1990 (9) TMI 327 - HC - VAT and Sales Tax

Issues Involved:

1. Delay in presenting the appeal.
2. Necessity of notice to all partners of a dissolved firm.
3. Validity of the Commissioner's order under Section 22-A of the Karnataka Sales Tax Act, 1957.
4. Interpretation of the exercise of suo motu revisional power under Section 22-A.

Issue-wise Detailed Analysis:

1. Delay in presenting the appeal:

The appellant presented the appeal with a delay of 1,633 days. The appellant claimed that the delay was due to lack of notice of the Commissioner's order dated June 3, 1985, and that the appellant only became aware of the order recently. The court directed the Government Advocate to produce the records. The court found that no contra material was presented by the respondent to show that the appellant had prior notice of the order. Consequently, the court condoned the delay, stating, "sufficient ground has been made out for the delay in presenting this appeal."

2. Necessity of notice to all partners of a dissolved firm:

The appellant contended that the Commissioner should have issued notice to all erstwhile partners of the dissolved firm. The court referred to subsection (2) of section 15 of the Sales Tax Act, which authorizes making an assessment on a dissolved firm as if it had not been dissolved. The court clarified that it is sufficient to serve notice on the person authorized by the firm to represent it in assessment proceedings. The court stated, "neither in respect of 12-A proceedings nor in respect of revisional proceedings under section 22-A of the Act, was there any necessity on the part of the authorities of the department to issue any notice to the appellant, who is an erstwhile partner of the firm."

3. Validity of the Commissioner's order under Section 22-A of the Karnataka Sales Tax Act, 1957:

The appellant argued that the Commissioner passed the order under section 22-A after nearly six years from the date of the appellate order, exceeding the four-year limitation period. The court examined the timing of the exercise of power under Section 22-A and referred to previous decisions, stating that the exercise of power begins when the Commissioner calls for the records. The court found that the Commissioner called for the records on May 12, 1982, within the four-year period from the appellate order dated June 29, 1979. Therefore, the court held that "the exercise of power under section 22-A of the Act had been done within a period of four years."

4. Interpretation of the exercise of suo motu revisional power under Section 22-A:

The court referred to two Division Bench decisions, Subba Rao v. Commissioner of Commercial Taxes [1967] 19 STC 257 (Mys) and Busunur Industries v. State of Karnataka [1986] 61 STC 123 (Kar); ILR (1985) 1 Kar 1322, which interpreted the exercise of suo motu revisional power. The court reiterated that the act of calling for records marks the commencement of the exercise of power. The court stated, "If the act of calling for the records is within four years from the date of the concerned order, every further step would be within time and with jurisdiction." The court upheld the view that the exercise of power includes calling for records, examining them, and passing orders, and this process must begin within the limitation period.

Conclusion:

The court dismissed the appeal, concluding that the delay in presenting the appeal was condoned, the necessity of notice to all partners was not required, the Commissioner's order under Section 22-A was valid, and the interpretation of the exercise of suo motu revisional power was consistent with previous decisions. The final order stated, "The appeal is dismissed. Appeal dismissed."

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