1973 (7) TMI 83 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Inclusion of railway freight in the gross turnover for sales tax assessment.
2. Validity and limitation period for the review of the Deputy Commissioner's order.

Issue-wise Detailed Analysis:

1. Inclusion of Railway Freight in Gross Turnover:

The assessee, a registered dealer in cement, was assessed for sales tax for the years 1955-56 and 1956-57. The Superintendent of Commercial Taxes added sums of railway freight, directly paid by purchasers to the railway administration, to the gross turnover. The Deputy Commissioner of Commercial Taxes, upon appeal, excluded the railway freight from the taxable turnover and remanded the case to the Superintendent for further inquiry. The Superintendent, following the remand, excluded the railway freight in his order dated 2nd April 1961.

2. Validity and Limitation Period for Review:

The successor Deputy Commissioner issued notices on 29th March 1966, proposing to review the order dated 9th November 1959. After obtaining the Commissioner's sanction under rule 39 of the Bihar Sales Tax Rules, 1949, a review order was passed on 5th December 1966, recalling the earlier order and remanding the case again for reassessment. The Tribunal held that the review was barred by limitation, as it was initiated more than four years after the original order. The Tribunal reasoned that the limitation period for review should align with the four-year period prescribed for revisions under section 24(4) of the Act.

Court's Analysis:

- Section 24 and Rule 39 Interpretation:
Section 24(4) prescribes a four-year limitation for revisions initiated suo motu by the prescribed authority. However, Section 24(5), which confers the power of review, does not specify a limitation period. Rule 39 requires the Commissioner's sanction for reviews initiated more than twelve months after the original order or for reviews by officers below the rank of Commissioner.

- Principle of Distinct Limitation Periods:
The court noted that different periods of limitation could be prescribed for appeals, revisions, and reviews within the same statute. The absence of a specific limitation period for reviews in Section 24(5) indicates legislative intent not to impose such a period.

- Case Law Consideration:
The court referenced several cases, including the Supreme Court's interpretation in Indian Copper Corporation Ltd. v. State of Bihar, which emphasized that the time limit in rule 39(2) does not apply to orders passed by the Commissioner. The court distinguished this case from others where specific statutory bars of limitation were applicable.

- Relevance of Sanction:
The court dismissed the argument that the sanction obtained was only under rule 39(3) and not rule 39(2), as this point was not raised before the Tribunal.

Conclusion:

The court concluded that the Tribunal was not justified in holding that the review order dated 5th December 1966 was barred by time. The absence of a statutory limitation period for reviews under Section 24(5) and rule 39 supports the validity of the review order. The reference was answered in the negative, indicating that the review was not time-barred. There was no order as to costs.