REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.  6889-6891 OF 2011 [Arising out of SLP (C) Nos. 19104-19106 of 2008]

State of Jharkhand & Ors. Etc.       …. Appellants

Versus

M/s. Shivam Coke Industries, Dhanbad, Etc.    …. Respondents

With

CIVIL APPEAL NO. 6892 OF 2011 [Arising out of SLP (C) No. 21491 of 2008]

With

CIVIL APPEAL NO. 6893 OF 2011 [Arising out of SLP (C) No. 8424 of 2010]

JUDGMENT

Dr. MUKUNDAKAM SHARMA, J.

1. Delay condoned in SLP (C) No. 8424 of 2010.

2. Leave granted.

By this  common judgment  and order,  we  propose  to  dispose  of  these  

appeals as they involve similar issues both of facts as also of law and  

therefore, they were heard together.

3. Appeals  arising  out  of  SLP  (Civil)  Nos.  19104-19106  of  2008  are  

directed against the judgment and order dated 14.3.2008 in WP (T) No.  

6377 of 2007, WP (T) No. 5895 of 2007 and WP (T) No. 5892 of 2007. The  

appeal arising out of SLP (Civil) No. 21491 of 2008 is directed against the  

judgment and order dated 19.3.2008 in WP (T) No. 6071 of 2007 and the  

appeal arising out of SLP (Civil) No. 8424 of 2010 is directed against the  

judgment and order dated 31.7.2009 in W.P. (T) 54 of 2009 passed by the  

High Court of Jharkhand at Ranchi allowing all the Writ Petitions filed by  

the respondents herein.

CIVIL APPEAL ARISING OUT OF SLP (C) NO. 19104 OF 2008

4. The facts leading to the filing of the case in the appeal arising out of  

SLP (C)  No.  19104 of  2008 are  that the respondent-M/s Shivam Coke  

Industries, Dhanbad is a manufacturer of coal and was registered under  

the provisions of the Bihar Finance Act, 1981 [now repealed - for short  

“BFT Act, 1981”] and presently under the provisions of Jharkhand Value

Added Tax, 2005. Respondent-assessee being manufacturers of hard coke  

buys coal from Bharat Coking Coal Ltd. after making the payment of local  

Sales  Tax  @ 4% which  is  being  used  as  an  input  for  the  purpose  of  

manufacturing the hard coke.  Respondent was assessed to tax for the  

Financial Years 1988-89, 1992-93 and 1996-97 determining the tax on  

intra-State sales transactions as well as Central Sales Tax on inter-State  

sales  transactions.  Respondent  preferred  an  Appeal  before  the  Joint  

Commissioner  of  Commercial  Taxes  (Appeals),  Dhanbad  Division,  

Dhanbad  against  the  assessment  orders  passed  between 26.4.1990  to  

23.12.1998 for the Financial Years 1988-89, 1992-93 and 1996-97, who  

vide  order  dated  25.08.2003  remanded  the  aforesaid  assessment  

proceedings by a common order to re-examine the books of account and  

to re-determine the nature of sales as to whether they are intra-state sales  

or inter-state sales, on the basis of the books of account and the audit  

reports  as  well  as  on the basis  and within  the meaning and scope  of  

Section 3(a) of the Central Sales Tax Act, 1956 (for short “the CST Act”).  

Thereafter, Deputy Commissioner of Commercial Taxes, Dhanbad Circle  

on  the  basis  of  guidelines  issued  by  the  Joint  Commissioner  of  

Commercial  Taxes  (Appeals)  passed  the  revised  assessment  orders  on  

26.12.2003 reversing the then inter-State sales under Section 3(a) of the

CST Act 1956 into the intra-State sales.  Respondent on 10.3.2005 filed  

an application for refund of excess amount of tax after adjustment of the  

amount to be paid by Respondent. Accordingly, on 21.8.2006 notice was  

issued by Deputy Commissioner of Commercial Taxes to Respondent to  

file its refund application before the Joint Commissioner of Commercial  

Taxes  since  the  amount  refundable  to  the  Respondent  is  above  Rs.  

