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The Paper Products Limited Vs. Assistant Commissioner, Commercial Taxes and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKolkata High Court
Decided On
Case NumberCivil Rule No. 5064(W) of 1969
Judge
Reported in[1973]32STC208(Cal)
AppellantThe Paper Products Limited
RespondentAssistant Commissioner, Commercial Taxes and ors.
Appellant AdvocateBibhuti Bhusan Ghosh, Adv.
Respondent AdvocatePanchanan Pal and ;Debesh Mukherjee, Advs.
Cases ReferredMadras v. Raj Brothers Agencies
Excerpt:
- .....and propriety of the order. once such a power is invoked, the jurisdiction exercised by way of suo motu revision is not cribbed and cabined or confined by conditions and qualifications. the purpose of such an amplitude being given to suo motu revision appears to be as much to safeguard the interest of the exchequer as in the interest of the assessee : east asiatic co. (india) ltd. v. state of madras [1956] 7 s.t.c. 299; state of andhra pradesh v. j. papaiah [1972] 29 s.t.c. 279.5. the contention that a party aggrieved cannot move the appropriate authority for the exercise of the revisional power suo motu cannot be accepted as correct. such a contention is inconsistent with the principle and the purpose for which such plenary power of suo motu revision is entrusted with the revising.....
Judgment:

Debiprosad Pal, J.

1. The petitioner is a public limited company and deals in paper containers which are sold mainly to bulk consumers, majority of whom are registered dealers under the Act. The petitioner also is a registered dealer under the Bengal Finance (Sales Tax) Act, 1941 (hereinafter referred to as the Act). For the period 1st August, 1961, to 31st July, 1962, the petitioner claims that its gross turnover amounted to Rs. 4,07,167.37 and taxable turnover was Rs. 1,00,990.00. The tax payable on the basis of the petitioner's figures amounted to Rs. 5,049.50 and a sum of Rs. 5,125.25 was alleged to have been paid by it. For the said assessment year, the petitioner produced before the Commercial Tax Officer, being respondent No. 2, bills prepared by the Calcutta office, profit and loss account and the balance sheet. As respondent No. 2 desired to examine all the books of accounts of the petitioner because of certain alleged discrepancies between the return figures and the figures appearing from the profit and loss account, the petitioner prayed for adjournment of the date of hearing on the ground that all its books were not made available from New Delhi and also that the petitioner's accountant was indisposed. It is alleged that in spite of the said prayer made by a letter dated 3rd June, 1965, an ex parte assessment was made on that date computing the gross turnover at Rs. 6,40,000.00 and taxable turnover at Rs. 3,70,431.10. The tax assessed to be payable was determined at Rs. 18,521.25. The petitioner's case is that he did not receive any intimation of the said assessment and the additional demand until 20th December, 1966, when a certificate under the Public Demands Recovery Act was served upon the petitioner. As the period within which an appeal could be preferred under the Act expired long ago, the petitioner made an application before the Assistant Commissioner, Commercial Taxes, West Bengal, North Circle, being respondent No. 1, under Section 20(3) of the Act read with Rule 80(5) of the Bengal Sales Tax Rules (hereinafter referred to as the Rules), invoking the power of the Assistant Commissioner to revise suo motu the assessment made by the Commercial Tax Officer. Respondent No. 1 by an order dated 31st October, 1967, held that the instant revision was governed by Section 20(3) of the Act read with Rule 80(2) of the Rules and as the said application was not filed within 60 days from the date of the assessment order and as no sufficient cause for the belated presentation of the revision was shown, the said application was rejected as being time-barred. Respondent No. 1 also was of the view that there was no justification for revising the impugned assessment suo motu. Being aggrieved by the said order the petitioner made this present application and obtained a rule nisi.

2. The main contention urged on behalf of the petitioner before me is that the application made by it before respondent No. 1 was to request him to exercise his power of revision suo motu and the time for such revision of his own motion is four years from the date of the assessment. As, admittedly, four years had not expired from the date of the assessment order, respondent No. 1 erred in holding that the application was time-barred. It is further submitted that respondent No. 1 proceeded upon an erroneous view as if this application has been made under Section 20(3) of the Act read with Rule 80(2) of the Rules and hence the period within which an application for revision to be made by a dealer has been erroneously applied.

3. An affidavit has been filed on behalf of respondents Nos. 1 to 3. The counsel for the respondents contended that when the revisional power is invoked under Section 20(3) of the Act by way of an application by the dealer, Rule 80(2) will be attracted and the time within which such an application for revision can be entertained is 60 days from the date of the order. As, admittedly, the said period has expired, the application has been rightly considered by respondent No. 1 to be time-barred. It has also been submitted that under the second proviso to Section 20(3) of the Act, no application for revision lies in respect of any assessment if an appeal lies under Section 20(1) in respect of such an assessment. As the petitioner has not availed itself of the right of appeal provided under Section 20(1) of the Act, it is not entitled to make an application for revision. It appears from the application filed before respondent No. 1 as also from the order passed by him that respondent No. 1 was moved under Section 20(3) of the Act read with Rule 80(5) of the Rules, Rule 80(5) of the Rules applies only when the Commissioner exercises the power of revision of his own motion and not in a case where a dealer makes an application for revision. It is, therefore, the admitted case that respondent No. 1 was requested by the application to exercise his power of revision suo motu. The question therefore arises as to whether such revisional power can be exercised suo motu on the basis of the facts and the materials brought before the revising authority at the instance of a dealer. The submission on behalf of the respondents was that a suo motu exercise of the power of revision cannot be made at the request of a dealer.

