get redress before the appellate authority and, therefore, he went in revision in regard to those points where he had failed. That authority remanded the case to the Taxing Officer with certain directions in regard to two points, namely, the discrepancy of the figure to the extent of Rs. 2,522/- in the account books and the return and the apportionment, of Arhat charges in the turnover under various categories. When the matter went, on remand, before the Assessing Officer, he in disregard to the exemption of the sales of chillis as allowed by the Commissioner included the same in the assessee's turnover as he had done at the first instance. Against that, the dealer again went in appeal but without success. His revision before the Deputy Commissioner also met with the similar fate, He came before the Board of Revenue without any success. Ultimately he asked for a reference to be made under Section 25 of the Act to the High Court. The question formulated was "whether the Superintendent of Sales Tax had jurisdiction to go beyond the terms of the remand order and to levy Bihar Sales Tax on the aforesaid dispatch of chillis outside Bihar which had been exempted from tax by his superior officer." Answering the reference, the Division Bench held:
4. It was contended by the learned Counsel appearing for the State of Bihar that the Deputy Commissioner, the revisional authority, though approached by the assessee for limited purposes in regard to which he felt aggrieved by the disallowance of his prayer by the lower appellate authority (the Assistant Commissioner of Commercial Taxes), had powers under the Act to revise the entire appellate order or to set it aside. He referred to Section 24(4) of the Act which provides that subject to such rules as may be prescribed and for reasons to be recorded in writing, the prescribed authority may, upon application or of its own motion, revise any order passed under this Act. 'Learned Counsel relied upon the powers of the revising authority to revise an order of its own motion : but that provision refers that power can only be exercised subject to the rules as may be prescribed and for reasons to be recorded in writing. The relevant rule is Rule 36(5)(a), which empowers only the Commissioner, who is authorized, of his own motion, to revise any order passed by the Assistant Commissioner. The Board of Revenue has also similar power to revise of its own motion. No power in this respect is given to the revising authority when it is exercised by the Deputy Commissioner. It is, therefore, clear that the Deputy Commissioner had no power in the present case to revise of his own motion the whole order of the Assistant Commissioner and to set aside his entire appellate order, if that was not asked for by the assessee. The application made by the assessee which alone gave jurisdiction to the Deputy Commissioner, was limited to the extent to which the assessee asked for revisional interference, and not beyond that. In that view of the matter, the remand order by the Deputy Commissioner cannot be taken to have set aside the exemption from taxation allowed by the appellate authority. Secondly, on reading the remand order as a whole it can be legitimately contended that the Deputy Commissioner wanted that the whole appellate order even in respect of the exemption from taxation of the sales of chillis was to be set aside. In either view of the matter, therefore, the inclusion of the sales of chillis in the turnover of the dealer in the assessment made by the Superintendent of Sales Tax, after remand of the case by the Deputy Commissioner, was without the authority of law and outside his jurisdiction. This question is, therefore, answered in the negative and against the Department.
48. In the case of Pathikonda Balasubba Setty v. Commissioner of Income Tax, Mysore , the power of Tribunal has been discussed in different Tax Acts. In that case the Income Tax Officer estimated the gross profit under two of the various businesses carried on by the assessee. The Officer found suspicious entries but did not make any addition specifically for that purpose. A further addition of Rs. 20,000/- was made on account of unexplained stock. On appeal, the Appellate Assistant Commissioner gave substantial relief on the addition to the gross profit but did not interfere with the addition of Rs. 20,000/-. The Tribunal, on an appeal by the department, set aside the entire order of the Appellate Assistant Commissioner and directed him to decide the appeal afresh. On a reference to the High Court at the instance of the assessee on the question whether the Tribunal had jurisdiction to set aside the entire order of the Appellate Assistant Commissioner and direct him to dispose of the appeal afresh, Mysore High Court held that powers of the Tribunal are limited to the subject-matter of the appeal. The Tribunal had no power to make an enhancement beyond the figure fixed by the officer. It can only deal with the two additions relating to the gross profit but not with the other addition relating to unexplained stock and hence, had no jurisdiction to set aside the entire order of the Appellate Assistant Commissioner.
