1989 (7) TMI 317 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Commissioner to initiate suo motu revision proceedings u/s 21(1) of the Tripura Sales Tax Act, 1976.
2. Interpretation of the term "erroneous" and "prejudicial to the interest of the revenue" in the context of u/s 21(1).
3. Legality of the Commissioner's refusal to grant adjournment and the subsequent order to prosecute the petitioner u/s 29(5) of the Act.
4. The scope of delegation of powers by the Commissioner u/s 43 of the Act.

Summary:

1. Jurisdiction of the Commissioner to initiate suo motu revision proceedings u/s 21(1) of the Tripura Sales Tax Act, 1976:
The main question was regarding the scope and ambit of the Commissioner's power to exercise suo motu revision u/s 21(1) of the Tripura Sales Tax Act, 1976. The Commissioner issued a notice to the petitioner, a dealer in bricks, to re-examine the books of account for the periods ending March 31, 1977, March 31, 1978, and March 31, 1979, arguing that the assessments were hurried and superficial. The petitioner challenged the jurisdiction of the Commissioner to initiate such proceedings.

2. Interpretation of the term "erroneous" and "prejudicial to the interest of the revenue" in the context of u/s 21(1):
The Court held that the power of suo motu revision u/s 21(1) can only be exercised if the order is both "erroneous" and "prejudicial to the interest of the revenue." An order is "erroneous" if it deviates from the law, and "prejudicial to the interest of the revenue" if it results in lawful revenue not being realized. The Commissioner cannot initiate proceedings based on a mere opinion without material evidence. The Court emphasized that the Commissioner's power is not arbitrary and must be based on materials available on record.

3. Legality of the Commissioner's refusal to grant adjournment and the subsequent order to prosecute the petitioner u/s 29(5) of the Act:
The Commissioner refused to grant adjournment and directed prosecution u/s 29(5) of the Act for the petitioner's failure to produce records. The Court found this action to be excessive and not in accordance with elementary principles of law. The Tribunal had directed a fresh hearing, and no prosecution was launched, making further orders unnecessary.

4. The scope of delegation of powers by the Commissioner u/s 43 of the Act:
The petitioner argued that the Commissioner could not exercise revisionary powers as the powers u/s 43 were delegated to officers assisting him. The Court rejected this argument, clarifying that officers appointed u/s 4(1) to assist the Commissioner can exercise powers delegated to them. The Superintendent of Taxes, having been delegated the power to assess, did so lawfully, and the Commissioner could revise such orders.

Conclusion:
The petitions were allowed, and the proceedings for suo motu revision u/s 21(1) of the Act in all eight cases were quashed. The Court found no material to justify the exercise of suo motu revisionary power by the Commissioner. No order as to costs.