2008 (3) TMI 626 - HC - VAT and Sales Tax

Whether the Commissioner of Commercial Taxes cannot call for and examine the record of any appellate proceeding for the purpose of satisfying himself as to the legality or propriety of the appellate order in exercise of power vested under section 46(4) of the Bihar Finance Act 1981 and further for quashing the entire revision proceeding including the order dated February 16 1999 passed by the Commissioner of Commercial Taxes Bihar Patna for the period 1987-88 by which he had initiated proceeding for suo motu under section 46(4) of the Act? Held that - In the instant case the Commissioner exercised power of suo motu revision under section 46(4) of the Act by issuing notice within two years from the date of the appellate order sought to be revised. In that view of the matter initiation of proceeding cannot be declared illegal and arbitrary on the ground of limitation. Appeal dismissed.

Issues Involved:
1. Whether the Commissioner of Commercial Taxes can exercise suo motu revisional power under Section 46(4) of the Bihar Finance Act, 1981 against appellate orders.
2. Whether the initiation of suo motu revision without calling for and examining the record of the concerned appellate proceeding is arbitrary.
3. Whether the suo motu revision was initiated within a reasonable time frame.

Issue-wise Detailed Analysis:

1. Suo Motu Revisional Power of the Commissioner:
The petitioner argued that the Commissioner of Commercial Taxes cannot call for and examine the record of any appellate proceeding for the purpose of satisfying himself as to the legality or propriety of the appellate order under Section 46(4) of the Bihar Finance Act, 1981. The petitioner contended that the only remedy available to the Commissioner was to file a revision before the Tribunal under Section 46(1) of the Act. The court, however, held that Section 46(4) grants the Commissioner extraordinary power to initiate suo motu revision proceedings at any time, without a prescribed limitation period. This power is intended to enable the Commissioner to check and correct orders passed by subordinate authorities, including appellate authorities. The court referenced the legislative history and amendments of the relevant sections to support this interpretation. The decision in Commissioner of Sales Tax, Orissa v. Halari Store [1997] 107 STC 579 (SC) was cited, where the Supreme Court held that the expression "any order made under the Act" includes appellate orders, thus supporting the Commissioner's power to revise such orders suo motu.

2. Arbitrary Exercise of Suo Motu Power:
The petitioner claimed that the initiation of suo motu revision without calling for and examining the record of the concerned appellate proceeding was arbitrary and a colorable exercise of jurisdiction. The court rejected this argument, stating that the Commissioner is vested with the power to call for and examine any record of any proceeding under Section 46(4) for the purpose of satisfying himself as to the legality or propriety of such order. The court emphasized that this power is not restricted by Rule 30 of the Bihar Sales Tax Rules and is intended to ensure the legality and propriety of orders passed by subordinate authorities.

3. Reasonable Time Frame for Initiating Suo Motu Revision:
The petitioner argued that the suo motu revision proceeding was initiated after an unreasonable delay of one year, eleven months, and twenty-one days from the date of communication of the appellate order. The court addressed this by referring to its decision in Shivam Coke Industries, Dhanbad v. State of Jharkhand, where it was held that in the absence of a specific statutory time limit, the suo motu revisional power must be exercised within a reasonable period, which was determined to be three years as per Article 137 of the Limitation Act, 1963. Since the Commissioner initiated the suo motu revision within two years from the date of the appellate order, the court found the initiation of the proceeding to be within a reasonable time frame and not arbitrary or illegal.

Conclusion:
The court concluded that the Commissioner of Commercial Taxes has the power to initiate suo motu revision under Section 46(4) of the Bihar Finance Act, 1981, against appellate orders. The initiation of such proceedings does not require calling for and examining the record of the appellate proceeding beforehand, and the power must be exercised within a reasonable time frame, which in this case was within two years. Consequently, the writ application was dismissed for lack of merit.

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