A. Pasayat, J.:— The petitioner calls in question the order passed by the Commissioner of Sales Tax, Orissa (opposite party No. 1), whereby he has nullified the effect of certain amendments to the certificate of registration issued to the petitioner under the Orissa Sales Tax Act, 1947 (in short “the Act”).
2. The background as indicated by the Commissioner in the impugned order is that on July 17, 1989, the petitioner prayed for amendment of its certificate of registration to the effect that it wanted to deal with thirteen additional items of goods for the purpose of resale. The prayer was allowed by the Sales Tax Officer (opposite party No. 2) on July 12, 1991, giving effect to such amendment with effect from the date of application, i.e, July 17, 1989. A notice as per annexure 3 was issued by the Commissioner to the petitioner proposing to revise the order dated July 12, 1991, by which the amendment as prayed for on July 17, 1989, was allowed. He proposed to exercise power under section 23(4)(a) of the Act read with rule 80 of the Orissa Sales Tax Rules, 1947 (in short “the Rules”), as according to him the order of the Sales Tax Officer effecting amendment was erroneous so far as it was prejudicial to the interest of the Revenue. The petitioner submitted its reply asserting that no error was committed by the Sales Tax Officer in allowing the amendment. It was also submitted that there was no indication in the notice as to why the amendment was considered erroneous, the notice was vague and no effective opportunity was granted to the petitioner to have its say. The Commissioner disposed of the matter by observing that the petitioner has utilised the entitlements given for wrongful purposes. The real object was to cover a fraud and the order was premature.
3. The learned counsel for the petitioner has assailed correctness of the order of the Commissioner on several grounds. According to him, there was nothing wrong in the order of amendment, and the approach of the learned Commissioner was not proper. It is also stated that the petitioner was not granted a reasonable opportunity of submitting his reply because show cause notice issued to him was vague and did not spell out the grounds on which the proposed action for suo motu revision was initiated.
4. The learned counsel for the department, however, submits that the learned Commissioner has elaborately dealt with the facts of the case as to how the effect of amendment granted by the Sales Tax Officer was erroneous and consequently prejudicial to the Revenue.
5. At this juncture, a reference to section 23(4)(a) and rule 80 is necessary. Section 23(4)(a) authorises the Commissioner to revise any order made under the Act or the Rules, by any person other than the Tribunal. Such power can be exercised on application by a dealer or person or on his own motion. Reasons for revision are to be recorded in writing. Rule 80 delineates power of the Commissioner to revise any order passed by the Additional Commissioner, the Special Additional Commissioner or the Assistant Commissioner within a period of two years from the date of passing of the order by the aforesaid authorities, and within three years from the date of passing of any order by the Sales Tax Officer. Such power can be exercised if it is considered that any order was erroneous in so far as it was prejudicial to the interest of the Revenue. Such power can be exercised after giving due opportunity of being heard to the dealer and after making such enquiry as deemed necessary. The opportunity to be granted must be effective. It cannot be an empty formality. A person who is required to show cause must know the basis on which the action is proposed. Obviously, therefore, the notice issued must indicate as to on what grounds the order is considered erroneous in so far as it is prejudicial to the interest of the Revenue. It is only where the order of the subordinate authority causes prejudice to the interest of the Revenue, the suo motu power can be exercised. In exercising such jurisdiction, the Commissioner exercises quasi-judicial authority. Notice issued by the Commissioner so far as it is relevant reads as follows:
“Whereas it appears that an order dated July 12, 1991, of the learned Sales Tax Officer, Cuttack I, East Circle, effecting amendment with effect from July 12, 1989 to your registration certificate under the Orissa Sales Tax Act, 1947, is erroneous in so far as it is prejudicial to the interest of the Revenue, you are required to show cause as to why the same will not be revised suo motu under the provisions of the Orissa Sales Tax Act, 1947 and the Rules made thereunder.”
6. It is indeed difficult to know from the quoted portion as to on what ground, if any, the Commissioner was of the view that the order of the Sales Tax Officer was erroneous in so far as it is prejudicial to the interest of the Revenue. Therefore, in our considered opinion, the petitioner was denied an effective opportunity to show cause against the proposed action. The indication of the basis, even if it is accepted that the same was done, in the impugned order cannot be held sufficient compliance of the requirement to give an effective opportunity.
7. We, therefore, vacate the order passed by the Commissioner vide annexure 1. If so deemed necessary, he may issue a fresh notice to the petitioner indicating the reasons/grounds which according to him necessitate any order under section 23(4)(a) of the Act read with rule 80 of the Rules. We have not expressed any opinion about merits of the case as urged before us by the learned counsel for the petitioner and the learned counsel for the department.
8. The writ application and Miscellaneous Case No. 750 of 1992 are disposed of Requisites for communication of our order to opposite parties shall be filed by Monday (February 17, 1992).
S.K Mohanty, J.:— I agree.
9. Petition allowed.