1974 (4) TMI 84 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the order of assessment dated 30th July, 1962, had merged in the order dated 11th January, 1964, passed by the Board of Revenue.
2. Jurisdiction of the Commissioner of Commercial Taxes to exercise suo motu power of revision.
3. Whether the suo motu revision was barred by the principles of constructive res judicata.

Issue-Wise Detailed Analysis:

1. Merger of Assessment Orders:
The primary issue was whether the order of assessment dated 30th July, 1962, had merged in the order dated 11th January, 1964, passed by the Board of Revenue. The court noted that the doctrine of merger is not a rigid and universal application. It depends on the scope of the appellate or revisional order. The Board of Revenue, while dealing with the revisional applications, had the authority to disallow claims of deductions and enhance the tax. The court referenced several cases, including the Supreme Court's decision in *Commissioner of Income-tax v. M/s. Amritlal Bhogilal and Co.*, which established that if an appellate authority modifies or confirms an order, the original decision merges in the appellate decision. Thus, the assessment order dated 30th July, 1962, merged in the order dated 11th January, 1964, passed by the Board of Revenue.

2. Jurisdiction of the Commissioner:
The Commissioner of Commercial Taxes issued a notice for suo motu revising the orders of assessment dated 30th July, 1962. The assessee challenged this, arguing that the Commissioner had no jurisdiction to exercise suo motu power of revision. The Tribunal held that under rule 36(5)(a) of the Bihar Sales Tax Rules, 1949, the Tribunal can suo motu revise any order passed by the Commissioner, including interlocutory orders. However, since the order of assessment had merged with the Board of Revenue's order, the Commissioner had no jurisdiction to revise the assessment orders dated 30th July, 1962.

3. Constructive Res Judicata:
The assessee argued that the suo motu revision was barred by the principles of constructive res judicata. However, the Tribunal found it unnecessary to give any finding on this question since it had already concluded that the Commissioner had no jurisdiction to revise the assessment orders due to the merger of the original order with the Board of Revenue's order.

Conclusion:
The court concluded that the entire order of assessment dated 30th July, 1962, had merged into the order dated 11th January, 1964, passed by the Board of Revenue. Consequently, the Commissioner of Commercial Taxes had no jurisdiction to suo motu revise the assessment orders dated 30th July, 1962. The reference was answered in the affirmative, in favor of the assessee and against the revenue, with each party bearing their own costs.