2008 (3) TMI 627 - HC - VAT and Sales Tax

Whether the Joint Commissioner of Commercial Taxes can initiate suo motu revision proceeding on the basis of application/letter received from Deputy Commissioner of Commercial Taxes? Whether after assessment order attained its finality, the same can be reopened by invoking power of suo motu revision by the Joint Commissioner of Commercial Taxes under section 46(4) of the Act? Whether the action of the Joint Commissioner of Commercial Taxes in issuing notice and initiating suo motu revision is illegal, arbitrary, mala fide and without jurisdiction in the facts and circumstances of the case? Held that - Having regard to the entire facts and circumstances of the case and after considering the law discussed hereinabove, we are of the view that the impugned notices and suo motu revision proceedings initiated by the Joint Commissioner of Commercial Taxes on the basis of applications filed by the Revenue are wholly illegal and without jurisdiction. Writ applications are allowed, the entire suo motu revision proceedings and the orders passed therein are quashed.

Issues Involved:
1. Whether the Joint Commissioner of Commercial Taxes can initiate suo motu revision proceeding on the basis of an application/letter received from the Deputy Commissioner of Commercial Taxes.
2. Whether after an assessment order has attained finality, it can be reopened by invoking the power of suo motu revision by the Joint Commissioner of Commercial Taxes under section 46(4) of the Act.
3. Whether the action of the Joint Commissioner of Commercial Taxes in issuing notice and initiating suo motu revision is illegal, arbitrary, mala fide, and without jurisdiction in the facts and circumstances of the case.

Issue-wise Analysis:

1. Whether the Joint Commissioner of Commercial Taxes can initiate suo motu revision proceeding on the basis of an application/letter received from the Deputy Commissioner of Commercial Taxes:
The court held that the power to initiate suo motu revision under section 46(4) of the Bihar Finance Act, 1981, has been delegated to the Joint Commissioner of Commercial Taxes (Admn.) against the orders of officers lower than his rank. However, this power can only be exercised on his own motion and not on an application. The power to entertain applications for initiating revision proceedings has been retained by the Commissioner and has not been delegated to the Joint Commissioner. Therefore, initiation of suo motu revision proceedings on the basis of an application filed by the Deputy Commissioner of Commercial Taxes is wholly without jurisdiction.

2. Whether after an assessment order has attained finality, it can be reopened by invoking the power of suo motu revision by the Joint Commissioner of Commercial Taxes under section 46(4) of the Act:
The court observed that the power of revision is conferred to examine the correctness, legality, and propriety of the order. However, the revisional authority cannot set aside that part of the order which has been affirmed by the appellate authority while remanding the matter to the assessing authority. The court also emphasized that the suo motu revisional power must be exercised within a reasonable period. In absence of a specific statutory time limit, the court applied Article 137 of the Limitation Act, 1963, which prescribes a three-year period for exercising such power.

3. Whether the action of the Joint Commissioner of Commercial Taxes in issuing notice and initiating suo motu revision is illegal, arbitrary, mala fide, and without jurisdiction in the facts and circumstances of the case:
The court found that the initiation of suo motu revision proceedings by the Joint Commissioner of Commercial Taxes on the basis of applications filed by the Deputy Commissioner of Commercial Taxes was not only illegal and without jurisdiction but also a colorable exercise of power and abuse of process of law. The court noted that such proceedings were initiated after the assessment order had attained finality and were often triggered by the dealers' applications for refund of excess tax paid. The court held that the initiation of such proceedings was mala fide and directed that the entire suo motu revision proceedings and the orders passed therein be quashed.

Conclusion:
The court allowed the writ applications, quashed the entire suo motu revision proceedings, and the orders passed therein, highlighting that the Joint Commissioner of Commercial Taxes acted without jurisdiction and in a mala fide manner by initiating revision proceedings based on applications from the Deputy Commissioner of Commercial Taxes.

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