49. In the case of Tel Utpadak Kendra v. Deputy Commissioner of Sales Tax (1981) 48 STC 248, the appellant is a partnership firm, carrying on the business of manufacturing and selling vegetable oil. The Sales Tax Officer estimated the turnover for the calendar year 1971 and made an order dated 26th March, 1973, levying sales tax at Rs. 73,198.62 and a penalty of Rs. 36,197.64. On the same date, another assessment order was made for the first six months of the year 1972, whereby the sales tax was computed. The two assessment orders were separately made under Section 33 of the Bombay Sales Tax Act, 1959. Against the assessment and penalty orders, the appellant appealed under Section 55 of the Act to the Assistant Commissioner. By a common order dated 29th September, 1973, the Assistant Commissioner reduced the quantum of the turnover and, consequently, the tax liability and the penalty. Not fully satisfied by the relief granted, the appellant proceeded in Second Appeal to the Maharashtra Sales Tax Tribunal. During the pendency of the appeals before the Tribunal, the Deputy Commissioner, Nagpur issued two notices requiring the appellant to show cause why the appellate orders passed by the Assistant Commissioner should not be revised under Section 57 of the Act. The appellant objected to the exercise of revisional power by the Deputy Commissioner during the pendency of the appeals before the Tribunal. The Deputy Commissioner rejected the objection. Against the order of rejection, the appellant filed two appeals before the Tribunal. The Tribunal dismissed the appeals. At the same time, the Tribunal adjourned the two second appeals filed by the appellant against the appellate orders. The Tribunal took the view that its deciding those appeals would result in nullifying the revisional power vested in the Deputy Commissioner. The appellant, thereafter, filed writ application in the Bombay High Court against the order of Deputy Commissioner rejecting its preliminary objection. The point pressed by the appellant before the High Court was that the Commissioner of Sales Tax could not exercise his revisional power against the appellate order of the Assistant Commissioner when a second appeal against that order was pending before the Tribunal. The High Court turned down the plea by its order 5th July, 1978 observing that it was always" open to the Commissioner to interfere in revision with an order prejudicial to the revenue notwithstanding that such order may be already under appeal before the Tribunal. The High Court felt compelled to take this view because, in its opinion, the statute did not provide any other Forum or jurisdiction for protecting the interests of the revenue. It relied on its earlier judgment in Commissioner of Sales Tax v. Motor and Machinery Manufacturers Ltd. (1976) 38 STC 78. While allowing the appeal, their Lordships observed:
It is evident then that in a second appeal under Sub-section (2) of Section 55 of the Bombay Sales Tax Act, the Tribunal has power to enhance the assessment. That being so, plainly it is open to the Revenue to invoke that power in a pending second appeal filed by the dealer before the Tribunal. The High Court is in error in concluding that the power to enhance an assessment can be discovered only in the revisional jurisdiction of the Commissioner and nowhere else. The compulsion which drove the High Court to the construction placed by it on Sub-section (1) of Section 57 of the Act does not have substance, and the entire sub-stratum underlying the High Court judgment must give way.
On the view which finds favour with us we cannot approve of the law laid down on the point in Motor and Manufacturers Ltd. nor do we see any overlapping of, or conflict in, the powers of the Commissioner and the Tribunal referred in Oriental Rubber Industries Pvt. Ltd. As regards the observation of this Court in Amritlal Bhogilal, that was not a case where a subordinate authority sought to exercise its revisional jurisdiction over an order pending in appeal before a superior authority. No support can be derived by the respondent from that case. For the same reason, Ramlal Onkarmal v. CIT decided by the Assam High Court, Kelpunj Enterprises v. CIT, decided by the Kerala High Court and Russel Properties (P) Ltd. v. A. Chowdhury. decided by the Calcutta High Court, placed before us by the respondent have no relevance.
Our attention has been invited to Section 34 of the Maharashtra Agriculture Income Tax Act, 1962 where when defining the revisional power of the Commissioner the Legislature has expressly incorporated a provision prohibiting the Commissioner from exercising his revisional power against an order pending in appeal before the Assistant Commissioner or Tribunal. It is urged that if a similar prohibition was intended against the Commissioner under the Bombay Sales Tax Act, an express provision to that effect would have been made. Reference has also been made to the provisions in the Customs Act, 1962 conferring revisional jurisdiction. We are not impressed by the contention. The absence of an express provision cannot detract from the conclusion reached by us -- a conclusion flowing from the necessary intendment of the statute -- that the Commissioner being a subordinate authority to the Tribunal, cannot interfere with an order pending in appeal before the Tribunal, and further that the interest of the Revenue is protected by the power of enhancement vested in the Tribunal while disposing of a second appeal filed by a dealer.
