Suo motu revisional power requires a jurisdictional finding of error and revenue prejudice before disturbing a merged revisional order.

Under the Karnataka Value Added Tax Act, 2003, suo motu revision under section 64(1) could be exercised only against the first revisional order after recording a jurisdictional finding that the order was erroneous and prejudicial to the interests of the Revenue. Because the Joint Commissioner had already exercised revision under section 63A and dropped the proceedings, the assessment order stood merged with that first revisional order. An order that merely criticised the assessment order, without addressing the merged revisional order or recording the mandatory finding, could not sustain further revision. The revisional order was therefore liable to be set aside and the matter remanded for fresh decision on merits.

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Issues: Whether the Additional Commissioner could invoke suo motu revisional power under section 64(1) of the Karnataka Value Added Tax Act, 2003 and set aside the first revisional order without recording a finding that the order was erroneous and prejudicial to the interests of the Revenue.

Analysis: Once the Joint Commissioner exercised suo motu revision under section 63A and dropped the proceedings, the assessment order stood merged with the first revisional order. The power under section 64(1) could be exercised only against the first revisional order, and only after recording a jurisdictional finding that that order was both erroneous and prejudicial to the interests of the Revenue. The impugned order did not contain such a finding and instead proceeded by criticising the assessment order, which was not sufficient to sustain the revision against the merged revisional order.

Conclusion: The revisional order was unsustainable for want of the mandatory jurisdictional finding under section 64(1) and was liable to be set aside.

Final Conclusion: The matter was sent back to the revision authority for fresh decision on merits in accordance with the scope of suo motu revision.

Ratio Decidendi: A revisional authority can interfere with a subordinate revisional order under a suo motu revisional provision only if it first records that the order is erroneous and prejudicial to the interests of the Revenue; absent that jurisdictional finding, the revision cannot be sustained.

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