2003 (11) TMI 327 - SC - VAT and Sales Tax

Whether it is a fit case where suo motu power of revision should be exercised? Held that - Appeal allowed. The second proviso appended to section 67F of the Act provides that no order prejudicial to a person can be passed under this section without giving him an opportunity of being heard. The principles of natural justice by reason of the aforementioned statutory provision therefore have been extended only in a case where the proceeding is initiated in terms of the said provision and the order is proposed to be passed which would be prejudicial to the parties to the lis. As the respondent herein had no statutory right to file a revision application only because his application requesting the Commissioner to exercise suo motu revisional powers had not been entertained the same would not mean that any order prejudicial to him had been passed.

Summary

Issues:
1. Interpretation of section 67F of the Kerala Abkari Act, 1077 regarding revisional powers of the Commissioner.
2. Whether the Commissioner is required to provide an opportunity of hearing and record reasons when exercising suo motu revisional powers.
3. Application of principles of natural justice in cases of revision under section 67F.

Analysis:
1. The case involved the interpretation of section 67F of the Kerala Abkari Act, 1077, which empowers the Commissioner to call for and examine the record of an order passed under section 67B or section 67E and make such inquiries or pass orders as deemed fit. The provision allows the Commissioner to exercise revisional powers within thirty days of the order, subject to certain conditions, including not calling for the record if an appeal is pending. The Commissioner may initiate proceedings based on an application or on his own motion.

2. The Court considered whether the Commissioner is obligated to provide an opportunity of hearing and record reasons when exercising suo motu revisional powers under section 67F. It was held that the Commissioner is not required to provide an opportunity of hearing or record reasons at the stage of examining whether to exercise suo motu powers. The party to the proceedings does not have a statutory right to file a revision application, and the Commissioner's examination for initiating revision does not create a pending lis between the parties.

3. The Court further analyzed the application of principles of natural justice in cases of revision under section 67F. It was clarified that the second proviso of section 67F mandates providing an opportunity of being heard before passing any prejudicial order. Since the respondent did not have a statutory right to file a revision application and the Commissioner's refusal to entertain the request did not result in a prejudicial order, the principles of natural justice were not violated in this case.

In conclusion, the Court held that the view taken by the division Bench of the Kerala High Court, which required the Commissioner to provide an opportunity of hearing and record reasons while exercising suo motu revisional powers, was erroneous. The Court set aside the High Court's order and allowed the appeal, emphasizing that no opportunity of hearing or recording of reasons is necessary at the stage of considering whether to exercise revisional powers under section 67F.