50. In the case of Baijnath Biswanath v. State of Assam (Gauhati) and Ors. (2003) 133 STC 300, the Gauhati High Court discussed the revisional power of the Commissioner conferred under Section 20(1) of the Assam Finance (Sales Tax) Act, 1956 and held as under:
7. To overcome the above controversy, Section 263 of the Income-tax Act was amended and explanation was incorporated for removal of doubts. The legislative will is clear and unambiguous. It has given full powers to the Commissioner to make or cause to be made such enquiry as he deems necessary to ascertain the lawfulness of the order and if on such enquiry, the Commissioner finds that the order is, erroneous so far as it is prejudicial to the interest of revenue, it may pass such orders as it deems fit. The decision in the case of Ganga Properties came up for consideration before the Supreme Court in the case of Commissioner of Income-Tax v. Shree Manjunatheshware Packing Products and Comphor Works , wherein the Supreme Court held:
Such a narrow interpretation of the word 'record' was justified. In view of the object of the provision and the nature and scope of the power conferred upon the Commissioner. The revisional power conferred on the Commissioner under Section 263 is of wide amplitude.... Obviously, as a result of the enquiry he may come into possession of new material and he would be entitled to take that new material into account. If the material, which was not available to the Income-tax Officer when he made the assessment could thus be taken into consideration by the Commissioner after holding an enquiry, there is no reason why the material which had already come on record though subsequently to the making of the assessment cannot be taken into consideration by him.
As indicated earlier, the suo motu power of revision conferred on the Commissioner is of wide amplitude. He can revise an assessment when the order of assessment passed is not in accordance with law in consequences of which the State is deprived of its lawful revenue. The power reposed on the Commissioner, no doubt, is a power of judicial nature and, therefore.such power is to be exercised lawfully and with due application of mind. The power cannot be exercised mechanically or at the behest of some other authority other than on the own discretion of the assigned officer. The Commissioner, therefore, is not to exercise his discretion on the dictation of some other authority. But in the instant case, the action of the Commissioner cannot be faulted simply because of his reference in the impugned order about the public debate on the high price including debate in the assembly and the audit objection. The decision of the Commissioner, as it appears from the order, was not affected by any of those debates. The Commissioner, however, fell into error on relying upon the market information and the report from the Department of Agriculture in determining the sale price. In the absence of any authentic material regarding sale price on the date of assessment, the Commissioner ought not to have acted on such information. The minimum rate and the maximum rate, as indicated by the Commissioner, which led him to arrive at a particular sale price/market price, cannot, therefore, be legally sustained. The revisional authority is required to act on materials on record. A decision to be sustained lawfully, is to be based on materials, otherwise the decision will suffer from the vice of perversity.
The Commissioner is authorised to take any decision as he deems fit and is free to draw any inference from the facts available. He is, however, to act on factual material and not on conjectures, assumptions and presumptions, else the decision will suffer from the vice of perversity. In this case, the revisional authority in determining the price of onions referred to same prices which was collected by the Department from the market as well as from the Agricultural Marketing Board, Assam. The sale price depends on the market force and in the absence of any valid piece of evidence like sale receipts of the commodity indicating the price or any other acceptable evidence, the said average price relied on by the Commissioner cannot be accepted as a lawful evidence for the aforesaid periods. The decision in respect of determining the sale price, therefore, cannot be upheld.
51. In the case of Mukunda Dairy Products Pvt. Ltd. v. Commercial Tax Officer Narasaraopet. Guntur and Anr. (2006) 144 STC 177, the fact was that the petitioner-company was a dealer carrying business of sale and purchase of milk products. It was assessed under the Andhra Pradesh Sales Tax Act, 1957. The Assessing Officer rejected the claim of the petitioner that the entire turnover is exempted from tax and accordingly, levied the tax. The petitioner preferred appeal. The appellate authority allowed the appeal and held that the cream produced and marketed by the petitioner through the process called "churning" is eligible for exemption as claimed by it. The order of the assessing authority was accordingly set aside. Petitioner thereafter filed representations including the representation requesting the Commercial Tax Officer to refund the amount deposited for maintaining the appeal. Petitioner again filed representation requesting the Commercial Tax Officer at least to adjust the amount refundable towards the value added tax which also there has been no response. Petitioner then moved the High Court under Article 226 of the Constitution of India for declaration that the action of the respondent in not refunding the amount is illegal, arbitrary and without any authority of law. In the counter affidavit filed by the Deputy Commercial Tax-Officer, it was stated that a show cause notice has already been issued by the Additional Commissioner proposing to set aside the appellate order. The Andhra Pradesh High Court taking notice of all these facts observed that the department has made an attempt to over reach the orders that were likely to be passed in this writ petition. The Court observed:
7. Be that as it may. There is no provision under the Act which enables the authorities to withhold refund of the amount merely because a show cause notice is issued proposing to revise the appellate order. We fail to appreciate as to how the department could sit over the matter and refuse to refund the amount to the petitioner to which it is lawfully entitled to in law. We are not able to appreciate the averments made in the counter-affidavit, which are in the nature of grounds attacking the order passed by the appellate authority. There is no answer forthcoming from the department as to how they could refuse to refund the amounts to the petitioner as is required under Section 21 (2) of the Act. The high handed and arbitrary action of the respondents is required to be deprecated and we accordingly do so.
