Order passed by Commissioner of Sales Tax set aside on grounds of limitation

Orissa High Court: An order of revision of assessment passed against the petitioner by the Commissioner of Sales Tax was set aside by a Division Bench comprising of Vineet Saran, CJ and B.R. Sarangi, J., holding that under Rule 80 of the Orissa Sales Tax Rules, the revision proceedings has to be concluded within a period of three years as provided for in the said provision.
The petitioner was a registered dealer dealing in petrol, diesel, kendu leaves and jute. He was assessed for sales tax for the year 1991 by the Sales Tax Officer, who allowed a claim of exemption as prayed for by the petitioner. Subsequently, on receipt of opposition from the auditing party, such exemption was partly disallowed in the re-assessment proceeding on 25.08.1993. Assistant Commissioner of Sales Tax re-opened the said assessment and on 05.09.1996, passed an order wherein the petitioner was held liable to pay the entire amount of exemption; under Rule 80 of the Orissa Sales Tax Rules. Against the said order, the petitioner preferred an appeal before the Commissioner of Sales Tax, who vide order dated 05.06.1999 dismissed the appeal. Hence, the petitioner filed the instant petition. Learned counsel for the petitioner contended that the order of revision was beyond the prescribed period of limitation as provided under Rule 80, which provides that a suo motu revision initiated by the Commissioner of Sales Tax has to be concluded within a period of three years from the passing of the order of Sales Tax Officer. On the contrary, the counsel for the respondent contended that the said period of limitation is only applicable for the initiation of proceedings and does not take into account its conclusion.
In order to settle the controversy, the High Court perused the provisions of the Orissa Sales Tax Act and Rules, and was of the opinion that Rule 80 of the OST Rules prescribes a limitation of three years in which the revision by the Commissioner of Sales Tax has to be initiated and concluded. The purpose of Rule 80 is to give finality to the suo motu proceedings initiated by the Assistant Commissioner in a specified period. Any interpretation contrary to the one that is mentioned above would mean that even though initiation of proceedings for revision may be done within three years, final order can be passed after years of such initiation which would keep the matter hanging for years together, which could not have been the intention of the Act.
In view of the aforesaid, the High Court was of the opinion that the order passed by the Assistant Commissioner as well as the Commissioner of Sales Tax mentioned above were beyond the period of limitation as provided for in the Orissa Sales Tax Rules. Hence, the said orders were quashed and the petition was allowed. [Sagarmal Agarwalla v. CST, 2018 SCC OnLine Ori 40, order dated 10-01-2018]