GYANCHAND DHARAMCHAND Vs. ADDITIONAL MEMBER BOARDOF REVENUE

JUDGEMENT

(1.) IN this application the petitioner has challenged the order made by the Additional Member, Board of revenue, under Section 20 (3) of the bengal Finance (Sales Tax) Act, 1941 (hereinafter referred to as the Act), which in effect would enhance the assessment of the amount of tax.

(2.) THE petitioner is a registered partnership firm and at all material time is dealing in agency business of ready-made garments, hosiery goods, etc. on commission basis. The petitioner is a registered dealer, the registration certificate being No. RJ/764a. On or about 7th January, 1959, the petitioner submitted a return before the Commercial tax Officer, Raja Katra Charge, for the period of 22nd October, 1957 to 10th november, 1958. The Commercial Tax officer, Rajakatra Charge on 27th september, 1962 made an exparte assessment under Section 11 (1) of the Act, on an estimated gross turnover at rs. 5,00,000/ -. The taxable turnover was again broken up and was determined at Rs. 20,000/- upto 31. 12. 57 and rs. 60,000/- thereafter. The petitioner thereafter preferred an appeal against the said order before the Assistant Commissioner, Commercial Tax, burrabazar Charge, under Section 20 (1) of the Act. The Assistant Commissioner of Commercial Tax, Burrabazar Circle, reduced the taxable turnover to Rs. 60,000/- in the computation of its taxable turnover. The appellate authority further directed that the tax was to be paid at 5% of the taxable turnover. The petitioner thereafter moved the Commissioner of Commercial taxes, West Bengal, in revision under section 20 (3) of the Act. The Additional Commissioner, Commercial Tax, west Bengal, by an order dated 30th december, 1967, reduced the taxable turnover further to Rs. 40,000/-, as in his opinion the estimate of Rs. 60,000/-was excessive and unreasonable and also that the textiles in which the petitioner carried on his main business were declared, exempt with effect from 13. 12. 57. The petitioner thereafter moved the board of Revenue, West Bengal, in revision under Section 20 (3) of the Act. On 19. 6. 68 the revision case was fixed for hearing on the preliminary point of limitation. It is alleged that the petitioner's advocate duly appeared on that date and the preliminary point was decided in his favour. As the petitioner was advised thereafter not to proceed with the said revision case before the board of Revenue, the petitioner filed a petition for withdrawal of his application on 8th May, 1968. The petitioner's case is that the office of the Board of revenue received the said application on 8th May, 1968 and a receipt was granted to the petitioner to that effect. The petitioner's revision case was also fixed for hearing on that date. As the petitioner had withdrawn his case by filing a petition to that effect, the petitioner did not make any representation before the Board of Revenue under the impression that the case would be dismissed in view of the petition of withdrawal already filed. The petitioner however received an order of the Additional member, Board of Revenue, made on 8th August, 1968. It appears from the said order that the Additional Member, board of Revenue, did not consider the application for withdrawal of the revision petition and in view of the fact that nobody appeared for the petitioner on that date even at 13. 00, the Additional Member, board of Revenue, passed an exparte order and dismissed the revision application. The Additional member, Board of Revenue, not only dismissed the application of the petitioner but took the view that the estimate of the gross turnover at Rs. 5,00,000/- made by the Commercial Tax Officer was reasonable. He did not however agree with the Commercial Tax Officer that any deduction could be allowed under Section 5 (2) (a) of the Act. The effect of his order is that there would be an increase in the taxable turn over and an enhancement of the assessment of the amount of tax.

(3.) THE petitioner has come against the order of the Additional Member under Art. 226 of the Constitution and obtained a rule nisi. The main contention urged by the learned Counsel on behalf of the petitioner is that before the order of revision is made by the Additional Member, Board of Revenue which had the effect of enhancing the tax, the petitioner should have been given an opportunity of being heard. In my opinion the grievance of the petitioner on this ground is justified. Under Section 20 (3) the power of revision has been conferred upon the Commissioner and also the Board of Revenue. Such power can be exercised either on an application by a dealer or suo motu. In my opinion, the scope of the revisional power which can be exercised under Sec. 20 of the Act fails into two board categories. When a dealer makes an application for revision, the revising authority on such application may either reject the application or may grant such relief as it thinks fit. The revising authority in such an application cannot enhance the assessment. By making are vision application the dealer is not placed in a position worse than what he would have been if he would not have made such an application. This does not necessarily mean that in the exercise of the revisional power, the Commissioner or the Board of Revenue cannot increase or enhance the assessment under any circumstances. Such power can be exercised by the Commissioner on his own motion. Even when an application for revision is filed by a dealer, if the Commissioner on perusal of the records considers that the assessment requires a revision so as to enhance the tax liability of the dealer he can exercise his power of revision, but such an exercise of his power, will be on his own motion or suo motu. In such a case before any order is made enhancing the assessment, in my opinion, the dealer must be given an opportunity of being heard on the enhancement of assessment proposed to be made. In the present case the petitioner made an application against the order of the Additional Commissioner of Commercial Taxes, Without entering into the controversy as to whether the Additional Member, Board of Revenue, could dismiss the application exparte when the petitioner has filed petition for withdrawing the revision application, the Additional Member, Board of Revenue acted in gross violation of the principles of natural justice when he suo motu exercised his power of revision by enhancing the assessment. It is true that the petitioner was not present when his application for revision was fixed for hearing. The only consequence he may suffer is the dismissal of his application for non-prosecution. He was never informed at any stage that the Additional Member while dealing with his application for revision proposed to enhance the assessment suo motu. The scope of the revisional power on an application by a dealer and suo motu at the instance of the revising authority is different. The subject-matter of the decision of the revising authority moved by an assessee is in no way affected by the potential power of that authority to take action suo motu if it thinks fit. But before such a power is invoked the dealer who is affected by such an order must be given reasonable opportunity of being heard. This requirement is given a statutory recognition under section 20 (5) of the Act which requires that before any order is passed under section 20, which is likely to affect any person adversely, such person shall be given reasonable opportunity of being heard. In my opinion an order which is passed in revision on an application by an assessee is different from an order which passed in revision suo motu at the instance of the revising authority. The view which I am taking is supported by the scheme of the Act. The contrary view is likely to lead to certain anomalous position. A dealer who has made an application for revision appears before the revising authority and presents his case in support of his application, the revising authority after hearing him passes an order which not only dismisses his application but enhances his tax liability on a different ground, but he was never informed of such proposed enhancement at the time of the hearing. It can hardly be contended that before the order of revision was passed the dealer was given a reasonable opportunity of being heard and hence the order is not vitiated by any breach of the principles of natural justice. Such a construction of Section 20 (5), in my opinion, is patently untenable.