52. From the ratio decided by the Supreme Court and different High Courts law with regard to the revisional power has been set at rest. The revisional authority, while exercising power of revision under the Taxation Law, is entitled to examine the correctness, legality and propriety of the order and there is no bar to hold further enquiry for coming to the right conclusion. But while exercising power of revision against the revised assessment order in terms of the order passed by the appellate authority, the revisional authority cannot set aside that part of the order which has been affirmed by the appellate authority while remanding the matter to the assessing authority.
53. So far the power delegated to the Joint Commissioner Commercial Taxes under Section 46(4) of the Act to initiate suo motu revision proceeding is concerned, undisputedly such power cannot be exercised on the basis of application filed by the Deputy Commissioner of Commercial Taxes or any other authority when a regular revision by the Commissioner is provided under the Act on the basis of an application filed by the aggrieved party. In our considered opinion, therefore, initiation of suo motu revision proceeding on the basis of an application filed by the Deputy Commissioner of Commercial Taxes with specific request to revise the order, shall be wholly without jurisdiction for the reason that jurisdiction is vested with the Commissioner, Commercial Taxes.
54. The next question which needs consideration is as to within what time power of suo motu revision can be exercised by the authority.
55. In the case of Government of A.P. and Ors. v. Kalleti Chengaiah , the Supreme Court considering the time for exercising suo motu revisional power under the Tenancy Law observed:
4. It is settled law that the power of suo motu revision can be exercised within reasonable time. When it is held that the power may be exercised from time to time, what would be the reasonable time depends upon facts of each case. It is seen that in this case the orders were issued by the Settlement Officer contrary to the provisions and it was not known till an enquiry was held and until it came to light that the exercise of power by the Settlement Officer under Section 11 (a) of the Act was clearly in contravention of the provisions of the Act. Under those circumstances, the Director was constrained to exercise the power. It is also seen that when the record was called for it came to light that the record was destroyed. It would be obvious that the persons behind the scheme had managed to see that the records were destroyed. Considered from this perspective, we are of the view that the High Court was clearly in error in interfering with the order of the Director of Settlement.
56. In the case of M/s. S.B. Gurbaksh Singh v. Union of India and Ors. , the question with regard to limitation in entertaining the revision by the Commissioner under the Bengal Finance (Sales Tax) Act, 1941 came for consideration. In that case the appellant was assessed to sales tax by the Sales Tax Officer for the year 1955-1956 by order dated 23.11.1959. The Assistant Commissioner vide order dated 11.2.1960 held that assessment for the two quarter is time barred and ordered for reassessment for the third and fourth quarter and the Sales Tax Officer passed fresh assessment order on 21.3.1960. The Commissioner exercising revisional power under Section 20(3) of the Act revised the appellate order of the Assistant Commissioner on 29.7.1960 and held that no part of assessment for the year 1955-1956 is time barred. The assessee ultimately came to Supreme Court assailing the order on the ground that in fact the orders are the order of remand for fresh assessment to the assessing authority they also must pass their orders within the periods prescribed. It was also assailed that Commissioner while exercising power in revision cannot overstay and ignore the period of limitation of three years provided in Section 11-A of the Act. Answering the question, their Lordships observed:
7. Section 20 deals with an appeal, revision or review. If the appeal is filed in time the Appellate Authority in disposing of any appeal filed under Sub-section (1) may
(a) confirm, reduce, enhance or annul the assessment; or
(b) set aside the assessment and direct the assessing authority to make a fresh assessment after such further inquiry as may be directed.
For exercise of the appellate power in any of the manners mentioned above, there is no limitation of time. If assessment can be reduced in appeal at any time it can be enhanced also without the fetter of time. If the assessment is set aside and the case remanded to the assessing authority to make a fresh assessment then the authority, because of the proviso to Section 11 (2-a), is obliged to make the fresh assessment within four years of the appellate order. Subsection (3) of Section 20 reads thus:
Subject to such rules as may be prescribed and for reasons to be recorded in writing, the Commissioner upon application or of his own motion may revise any assessment made or order passed under this Act or the rules thereunder by a person appointed under Section 3 to assist him, and subject as aforesaid, the Chief Commissioner may, in like manner, revise any order passed by the Commissioner.
