2015 (10) TMI 2493 - HC - VAT and Sales Tax

Initiation of revisional proceedings - Notice issued under Section 40(2) of the Act by the Deputy Excise and Taxation Commissioner (Inspection)-cum-revisional authority, Hisar - Assessment was framed by the Assessing Officer of equal rank, namely, Deputy Excise and Taxation Commissioner-cum-Assessing Authority, Hisar and the revisional power has also been exercised by officer of same and equal rank. Held that - in view of the decision of this court in the case of petitioner for the identical issue wherein notice issued under Section 40(2) of the Act for revising the assessment order by the officer of same rank was challenged reported in 2015 (2) TMI 1162 - PUNJAB AND HARYANA HIGH COURT , the Department had withdrawn the said notice, the impugned notices, Annexures P-3, P-5 and P-6, issued by respondent No.2 are set aside and liberty is granted to the State to issue fresh notice under Section 40(2) of the Act in accordance with law without prejudice to the rights of the parties. - Decided in favour of petitioner

Summary

Issues:
Challenge to initiation of revisional proceedings under Section 40(2) of the Act by Deputy Excise and Taxation Commissioner; Permissibility of revision by an officer of the same rank; Applicability of previous court judgments on similar issues.

Analysis:
The petitioner filed a writ petition under Articles 226/227 of the Constitution of India seeking the quashing of certain notifications and notices related to sales tax assessment. The primary challenge was against the initiation of revisional proceedings by the Deputy Excise and Taxation Commissioner under Section 40(2) of the Act. The petitioner contended that since the assessment was done by an officer of equal rank, namely, Deputy Excise and Taxation Commissioner-cum-Assessing Authority, the revisional power should not have been exercised by an officer of the same rank.

The High Court referred to a previous judgment in Triputi Udyog Ltd. v. State of Haryana, where it was held that revision by an officer of the same rank was impermissible. The court cited instances and orders from the Sales Tax Tribunal to support this position. The court emphasized that the revisional powers could only be exercised by an officer in relation to orders passed by their subordinates and not by an officer of the same or higher rank. This legal principle was reiterated in the present case, highlighting the importance of hierarchy in the exercise of revisional powers.

In a previous case involving the same petitioner, the court had granted relief when a notice issued for revising the assessment order by an officer of the same rank was challenged, and the Department subsequently withdrew the notice. The court allowed the writ petition in the present case and set aside the impugned notices issued by the Deputy Excise and Taxation Commissioner. However, the State was granted liberty to proceed afresh under Section 40(2) of the Act in accordance with the law, ensuring that the rights of the parties were not prejudiced. This decision reaffirmed the legal principle that revision by an officer of the same rank was not permissible, providing clarity on the hierarchy and exercise of revisional powers in tax assessments.