1991 (7) TMI 345 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality and validity of the Tribunal's decision regarding the exercise of powers under section 31 of the Bombay Sales Tax Act, 1953.
2. Whether the exercise of suo motu revision power by the Deputy Commissioner infringes upon the power of rectification of the Assistant Commissioner of Sales Tax.
3. Applicability of the "reasonable time" principle for the exercise of suo motu revision power.
4. Reasonableness of the exercise of suo motu revision power in the case at hand.
5. Legality and validity of suo motu revision orders passed without making all ex-partners of the dissolved firm parties to the proceedings.

Issue-wise Detailed Analysis:

1. Legality and Validity of Tribunal's Decision:
The Tribunal held that the exercise of powers under section 31 of the Bombay Sales Tax Act, 1953, by the Deputy Commissioner of Sales Tax, which set aside the appeal orders dated November 29, 1967, was legal and valid. However, the High Court answered this question in the negative, favoring the assessee and against the Revenue. The Court emphasized that the exercise of such powers must be within a reasonable time, and in this case, the delay of over eight years was deemed unreasonable.

2. Exercise of Suo Motu Revision Power:
The Tribunal found that the exercise of suo motu revision power by the Deputy Commissioner did not infringe upon the power of rectification of the Assistant Commissioner of Sales Tax. The High Court affirmed this view, stating that the revisional authority does not encroach upon the powers of other authorities unless rectification or reassessment proceedings are pending.

3. Reasonable Time Principle:
The Tribunal held that the requirement of exercising suo motu revision power within a reasonable time, as laid down by the Supreme Court in the case of State of Gujarat v. Patel Raghav Natha, would not apply to the provisions of the Bombay Sales Tax Act, 1953. The High Court disagreed, answering this question in the negative, favoring the assessee. The Court reiterated that all statutory powers must be exercised reasonably, including within a reasonable time frame.

4. Reasonableness of Suo Motu Revision Power:
The Tribunal concluded that the exercise of suo motu revision power in the case of the applicant was not unreasonable. The High Court, however, found this conclusion incorrect, answering in the negative and favoring the assessee. The Court emphasized that the delay of over eight years in exercising the power was unreasonable and not in line with the principles of reasonable exercise of statutory powers.

5. Legality of Suo Motu Revision Orders Without Making All Ex-Partners Parties:
Given the answers to questions 1 and 4, the High Court deemed this question moot and did not answer it. The Court implied that the suo motu revision orders would not be valid if they were passed without making all ex-partners of the dissolved firm parties to the proceedings.

Conclusion:
The High Court's judgment emphasizes the importance of exercising statutory powers within a reasonable time and in a manner that is just, fair, and reasonable. The Court found the Deputy Commissioner's exercise of suo motu revision powers after a delay of over eight years to be unreasonable and invalid. The judgment underscores the principle that the length of reasonable time must be determined by the facts of each case and the nature of the order being revised.