The Commissioner can revise any assessment made or order passed under the Act including the order of the Appellate Authority. The limits of the revisional power are not circumscribed in Sub-section (3), but it goes without saying that they will be akin to the power of the Appellate Authority as mentioned in Sub-section (2). The revisional authority obviously, as pointed out by this Court in the case of State of Kerala v. K.M. Cheria Abdulla and Company should not trench upon the power expressly reserved by the Act or the rules to other authorities and cannot ignore the limits inherent in exercise of those powers. Section 11-A is one such power which deals with assessment and reassessment of tax in case of an escaped assessment or under assessment. Exercise of that power is subject to the limitations provided therein. In Rule 66(2) of the Delhi Sales Tax Rules, 1951 a period of limitation of 60 days has been provided for the filing of an application in revision which can be extended under the proviso appended to that rule on sufficient cause being shown. But no such limitation has been provided for the sua motu exercise of the revisional power.
12. In Commissioner of Commercial Taxes, Bihar, Patna v. Sheodutta Prasad Chandeshwar Singh, the review proceedings initiated by the assessing authority was held to be barred under the proviso to Section 13(6) of the Bihar Sales Tax Act, 1947. But distinguishing the said decision another Bench of the Patna High Court held in Commissioner of Commercial Taxes, Bihar v. Ashoka Marketing Ltd., that the order of review passed by the Deputy Commissioner was not barred by time. The decision of the Patna High Court in Commissioner of Commercial Taxes, Bihar, Patna v. Sheodutta Prasad Chandeshwar Singh on identical facts was followed in Commissioner of Commercial Taxes, Bihar v. Shiva Pujan Prasad Bhagat. But the principle decided in those cases cannot help the appellant. It may well be that if the assessing authority itself exercises the power of review it cannot circumscribe the bar of limitation provided in Section 11(2-a). But it will be unjust, unreasonable and impracticable to say that the said bar of limitation must also continue to run at all stages of the proceedings, namely, the appellate, revisional, reference, writ or any other stage.
13. It was pointed out by this Court in Swastik Oil Mills case that the Deputy Commissioner when seeking to exercise his revisional powers was not encroaching upon the powers reserved to other authorities. The powers were not exercised for the purpose of assessing or re-assessing an escaped turnover. The revisional powers were sought to be exercised to correct what appeared to be an incorrect order passed by an Assistant Collector and for such a purpose proceedings could not possibly have been taken under Section 11-A. In the instant case also it could not be disputed that the view taken by the Assistant Commissioner in appeal was obviously wrong. The Commissioner while correcting that mistake in exercise of his revisional power was not doing anything which the Sales Tax Officer was empowered to do under Section 11-A. He was merely setting right the illegality in the appellate order.
57. In the case of State of Gujarat and Anr. v. Patel Ramjibhai Danabhai and Ors. , the question that falls for consideration before the Supreme Court was as to whether provisions of Sections 33(6) and 35 of Bombay Sales Tax Act, 1959 which are in parimateria with 1953 Act offended Article 14 of the Constitution of India are void. Section 33(6) of the confers power upon the Commissioner to assess to the best of his judgment amount of tax payable by the dealer, if he has reason to believe that a dealer is liable to pay tax but has failed to apply for registration within time. Section 35(1) confers power upon the Commissioner to proceed to assess or re-assess the amount of tax on certain grounds. On the question of limitation in exercise of such power Supreme Court observed:
27. It is true that no limitation has been prescribed for taking action under Section 33(6) against an unregistered dealer falling thereunder. But, there is rational basis for not putting any restriction as to the length of time within which action can be taken under Section 33(6). The reason is that tax evasion by the unregistered dealers in this class because of the clandestine modus operandi adopted by them, and wholesale disregard of the law, is more contumacious in character, more sinister in its effect both on the lawabiding tax-payers and the collection of public revenue, and more difficult to detect than tax evasion by a registered dealer. When a dealer applies for and obtains a registration certificate under the Act, he thereby admits his liability to pay tax. In his case, the Sales Tax Authorities, have basic information, in pursuance of which they can, by the exercise of due vigilance, check and detect any tax evasion by him within a reasonable time. This reasonable time is the period of limitation fixed by the legislature, in its wisdom, in Section 35. But the case of a tax evading unregistered dealer is different. In his case, the authorities have on their record no such basic information such as the registration record which would supply them a "lead" to work upon. For lack of information, or want of adequate staff, resources and time at the disposal of the Department, and the secretive nature of the modus operandi, tax evading activities of an unregistered dealer may go on undetected for years on end. That is why for taking action under Section 33(6) against a tax evading unregistered dealer, the legislature has not fixed any period of limitation. Thus, putting the unregistered dealer who, though liable to pay tax, fails to get himself registered and does not pay any tax, in a separate class, to be dealt with under Section 33(6), differently from other dealers falling under Section 35, rests on intelligible differentia having a rational nexus with the object of preventing tax evasion.