25,000/-.  Thereafter in the year 2006, as is alleged by the respondent,  

the Deputy Commissioner of the Dhanbad Circle got changed and the new  

Deputy  Commissioner  examined  the  revised  assessment  orders  of  the  

Respondent  and he  opined  that  the  revised  assessment  orders  do  not  

conform to the appellate direction and Deputy Commissioner informed the  

Joint  Commissioner  of  Commercial  Taxes  (Administration)  about  his  

observations.  The  Joint  Commissioner  of  Commercial  Taxes  

(Administration),  Dhanbad  Division,  Dhanbad  [Appellant  No.  4]  then  

initiated  the  proceeding  suo  motu under  Section  46(4)  of  the  adopted  

Bihar Finance Act, 1981 [now repealed] and issued notice/Memo No. 744  

dated 1.8.2007 directing the Respondent to furnish the complete sets of  

books of account in order to determine the legality and propriety of the  

said  revised  assessment  orders  conforming  to  the  appellate  order.  On  

28.11.2007  Respondent  filed  Writ  Petition  before  the  High  Court  of

Jharkhand which was registered as WP (T) No. 6377 of 2007 praying for a  

direction to quash the notice/Memo No. 883 dated 20.9.2007 [which was  

issued  in  pursuance  to  earlier  notice/Memo  No.  744  dated  1.8.2007]  

issued by the Joint Commissioner of Commercial Taxes (Administration)  

for initiating the proceeding suo motu under Section 46(4) of the repealed  

BFT Act, 1981 and also for quashing the order dated 26.11.2007 passed  

by the Joint Commissioner of Commercial Taxes by which he set aside the  

revised assessment order dated 26.12.2003. The High Court of Jharkhand  

vide  its  order  dated  14.03.2008  allowed  the  Writ  Petitions  of  the  

respondent  herein  against  which the  appellants  have  filed  the  present  

appeals on which we heard the learned counsel appearing for the parties.

CIVIL APPEALS ARISING OUT OF SLP (C) NOS. 19105-06 OF 2008

5. The facts leading to the filing of appeals arising out of SLP (C) Nos.  

19105-06  of  2008  are  that  the  Respondent  -M/s.  Rani  Sati  Coke  

Manufacturing Company, Baliyapur, Dhanbad is engaged in processing of  

coal to coke and was assessed to tax for the Financial Years from 1984-85  

to 2000-2001 determining the tax on “intra-State sales” transactions, as  

well as Central Sales Tax on inter-State sales transactions. Respondent

filed an appeal against the assessment orders passed between 29.12.1987  

to 10.3.2003 for the Financial Years from 1984-85 to 2000-01 and the  

appellate  authority,  i.e.,  the  Joint  Commissioner  of  Commercial  Taxes  

(Appeal), Dhanbad Division, Dhanbad remanded the aforesaid assessment  

proceedings by a common order to re-examine the nature of intra-State  

sales and inter-State sales on the basis of the books of account and the  

audit reports as well as on the basis of the meaning and scope of Section  

3(a)  of  the  CST  Act,  1956.  Thereafter,  the  Deputy  Commissioner  of  

Commercial Taxes  passed the revised assessment order vide orders dated  

14.12.2005 and 29.12.2005 reversing / converting the then inter-State  

sales under Section 3(a) of the CST Act, 1956 into the intra-State sales.  

Pursuant thereto, Respondent filed prescribed refund application before  

the Deputy Commissioner  of  Commercial  Taxes.  Thereafter  in the year  

2006, it is alleged by the respondents that, the Deputy Commissioner of  

the  Dhanbad  Circle  got  changed  and  the  new  Deputy  Commissioner  

examined the revised assessment orders of the Respondent and he opined  

that  the  revised  assessment  orders  do  not  conform  to  the  appellate  

direction and as such do not have any merit as they were re-assessed on  

the basis of same facts for converting the then inter-State sales into the  

intra-State  sales,  which  resulted  the  claim  of  refund  and  Deputy

Commissioner  informed  the  Joint  Commissioner  of  Commercial  Taxes  

(Administration)  about  his  observations.  Pursuant  to  this  Joint  

Commissioner  of  Commercial  Taxes  (Administration)  initiated  the  

proceeding suo motu under Section 46(4) of the Bihar Finance Act, 1981  

and  issued  notice  No.  850  dated  06.09.2007  directing  Respondent  to  

furnish the complete sets of books of account, in order to determine the  

legality and propriety of the said revised assessment orders conforming to  

the appellate order. Thereafter, Respondent No. 2 filed two Writ Petitions  

before the High Court of Jharkhand which were registered as W.P. (T) Nos.  

