Suo motu revision and effective tax rate: assessee information can trigger correction of a patent assessment error.

Section 21(1) of the Punjab General Sales Tax Act, 1948 empowers the Commissioner to examine subordinate proceedings for legality or propriety and to correct patent mistakes, even when the error is brought to notice by the assessee rather than the Revenue. The source of information does not limit the existence of suo motu revisional jurisdiction. The text also states that cotton purchases made between 1 July 1975 and 28 March 1976 were taxable at 3%, and the enhanced 4% rate applied only from 29 March 1976. An assessment applying 4% to the earlier period was therefore a patent error liable to rectification.

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Issues: Whether the Commissioner could refuse to exercise suo motu revisional power under section 21(1) of the Punjab General Sales Tax Act, 1948 merely because the assessee had brought the mistake to notice, and whether purchase tax on cotton purchased before 29 March 1976 could be assessed at 4% instead of 3%.

Analysis: Section 21(1) confers on the Commissioner a revisional power to call for and examine subordinate proceedings for legality or propriety and to pass appropriate orders. That power is meant to remedy injustice and may be invoked when a mistake is brought to the Commissioner's notice by either the Revenue or the assessee; the source of information does not control the existence of jurisdiction. On the admitted facts, the rate of tax on purchase of cotton during 1 July 1975 to 28 March 1976 was 3%, and the enhancement to 4% operated only from 29 March 1976. An assessment at 4% for purchases made before the effective date was therefore a patent mistake.

Conclusion: The Commissioner ought to have exercised suo motu revisional powers and corrected the assessment. The assessment at 4% for the pre-29 March 1976 period was unsustainable and had to be rectified to 3%.

Ratio Decidendi: A revisional authority empowered to act suo motu may act on information supplied by the assessee, and an assessment made at a rate not in force on the relevant date is liable to correction as a patent error.

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