4. To appreciate the controversies it is necessary to refer to the relevant provisions of the Act and the Rules. Under Section 20(1) of the Act, the right of appeal has been provided against an assessment. Such an appeal is to be preferred before the prescribed authority within the time fixed by the said Section. Under Section 20(3) of the Act the power of revision has been conferred upon the Commissioner and also the Board of Revenue, Under Rule 71 of the Rules, such power of revision can be exercised by the Assistant Commissioner of Commercial Taxes when the order or the assessment sought to be revised is passed by a Commercial Tax Officer. The power of revision can be exercised either on an application by a dealer or suo motu. The second proviso to Section 20(3) of the Act does not allow an application for revision in respect of any assessment if an appeal lies under the Act in respect of such an assessment. Rule 80(2) prescribes the period within which an application by a dealer for revision of an order can be entertained. The time fixed under the said rule is 60 days from the date of the order. Rule 80(5) is attracted when the power of revision is exercised by the revising authority of his own motion. Such a power cannot be exercised if the time within which an appeal or application for revision, as. the case may be, may be made before him has not expired or the assessment order sought to be revised has been made beyond four years. The above analysis shows two broad categories of cases where such revisional power can be exercised. When a dealer makes an application for revision, the revising authority on such an application may exercise its power of revision. The revising authority may also exercise such power of his own motion or suo motu. The word 'suo motu' only means 'on his own motion' as opposed to 'on an application by a party'. The essence of revisional jurisdiction lies in the duty of the superior Tribunal or officer entrusted with such jurisdiction to see that the subordinate Tribunals or officers keep themselves within the bounds prescribed by law and that the order passed is not illegal or improper or that the proceeding recorded is not irregular. This jurisdiction is one of superintendence and correction in appropriate cases. Hence the revising authority is vested with the power of revision suo motu in order to examine the correctness, legality and propriety of the order. Once such a power is invoked, the jurisdiction exercised by way of suo motu revision is not cribbed and cabined or confined by conditions and qualifications. The purpose of such an amplitude being given to suo motu revision appears to be as much to safeguard the interest of the exchequer as in the interest of the assessee : East Asiatic Co. (India) Ltd. v. State of Madras [1956] 7 S.T.C. 299; State of Andhra Pradesh v. J. Papaiah [1972] 29 S.T.C. 279.

5. The contention that a party aggrieved cannot move the appropriate authority for the exercise of the revisional power suo motu cannot be accepted as correct. Such a contention is inconsistent with the principle and the purpose for which such plenary power of suo motu revision is entrusted with the revising authorities. The power of revision suo motu is conferred upon the revising authority to examine the legality and the propriety of any order and to remedy any injustice flowing from such an order passed by the subordinate authorities. The width and the amplitude of such power does not lend support to the contention raised on behalf of the revenue. It is open to an assessee or the revenue to bring to the notice of the revising authority any error made by the subordinate authorities. It is up to it to consider whether the case is a fit one for exercising its revisional jurisdiction : The Board of Revenue, Madras v. Raj Brothers Agencies [1973] 31 S.T.C. 434 (S.C). Having regard to the facts and circumstances of a particular case, whether the revising authority is to exercise its power of revision is a matter entirely for it to consider and decide. If a decision has been taken on a due consideration of all the relevant matters, the court will be slow to interfere with such a decision in its writ jurisdiction unless such a decision is vitiated by any of the circumstances recognised by law.

6. Having regard to the principles discussed above, in my view, respondent No. 1 was wrong in treating this application as time-barred applying the provisions of Section 20(3) read with Rule 80(2) of the Rules. This cannot be treated as an application made by the dealer by way of revision. In such a case, the restriction provided in the second proviso to Section 20(3) of the Act would have been attracted. In view of the fact that an appeal lies against the order sought to be revised, the limitation for preferring such an application provided in Section 80(2) of the Rules would also govern such a case. But this petition was filed before respondent No. 1 for the purpose of placing the relevant facts before him in order that he may exercise his revisional power suo motu. In fact, respondent No. 1 himself has treated the revision as having been preferred under Section 20(3) of the Act read with Rule 80(5) of the Rules. Rule 80(5) of the Rules as already pointed out deals only with the case where the revising authority purports to exercise his power and jurisdiction of his own motion. In such a case, the period of limitation is four years from the assessment sought to be revised. As, admittedly, four years have not expired, such petition cannot be rejected on the ground of limitation. It is open to an assessee to place by way of a petition or otherwise the relevant facts for the due consideration of the revising authority. The revising authority would be free to act on any information that is supplied to him or that comes to his knowledge. An assessee equally as much as the department can place the relevant facts and materials before the revising authority when such authority exercises its revisional power suo motu. No doubt it will be for him to consider and decide whether such power should be exercised on the facts of that particular case. As the period within which such power can be exercised has not expired, the rejection of the petition on the ground of limitation is illegal and improper.

7. If the order of respondent No. 1 would have been based on that ground alone there would have been no difficulty in quashing the said order. I, however, find that respondent No. 1 has also considered the merits of the case and found that there was hardly any reason for him to hold that a suo motu revision was necessary. The reasoning of respondent No. 1 on this point does not seem to be very clear. While he treats this application as one made under Rule 80(2) of the Rules and rejects the same as time-barred, he also proceeded on the basis that it was a suo motu revision. It is not clear as to whether this application was treated by him as one for suo motu revision or as an application for revision at the instance of the petitioner.

8. In these circumstances, the order of respondent No. 1 is quashed and set aside by a writ of certiorari. There will be a writ in the nature of mandamus commanding the respondents to forbear from giving any effect to the said order. Respondent No. 1 is, however, at liberty to proceed according to law. The rule is made absolute to the extent indicated above. There will be no order as to costs.


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