5892 and 5895 of  2007 praying for  the direction to the appellants for  

immediate  refund  of  the  entire  amount  arising  out  of  the  revised  

assessment  orders  in  which  High  Court  directed  the  appellants  to  

participate  in  revision  proceedings,  after  which  Respondent  filed  an  

amended petition  before  the  High  Court  by  bringing  the  fact  that  the  

revision proceedings under Section 46(4) of the Bihar Finance Act, 1981  

was opened on the basis of an application of the Deputy Commissioner  

which is not permitted as per the provisions of the repealed BFT Act, 1981  

and  that  the  same  is  also  barred  by  limitation.  The  High  Court  of  

Jharkhand vide its order dated 14.03.2008 allowed the Writ Petitions of  

the  respondents  herein  against  which  the  appellants  have  filed  the

present appeals on which we heard the learned counsel appearing for the  

parties.  

CIVIL APPEALS ARISING OUT OF SLP (C) NO. 21491 AND 8424 OF  2008

6. The appeals arising out of SLP(C) No. 21491 of 2008 are against the  

judgment and order of the High Court of Jharkhand dated 19.03.2008  

following the judgment in WP (T) NO. 6377 of 2007.   The facts of this  

appeal and also of the appeal arising out of SLP (C) No. 8424 of 2010 are  

similar to the other appeals at hand. So, we need not go into the detailed  

facts of the said two appeals.

7. The learned counsel appearing for the appellant while taking us to  

the impugned judgment and also the connected records submitted that  

judgment and order passed by the High Court is incorrect.  He further  

submitted that the findings arrived at by the High Court are erroneous  

and based on wrong readings of the materials available on record.

8. The  learned  counsel  appearing  for  the  respondents  on  the  other  

hand  while  drawing  support  from  the  impugned  judgment  and  order  

submitted that the findings recorded by the High Court are findings of fact

and  therefore  this  Court  should  not  interfere  with  the  aforesaid  

conclusions of fact arrived at by the High Court by giving cogent reasons  

for its conclusions.

9. Upon reading the entire records and materials placed and also upon  

hearing the learned counsel appearing for the parties, in our considered  

opinion three following issues appear to arise for our consideration;

a) Whether the suo motu power of revision under Section 46(4) of the  

BFT Act, 1981, vested with the Joint Commissioner was legally and  

properly exercised in the present case;

b) Whether or not the action taken by the Department was barred by  

limitation  and whether  such action was  bad  for  not  having  been  

initiated within a reasonable time;

c) Whether  the  order  dated  26.11.2007  passed  by  the  Joint  

Commissioner  setting  aside  the  revised  assessment  order  dated  

26.12.2003 is proper and could be maintained;

10. We propose to deal with the aforesaid three issues one after the other  

and record our reasons for coming to the decision in each of the aforesaid  

issues;

Issue 1: Whether exercise of Suo Motu power of revision as provided  under Section 46(4) of the BFT Act, 1981 could be upheld;

 11. Section 46 of the BFT Act, 1981 with which we are concerned in the  

present  case  came  to  the  statute  book  with  the  enactment  of  Bihar  

Finance Act, 1981. The aforesaid Act was a consolidated Act which was  

passed by the State Legislature amending the law relating to levy of tax on  

sale and purchase of goods.  In the said Act, Section 45 provides for the  

provision of filing an appeal whereas Section 46 of the Act lays down the  

provision of revision.  In the present case, we are only concerned with the  

provision of revision and in our estimation, the entire provision of Section  

46 should be extracted hereinafter.

46.  Revision – (1)  Subject to such rules as may be made by  the State Government an order passed on an appeal under sub- section (1) or (2) of section 45 may, on application, be revised  by the Tribunal.

(2)  Subject as aforesaid any order passed under this part or  the rules made thereunder, other than an order passed by the  Commissioner under sub-section (5) of section 9 or an order  against which an appeal has been provided in section 45 may,  on application be revised.

(a)  by the Joint Commissioner, if the said order has been  passed  by  an  authority  not  above  the  rank  of  Deputy  Commissioner; and

(b)   by the Tribunal, if the said order has been passed by  the Joint Commissioner or Commissioner.