28. The question of limitation apart, it cannot be said that the procedure provided in Section 33(6) is more onerous than the one specified in Section 35. The requirement as to issue of a notice to the defaulter and giving of an opportunity of being heard is a common feature of both the sections. It is true that under Section 33(6), the assessment is made on "best judgment" basis. Nevertheless, it cannot be made arbitrarily or capriciously. It has to be made after taking into account all relevant material gathered by the Taxation Officer or produced before him by the assessee in response to the notice. If an assessment under Section 33(6) is made upon inadequate materials, but on honest and fair guesswork, then it will be but due to the deliberate default of the assessee in supplying the necessary information. The differential mode of assessment under Section 33(6) is thus founded upon rational criteria.
58. In the case of "Bharat Steel Tubes Ltd. and Anr. v. State of Haryana and Anr. , answering the question as to whether order of assessment under the Punjab General Sales Tax Act, 1948 would be barred by limitation held as under:
14. The short question that really falls for examination in this case is whether an order of assessment under Sub-section (3) of Section 11 of the Punjab Act or Section 28(3) of the Haryana Act can now be completed or would that be barred by limitation. Undoubtedly, the assessment proceedings have been very delayed. As the material placed before us shows, the assessee had gone before different Courts from time to time to ask for injunction against the completion of assessment but that trial appears to have started in December 1980 when a suit was filed and injunction was obtained. Though notices were issued under Section 11(2) of the Punjab Act or Section 28(2) of the Haryana Act within a reasonable period from the filing of returns for the respective quarters in the assessment years under consideration, further action has not been taken by the assessing officer to complete the assessments. But as we have said above, in the absence of any prescribed period of limitation, the assessment has to be completed within a reasonable period. What such reasonable period would be. would depend upon facts of each case. One view can be that it should be a period not exceeding five years as the legislature has fixed the limitation of five years for completing assessments in case of escaped turnover. Unless there be an assessment made soon after the period to which such assessment relates, the question of consideration of escapement would indeed become difficult to consider and examine. We are, however, not inclined to extend into a situation like the one before us, a period of limitation for completion of assessments under Section 11(3) or 28(3) of the respective Acts. The assessee has made returns for all the quarters and must have paid its admitted tax. Now that the assessing authority intends to complete assessments under Section 11(3) of the Act, we see no prejudice to the assessee if the assessing authority is permitted to complete the assessment now. On the other hand, if no assessment is made an anomalous situation might arise and even though the assessee has collected the sales tax on its sale turnover, it might raise a claim for refund of it in the absence of an assessment. We do not propose to create such a situation. It would suffice to say that in the situation which has arisen in the matter before us, it would be appropriate to call upon the assessing authority to complete all these pending assessments within a total period of four months from today on the basis of available material in the record before him and such other material as the authority may obtain. We, however, make it clear that such assessment has to be only under Section 11(3) of the Act.
15. Before we part with the case, we would like to indicate that assessment of tax should be completed with expedition. It involves the revenue to the State. In the case of a registered dealer who collects sales tax on behalf of the State, there is no justification for him to withhold the payment of the tax so collected. If a timely assessment is completed, the dues of the State can be conveniently ascertained and collected. Delay in completion of assessment often creates problems. The assessee would be required to keep up all the evidence in support of his transactions. Where evidence is necessary, with the lapse of time, there is scope for its being lost. Oral evidence as and when required to be produced by the assessing authority may not be available if a long period intervenes between the transactions and the consideration of the matter by the assessing authority. Long delay thus is not in the interest of either the assessee or the State. In view of the fact that a period of limitation has been prescribed for bringing the escaped turnover into the net of taxation, such an eventuality cannot be grappled with appropriately unless timely assessment is completed. In several taxing statutes, even in a situation like this, where assessment under Section 11(3) or 28(3) of the respective Acts is contemplated, a period of limitation is provided. Until by statute, such a limitation is provided, it is proper for the State Governments to require, by statutory rules or appropriate instructions, to ensure completion of assessments with expedition and reasonable haste but subject to rules of natural justice.
59. In the case of State of Punjab and Ors. v. Bhatinda District Co-operative Milk P. Union Ltd., 2008 Bihar Revenue and Labour Journal, page 77, the question of limitation for reopening an order of assessment under the Punjab General Sales Act has been considered. In that case the fact was that the federation doing business of Milk was assessed. In 1948 Act period of three years has been prescribed as period of limitation for completing assessment from the last day for filing of return. Section 20 confers power upon the Commissioner to exercise power of revision. The Supreme Court observed:
15. Sub-section (1) of Section 11 empowers the Commissioner to extend the period of three years for passing the order assessment where or reasons are required to be recorded in writing subject, however, to the maximum period of five years. Ordinarily, therefore, a period of three years has been prescribed for completion of the assessment in terms of the provisions of the Act. We may also notice that in cases where an assessment order is to be reviewed, the same should be done within a period of one year.
