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CASE NO.: Appeal (civil)  4808 of 2007

PETITIONER: State of Punjab & Ors

RESPONDENT: Bhatinda District Coop. Milk P. Union Ltd

DATE OF JUDGMENT: 11/10/2007

BENCH: S.B. Sinha & Harjit Singh Bedi

JUDGMENT: J U D G M E N T (Arising out of SLP (C) NO.5040 of 2007)

S.B. Sinha, J.

1.      Leave granted. 2.      What should be the reasonable period for reopening an order of  assessment under the Punjab General Sales Tax Act is the question involved  in this appeal which arises out of a judgment and order dated 22.12.2006  passed by a Division Bench of the High Court of Punjab and Haryana at  Chandigarh in CWP No.15477 of 2006 whereby and whereunder the writ  petition filed against a notice dated 4.9.2006 issued by Revisional Authority- cum-Assistant Excise and Taxation Commissioner, Bhatinda to the  respondent was allowed.   3.      Before embarking upon the said question, we may notice the basic  fact of the matter.   4.      Respondent herein is a federation of milk union.  It is a cooperative  society registered under the Punjab Cooperative Societies Act, 1948.  It is  also registered as a dealer under the Punjab General Sales Tax Act and the  Rules framed thereunder.  It has been running milk plants under the control  of Punjab State Cooperative Milk Producers Federation Limited,  Chandigarh.  The Act provides for levy of purchase tax on milk when  purchased for use in the manufacture of goods which are specified in  Schedule C thereof.  Milk when purchased for use in the manufacture of any  goods other than tax free goods provides for levy of purchase tax. 5.      In respect of the assessment for the year ending 31.3.2000, the  assessment proceedings were completed relying on the return filed by the  appellant on 20.3.2001.  Indisputably, in terms of Section 11 of the 1948  Act, a period of three years has been prescribed as a period of limitation as  contained under sub-section (3) of Section 11 for completing assessment  from the last date for filing of return.  Sub-section (6) of Section 11 reads as  under : \023If upon information which has come into his  possession, the Assessing Authority is satisfied  that any dealer has been liable to pay tax under this  Act in respect of any period but has failed to apply  for registration, the Assessing Authority shall,  within five years after the expiry of such period,  after giving the dealer a reasonable opportunity of  being heard, proceed to assess to the best of his  judgment, the amount of tax, if any, due from the  dealer in respect of such period and all subsequent  periods and in case where such dealer has willfully  failed to apply for registration, the Assessing  Authority may direct that the dealer shall pay by  way of penalty, in addition to the amount so  assessed, a sum not exceeding one and a half times  that amount.\024

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    Section 21 of the said Act provides for revision.  Section 21 of the Act  with which we are concerned herein reads as under: \02321. Revision-(1) The Commissioner may of his  own motion call for the record of any proceedings  which are pending before, or have been disposed  of by any authority subordinate to him, for the  purpose of satisfying himself as to the legality or  propriety of such proceedings or order made  therein and may pass such order in relation thereto  as he may think fit. (2)     The State Government may by notification  confer on any Officer the powers of the  Commissioner under sub-section (1) to be  exercised subject to such conditions and in respect  of such areas as may be specified in the  notification. (3)     A Tribunal, on application made to it against  an order of the Commissioner under sub-section  (1) within ninety days from the date of  communication of the order, may call for and  examine the record of any such case and pass such  orders thereon as it thinks just and proper. (4)     No order shall be passed under this section  which adversely affects any person unless such  person has been given a reasonable opportunity of  being heard.\024

6.      The authority issued notice upon the respondent to show cause as to  why the proposed action under Section 21(1) of the Act be not taken on the  premise that \023illegalities, irregularities and improprieties\024, as enumerated  therein had been found in the order of assessment dated 20.3.2001.  Cause  was to be shown on 14.9.2006.  Respondent neither appeared before the  revisional authority nor filed any show cause.   7.      It filed a writ petition before the Punjab and Haryana High Court  praying, inter alia, for the following reliefs : \023(i) A writ in the nature of certiorari calling for  the records of the case from the respondents  and quashing Notice (Annexure P1) as time  barred. (ii)    A writ in the nature of prohibition  restraining the respondents No.2 from  imposing, collecting and recovery of  purchase tax proposed in the notice  exercising Revisional powers u/s 21(1) of  the Act. (iii)   Any other writ, order or direction as this  Hon\022ble Court may deems fit and  appropriate in the facts and circumstances of  the case.\024

8.      Appellant, in its affidavit in opposition, took a preliminary objection  that the said writ petition was pre-mature and, thus, should not be  entertained being against a mere show cause notice.  It was contended that  respondents would be entitled to take all the points raised by it in the writ  petition before the Revisional Authority.   9.      The High Court, relying on some of precedents, opined that the order  of assessment having been passed on 20.3.2001 and as the same is sought to  be revised by issuing notice dated 4.9.2006, without assigning any reason  justifying exercise of revisional jurisdiction, the same was wholly  unsustainable in law.   10.     The learned counsel appearing on behalf of the appellant, in support  of this appeal, inter alia, submitted that the High Court in passing the  impugned judgment committed a serious illegality in so far as it failed to  take into consideration that no time limit has been fixed for exercise of suo

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moto jurisdiction of the Revisional Authority.  It was further submitted that  as it was open to the respondent to raise all contentions before the Revisional  Authority itself, it was not a fit case where the High Court should have  exercised its power of judicial review.   11.     Punjab General Sales Tax Act provides for levy of purchase tax on  certain goods which are specified in Schedule C therein; Entry No. 13  whereof reads as under : \023Milk \026 when purchased for use in the  manufacture of any goods other than tax free  goods for sale.\024   