(3)  Every application for revision under this section shall be  filed  within  ninety  days  of  the  communication  of  the  order  which is sought to be revised, but where the authority to whom  the application lies is satisfied that the applicant had sufficient  cause for not applying within time, it may condone the delay.

(4)  The  Commissioner  may,  on  his  own  motion  call  for  an  examine the records of any proceeding in which any order has  been passed by any other authority appointed under section 9,  for  the  purpose  of  satisfying  himself  as  to  the  legality  or  propriety of  such order and may, after examining the record  and making or causing to be made such enquiry as he may  deem necessary, pass such order as he thinks proper.

(5)  No order under this section shall be passed without giving  the appellant as also the authority whose order is sought to be  revised  or  their  representative,  a  reasonable  opportunity  of  being heard.

(6)  Any revision against an appellate order filed and pending  before the Joint Commissioner or a revision against any other  order filed and pending before the Deputy Commissioner since  before  the enforcement of  this  part  shall  be deemed to have  been filed and/or transferred respectively to the Tribunal and  Joint Commissioner; and any revision relating to a period prior  to the enforcement of this part against an appellate order, or  against any other order passed by an authority not above the  rank of Deputy Commissioner shall,  after the enforcement of  this part, be respectively filed before the Tribunal and the Joint  Commissioner.

12. The said Act came to be amended in 1984.  Section 10 of the Bihar  

Finance  Amendment  Act,  1984  amended  Section  46  in  some  respect  

which again is extracted hereinbelow:-

10. Amendment of section 46 of the Bihar Act V, 1981 (Part   I). –  In sub-section (3) of section 46 of the said Act for  the word “sixty” the word “ninety” shall be substituted.

(2)  For  sub-section  (4)  the  following  sub-section  shall  be  substituted namely :-

“4 (a) The Commissioner may, on his own motion call for and  examine the records of any proceeding in which any order  has been passed by any other authority appointed under  section 9,  for  the purpose of  satisfying himself  as to the  legality or property of such order and may, after examining  the record and making or causing to be made such enquiry  as he may deem necessary, pass such order as he thinks  proper.

13. By  inserting  a  provision  namely  Section  7  of  the  Bihar  Finance  

(Amendment)  Ordinance,  1989,  clause  (b)  of  sub-Section  (4)  has  been  

deleted with effect from May, 1989. Therefore, the statutory provision that  

now stands and is operative is that Section 46 provides for a revision of all  

appellate and other orders passed by various authorities under the BFT  

Act, 1981.  According to the statutory provision as applicable, power of  

revision is vested with the Tribunal and the Joint Commissioner, which  

power  is  to  be  exercised  on  application  by  any  person  aggrieved,  but  

subject  to  time  limit  prescribed  in  sub-Section  (3)  i.e.  90  days  of  the  

communication of the order with a further power to condone the delay, if  

sufficient cause is shown.   There is an additional power vested on the

Commissioner  which empowers the Commissioner  to initiate  suo motu  

revision  proceedings  at  any  time  and  for  exercising  such  power  no  

limitation  has  been  prescribed  in  the  statute.   The  power  of  the  

Commissioner to initiate such suo motu revisional proceeding has been  

delegated  to  the  Joint  Commissioner  of  Commercial  Taxes  

(Administration)  against  the  orders  of  the  officers  lower  than his  rank  

which is so delegated in terms of the notification issued by the State of  

Bihar under S.O. No. 795 dated 28th June 1986.    

14. It is thus established that under Section 46 of the BFT Act, 1981, it  

is  the  Commissioner  who  on  the  basis  of  an  application  filed  by  an  

aggrieved party revise the order passed by any authority subordinate to  

him.   He also has the additional power alongwith the Joint Commissioner  

as a delegatee as provided under Section 46(4) of the BFT Act, 1981 to  

revise an order passed by an authority subordinate to it by exercising its  

suo motu power.

15. In all these appeals, the Joint Commissioner of Commercial Taxes  

has exercised the power vested on him under Section 46(4) of the BFT Act,  

1981  which  power  in  most  cases  concerning  the  present  appeals  was

exercised by him within a period of three years but in some other cases  

beyond the expiry of three years period, but soon thereafter.

