1973 (5) TMI 88 - HC - VAT and Sales Tax

Issues Involved:
1. Time-limit for passing a revisional order under section 20(3) of the Bengal Finance (Sales Tax) Act, 1941.
2. Validity of the assessment order made by the Sales Tax Officer based on the revisional order.

Detailed Analysis:

1. Time-limit for passing a revisional order under section 20(3) of the Bengal Finance (Sales Tax) Act, 1941:
The core issue in this appeal is whether there is a time-limit for passing a revisional order under section 20(3) of the Bengal Finance (Sales Tax) Act, 1941, as extended to the Union Territory of Delhi. The respondent argued that the revisional order by the Commissioner of Sales Tax was time-barred as it was passed beyond four years from the end of the assessment year. The Assistant Commissioner had initially accepted this contention, leading to a remand for fresh assessment only for the third and fourth quarters of the year. However, the Commissioner, exercising suo motu revisional powers, set aside this order, which led to the fresh assessment and subsequent demand.

The learned single Judge quashed the revisional order, holding that the Commissioner could not exercise revisional powers beyond four years from the end of the assessment year, i.e., the last date for passing the revisional order was 31st March, 1960. This judgment relied on the case of Sir Sobha Singh & Company v. Commissioner of Sales Tax, Delhi, where it was held that the time-limit prescribed by section 11(2a) also governed revisional orders under section 20(3). The proviso to section 11(2a), introduced in 1959, allowed a further period for the assessing authority to pass an order but did not affect the period during which the revisional power had to be exercised.

The appellant argued that the decision in State of Orissa v. Debaki Debi should be restricted to its specific circumstances and that the language of section 11(2a) did not extend the four-year limitation to revisional orders under section 20. The court agreed with this view, noting that the Orissa Sales Tax Act had a specific proviso that imposed a time-limit on assessments, which was not present in the Bengal Finance (Sales Tax) Act. The court emphasized that the four-year limit in section 11(2a) applied only to the original assessment authority and not to appellate or revisional authorities.

2. Validity of the assessment order made by the Sales Tax Officer based on the revisional order:
The court examined whether the fresh assessment order made by the Sales Tax Officer was valid in light of the revisional order. The proviso to section 11(2a) allowed for a fresh period of limitation for passing an assessment order following a remand. The court illustrated that if the original assessment could be made within four years, any subsequent appeal or revision could naturally extend beyond this period. The appellate and revisional authorities, under section 20, have the power to confirm, reduce, enhance, annul, or set aside assessments, which inherently involves passing orders beyond the initial four-year period.

The court concluded that the Commissioner of Sales Tax did not pass an order of assessment but merely directed a fresh assessment. The fresh assessment by the Sales Tax Officer was within the time allowed by law, as the period for a fresh assessment starts from the date of the remand order. Therefore, both the revisional order dated 24th September, 1960, and the fresh assessment order were valid.

Conclusion:
The appeal was allowed, and the judgment of the learned single judge granting the two writ petitions was reversed. The writ petitions were dismissed, with each party bearing their own costs. The court held that there was no time-limit for passing a revisional order under section 20(3) of the Bengal Finance (Sales Tax) Act, 1941, and the fresh assessment order made by the Sales Tax Officer was valid.

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