2018 (1) TMI 868 - HC - VAT and Sales Tax

Suo motu proceedings for revision - time limitation - interpretation of statute - Section 23(4)(a) of O.S.T.Act read with Rule 80 of the O.S.T.Rules - whether under Rule 80 of the Rules, revisional proceedings are to be concluded from the date of passing of the final orders passed within a period of three years sought to be revised or the proceedings if initiated within three years can be concluded beyond the period of three years? Held that - The purpose of Rule 80 is to give finality to the suo motu proceedings initiated by the Asst. Commissioner within a specified period and the same can be done after proper interpretation is given that the proceedings are to conclude and revision orders passed within a period specified in the Rule - the entire Rule 80 cannot be read in a disjoined manner. On reading of the Rule in a joint manner would make it clear that for revising an order within a period of three years after providing opportunity to the assessee and calling for the records, the revision order itself has to be passed within a period of three years. Passing of the order dated 05.09.1996 in Annexure-3 which was beyond the period of three years from the date of the order sought to be revised, is liable to be quashed as also the order of the Commissioner dated 05.06.1999 in Annexure-4 - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Interpretation of limitation period for revisional proceedings under Rule 80 of the Orissa Sales Tax Rules.

Analysis:

Issue 1: Interpretation of limitation period for revisional proceedings under Rule 80 of the Orissa Sales Tax Rules

The petitioner, a registered dealer under the Central Sales Tax Act and Orissa Sales Tax Act, was assessed initially in 1991 under Rule 12(5) of the CST(O) Rules. Subsequently, the assessment was reopened, disallowing the exemption claim and demanding payment under the Central Act. The Assistant Commissioner of Sales Tax revised the reassessment in 1996, disallowing the exemption claim. The petitioner appealed, which was dismissed in 1999. The petitioner challenged the revisional order, arguing that it was beyond the limitation period prescribed under Section 23 of the Orissa Sales Tax Act read with Rule 80 of the Orissa Sales Tax Rules.

The petitioner contended that the order passed in 1996 was beyond the prescribed limitation period of three years from the date of the original order in 1993. The respondent argued that the limitation period applied only to calling for records, not passing the revisional order. The Court examined Section 23(4)(a) of the O.S.T. Act and Rule 80 of the O.S.T. Rules, emphasizing the need for the Commissioner to revise orders within the specified time frame.

The Court held that the purpose of Rule 80 was to provide finality to revision proceedings initiated by the Assistant Commissioner within a specified period. Any interpretation allowing the passing of revision orders after the prescribed period would defeat the intention of the Act. The Court emphasized that the revision order must be passed within the three-year limitation period from the date of the original order.

The Court distinguished a previous case cited by the respondent, stating that the provisions under Section 12(7) of the OST Act in that case were different from those of Rule 80 being interpreted. The Court concluded that the orders dated 1996 and 1999, passed beyond the three-year limitation period, were liable to be quashed. Consequently, the writ petition was allowed, and the orders were quashed.

In summary, the Court clarified the interpretation of the limitation period for revisional proceedings under Rule 80 of the Orissa Sales Tax Rules, emphasizing the need for revision orders to be passed within the specified time frame to provide finality to the proceedings initiated by the Assistant Commissioner.