1985 (6) TMI 176 - HC - VAT and Sales Tax

Commissioner's Actions Initiate Revisional Proceedings; Writ Petitions Dismissed for Justice

The Court held that the Commissioner's actions in receiving and examining the records within the four-year period constituted a valid initiation of ... - Issues Involved:1. Exercise of suo motu revisional power under Section 22-A(1) of the Karnataka Sales Tax Act, 1957.2. Limitation period for exercising or initiating revisional power under Section 22-A(2) of the Act.3. Validity and jurisdiction of the show cause notices issued by the Commissioner.4. Compliance with the principles enunciated by the Supreme Court in relevant cases.Issue-wise Detailed Analysis:1. Exercise of suo motu revisional power under Section 22-A(1) of the Karnataka Sales Tax Act, 1957:The core issue is whether the revisional power under Section 22-A(1) of the Act was exercised or initiated within the prescribed period of four years from the date of the order. The facts of Writ Petition No. 16098 of 1981 illustrate that the Commissioner received the records from the Deputy Commissioner (DC) on 23rd March 1977, and the Commissioner issued a show cause notice on 27th May 1981, after the Supreme Court's decision in State of Karnataka v. B. Raghurama Shetty. The Court examined whether the Commissioner's actions constituted a valid exercise of power under Section 22-A(1).2. Limitation period for exercising or initiating revisional power under Section 22-A(2) of the Act:The petitioners contended that the revisional proceedings were not initiated within the four-year period as required by Section 22-A(2) and thus were barred by time. The Commissioner argued that the proceedings were initiated within the limitation period when he received and examined the records. The Court referenced previous rulings, including S. Subba Rao v. Commissioner of Commercial Taxes and Busunur Industries v. State of Karnataka, which held that calling for records constitutes initiation of proceedings. The Court concluded that the Commissioner's receipt and examination of records, even if not formally called for, met the requirement of initiation within the limitation period.3. Validity and jurisdiction of the show cause notices issued by the Commissioner:The petitioners challenged the show cause notices on the grounds of jurisdiction and legality, arguing that they were issued beyond the four-year limitation period. The Commissioner maintained that the notices were within jurisdiction as the records were received and examined within the prescribed period. The Court found that the Commissioner's actions, including the decision to await the Supreme Court's ruling, constituted a valid initiation of proceedings. The Court emphasized that the term 'exercisable' in Section 22-A(2) should be interpreted broadly to include such actions.4. Compliance with the principles enunciated by the Supreme Court in relevant cases:The Court referenced the Full Bench ruling in Mohamed Samiullah v. Commissioner of Commercial Taxes, which upheld the validity of Section 22-A and the Commissioner's power to revise appellate orders. The Court also considered the principles from State of Karnataka v. Hansa Corporation and K.P. Varghese v. Income-tax Officer, emphasizing that fiscal statutes should not be construed to facilitate evasion. The Court concluded that the Commissioner's actions were in substantial compliance with Section 22-A(2) and aligned with the principles enunciated by the Supreme Court.Conclusion:The Court held that the Commissioner's actions in receiving and examining the records within the four-year period constituted a valid initiation of revisional proceedings under Section 22-A(1). The show cause notices were deemed to be within jurisdiction and not barred by time. The Court dismissed the writ petitions, stating that interfering with the Commissioner's actions would defeat the cause of justice. The order was to be communicated to the Commissioner of Commercial Taxes within 10 days.