Limitation and estoppel defeated revisional challenge to a composition order after the revenue had acted on it.

A revisional notice was invalid because it was issued after the three-year statutory limit running from the composition order sought to be revised. The challenge also failed on merits: the assessee had supplied details and copies of the composition applications when asked, the department never treated them as unfiled, and the composition order was passed and later acted on by the authorities. In those circumstances, the revenue could not rely on its own omission to question the validity of the order, and estoppel applied against that contention. The revisional notice was quashed and the challenge to the composition order succeeded.

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Issues: (i) whether the notice under the revisional provision was barred by limitation; (ii) whether the revision could be sustained on the ground that the original composition applications were not found on record.

Issue (i): whether the notice under the revisional provision was barred by limitation.

Analysis: The composition order had been made on 31 March 1998, whereas the impugned notice was issued on 25 September 2001. The revisional provision empowered action only within three years from the date of the order sought to be revised. The notice was issued beyond that period and was therefore outside the statutory time-limit.

Conclusion: The notice was barred by limitation and could not be sustained.

Issue (ii): whether the revision could be sustained on the ground that the original composition applications were not found on record.

Analysis: The petitioner had furnished details of the applications and xerox copies when called upon to do so, and the department never informed the petitioner that the applications would be treated as not filed. The composition order was nevertheless passed, and the assessment based on it was approved with modifications by the Assistant Commissioner. In these circumstances, the department could not later rely on its own omission to contend that the composition order was invalid. The conduct of the authorities also attracted estoppel against such a contention.

Conclusion: The revision could not be sustained on merits.

Final Conclusion: The revisional notice was quashed, and the challenge to the composition order succeeded on both limitation and merits.

Ratio Decidendi: A revisional notice issued beyond the statutory period of limitation is invalid, and where the revenue has acted on and approved the underlying order without timely objection, it cannot later revoke that order by relying on its own failure to object to the absence of original papers.

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