1977 (4) TMI 165 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction under section 23(4) of the Orissa Sales Tax Act.
2. Reasonable opportunity of hearing.

Issue-wise Detailed Analysis:

1. Jurisdiction under section 23(4) of the Orissa Sales Tax Act:

The petitioner, a registered dealer, challenged the Commissioner of Sales Tax's suo motu revision of assessments for the years 1969-70 and 1970-71. The petitioner contended that the Commissioner lacked jurisdiction under section 23(4) of the Act because the appellate authority had already affirmed the orders of assessment. According to the petitioner, rule 80 of the Orissa Sales Tax Rules barred such revision.

The court examined section 23(4)(a) of the Act and rules 79 and 80. Section 23(4)(a) allows the Commissioner to revise any order made under the Act, except those by the Tribunal or Additional Tribunal. Rule 80 excludes the Commissioner's suo motu jurisdiction over appellate orders by the Additional Commissioner, Deputy Commissioner, or Assistant Commissioner. The court noted that while section 23(4)(a) does not explicitly exclude appellate orders of the Assistant Commissioner, rule 80 does. The court concluded that the appellate order of the Assistant Commissioner is not open to the Commissioner's suo motu revisional jurisdiction.

The court then considered whether the summary dismissal of the appeals by the Assistant Commissioner constituted appellate orders within the meaning of rule 80. The court referred to the principle of merger, which holds that the judgment of an inferior court merges into the judgment of a superior court when subjected to examination. The court cited several Supreme Court cases, including Gojer Brothers (P.) Ltd. v. Shri Ratan Lal Singh, to support the principle that even a summary dismissal of an appeal results in the merger of the original order into the appellate order. The court held that the summary dismissal of the appeals led to the merger of the original assessments into the appellate orders, thus barring the Commissioner's revisional jurisdiction under rule 80.

2. Reasonable opportunity of hearing:

The petitioner also argued that the Commissioner passed the revision orders without affording a reasonable opportunity of hearing. The grounds for the revision were communicated to the petitioner's counsel on 2nd May 1975, with the hearing fixed for 7th May 1975. The petitioner received the intimation on 9th May 1975, and thus could not instruct his counsel in time.

The court found that the interval of four days between the communication of the grounds and the hearing was not reasonable, especially considering the petitioner's location in Kantabanji. The court noted that the Commissioner appeared to be in a hurry to close the proceeding to avoid the limitation period of three years provided in rule 80, which would expire on 26th May 1975. The court held that the short notice period deprived the petitioner of a fair hearing.

Conclusion:

The court concluded that the Commissioner's orders enhancing the tax demand were without jurisdiction and passed without affording a reasonable opportunity of hearing. Consequently, the court quashed the impugned orders and allowed the writ applications, though no direction for costs was made due to the contentious nature of the issue.