1965 (12) TMI 108 - SC - VAT and Sales Tax

Whether the Commissioner had jurisdiction or not in reviewing his own order? Held that - The errors, if any, arose because the Department did not raise those points before the Commissioner. They were also errors not apparent on the face of the record for the decision depends upon consideration of arguable questions of limitation and construction of documents. Indeed the Commissioner re-heard arguments and came to a conclusion different from that which he arrived on the earlier occasion. This is not permissible under rule 83 of the Rules. The order of the Commissioner is set aside, except in regard to items (b) and (e) mentioned in paragraph 7 of his order.

Summary

Issues:
Scope of jurisdiction of the Commissioner of Sales Tax under rule 83 of the Orissa Sales Tax Rules, 1947; Maintainability of appeal under Article 136 of the Constitution of India; Interpretation of rule 83 regarding correction of errors by the Commissioner; Review of previous order by the Commissioner; Entitlement to refund of taxes paid; Bar on refund due to limitation; Impact of appellate orders on refund eligibility.

Analysis:

The judgment by the Supreme Court of India, delivered by Subba Rao, J., addresses the scope of the Commissioner of Sales Tax's jurisdiction under rule 83 of the Orissa Sales Tax Rules, 1947. The case involves a private limited company engaged in building contracting in Orissa, assessed for sales tax under various provisions of the Orissa Sales Tax Act, 1947. Following a petition based on a Supreme Court decision, the High Court of Orissa quashed the assessments and directed refunds for amounts not barred by limitation. The appellant applied for refunds, leading to a series of decisions culminating in a notice under rule 83 issued by the Commissioner of Sales Tax, questioning the earlier refund order.

The Court first tackled the issue of appeal maintainability under Article 136 of the Constitution of India, emphasizing the discretionary nature of the appellate jurisdiction. It clarified that statutory remedies need not be exhausted for appeal to the Supreme Court, especially when no further remedy is available under the Act against the Commissioner's order. The Court rejected the contention that the appellant must exhaust all remedies before filing an appeal.

Regarding the interpretation of rule 83, the Court highlighted that the Commissioner's jurisdiction is limited to correcting arithmetical, clerical mistakes, or errors apparent on the face of the record due to accidental slip or omission. The rule provides a summary remedy within strict confines, excluding re-arguments on facts or law. The judgment elaborated on the nature of mistakes covered under the rule, emphasizing the need for errors to be evident on the record without requiring elaborate arguments for discovery.

The Court scrutinized the Commissioner's review of the previous order concerning refunds, focusing on the limitations imposed by rule 83. It found that the Commissioner's reevaluation of the refund eligibility based on new arguments and facts was beyond the rule's scope. The errors in the earlier order arose due to the Department's failure to raise certain points, making them not apparent on the face of the record. The Commissioner's rehearing of arguments and subsequent differing conclusion were deemed impermissible under rule 83.

Ultimately, the Court set aside the Commissioner's order, except for specific items, emphasizing that the errors in the previous order did not meet the criteria for correction under rule 83. The judgment concluded with no order as to costs, maintaining a strict interpretation of the rule's scope and limitations on the Commissioner's corrective powers.