1957 (8) TMI 18 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Competence of the Board of Revenue to make suo motu observations not raised in the petition.
2. Requirement of special notice for suo motu revisions.
3. Exemption from sales tax for sugar manufactured in Bihar but dispatched outside Bihar after the Constitution came into force.

Detailed Analysis:

Issue 1: Competence of the Board of Revenue to Make Suo Motu Observations Not Raised in the Petition

The primary question was whether the Board of Revenue has the legal authority to make suo motu revisions on points not raised in the petition. The Board of Revenue considered that there was a patent mistake of law in the terms of the remand order of the Deputy Commissioner. The Board observed that the Deputy Commissioner's direction contained a misdirection of law, particularly in the phrase "but in the latter case I am afraid it will be not." The Board held that under sub-section (4) of section 24, it had the jurisdiction to revise any order passed by the Deputy Commissioner, provided that the petitioner was given a reasonable opportunity of being heard on any point likely to affect him adversely. The High Court upheld this view, stating that the Board of Revenue is competent to make suo motu revisions and that the opportunity given to the petitioner during the hearing was adequate.

Issue 2: Requirement of Special Notice for Suo Motu Revisions

The second aspect of the first issue was whether a special notice intimating the intention to make such suo motu revisions should be issued. The Board of Revenue held that no special notice in Form XII was required under rule 38, as the petitioner was present in court during the hearing. The High Court agreed, stating that rule 38 does not apply when the affected person is present in court. The High Court emphasized that the requirement under section 24(6) for a reasonable opportunity of being heard was met during the hearing, and no additional notice was necessary.

Issue 3: Exemption from Sales Tax for Sugar Manufactured in Bihar but Dispatched Outside Bihar After the Constitution Came into Force

The second question referred to the High Court was whether the petitioner was entitled to exemption from sales tax for sugar manufactured in Bihar but dispatched outside Bihar after the Constitution came into force. The High Court noted that this question was referred under a misapprehension and misreading of the Board of Revenue's order. The High Court concluded that this question of law did not arise out of the order of the Board of Revenue in revision and therefore did not address it.

Conclusion:

The High Court answered the first question in favor of the State of Bihar, affirming that the Board of Revenue is competent to make suo motu revisions without issuing a special notice, provided a reasonable opportunity of being heard is given. The second question was deemed unnecessary to answer as it did not arise from the Board of Revenue's order. The State of Bihar was awarded costs of the reference, with a hearing fee of Rs. 250.