1987 (6) TMI 387 - HC - VAT and Sales Tax

Summary

Issues:
1. Competency of Deputy Commissioner to initiate suo motu revision proceedings under section 35(2A) of the Kerala General Sales Tax Act.
2. Retroactive application of section 35(2A) to assessment orders made before its enactment.

Analysis:

Issue 1: Competency of Deputy Commissioner to initiate suo motu revision proceedings under section 35(2A)
The petitioner contended that the Deputy Commissioner lacked the authority to initiate suo motu revision proceedings under section 35(2A) as the assessment orders had been appealed to the Deputy Commissioner of Sales Tax. The petitioner argued that the amendment introducing section 35(2A) did not have retrospective effect and could not apply to finalized assessment orders. The Appellate Tribunal upheld the Deputy Commissioner's jurisdiction under section 35(2A) and dismissed the petitioner's appeals. However, the petitioner challenged this decision, asserting that the new provision affected substantive rights and could not be applied to finalized orders. The court examined the legislative intent behind the amendment and concluded that section 35(2A) conferred wider jurisdiction on the Deputy Commissioner but could not be invoked against orders finalized before its enactment. Drawing parallels with a Supreme Court decision, the court held that the amendment did not pertain to mere procedural matters and, therefore, the Deputy Commissioner's actions were illegal and lacked jurisdiction.

Issue 2: Retroactive application of section 35(2A) to assessment orders made before its enactment
The court analyzed the language of section 35(2A) and emphasized that no retrospective effect had been given to the provision. It noted that the wider jurisdiction granted to the Deputy Commissioner under section 35(2A) could not be exercised for assessment orders that had already attained finality through appeals. By citing a Supreme Court precedent, the court highlighted that legislative amendments impacting substantive rights should not be applied retroactively. Consequently, the court held that the Deputy Commissioner's initiation of suo motu revision proceedings under section 35(2A) for assessment orders predating the provision was unlawful. The court overturned the decision of the Appellate Tribunal and set aside the common order passed for all three years in question.

In conclusion, the court allowed the revisions, emphasizing that the Deputy Commissioner's actions were unauthorized and lacked legal basis. The court awarded costs to the petitioner and set aside the Appellate Tribunal's decision.