IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.7521 of 2011 ====================================================== M/s Hotel Maurya, a Unit of Bihar Hotels Ltd. having its Registered Office at South Gandhi Maidan, P.S.-Gandhi Maidan, District-Patna through its Financial Controller, Rajeev Kumar, S/o Shri Lakhan Lal, R/o Flat No. 502B, Mundeshwari Enclave, Akasvani Road, Khajpura, P.S.-Sashtri Nager, District-Patna. .... .... Petitioner/s Versus 1. The State of Bihar through the Secretary –cum-Commissioner of Commercial Taxes, Vikash Bhawan, Bailey Road, Patna. 2. The Joint Commissioner of Commercial Taxes (Appeal), Patna Division, Patna. 3. The Dy. Commissioner of Commercial Taxes, Gandhi Maidan Circle, Judges Court Road, District-Patna. .... .... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr. D.V.Pathy, Mr. Rajeev Ranjan Prasad, Mr. Abhi Sarkar, Advocates For the Respondent/s : Mr. Vikash Kumar, A.C. to AAG 1. ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE BIRENDRA PRASAD VERMA ORAL ORDER (Per: HONOURABLE THE CHIEF JUSTICE) 12 18-08-2011 With the consent of the learned advocates, the writ petition is heard and decided today. This petition under Article 226 of the Constitution is filed by a dealer against the order dated 28th March 2011 made by the Commissioner of Commercial Taxes, Bihar , Patna in exercise of revisional power conferred by Section 74 of the Bihar Value Added Tax Act, 2005 (hereinafter referred to as ‘the Act’). The petitioner is a Hotel. For running the business of Hotel, it had obtained certificate of registration for purchase of several articles mentioned in the said certificate of registration issued on 9th December 1977. In respect of certain purchases made Patna High Court CWJC No.7521 of 2011 (12) dt.18-08-2011 2 / 4 2 by the petitioner in course of inter-state sale, a proceeding was initiated against the petitioner. For the assessment years 2005-06, 2006-07 and 2007-08 by order dated 24th February 2011 the Assessing Officer raised a demand of Rs. 9,32,475/-. For the assessment years 2008-09, 2009-10 and 2010-11, by order dated 5th March 2011, the Assessing Officer raised a demand of Rs. 18,41,469/-. Feeling aggrieved the petitioner preferred appeals before the Joint Commissioner of Commercial Taxes. Pending the said appeals by order dated 23rd March 2011 made in respect of assessment years 2005-06, 2006-07 and 2007-08 the demand was stayed on condition that the petitioner paid a sum of Rs. Three lakhs. We are informed that the said condition has been complied with. In respect of assessment years 2008-09, 2009-10 and 2010- 11 the appellate authority stayed the order of demand on condition that the petitioner paid a sum of Rupees six lakhs. We are informed at the bar that the said condition too has been complied with. Pending the aforesaid appeals the Commissioner of Commercial Taxes has made the impugned order on 28th March 2011 in exercise of revisional power conferred by Section 74 of the Act. Under the impugned order the Commissioner of Commercial Taxes has held that the petitioner was issued certificate of registration for purchase of cooked food and wine alone. The other materials were purchased by the petitioner without the authority of law. The petitioner not only evaded the tax, but also misused the C-Form issued to it. The petitioner was guilty of contravention of Section 8(3) of the Central Sales Tax Act, 1956. The Commissioner of Commercial Taxes further held Patna High Court CWJC No.7521 of 2011 (12) dt.18-08-2011 3 / 4 3 that no notice to the petitioner was required. Feeling aggrieved, the petitioner has filed the present petition under Article 226 of the Constitution. Learned advocate Mr. D.V.Pathy has appeared for the petitioner. He has submitted that not only the impugned order has been made in violation of the principle of natural justice and in violation of statutory obligation to issue notice to the petitioner, it is totally perverse. He has relied upon the certificate of registration (Annexure-1 to the writ petition). He has submitted that the certificate of registration runs into several pages. On the first page there is reference to cooked food and wine. The rest of the materials are listed on the following pages. Obviously, the Commissioner of Commercial Taxes has not perused the entire certificate of registration. The impugned order has been made on the basis of the first page only of the certificate of registration. He has further submitted that in view of the order made by the Commissioner of Commercial Taxes the appeals preferred by the petitioner pending before the Joint Commissioner of Commercial Taxes have been rendered infructuous. The Commissioner of Commercial Taxes has decided the appeals of the petitioner against it without affording opportunity of hearing to the petitioner. The petition is contested by the learned advocate Mr. Vikash Kumar. Though he has submitted that the Commissioner of Commercial Taxes does have power of suo motu revision conferred by Section 74 of the Act, he has not been able to justify the impugned order made pending the appeals preferred by the writ petitioner, without affording opportunity of hearing to the petitioner. Section 74 of the Act indeed confers the power of suo Patna High Court CWJC No.7521 of 2011 (12) dt.18-08-2011 4 / 4 4 motu revision upon the Commissioner of Commercial Taxes. The said Section also enjoins the Commissioner of Commercial Taxes to give the dealer or the person concerned an opportunity of being heard. Indisputably, the Commissioner of Commercial Taxes has made the impugned order in contravention of the statutory obligation of hearing the dealer and without perusing the certificate of registration dated 9th December 1977 issued in favour of the petitioner. In our opinion, the learned advocate Mr. Pathy is justified in submitting that the impugned order is perverse and is also made in contravention of Section 74 of the Act. For the aforesaid reasons, the petition is allowed. The impugned order dated 28th March 2011(Annexure-6) made by the Commissioner of Commercial Taxes, Patna is set aside. The parties will bear their own cost. We may clarify that nothing said in this order will have bearing upon the appeals preferred by the petitioner, pending before the Joint Commissioner of Commercial Taxes. The said appeals will be decided in accordance with law without being influenced by this order. Sujit/- (R.M. Doshit, CJ) (Birendra Prasad Verma, J)