Vague suo motu revision notice failed the test of effective hearing and led to quashing of the revisional order.

A suo motu revision notice under section 23(4)(a) of the Orissa Sales Tax Act, 1947 read with rule 80 of the Orissa Sales Tax Rules, 1947 must disclose the basis on which the order is said to be erroneous and prejudicial to the Revenue. The statutory hearing requirement is effective only if the dealer knows the grounds of the proposed revision. A notice that merely states that the order appears erroneous and prejudicial, without reasons or particulars, is vague and does not satisfy the requirement of real opportunity of hearing. On that basis, the revisional order was quashed.

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Issues: Whether the show cause notice issued for suo motu revision under section 23(4)(a) of the Orissa Sales Tax Act, 1947 read with rule 80 of the Orissa Sales Tax Rules, 1947 was vague and failed to afford an effective opportunity of hearing, and whether the revisional order was therefore liable to be quashed.

Analysis: Section 23(4)(a) empowers the Commissioner to revise an order on his own motion, and rule 80 requires that the order be considered erroneous insofar as it is prejudicial to the interest of the Revenue, with due opportunity of hearing to the dealer. The opportunity contemplated by the rule must be real and effective, and the person called upon to show cause must know the basis on which revision is proposed. The notice in question merely stated that the order appeared erroneous and prejudicial to the Revenue, without disclosing the grounds or reasons for that view. Such a notice did not disclose the basis of the proposed action and could not satisfy the requirement of effective hearing.

Conclusion: The revisional order was quashed, and the petitioner succeeded because the notice was vague and the statutory requirement of effective opportunity of hearing was not met.

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