No Suo moto Revisional power of Deputy Excise and Taxation Commissioner (ST)-cum-Revisional Authority

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While hearing the M/s. Godrej Sara Lee Ltd. vs the Excise and Taxation officer cum Assessing Authority case, the Supreme Court addressed a jurisdictional issue, questioning the very competence of the Revisional Authority to exercise suo motu power. In this case, the appellant questioned the jurisdiction of the Deputy Excise and Taxation Commissioner (ST)-cum-Revisional Authority to reopen proceedings, in the exercise of suo motu revisional power. They also demanded “to pass final orders holding that the two assessment orders passed by the ETO-cum-Assessing Authority suffered from illegality and impropriety as delineated therein, viz. That the Assessing Authority erred in levying tax on mosquito repellant (a product manufactured by the appellant) @ 4% instead of 10%” The High Court opined that there could be no presumption that the appellate authority would not be able to grant the relief sought in the writ petition; hence, the writ petition was dismissed and the appellants were relegated to the appellate remedy. A Special Leave Petition was registered challenging the Punjab and Haryana High Court’s decision, dismissing the writ petition and regulating it to the remedy of an appeal under Section 33 of the Haryana Value Added Tax (VAT) Act, 2003.

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The top Court highlighted that it was axiomatic that “the High Courts have a discretion whether to entertain a writ petition or not”. One of the self-imposed restrictions on the exercise of power under Article 226, which evolved through judicial precedents was that “the HC should normally not entertain a writ petition, where an effective and efficacious alternative remedy is available”. Since a jurisdictional issue was raised by the appellant in the writ petition questioning the very competence of the Revisional Authority to exercise suo motu power, being a pure question of law, the plea raised in the writ petition did deserve consideration on merits and the appellant’s writ petition ought not to have been thrown out at the threshold. The High Court by dismissing the writ petition committed a manifest error of law for which the order under challenge was unsustainable. Having regard to the lapse of time (almost a life term of fourteen years) since the orders impugned in the writ petition were made, it would not be in the best interests of justice to remit the matter to the HC. The top Court further illustrated that the sine qua non for the exercise of power under section 34 was the satisfaction of the Revisional Authority that an order has been made by a taxing authority in any proceeding prejudicial to the interests of the State, the legality or propriety of which appears to him to be prima facie vulnerable. Nevertheless, such power cannot be exercised if the issue involved was pending before or settled by an appellate authority. 
The Apex Court also answered the question “Whether the orders of the Revisional Authority seeking to revise the orders of the Assessing Authority have been issued in exercise of the jurisdiction conferred by law?” To which the top Court stated that The decision of the Tribunal may not be acceptable to the Revisional Authority, but that cannot furnish any ground to such authority to perceive that it was either not bound by the same or that it need not be followed. The first proviso, in such a case, gets activated and would operate as a bar to the exercise of powers by the Revisional Authority. To brand the orders of the Assessing Authority as suffering from illegality and impropriety appears to be not only unjustified but also demonstrates a thorough lack of understanding of the principle regulating the exercise of suo motu revisional power by a quasi-judicial authority apart from being in breach of the principle of judicial discipline, while confronted with orders passed by a superior Tribunal/Court. The Apex Court further invalidated the impugned final revisional orders and allowed the appeal. 

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