1999 (2) TMI 647 - AT - VAT and Sales Tax

Summary

Issues:
Challenge to validity of show cause notice by Additional Commissioner of Commercial Taxes during pendency of appeals against original assessment and suo motu revisions.

Analysis:
1. The applicant, a registered partnership-firm, challenged the validity of a show cause notice served by the Additional Commissioner of Commercial Taxes during the pendency of appeals against the original assessment. The firm contended that the Additional Commissioner lacked the legal competence to revive a previously set aside suo motu order of the assessing authority. The firm argued that the notice was intended to prevent the additional assessment from being barred by limitation, contrary to rule 80(5) of the Bengal Sales Tax Rules, 1941.

2. The respondents, in opposition, argued that the Additional Commissioner had the authority to revise any order of his subordinate under section 20(3) of the West Bengal Taxation Tribunal Act, 1987. They contended that the mere issuance of a show cause notice did not imply a predetermined final order, and the Additional Commissioner had the discretion to consider objections raised by the assessee.

3. The central question was whether the Additional Commissioner acted illegally or within his jurisdiction by issuing the impugned notice. The legal representative for the applicant questioned the validity of the notices, citing the lack of reasons for reopening the original assessment. However, the Supreme Court precedent highlighted the importance of providing the assessee with an opportunity to be heard on all grounds for reopening the assessment.

4. The Assistant Commissioner's order in appeal case No. A-1113/AW/1991-92 raised concerns about the Commercial Tax Officer's modification of the assessment order. The Tribunal noted that the revisional power under section 20 did not extend to revising one's own order, emphasizing the distinction between revision and review. The absence of the Commercial Tax Officer's modifying order hindered a clear determination of the nature of the revision.

5. The Tribunal deliberated on the permissibility of reviewing one's own assessment order during the pendency of an appeal, drawing parallels with the prohibition on suo motu revision under rule 80(5) of the 1941 Rules. It emphasized the legislative intent behind the rule to prevent interference with ongoing appeals and maintain the integrity of the appellate process.

6. The Tribunal suggested a procedural approach for addressing instances of concealment or tax evasion detected during the appeal process, advocating for the submission of a memorandum to the appellate authority for combined consideration with the appeal. This approach aimed to streamline proceedings without complicating the appeal process with unilateral reviews.

7. The respondents argued for the Additional Commissioner's unrestricted jurisdiction to revise any order of his subordinate under section 20, citing relevant case law. However, the Tribunal emphasized that in cases where a subordinate authority reviewed its own order during an appeal, the revisional authority had a predetermined decision, rendering the revision process redundant.

8. Ultimately, the Tribunal allowed the applicant's application, directing the discontinuation of the impugned notices by the Additional Commissioner. It permitted the Commercial Tax Officer to submit a memorandum to the appellate authority for comprehensive adjudication alongside the pending appeals, ensuring due process and procedural fairness in the assessment review process.