2004 (6) TMI 613 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to the order of revision under Section 20(1) of the Assam Finance (Sales Tax) Act, 1956 for the period ending September 30, 1982 to September 30, 1987.

Analysis:
The petitioner, a registered dealer under the Assam Finance (Sales Tax) Act, 1956, challenged the order of revision passed by the Assistant Commissioner of Taxes, Nagaon Zone, exercising suo motu power under Section 20(1) for the mentioned period. The petitioner filed returns showing turnover for different periods, paid taxes accordingly, and the assessments were accepted by the authority. However, a revision was initiated by another authority based on new facts and circumstances, leading to fresh assessments and additional tax demands. The petitioner contested this revision through revision petitions, which were rejected, prompting the filing of a writ petition challenging the impugned order of revision.

The petitioner argued that the revision under Section 20(1) was arbitrary, illegal, and lacked jurisdiction as the original assessments were completed satisfactorily. The petitioner relied on various legal precedents to support this argument. On the other hand, the State Counsel defended the impugned order, stating it was within the jurisdiction of the revising authority and did not warrant interference through judicial review.

The Court examined the scope of suo motu revision, emphasizing that it should only be exercised if the original order is erroneous and prejudicial to the Revenue. The Court highlighted that a wrong order is not necessarily erroneous, and the revisional authority cannot substitute its judgment without proper reasoning or evidence. The power of revision should not be used to correct every mistake by the assessing officer, and must be based on lawful evidence.

The Court found that the revisional authority in this case re-determined sales prices without demonstrating how the original assessments were erroneous and prejudicial to Revenue. Relying on the report of an Inspector without proper evidence was deemed improper. The Court concluded that the revision was based on new materials not part of the original records, and the revising authority did not apply its mind independently. Therefore, the impugned order of revision and subsequent reassessments were set aside, and the petitioner was entitled to a refund of the amount paid as per the interim order.

In conclusion, the Court allowed the writ petition, holding that the order of revision under Section 20(1) for the mentioned period was unsustainable, and the reassessment orders were quashed.