2023 (3) TMI 275 - HC - VAT and Sales Tax

Jurisdiction - suo motu revisional power of the Additional Commissioner of Sales Tax - Was the exercise of the suo motu revisional power by the Additional Commissioner of Sales Tax (Revenue) by way of the impugned order dated 10th May, 2016 under Section 18(1) of the Odisha Entry Tax Act, 1999 (OET Act) without jurisdiction inasmuch as an appeal filed against the Assessment Order sought to be revised, was already pending at the instance of the Assessee? - barred by time limitation or not. HELD THAT - It is a settled legal position that the suo motu revisional proceeding has to be concluded not beyond five years from the original order of assessment. This Court has interpreted a similar provision contained in Section 23(1) of the Odisha Sales Tax Act, 1947 read with Rule 80 of the Odisha Sales Tax Rules, 1947 in the cases of M/S. SAGARMAL AGARWALLA VERSUS COMMISSIONER OF SALES TAX, ORISSA, CUTTACK AND 2 OTHERS 2018 (1) TMI 868 - ORISSA HIGH COURT and vide Order dated 10th July, 2019 passed in the case of P.P. RICE MILLS VERSUS SPECIAL ADDITIONAL COMMISSIONER OF SALES TAX 2019 (7) TMI 1969 - ORISSA HIGH COURT - In P.P. Rice Mills, this Court held that 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. The impugned order dated 10th May, 2016 of the Additional Commissioner is hereby set aside - the questions framed by this Court are answered in favour of the Appellant-Dealer and against the Department - appeal allowed.

Summary

Issues:
1. Jurisdiction of Additional Commissioner to exercise suo motu revisional power when an appeal is pending.
2. Limitation period for exercising suo motu revisional power by the Additional Commissioner.

Analysis:

Issue 1: Jurisdiction of Additional Commissioner to exercise suo motu revisional power when an appeal is pending:
The case involved the Additional Commissioner of Sales Tax exercising suo motu revisional power under Section 18(1) of the Odisha Entry Tax Act, 1999 (OET Act) for an assessment period. The Appellant-Dealer's original assessment was completed by the Deputy Commissioner of Sales Tax, followed by reassessment proceedings initiated based on objections raised during an audit. The Assessing Officer proposed suo motu revisional proceedings for the entire assessment period, including a period excluded in the initial assessment. The Additional Commissioner issued a Show-Cause Notice for revision, which the Dealer objected to as being beyond the 5-year limitation period from the original assessment order. The Additional Commissioner, in the impugned order, held that once the proceeding is initiated, orders can be passed subsequently after giving the Dealer an opportunity. However, the Court held that initiating revisional proceedings beyond the limitation period and during the pendency of an appeal is impermissible in law. Citing previous judgments, the Court emphasized that exercising suo motu revisional power when an appeal remedy is available is not justified. Therefore, the Court set aside the impugned order in favor of the Appellant-Dealer.

Issue 2: Limitation period for exercising suo motu revisional power by the Additional Commissioner:
The Court referred to Section 18(2) of the OET Act, which sets a 5-year limitation for revisional powers of the Commissioner. The Court also discussed a similar provision in the Odisha Sales Tax Act, 1947, and relevant rules. The Court analyzed Rule 80, which provides for revision by the Commissioner suo motu within a specified period from the passing of the order. The Court clarified that the revisional proceedings must be concluded within the specified period from the date of passing the final orders to provide finality to such proceedings. Any interpretation allowing the delay in passing final orders after the initiation of revision proceedings would defeat the purpose of the Act. The Court emphasized that the revision order must be passed within the specified period for concluding revisional proceedings. Therefore, the Court held that the Additional Commissioner's observation in the impugned order, allowing delays in passing revision orders, was erroneous. Consequently, the Court ruled in favor of the Appellant-Dealer and set aside the impugned order.

In conclusion, the Court answered the framed questions in favor of the Appellant-Dealer, holding the Additional Commissioner's exercise of suo motu revisional power as impermissible due to jurisdictional issues and limitations. The appeal was allowed with no order as to costs.