16. In  that  view of  the  matter,  counsel  appearing  for  the  respondent  

submitted in the High Court  that exercise of  such power by the Joint  

Commissioner after expiry of more than two years time is illegal, without  

jurisdiction and bad in law. The Division Bench of the Jharkhand High  

Court found force in the aforesaid submissions of the counsel appearing  

for  the  respondent  and held  that  such suo motu power  vested  on an  

authority must be exercised within three years period which is a period  

prescribed under Article 137 of the Limitation Act, 1963.   According to  

the  High Court  where  no time  limit  is  prescribed  for  filing  a  revision,  

Article 137 of the Limitation Act would apply to such cases.  It was further  

held  that  since  under  Section  46(4),  no  time  limit  is  prescribed  the  

limitation  as  prescribed under  Article  137 of  the  Limitation  Act  would  

apply to the facts and circumstances of the present case.

17. Counsel appearing for the appellant, however, submitted before us  

that the aforesaid contentions on the face of it cannot be accepted as a  

correct position in law for by enacting sub-Section (4) in Section 46, the  

legislature thought it fit not to impose any restriction or time limit so far

as limitation is concerned and therefore to hold that Article 137 of the  

Limitation Act would apply to such provisions is nothing but misreading  

of the provisions for if that was the intention of the legislature it would  

have so stated specifically by making the said provision applicable to a  

case like this.

18. The counsel therefore, submitted that such power of initiation of suo  

motu revision proceedings by the Commissioner or Joint Commissioner as  

the case may be should be held to be without any time or such restriction  

or at least it should be held that such exercise of power of revision could  

be exercised suo motu within a reasonable time depending on the facts  

and circumstances of each case.

19. Another submission which is advanced by the counsel appearing for  

the respondent was that the Joint Commissioner has exercised the power  

of suo motu revision in the instant case on the basis of an application  

filed  by  the  Deputy  Commissioner  which  was  sent  to  the  Joint  

Commissioner by him and that application was drawn up and submitted  

under Section 46(4) itself and therefore, the entire exercise of power by the  

Joint  Commissioner  is  fallacious,  untenable  and should be  held  to  be  

illegal.

20. The counsel appearing for the appellant, however, refuted the said  

allegations  and  submitted  that  although  Deputy  Commissioner  had  

written a letter to the Joint Commissioner  bringing to his notice some  

mistakes and errors apparent on the face of records and illegalities by his  

predecessor in his order, but, it was a power which was exercised by the  

Joint Commissioner independently  on his own accord and therefore,  it  

cannot be said that the aforesaid power was exercised illegally or without  

jurisdiction.

21. We may therefore, refer to the materials on record so as to record our  

findings on the aforesaid issue.    

22. In  all  these  appeals,  there  are  letters  which  were  written  by  the  

Deputy Commissioner  of  Commercial  Taxes  to the Joint  Commissioner  

(Administration).  One of such letter is dated 28.8.2007.  In the said letter  

it is stated by the Deputy Commissioner that the said communication is  

regarding filing of suo motu revision under Section 46(4) of the BFT Act,  

1981.   The aforesaid letter by the Deputy Commissioner,  Commercial  

Taxes was written to the Joint Commissioner (Administration).    In the  

said  letter,  the  Deputy  Commissioner  has  pointed  out  some  alleged

mistakes in the original tax assessment order and the revised order.   He  

also stated in that communication that he is unable to agree with the  

revised  tax  assessment  order  and reimbursement  order  passed  by  the  

Divisional  Incharge  and  therefore,  according  to  his  opinion  a  revision  

should  be  filed  under  Section  46(4)  of  the  BFT Act,  1981  against  the  

revised tax assessment order dated 29.12.2005

23. Our attention was also drawn to the notice for revision issued by the  

Joint Commissioner of Commercial  Taxes (Administration).   One of the  

notices  is  dated  17.12.2007 issued  to  M/s.  Shivam  Coke  Industries  

namely  the  respondent  herein  for  the  assessment  years  1988-1989  to  

1992-1993 and 1996-1997.   The said notice reads as follows:-

“Whereas all the points and facts have not been considered  while passing the revised assessment orders pertaining to  the  above  cases  which  were  to  be  considered  as  per  directions of the appellate court, hence the related revised  assessment  orders  are  not  in  conformity  neither  the  directions of the appellate court and the provisions of law.

