1987 (11) TMI 357 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the Deputy Commissioner was bound to consider and dispose of exhibits P5 to P7 on the merits?
2. Interpretation of sections 35 and 36 of the Kerala General Sales Tax Act regarding revisional powers of the Deputy Commissioner.
3. Consideration of a Division Bench decision of the Calcutta High Court in State of West Bengal v. Paper Products Ltd.

Analysis:

1. The main issue in this case is whether the Deputy Commissioner was obligated to review and make decisions on exhibits P5 to P7 on their merits. The Revenue contended that the Deputy Commissioner's powers under section 35 of the Act are to be exercised suo motu and not at the request of an assessee. The Court examined the provisions of sections 35 and 36 of the Act, emphasizing that the power of revision is intended to rectify errors or illegalities by subordinate authorities, benefiting both the Revenue and the assessee. The Court held that the Deputy Commissioner should have considered the exhibits on their merits and in accordance with the law. The judgment quashing exhibit P8 and directing the Deputy Commissioner to deal with the exhibits was upheld.

2. The Court delved into the interpretation of sections 35 and 36 of the Kerala Act in light of relevant decisions from the Madras High Court and the Supreme Court. It was established that the revisional powers of the Deputy Commissioner are broad and aimed at correcting injustices. The Court emphasized that the power of revision can be exercised to rectify errors or illegalities, whether in favor of or against the assessee. The Court agreed with the single judge's decision that the Deputy Commissioner erred in refusing to exercise his jurisdiction under the law.

3. The Court also addressed a Division Bench decision of the Calcutta High Court in State of West Bengal v. Paper Products Ltd. The Court respectfully disagreed with the dictum laid down in that case, noting that it did not consider relevant decisions from the Supreme Court and other authorities. The Court concluded that there was no merit in the writ appeal and dismissed it accordingly.

In summary, the judgment upheld the decision to quash exhibit P8 and directed the Deputy Commissioner to reconsider the exhibits on their merits. The Court interpreted the broad revisional powers of the Deputy Commissioner under the Kerala Act, emphasizing the aim to rectify errors and injustices, whether in favor of the Revenue or the assessee. The Court also disagreed with a previous decision of the Calcutta High Court, finding no merit in the writ appeal.