12.     Respondent indisputably has been filing quarterly returns before the  assessing authority showing sales turn over and purchase turn over of the  goods.  Under the said provision, deposit of sales tax and purchase tax as per  returns is provided for.  It castes a duty on the assessee to deposit the  purchase tax on purchase of milk which is used for the manufacture of goods  other than tax-free goods as provided for in the Schedule appended thereto.   It is neither in doubt nor in dispute that the respondent filed returns for all  the quarters for the year ending 31.3.2000.  It also stands admitted that the  assessment proceedings were completed on 28.3.2001. 13.     Indisputably, books of accounts and other relevant documents were  taken into consideration by the assessing authority while passing the order of  assessment.   14.     Sub-section (1) of Section 11 provided for a three years limitation.   We may notice that the said period of limitation was introduced by reason of  Punjab Act No.12 of 1998 and prior thereto a period of five years was  prescribed therefor.  Sub-section (3) of Section 11 also provides for a three  years\022 limitation.  Sub-section (6) of Section 11 which is the residuary  provision provides for five years\022 limitation.   15.     Sub-section (1) of Section 11 empowers the Commissioner to extend  the period of three years for passing the order of assessment wherefor  reasons are required to be recorded in writing subject, however, to the  mximum period of five years.  Ordinarily, therefore, a period of three years  has been prescribed for completion of the assessment in terms of the  provisions of the Act.  We may also notice that in cases where an assessment  order is to be reviewed, the same should be done within a period of one year. 16.     A bare reading of Section 21 of the Act would reveal that although no  period of limitation has been prescribed therefor, the same would not mean  that the suo moto power can be exercised at any time.   17.     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.   18.     Revisional jurisdiction, in our opinion, should ordinarily be exercised  within a period of three years having regard to the purport in terms of the  said Act.  In any event, the same should not exceed the period of five years.   The view of the High Court, thus, cannot be said to be unreasonable.   Reasonable period, keeping in view the discussions made hereinbefore, must  be found out from the statutory scheme.  As indicated hereinbefore,  maximum period of limitation provided for in sub-section (6) of Section 11  of the Act is five years. 19.     In The State of Orissa v. Debaki Debi & Ors. reported in [AIR 1964  SC 1413], on interpretation of the provisions of Section 12(6) of the Orissa  Sales Tax Act, 1947, 36 months\022 time was considered to be the period of  limitation for exercise of the revisional jurisdiction.   20.     In S.B. Gurbaksh Singh v. Union of India & Ors. [1976 (37) STC  425], Untwalia J., speaking for the Bench, opined :  \023Appropos the fourth and last submission of the  appellant, suffice it to say that even assuming that  the revisional power cannot be exercised suo motu  after an unduly long delay, on the facts of this case  it is plain that it was not so done.  Within a few  months of the passing of the appellate order by the  Assistant Commissioner, the Commissioner  proceeded to revise and revised the said order.  

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There was no undue or unreasonable delay made  by the Commissioner.  It may be stated here that  an appeal has to be filed by an assessee within the  prescribed time and so also a time-limit has been  prescribed for the assessee to move in revision.   The appellate or the revisional powers in an appeal  or revision filed by an assessee can be exercised in  due course.  No time-limit has been prescribed for  it.  It may well be that for an exercise of the suo  motu power of revision also, the revisional  authority has to initiate the proceeding within a  reasonable time.  Any unreasonable delay in  exercise may affect its validity.  What is a  reasonable time, however, will depend upon the  facts of each case.\024

21.     Our attention has been drawn to a decision in Commissioner of Sales  Tax, Orissa & Anr. V. M/s. Halari Store etc. [(1997) 7 SCC 715] wherein  this Court, while considering the provisions of Orissa Sales Tax Act, 1948  and the Rules framed thereunder, held : \023\005 But, the same is not the position where the  Commissioner decides to exercise his suo motu  revisional power to revise an appellate order.   Significantly the words \023on his own motion\024  occurring in the enactment are conspicuously  present in the proviso the legislature has excluded  the revisional jurisdiction of the Commissioner of  Sales Tax to revise an appellate order if invoked at  the instance of a dealer or a person when such  dealer or person has a remedy by way of an appeal.   As noticed earlier, the limitation on the suo motu  power of the Commissioner as to revise an  appellate order has not been expressly provided in  the proviso.  In the absence of any expressed  provisions, no limitation on suo motu power of the  Commissioner to revise an appellate order can be  implied.  We accordingly hold that the provisions  of proviso to sub-section (4)(a) of Section 23 of  the Act do not prohibit the Commissioner to  exercise suo motu revisional power to revise an  appellate order.\024

22.     The question as to what would be the reasonable period did not fall  for consideration therein.  The binding precedent of this Court, some of  which had been referred to us heretobefore, had not been considered.  The  counsel appearing for the parties were remiss in bringing the same to the  notice of this Court.  Furthermore, from a perusal of the impugned notice  dated 4.9.2006, it is apparent that the Revisional Authority did not assign  any reason as to why such a notice was being issued after a period of 5=  years.   23.     Question of limitation being a jurisdictional question, the writ petition  was maintainable.   24.     We are, however, not oblivious of the fact that ordinarily the writ  court would not entertain the writ application questioning validity of a notice  only, particularly, when the writ petitioner would have an effective remedy  under the Act itself.  This case, however, poses a different question.  The  Revisional Authority, being a creature of the statute, while exercising its  revisional jurisdiction, would not be able to determine as to what would be  the reasonable period for exercising the revisional jurisdiction in terms of  Section 21(1) of the Act.  The High Court, furthermore in its judgment, has  referred to some binding precedents which have been operating in the field.   The High Court, therefore, cannot be said to have committed any  jurisdictional error in passing the impugned judgment. 25.     There is, thus, no merit in the case.  It is dismissed accordingly.  No  costs.