2002 (7) TMI 772 - HC - VAT and Sales Tax

Issues Involved:
1. Jurisdiction of the Commissioner of Commercial Taxes to issue a notice under Rule 80 of the Orissa Sales Tax Rules.
2. Legality and validity of the notice issued to the assessee.
3. Constitutional validity of Rule 80 of the Orissa Sales Tax Rules.
4. Delegation of revisional power under Rule 80 and whether the Commissioner can exercise the power after it has been exercised by the Assistant Commissioner.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Commissioner of Commercial Taxes to issue a notice under Rule 80 of the Orissa Sales Tax Rules:
The assessee challenged the jurisdiction of the Commissioner of Commercial Taxes to issue a notice under Rule 80 of the Orissa Sales Tax Rules, 1947, read with Rule 22 of the Central Sales Tax (Orissa) Rules, 1957. The court analyzed Rule 80, which allows the Commissioner to revise any order passed by the Sales Tax Officer or Assistant Commissioner if it is prejudicial to the interests of the revenue. The court held that the Commissioner has the jurisdiction to issue such a notice, even if the power had been previously exercised by the Assistant Commissioner, as the Commissioner's authority is not confined or restricted by any provision in the Act or the Rules.

2. Legality and validity of the notice issued to the assessee:
The notice under challenge required the assessee to produce its books of account and relevant documents for the assessment year 1986-87 and to show cause why its claim of stock transfer should not be disallowed. The court found no jurisdictional infirmity in the notice, stating that the Commissioner acted within his powers under Rule 80 of the Rules read with Section 23(4)(a) of the Act. The court dismissed the writ petition, allowing the assessee to put forward all other contentions available under the Act in response to the notice.

3. Constitutional validity of Rule 80 of the Orissa Sales Tax Rules:
Although the constitutional validity of Rule 80 was raised, it was not seriously pursued during the hearing. The court referenced previous decisions, including Halari Store v. Commissioner of Sales Tax and State of Orissa v. Krishna Stores, which upheld the Commissioner's jurisdiction to invoke revisional powers. The court did not find any constitutional infirmity in Rule 80, implying that the rule's validity had been upheld in earlier judgments.

4. Delegation of revisional power under Rule 80 and whether the Commissioner can exercise the power after it has been exercised by the Assistant Commissioner:
The assessee argued that since the Assistant Commissioner, acting as a delegate of the Commissioner, had already exercised the power under Rule 80, the Commissioner could not exercise the same power again. The court rejected this argument, stating that the delegation of power to the Assistant Commissioner does not preclude the Commissioner from exercising his revisional power. The court emphasized that the Assistant Commissioner remains subordinate to the Commissioner and that the Commissioner's authority to revise orders prejudicial to the revenue is not limited by the delegation of power.

Conclusion:
The court concluded that the Commissioner of Sales Tax has the jurisdiction to issue a notice under Rule 80 of the Orissa Sales Tax Rules, even if the Assistant Commissioner had previously exercised the power. The legality and validity of the notice were upheld, and the writ petition was dismissed without prejudice to the assessee's right to contest the merits of the case in response to the notice. The constitutional validity of Rule 80 was implicitly upheld based on prior judgments.

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