In the light of the above facts the legality & propriety of the  revised  assessment  orders  has  not  been established  and  hence the revision of the said orders have been considered  necessary.

You  are  hereby  directed  to  be  present  before  the  undersigned on 15.5.2007 and place your side as to why  the above stated revised orders should not be set aside?

Joint Commissioner of Commercial Taxes (Adm.) Dhanbad Division, Dhanbad”

24. Such  orders  are  also  existing  against  similar  notices  in  the  

connected matters.

25. Relying  on  the  aforesaid  two  documents,  the  counsel  for  the  

respondent  submitted before  us that  it  is  apparent  on the  face  of  the  

record that the Joint Commissioner of Commercial Taxes initiated the suo  

motu  action  on  the  basis  of  the  letter  of  the  Deputy  Commissioner,  

Commercial Taxes who had stated that the revision should be filed under  

Section 46(4) of the BFT Act, 1981.   It was submitted in such a situation  

and that since it is an application filed by the Deputy Commissioner, the  

same was a power to be exercised under Section 46 (2) of the BFT Act,  

1981   which  is  an  ordinary  power  of  revision  to  be  exercised  by  the  

competent authority on an application filed by the aggrieved party and  

here  the  Deputy  Commissioner.   According  to  the  counsel,  since  the  

Deputy  Commissioner  is  an  aggrieved  party,  he  could  file  such  an  

application seeking for revision within a period prescribed i.e. 90 days and  

in that view of the matter even if the Joint Commissioner exercises suo

motu power, such power could and should have been exercised within a  

period of 90 days as prescribed.

26. We are, however, unable to accept the aforesaid contentions for the  

simple reason that  a bare perusal of the notice issued on 17.12.2007, the  

contents of which have been extracted hereinbefore would indicate that  

the aforesaid notice was issued by the Joint Commissioner by exercising  

his individual suo motu power as provided under Section 46(4).   It is not  

a case where such notice was issued on the basis of an application filed  

by the Deputy Commissioner. This is obvious because in the said notice,  

there  is  absolutely  no  reference  made  of  the  application  sent  by  the  

Deputy Commissioner.   If from the available records of a particular case,  

the Joint Commissioner forms an independent opinion that the same is a  

case  where  suo  motu  power  of  Revision  should  be  exercised,  he  is  

empowered to so exercise such suo motu power of revising an order which  

appears to be illegal and without jurisdiction to the competent authority  

who  is  empowered  to  issue  such  notice  by  recording  his  reasons  for  

coming to such a conclusion in the notice itself.

27. In the present case, the Joint Commissioner has exercised his own  

independent  mind  for  issuing  the  notice  and  also  recorded  his  own

reasons for coming to a conclusion as to why the power under Section  

46(4) should be exercised.   Having recorded the aforesaid reason, such  

notice was issued to the assessee after forming a decision.   The assessee  

was informed by issuing the said notice that the legality and propriety of  

the  revised assessment  order  has not  been established because of  the  

reasons mentioned in the notice and therefore, the revision of the said  

orders is proposed is it has been considered necessary.    By the said  

notice,  the  assessee  was  directed  to  be  present  before  the  Joint  

Commissioner and place his side as to why the above revised assessment  

order should not be set aside.   

28. The  respondent  being  aggrieved  by  the  issuance  of  the  aforesaid  

order  filed  a  writ  petition  before  the  High  Court.    The  High  Court,  

however, did not grant any stay of the aforesaid notice and permitted the  

respondent to contest the said notice in accordance with law during the  

course  of  which the Joint  Commissioner  of  Commercial  Taxes  has set  

aside the revised orders and sent back the matter for fresh assessment to  

the assessing officer.    

29. The  aforesaid  subsequent  development  which  had  taken  place  

during the pendency of the writ petition in the High Court has not been

addressed  to  and  decided  by  the  High  Court  as  the  High  Court  has  

disposed of the entire writ petition on two issues namely on the issue of  

the ambit and scope of Section 46(4) of the BFT Act, 1981 and also on the  

ground of limitation.

