2012 (10) TMI 522 - SC - VAT and Sales Tax

Refund claim Validity of revision proceedings - independent opinion - held that - it was not a revision initiated on the basis of any application filed by an aggrieved party namely the Deputy Commissioner but initiation of a Revisional proceeding by the Joint Commissioner by forming his own opinion and satisfaction to exercise suo motu power vested under Section 46(4) of the BFT Act on the basis of the materials on record. - decided against the assessee. Limitation - power of drawing up a revisional proceeding by exercising suo motu power Held that - Power cannot be exercised by the revisional authority indefinitely - such extra ordinary power i.e. suo motu power of initiation of revisional proceeding has to be exercised within a reasonable period of time - powers have been exercised within about three years of time in some cases and in some cases soon after the expiry of three years period - Three years period cannot be said to be a very long period and power was exercised within a reasonable period of time. - Decided in favor of assessee. Whether the order passed by the Joint Commissioner setting aside the revised assessment order is proper and could be maintained, as the said order was passed during the pendency of the writ petition in the High Court Held that - Order was passed while the respondent was fighting out the litigation in the High Court and therefore, it was not possible for the assessee to give his entire focus and attention and also to give full concentration to the aforesaid proceeding pending before the Joint Commissioner. The learned counsel appearing for the appellant also could not dispute the fact that the respondent was somewhat handicapped in contesting the aforesaid matter very effectively before the Joint Commissioner - matter remited to the Joint Commissioner once again to hear the parties

Summary

Issues Involved:
1. Exercise of Suo Motu power of revision under Section 46(4) of the BFT Act, 1981.
2. Limitation period for initiating Suo Motu revision proceedings.
3. Validity of the Joint Commissioner's order dated 26.11.2007 setting aside the revised assessment order dated 26.12.2003.

Issue-wise Detailed Analysis:

Issue 1: Exercise of Suo Motu Power of Revision under Section 46(4) of the BFT Act, 1981
The court examined whether the Joint Commissioner of Commercial Taxes legally and properly exercised the Suo Motu power of revision under Section 46(4) of the Bihar Finance Act, 1981 (BFT Act, 1981). The BFT Act, 1981, and its amendments were analyzed, revealing that the Commissioner has the authority to revise orders passed by subordinate authorities, either on application or Suo Motu. The Joint Commissioner, as a delegatee, also holds this power. The court noted that the Joint Commissioner had exercised this power independently, not merely based on an application by the Deputy Commissioner. The court rejected the contention that the power was exercised illegally, affirming that the Joint Commissioner had formed an independent opinion based on the records.

Issue 2: Limitation Period for Initiating Suo Motu Revision Proceedings
The court addressed whether the Suo Motu revision proceedings were initiated within a reasonable period. It was highlighted that no specific limitation period is prescribed for Suo Motu revisions under Section 46(4) of the BFT Act, 1981. The High Court had erroneously applied Article 137 of the Limitation Act, 1963, which prescribes a three-year period. The Supreme Court clarified that the Limitation Act does not apply to quasi-judicial authorities and that the legislature did not intend to impose a limitation period for Suo Motu revisions. However, the court agreed that such powers must be exercised within a reasonable period, which depends on the facts and circumstances of each case. In this instance, the court found that the Joint Commissioner exercised the power within a reasonable period, approximately three years, which was deemed acceptable.

Issue 3: Validity of the Joint Commissioner's Order Dated 26.11.2007
The court considered whether the order dated 26.11.2007, setting aside the revised assessment order dated 26.12.2003, was proper. This order was passed while the respondent was litigating in the High Court, potentially affecting their ability to contest the matter effectively. Acknowledging this, the court set aside the order dated 26.11.2007 and remitted the matter back to the Joint Commissioner for a fresh hearing and decision. The Joint Commissioner was directed to pass a new order expeditiously, ensuring the legality and propriety of the revised assessment order dated 26.12.2003.

Conclusion
The Supreme Court concluded that the Joint Commissioner had properly exercised the Suo Motu power of revision within a reasonable period. However, due to the procedural context and the respondent's litigation in the High Court, the order dated 26.11.2007 was set aside, and the matter was remitted back to the Joint Commissioner for a fresh decision. The impugned judgment and order of the High Court were set aside to this extent, with the parties bearing their own costs.