1997 (1) TMI 451 - SC - VAT and Sales Tax

Whether in the present case the Commissioner is seeking to revise any appellate order passed by the Assistant Commissioner of Sales Tax within the meaning of rule 80? Held that - Appeal allowed. In the context of section 23(4) where the words any order other than an appellate order are absent, the prohibition against revising an appellate order in rule 80 should be taken as applying only to an appellate order in its full sense, i.e., an order which is passed after considering any issue arising in appeal. It would not cover an order of rejection under rule 49(1), when the appeal is not entertained at the threshold for consideration. From the facts as set out, it is apparent that the respondent was served with a notice of proposed revision on 21st March, 1975. The reasons for such revision were communicated to the respondent on 2nd May, 1975. The respondent had furnished written submissions to the Commissioner which were considered at the hearing of the case. After furnishing the grounds of revision the hearing of the case was fixed on 7th May, 1975. There is nothing on record to show that the respondent wanted more time or had asked for more time. The respondent appeared through his advocate on 7th May, 1975 and submitted his written arguments. Thereafter the Commissioner has passed a detailed order on 26th May, 1975. Looking to these facts it cannot be said that a reasonable opportunity of hearing was not given to the respondent.

Summary

Issues Involved:

1. Jurisdiction of the Commissioner of Sales Tax under section 23(4) of the Orissa Sales Tax Act, 1947, read with rule 80 of the Orissa Sales Tax Rules.
2. Whether the respondent was given a reasonable opportunity of hearing before the Commissioner of Sales Tax.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Commissioner of Sales Tax:

The respondent, a partnership firm, was initially assessed under section 12(4) of the Orissa Sales Tax Act, 1947, for the assessment year 1969-70. Following the seizure of its books by the vigilance unit, the assessment was reopened, leading to reassessment under section 12(8) of the said Act. Appeals filed by the respondent against these assessments were rejected due to defects under rule 49 of the Orissa Sales Tax Rules.

The Commissioner of Sales Tax issued notices under rule 80, proposing to revise the assessment orders suo motu under section 23(4) of the said Act, as the respondent had been under-assessed. The respondent contended that the Commissioner had no power to revise the orders since appeals had been filed, albeit rejected due to defects.

The court examined whether the Commissioner was revising an appellate order within the meaning of rule 80. It was concluded that the rejection of the appeals under rule 49(1) did not constitute an appellate order since it was a summary rejection at the initial stage without consideration of the merits. Therefore, the Commissioner was not precluded from exercising suo motu revision powers under section 23(4) read with rule 80.

2. Reasonable Opportunity of Hearing:

The respondent argued that it had not been given a reasonable opportunity of hearing before the Commissioner of Sales Tax. The court noted that the respondent was served with a notice of proposed revision on 21st March 1975, and the reasons for revision were communicated on 2nd May 1975. The respondent submitted written arguments on 7th May 1975, which were considered by the Commissioner, who then passed a detailed order on 26th May 1975.

Given these facts, the court held that the respondent had been given a reasonable opportunity of hearing, as the respondent was notified, provided reasons, and allowed to submit written arguments.

Conclusion:

The appeals were allowed, and the High Court's judgment was set aside. The court found that the Commissioner of Sales Tax had the jurisdiction to revise the assessment orders suo motu under section 23(4) read with rule 80, as the rejection of the appeals did not constitute an appellate order. Additionally, the respondent was given a reasonable opportunity of hearing. There was no order as to costs.