16. A bare reading of Section 21 of the Act would reveal that although no period of limitation has been prescribed therefore, the same would not mean that the suo motu power can be exercised at any time.
17. It is trite that if no period of limitation has been prescribed, statutory authority must exercise its jurisdiction within a reasonable period. What, however, shall be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors.
18. Revisional jurisdiction, in our opinion, should ordinarily be exercised within a period of three years having regard to the purport in terms of the said Act. In any event, the same should not exceed the period of five years. The view of the High Court, thus, cannot be said to be unreasonable. Reasonable period, keeping in view the discussions made hereinbefore, must be found out from the statutory scheme. As indicated hereinbefore, maximum period of limitation provided for in Sub-section (6) of Section 11 of the Act is five years.
60. In the case of Commissioner of Sales Tax Orissa and Anr. v. Halari Store , the Supreme Court while considering the suo motu power of revision of Commissioner of Sales Tax under the Orissa Sales Tax Act, observed as under:
11. So far as the second reasoning given by the High Court that the proviso to Clause (a) of Sub-section (4) of Section 23 of the Act places limitation on the Commissioner's suo motu revisional powers to revise an appellate order is concerned, a reading of the aforesaid proviso would show that the limitation on the revisional power of the Commissioner comes in only where a dealer or person filing the revision having a remedy by way of appeal under Sub-section (3) of Section 23 of the Act, did not avail of such remedy. However, it does not curtail the suo motu revisional power of the Commissioner of Sales Tax to revise an appellate order passed under the Act. The proviso to Section 23(4)(a) contemplates that the Commissioner shall not exercise any revisional jurisdiction at the instance of a dealer or person when he has a remedy by way of an appeal under Sub-section (3) of Section 23 of the Act. Thus, the Commissioner is not required to entertain an application under Section 23 (4) (a) of the Act if the dealer or person instead of filing an appeal before the appellate authority has invoked revisional jurisdiction of the Commissioner. But, the same is not the position where the Commissioner decides to exercise his suo motu revisional power to revise an appellate order. Significantly, the words "on his own motion" occurring in the enactment are conspicuously absent in the proviso. Normally, a proviso is enacted to carve out something special out of the general enactment or to qualify what is in the enactment. By enacting the proviso the legislature has excluded the revisional jurisdiction of the Commissioner, Sales Tax to revise an appellate order if invoked at the instance of a dealer or person when such dealer or person has a remedy by way of an appeal. As noticed earlier, the limitation on the suo motu power of the Commissioner as to revise an appellate order has not been expressly provided in the proviso. In the absence of any express provisions, no limitation on suo motu power of the Commissioner to revise an appellate order can be implied. We, accordingly hold that the provisions of proviso to Sub-section (4)(a) of Section 23 of the Act do not prohibit the Commissioner from exercising suo motu revisional power to revise an appellate order.
61. As noticed above, a suo motu power has been vested to the Commissioner to exercise revisional jurisdiction. But no time limit is prescribed to exercise such suo motu power unlike 90 days under Section 46(3) of the Act. It does not mean that it is a continuing power authorized to the concerned authority. From bare perusal of the provision of law in totality and co-jointly it can be apparently inferred that when the concerned authority does not get an opportunity to entertain the Revisional power within the statutory period of 90 days upon an application being made before it, then suo motu Revisional power must also be exercised within the reasonable period of time. If some time limit is not specified for the exercise of the power the possibility of irregular exercise of power on whim and caprice of authority cannot be ruled out. In absence of any specific period of statutory limit to exercise such power it would tantamount to arbitrary exercise of power which is not the intention of the legislation. Because unfettered power leads to corruption.
62. Suo Motu acts and power is to be exercised judicially i.e. ejusdem generis. Therefore, the suo motu revisional power not to be arbitrary, fanciful and oppressive, it must be guided by meticulous analysis with legal tools and some time limit must exist. In absence of statutory time period for the exercise of the power, Article 137 of the Limitation Act, 1963 will come into play and such suo motu revisional power be exercised within three years from the date of the order sought to be revised. The interpretation that a period of 90 days is prescribed to exercise power of revision if an application is made and no time limit is prescribed for taking action suo motu is in echo of what Mimamsakas pejoratively dismissed as "ardha Jarateeya Nyaya" (The argument that an egg can be partly used for eating and partly for hatching). Its western counterpart is : 'to have the cake and eat it too' as observed by Apex Court in the case of Union of India v. British India Corporation Ltd. .
