1998 (8) TMI 549 - HC - VAT and Sales Tax

Issues Involved:
1. Legality of the Commissioner of Sales Tax's jurisdiction to suo motu revise an order passed by the Additional Commissioner.
2. Validity and implications of the delegation of powers under section 23(4)(a) of the Orissa Sales Tax Act, 1947.
3. Compliance with procedural requirements and opportunity for the petitioner to be heard before extending the time for compliance with orders.

Detailed Analysis:

1. Legality of the Commissioner of Sales Tax's jurisdiction to suo motu revise an order passed by the Additional Commissioner:

The central issue is whether the Commissioner has the jurisdiction to suo motu revise an order passed by the Additional Commissioner. This question has been previously adjudicated in Orient Paper Mills v. State of Orissa [1988] 70 STC 333, where it was held that the Commissioner has no power to revise the order passed by the Additional Commissioner or the Special Additional Commissioner. This view has been consistently upheld in subsequent cases, including Food Corporation of India v. Sales Tax Officer [1990] 78 STC 58 (Orissa). The court reiterated that for about a decade, the accepted legal position is that the Commissioner cannot revise an order passed by the Additional Commissioner.

2. Validity and implications of the delegation of powers under section 23(4)(a) of the Orissa Sales Tax Act, 1947:

The learned Senior Standing Counsel for the Revenue argued that a fresh look is necessary due to observations by the apex Court in State of Orissa v. Krishna Stores [1997] 104 STC 594. However, the court noted that the decisions in Krishna Stores and Commissioner of Sales Tax v. Halari Store [1997] 107 STC 579 (SC) are not relevant to the present dispute as they pertain to the jurisdiction of the Commissioner to revise appellate orders passed by the Assistant Commissioner, not the Additional Commissioner.

The court referred to the notification dated May 18, 1963, which clearly delegates the powers of revision under section 23(4)(a) to the Additional Commissioner. The court emphasized that once the power of revision is delegated and exercised by the delegatee, the Commissioner cannot revise the same order under rule 80. The concept of delegation implies that the delegator retains the original power but does not denude himself of it. However, in this case, the Commissioner's attempt to revise the order already passed by the Additional Commissioner is impermissible.

3. Compliance with procedural requirements and opportunity for the petitioner to be heard before extending the time for compliance with orders:

In O.J.C. No. 2791 of 1998, the issue was raised regarding the Additional Commissioner extending the time for compliance with his order without notice to the petitioner. The court acknowledged that before such an extension was granted, the petitioner should have been given an opportunity to be heard. Despite this procedural lapse, the court held that the notices issued by the Commissioner were without jurisdiction. Consequently, the Sales Tax Officer was directed to comply with the Additional Commissioner's order regarding the grant of refund within three weeks.

Conclusion:

The court concluded that the Commissioner's notices under rule 80 cannot be maintained as they are without jurisdiction. The consistent legal position that the Commissioner cannot revise an order passed by the Additional Commissioner was upheld. The petitions (O.J.C. Nos. 14993 and 14994 of 1997) were allowed, and the impugned notices were quashed. Additionally, in O.J.C. No. 2791 of 1998, the court directed the Sales Tax Officer to comply with the Additional Commissioner's order within three weeks. No order as to costs was made in each of the cases.

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