Reasonable time governs review sanction under sales tax law; delayed review notices were quashed as time-barred and mala fide.

Review sanction under section 47 of the Bihar Finance Act, 1981 read with rule 32 of the Bihar Sales Tax Rules, 1983 must be exercised within a reasonable time and cannot remain open-ended merely because prior Commissioner's sanction is required after the ordinary twelve-month period. Applying that principle, the Court held that sanction granted more than three years after the relevant assessment years was time-barred, and the resulting review notices for 2002-03 and 2003-04 were quashed. The Court also treated the delayed review, initiated after refund claims were left unattended, as prima facie mala fide and without jurisdiction. Review proceedings for those years were invalidated, while the review for 2004-05 was sustained.

---

---

Issues: (i) Whether sanction for review of assessment orders under section 47 of the Bihar Finance Act, 1981 read with rule 32 of the Bihar Sales Tax Rules, 1983 could be granted beyond a reasonable time and, on the facts, was barred by limitation for the assessment years 2002-03 and 2003-04; (ii) whether the delayed initiation of review proceedings, after refund claims remained unattended, rendered the action mala fide and without jurisdiction.

Issue (i): Whether sanction for review of assessment orders under section 47 of the Bihar Finance Act, 1981 read with rule 32 of the Bihar Sales Tax Rules, 1983 could be granted beyond a reasonable time and, on the facts, was barred by limitation for the assessment years 2002-03 and 2003-04.

Analysis: Section 47 permits review of an order on the ground of a mistake apparent from the record, subject to the rules. Rule 32(2) contemplates review within twelve months by subordinate authorities, while review after that period requires previous sanction of the Commissioner. The Court read the provision as not conferring an unlimited power of sanction. Relying on the principle that discretionary revisional or review powers must be exercised within a reasonable period, and by analogy applying the residuary limitation principle reflected in article 137 of the Limitation Act, 1963, the Court held that the Commissioner's sanction must also be exercised within a reasonable time. On the facts, the sanction for the assessment years 2002-03 and 2003-04 was accorded after more than three years.

Conclusion: The sanction and review notices for the assessment years 2002-03 and 2003-04 were held to be barred by limitation and were quashed.

Issue (ii): Whether the delayed initiation of review proceedings, after refund claims remained unattended, rendered the action mala fide and without jurisdiction.

Analysis: The assessment orders had been followed by notices of excess payment and refund applications had been filed by the assessee well before the impugned sanction was granted. The respondents took no effective decision on the refund claims and moved for review only after the assessee approached the Court for refund. The Court treated this sequence as showing a prima facie attempt to defeat the refund claim and as indicative of bias in the exercise of power.

Conclusion: The action in respect of the assessment years 2002-03 and 2003-04 was held to be mala fide and without jurisdiction.

Final Conclusion: The writ petition succeeded in part: the review proceedings for the earlier two assessment years were invalidated, while the review notice for the assessment year 2004-05 was sustained and the assessee was directed to participate in the review proceedings in accordance with law.

Ratio Decidendi: Where a statute permits review or review-sanction subject to rules, the power must be exercised within a reasonable time and cannot be left unrestricted merely because the rule requires prior sanction after the ordinary period.

---