Orissa High Court bench comprising Justice Vineeth Saran and Justice B.R Sarangi recently ruled that the revisional proceedings under Central Sales Tax (Orissa) Rules must be concluded from the date of passing of the final orders passed within a period of 3 years.
A writ petition was filed by of M/s. Sagarmal Agarwalla against the order of the Commissioner of Sales Tax wherein it was held that the claim for exemption made by the petitioner was disallowed and the entire claim of exemption on the said transaction was put to sales tax under the Central Act.
The petitioner is the registered dealer for petrol, diesel, kendu leaves and jute, having its place of business at Dhenkanal. On initial assessment after examination of books of accounts allowed the claim of exemption made by the petitioner under Section 6(2) of the Central Act and determined to refund an amount of Rs.12,814/-
The auditing party raised objection and accordingly, Assistant Commissioner of Sales Tax, initiated a proceeding under Rule 80 of the Orissa Sales Tax Rules to revise the reassessment already made and disallowed the same.
The question before the Court was that under Rule 80 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.
The counsel for petitioner contended that Rule 80 provides for suo motu revision by the Commissioner of Sales Tax within a period of three years from the date of passing of the order by the Sales Tax Officer, but the reassessment having been made by the Sales Tax Officer passed by opposite party beyond the period of limitation and, as such, the same is liable to be quashed.
On other side, the Revenue submitted that the limitation of three years would be applicable for the first part only and not for the second part which is for passing of the order.
The High Court once made a decision in the case of Commissioner of Sales Tax vs. Nilei Sahoo, as relied on by Dr. Mishra advocate of respondent, wherein court observation “provisions of Section 12(7) of the OST Act which only dealt with the re–opening of the assessment within a period of 36 months and there was no mention in the said Section with regard to passing of the of the final order within a period of 36 months”.
The bench observed that this provision is not applicable to the present issue since wordings of Section 12(7) of the O.S.T.Act stood distinct from those of Rule 80. “In our view, 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,” the bench said.
Accordingly, the Court ordered that beyond the period of three years from the date of the order sought to be revised, is liable to be quashed.To Read the full text of the Judgment CLICK HERE