63. This is the dictum of Law for fairness. If such power continues for indefinite period the scope of mala fide, vengeance or vested interest is always there which can be eliminated by invoking Article 137 of Limitation Act. There must be some guidelines for exercising discretionary power to avoid discrimination. Since, in a fiscal law economic fabric is woven there should be a clear-cut provision to ensure reasonableness, fairness and justice. A socio-economic perspective must play upon the interpretative process. In order to ensure fair and just exercise of power there must be some reasonable time period within which such power is to be exercised. And the reasonable time is 3 years as prescribed under Article 137 of the Limitation Act as a residuary provision of Limitation Act. 1963.
64. In the light of the discussion made above, it is necessary to consider as to whether the impugned notices issued by the Joint Commissioner Commercial Taxes initiating revision proceeding under Section 46(4) of the Act was on his own motion or on an application.
65. In W.P. (T) No. 6377 of 2007, it is specific case of the petitioner that in compliance of the order of demand passed by the Joint Commissioner Commercial Taxes (Appeals) in respect of all the financial years, the Assessing Officer finally passed the revised assessment order on 26.12.2003. After about three years, Le. on 10.10.2005, the Deputy Commissioner of Commercial Taxes. Dhanbad division made an application before the Joint Commissioner Commercial Taxes (Admn.) to initiate proceeding under Section 46(4) of the Act. A copy of the said application has been annexed as Annexure-5 to the writ petition. In the said application addressed to the Joint Commissioner Commercial Taxes (Admn.), the Deputy Commissioner prayed for revision of the final assessment order dated 26.12.2003 on the ground, inter alia, that the appellate authority as also the assessing authority have committed serious illegality and irregularity in treating the transaction as countersigned instead of inter-state sale which is against the interest of revenue and, therefore, a case for revision under Section 46(4) of the Act is made out. The Joint Commissioner Commercial Taxes entertained the application and directed the office to issue the impugned notice to the petitioner. A copy of the said notice has been annexed as Annexure-7 to the writ petition. The Joint Commissioner Commercial Taxes thereafter finally passed order under Section 46(4) of the Act which is also impugned in these writ petitions. The aforementioned fact with regard to initiating of proceeding by the Joint Commissioner Commercial Taxes on the basis of application made by the Deputy Commissioner of Commercial Taxes has not been denied or disputed by the respondents.
66. It would not be out of place to mention here that a number of writ petitions have been filed by the dealers challenging the notices issued by the Joint Commissioner Commercial Taxes exercising suo motu revision under Section 46(4) of the Act. 2/3 years after, the assessment orders are sought to be revised and that too, when their applications for revision of the amount realized, were at the final stage of processing. In one of such cases being W.P. (T) No. 2223 of 2007, this Court, taking judicial notice of the aforesaid fact, observed that the legality and validity of the suo motu revision proceedings at the instance of Joint Commissioner Commercial Taxes initiated on the basis of applications filed by the Revenue shall be considered in the event the petitioners again come to this Court against the order passed in revision.
67. In almost all the writ petitions, after the assessment order was revised by the assessing authority, the assessing officer issued notices for refund of excess amount of tax paid by the dealers in respect of various financial years as well as notices of demand towards the tax amount payable by the dealers. In such cases, dealers filed application for refund of excess amount of tax after adjustment of the amount to be paid by the petitioners. Thereafter, the revenue authority including the Deputy Commissioner of Commercial Taxes directed the petitioners to file refund application before the Joint Commissioner Commercial Taxes. It is at this stage, on the basis of application filed by the Deputy Commissioner of Commercial Taxes for initiation of suo motu revision proceeding, the Joint Commissioner Commercial Taxes entertaining such applications, issued notices for initiation of suo motu revision proceedings.
68. Prima facie, therefore, we are of the view that initiation of such suo motu proceedings on the basis of applications filed by the Deputy Commissioner of Commercial Taxes are wholly illegal, improper and without jurisdiction. The initiation of such proceeding is not only colourable exercise of power and abuse of process of law, but the same is mala fide also. Even assuming that the Joint Commissioner Commercial Taxes can entertain application filed by the Revenue for initiation of revision proceeding, the same cannot be initiated after expiry of ninety days as contemplated under Section 46(3) of the Act for entertaining a regular revisions application.
69. Having regard to the entire facts and circumstances of the case and after considering the law discussed herein above, we are of the view that the Impugned notices and suo motu revision proceedings initiated by the Joint Commissioner Commercial Taxes on the basis of applications filed by the Revenue are wholly illegal and without jurisdiction.
70. In the result, these writ applications are allowed, the entire suo motu revision proceedings and the orders passed therein are quashed.
D.K. Sinha, J.
71. I agree.