Case Note & Summary
The dispute arose under the Orissa Sales Tax Act when a registered dealer, engaged in wholesale trade in betel nuts at Malgodown, Cuttack, challenged show-cause notices issued by the Additional Commissioner of Sales Tax for suo motu revision of appellate orders. The dealer had been assessed to sales tax for the years 1992-93 and 1993-94 after the Sales Tax Officer rejected the books of accounts and completed assessments to the best of judgment. Aggrieved, the dealer filed appeals before the Assistant Commissioner of Sales Tax, Cuttack, under Section 23(1) of the Act. The appellate authority allowed the appeals partly for 1992-93 and fully for 1993-94. Subsequently, the Additional Commissioner of Sales Tax, exercising suo motu revisional power under Section 23(4)(a) read with Rule 80 of the Orissa Sales Tax Rules, issued notices dated 9 June 1995 to show cause why the appellate orders should not be revised as erroneous and prejudicial to revenue. The dealer filed writ petitions under Articles 226 and 227 of the Constitution before the High Court of Orissa contending that the Commissioner had no jurisdiction to revise appellate orders. The High Court quashed the notices in O.J.C. Nos. 4496 and 4497 of 1995, relying on two grounds: first, that an appellate order was not an 'order made under the Act' within the meaning of Section 23(4)(a); second, that the proviso to Section 23(4)(a) placed a limitation on the Commissioner's suo motu revisional power when dealing with appellate orders. The Commissioner appealed to the Supreme Court by special leave. The Supreme Court examined Section 23 of the Act, which deals with appeals and revision. It noted that sub-section (1) provides an appeal against assessment or penalty orders, sub-section (2) empowers the appellate authority to confirm, reduce, enhance, annul or set aside the assessment, sub-section (3) provides a second appeal to the Tribunal, and sub-section (4)(a) confers revisional power on the Commissioner, either suo motu or at the instance of a party, to revise any order made under the Act or Rules by any person other than the Tribunal or Additional Tribunal. The Court observed that the expression 'any order made under the Act' in Section 23(4)(a) is plain and unambiguous, and its wide connotation includes both assessment orders and appellate orders passed under the Act. This interpretation did not run contrary to the statutory scheme. The Court also considered its earlier decision in State of Orissa v. Krishna Stores, (1997) 3 SCC 246, which had interpreted the unamended Rule 80. That rule expressly barred revision of appellate orders, but the rule was subsequently amended by deleting the words 'other than an appellate order'. The amended Rule 80 therefore removed the limitation, and read with Section 23(4)(a), it clearly empowered the Commissioner to suo motu revise an appellate order. Regarding the proviso to Section 23(4)(a), the Court held that it only restricted the Commissioner from entertaining a revision application at the instance of a dealer or person who had an appeal remedy under sub-section (3) and did not avail of it, but it did not curtail the suo motu revisional power. Consequently, the Supreme Court rejected the High Court's reasoning and held that the Commissioner of Sales Tax had jurisdiction to issue the impugned notices for revising the appellate orders. The notices were within jurisdiction, and the High Court's order quashing them was erroneous.
Headnote
A) Tax Law - Revisional Jurisdiction - Scope of 'Any Order Made Under the Act' - Orissa Sales Tax Act, Section 23(4)(a) - The High Court held that an appellate order did not fall within the expression 'order made under this Act', but the Supreme Court found that the plain language of Section 23(4)(a) included both assessment orders and appellate orders. Held that the Commissioner could suo motu revise any order, including an appellate order, passed by any person other than the Tribunal or Additional Tribunal (Paras Not mentioned). B) Tax Law - Interpretation of Amended Rule 80 - Effect of Deleting 'Other Than an Appellate Order' - Orissa Sales Tax Rules, Rule 80 - The unamended rule had expressly barred revision of appellate orders, but the amendment removed that phrase, thereby clearly empowering the Commissioner to revise appellate orders. Held that Section 23(4)(a) read with amended Rule 80 granted suo motu revisional jurisdiction over appellate orders (Paras Not mentioned). C) Tax Law - Proviso to Section 23(4)(a) - Limitation on Revisional Power - Orissa Sales Tax Act, Section 23(4)(a) proviso - The proviso only prevented the Commissioner from entertaining a revision at the instance of a dealer or person who had an appeal remedy under Section 23(3) and did not avail of it, but it did not curtail the Commissioner's suo motu powers. Held that the Commissioner's suo motu power to revise an appellate order was not limited by the proviso (Paras Not mentioned).
Issue of Consideration
Whether the Commissioner of Sales Tax, suo motu, can revise under clause (a) of sub-section (4) of Section 23 of the Orissa Sales Tax Act read with rule 80 of the Orissa Sales Tax Rules, an appellate order passed by the Assistant Commissioner of Sales Tax.
Final Decision
The Supreme Court held that under Section 23(4)(a) of the Orissa Sales Tax Act read with amended Rule 80, the Commissioner of Sales Tax has suo motu power to revise an appellate order passed by the Assistant Commissioner. The two grounds given by the High Court were rejected. Consequently, the notices issued by the Additional Commissioner were within jurisdiction.
Law Points
- Expression 'any order made under the Act' in Section 23(4)(a) includes appellate orders
- Amended Rule 80 of Orissa Sales Tax Rules removes bar on revising appellate orders
- Proviso to Section 23(4)(a) limits only revision at instance of dealer/person with appeal remedy not suo motu powers
- Commissioner can suo motu revise any order by person other than Tribunal or Additional Tribunal
