1988 (4) TMI 409 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Commissioner to revise orders passed by the Special Additional Commissioner.
2. Entitlement of the appellant to interest under Section 14-C of the Orissa Sales Tax Act.

Detailed Analysis:

1. Jurisdiction of the Commissioner to Revise Orders Passed by the Special Additional Commissioner:

The appellant challenged the order dated 7th January 1980, passed by the Commissioner of Sales Tax, Orissa, which set aside the orders of the Special Additional Commissioner of Sales Tax allowing interest to the appellant under Section 14-C of the Orissa Sales Tax Act. The appellant contended that the Commissioner acted without jurisdiction as the powers under Section 23(4)(a) of the Act had been delegated to the Special Additional Commissioner.

The court examined the relevant provisions of the Orissa Sales Tax Act and the Orissa Sales Tax Rules. According to Section 3, the State Government may appoint persons to assist the Commissioner and delegate powers to them. Section 17 allows the Commissioner to delegate his powers and duties under the Act to any person appointed under Section 3. Section 23(4)(a) allows the Commissioner to revise any order made under the Act by any person other than the Tribunal. However, Section 23(4)(d) states that the Commissioner cannot delegate his revisional powers without the prior approval of the State Government.

Notification No. 5118 dated 10th February 1971, delegated the Commissioner's revisional powers under Section 23(4)(a) to the Special Additional Commissioner. The court concluded that the delegation of powers meant that the Special Additional Commissioner's orders were deemed to be orders of the Commissioner himself. Therefore, the Commissioner could not revise these orders again under Rule 80, as it would amount to revising his own orders, which is legally untenable.

The court also referred to a similar case from the Gujarat High Court, which held that once the Commissioner delegates his revisional powers, he cannot further revise the orders passed by the delegatee.

2. Entitlement of the Appellant to Interest Under Section 14-C of the Orissa Sales Tax Act:

The appellant claimed interest on the refunded amounts under Section 14-C of the Act, which mandates payment of interest if the refund is not made within ninety days from the date of receipt of the application. The Special Additional Commissioner had allowed the interest, noting the long delay by the Sales Tax Officer (S.T.O.) in processing the refund applications.

The court found that the S.T.O. had indeed delayed the processing of the refund applications, which were filed on 30th December 1974 and 4th April 1975, respectively. The S.T.O. only acted on these applications on 15th March 1977, after pointing out minor defects, which the appellant rectified promptly. The court held that the delay was avoidable and that the appellant was entitled to interest due to the S.T.O.'s inaction.

The court distinguished the present case from a Supreme Court decision (Lalta Prasad Khinni Lal v. Assistant Commissioner), noting that the issue of limitation was not relevant here. Instead, the court referred to a recent decision of the Allahabad High Court (Modi Industries Limited v. Commissioner of Sales Tax), which supported the appellant's claim for interest due to the delay in refund processing.

The court concluded that the Special Additional Commissioner had taken a reasonable and legal view in allowing interest, and the Commissioner's order to the contrary was unsupportable both legally and factually.

Conclusion:

The court allowed the appeal, setting aside the impugned order of the Commissioner. The court held that the Commissioner had no jurisdiction to revise the orders of the Special Additional Commissioner and that the appellant was entitled to interest under Section 14-C of the Act due to the undue delay in processing the refund applications. Each party was ordered to bear its own costs.