30. The Deputy Commissioner, Commercial Taxes Division has pointed  

out in his communication to the Joint Commissioner several loopholes in  

the  revised  assessment  orders  passed  by  the  assessing  officer.   The  

Deputy Commissioner has also pointed out how the assessee has made  

conflicting  claims  and statements  and also  how while  upholding  such  

contradictory claims, there has been a revenue loss for the department.  

Alongwith his letter, some of the relevant records were transmitted to the  

Joint  Commissioner.    It  is  true  that  the  Deputy  Commissioner,  

Commercial Taxes Division has brought out and pointed out some of the  

illegalities and irregularities committed in the revised assessment orders  

passed  by  his  predecessor  in  the  assessment  orders  relating  to  the  

respondent.

31. But the impugned notice issued by the Joint Commissioner ex facie  

indicates  that  he  being  the  competent  authority  has  formed  an  

independent  opinion  and  personal  satisfaction  that  the  legality  and

propriety  of  the  revised  assessment  orders  has  not  been  established  

because of the reasons specifically stated in the said notice and therefore  

he has thought it fit to exercise his power of suo motu revision consequent  

upon which the aforesaid notice was issued.

32. There is no reference in the said notice to the letter and any other  

materials contained with the letter of the Deputy Commissioner anywhere  

in the notice and therefore, it cannot be said that while coming to the  

aforesaid  conclusion  in  the  impugned  notice,  the  Commissioner  was  

influenced  only  by  the  opinion  of  the  Deputy  Commissioner.    On  

consideration of the records we are satisfied that it  was not a revision  

initiated on the basis of any application filed by an aggrieved party namely  

the Deputy Commissioner but initiation of a Revisional proceeding by the  

Joint  Commissioner  by  forming  his  own  opinion  and  satisfaction  to  

exercise suo motu power vested under Section 46(4) of the BFT Act on the  

basis of the materials on record.   The aforesaid contention is therefore,  

rejected.

Issue 2 - Whether or not the action taken by the Department was  barred by limitation

33. The next issue which now arises for our consideration is whether the  

aforesaid  exercise  of  power  of  drawing  up  a  revisional  proceeding  by  

exercising  suo  motu  power  was  not  exercised  within  the  period  of  

limitation or within a reasonable period of time.

34. We have also extracted the provision which clearly indicates that no  

period  of  limitation  is  prescribed  for  initiation  of  suo  motu  revisional  

proceeding by the Commissioner or the Joint Commissioner as the case  

may be, whereas a period of limitation is prescribed for filing a revision  

application  by  an  aggrieved  party  for  initiation  of  the  revisional  

jurisdiction of the Commissioner which period is 90 days, as is stood at  

that relevant time.

35. The High Court has held that there cannot be an unlimited period of  

limitation even for exercising of suo motu revisional power for initiation of  

a proceeding by the Commissioner or the Joint Commissioner as the case  

may be and therefore provision of Article 137 of the Limitation Act  was  

read into the Act laying down that at least within a period of three years  

from the date of accrual of the cause of action such a power of suo motu  

Revision should be exercised by the Joint Commissioner.   

36. We  are  again  unable  to  accept  the  aforesaid  contention  as  the  

legislature has not stated in the provision at all regarding the applicability  

of Article 137 of the Limitation Act to Section 46(4) of the BFT Act.   If the  

legislature intended to provide for any period of limitation or intended to  

apply the said provision of Article 137 into Section 46(4), the legislature  

would have specifically said so in the Act itself.   When the language of the  

legislature is clear and unambiguous, nothing could be read or added to  

the language, which is not stated specifically. Therefore, the High Court  

wrongly read application of Section 137 of the Limitation Act to Section  

46(4) of the BFT Act.  

37. It  is  a  settled  position  of  law  that  while  interpreting  a  statute,  

nothing could be added or subtracted when the meaning of the section is  

clear  and unambiguous.   In  this  connection we may also  refer  to  the  

decision of this Court in Sakuru vs. Tanaji reported in (1985) 3 SCC 590  

wherein it  was stated by this  Court  that the  Limitation Act  applies to  

courts and not to quasi judicial authority.   

38. The aforesaid principle and settled position of law was totally ignored  

by the High Court while laying down that Article 137 of the Limitation Act  

would be applicable to the facts and circumstances of the present case.

39. We  would,  however,  agree  with  the  position  that  such  a  power  

cannot  be  exercised  by  the  revisional  authority  indefinitely.    In  our  

considered opinion,  such extra  ordinary  power  i.e.  suo motu power  of  

initiation of revisional proceeding has to be exercised within a reasonable  

period of time and what is  a reasonable period of time would depend on  

the facts and circumstances of each case.

40. For  this  proposition,  a  number of  decisions of  this  Court  can be  

referred to on which reliance was placed even by the counsel appearing for  

the respondent.

41.  In Sulochana Chandrakant Galande Vs. Pune Municipal Transport  

and Others reported in  (2010) 8 SCC 467,  this Court dealing with the  

issue of “reasonable time” held as follows:-

29. In view of the above, we reach the inescapable conclusion  that  the revisional  powers  cannot be used arbitrarily  at  a  belated stage for the reason that the order passed in revision  under Section 34 of the 1976 Act, is a judicial order. What  should be reasonable time, would depend upon the facts and  circumstances of each case.

42. In Govt. of India v. Citedal Fine Pharmaceuticals, Madras and  

Others reported in  (1989) 3 SCC 483:

6. ……While it is true that Rule 12 does not prescribe any  period within which recovery of any duty as contemplated by  the rule is to be made, but that by itself does not render the  rule  unreasonable  or  violative  of  Article  14  of  the  Constitution. In the absence of any period of limitation it is  settled that every authority is to exercise the power within a  reasonable period. What would be reasonable period, would  depend upon the facts of each case…..

43. In State of Punjab & Ors.  v. Bhatinda District Cooperative Milk  

Producers Union Ltd. reported in (2007) 11 SCC 363      

18.  It  is  trite  that  if  no  period  of  limitation  has  been  prescribed, statutory authority must exercise its jurisdiction  within  a  reasonable  period.  What,  however,  shall  be  the  reasonable  period  would  depend  upon  the  nature  of  the  statute, rights and liabilities thereunder and other relevant  factors.

44. Now, the question that arises for our consideration is whether the  

power  to  exercise  Suo  motu  revisional  jurisdiction   by  the  Joint  

Commissioner  in  the  present  cases  was exercised  within  a  reasonable  

period.   On perusal of the records, we find that such powers have been  

exercised within about three years of time in some cases and in some  

cases soon after  the expiry of  three years period.   Such period during  

which power was exercised by the Joint Commissioner cannot be said to  

be unreasonable by any stretch of imagination in the facts of the present  

case.   Three years period cannot be said to be a very long period and

therefore, in all these cases, we hold that the power was exercised within  

a reasonable period of time.

Issue 3:  Whether  the order dated 26.11.2007 passed by the Joint  Commissioner is proper and could be maintained;

45. Having decided the aforesaid two issues in the aforesaid manner, the  

next  and the last issue that arises for our consideration is whether the  

order dated 26.11.2007 passed by the Joint Commissioner setting aside  

the revised assessment order dated 27.12.2003 is proper and could be  

maintained, as the said order was passed during the pendency of the writ  

petition in the High Court.

46.  On this issue also, we have heard the learned counsel appearing for  

the parties. The aforesaid order dated 26.11.2003 was passed while the  

respondent was fighting out the litigation in the High Court and therefore,  

it was not possible for the assessee to give his entire focus and attention  

and also to give full  concentration to the aforesaid proceeding pending  

before the Joint Commissioner.  The learned counsel appearing for the  

appellant  also  could  not  dispute  the  fact  that  the  respondent  was  

somewhat handicapped in contesting the aforesaid matter very effectively  

before the Joint Commissioner.   

47. Considering the entire facts and circumstances of the case, we also  

set aside the order dated 26.11.2007 and remit back the matter to the  

Joint Commissioner once again to hear the parties and to pass fresh order  

in respect of the legality and propriety of the revised assessment order  

dated 26.12.2003.  Consequently, the matter is now remitted to the Joint  

Commissioner of Commercial Taxes to pass order in accordance with law  

giving  reasons  for  its  decisions  as  expeditiously  as  possible.   The  

impugned judgment and order passed by the High Court is set aside to  

the aforesaid extent while remitting back the matter as aforesaid, leaving  

the parties to bear their own costs.  

.....................................................J              (Dr. MUKUNDAKAM SHARMA)

.....................................................J  (ANIL R. DAVE)

NEW DELHI AUGUST 10, 2011