Joint Commissioner's VAT Revision Cannot Be Revisited By Senior Officer: Calcutta High Court

The Calcutta High Court on 2 February held that once an order is revised by a Joint Commissioner under Section 86 of the West Bengal Value Added Tax Act, 2003, it cannot be subjected to a further suo motu revision under Section 85 by a Senior Joint Commissioner, as both officers act as delegates of the Commissioner and exercise the same revisional authority.

A Bench of Justice Kausik Chanda, while dismissing a review petition filed by the West Bengal Tax Department, wrote:

"Once an order has been subjected to revision under Section 86, it cannot thereafter be revised under Section 85 of the Act of 2003. Permitting such a course of action would result in an impermissible cycle of successive revisions", stated the bench.

The case arose from a dispute over 73 declarations under Form “H” claimed by cotton traders mainly engaged in exports for the third and fourth quarters of the assessment year 2010–11. Form H declarations are issued to sellers to show that goods sold were exported out of India and are therefore not taxable.

The Sales Tax Officer, Barasat Charge, had rejected the traders' request on 3 March 2013. On appeal under Section 86 of the Act, the Joint Commissioner allowed the claim on 26 March 2014 and directed that the declarations be given.

The Revenue thereafter invoked Section 85 before the Senior Joint Commissioner, who by an order dated 7 January 2015 restricted the Form “H” benefit to only six out-of-State sellers.

The dealers challenged this order in the High Court and a coordinate Bench set it aside on 10 April 2023. The Revenue sought review of that decision, arguing that the Single Judge had proceeded on an incorrect basis and that the Senior Joint Commissioner was competent to revise the Joint Commissioner's order.

Rejecting the plea, Justice Chanda held that once revisional jurisdiction under Section 86 is exercised by a Joint Commissioner acting as a delegate of the Commissioner, the order passed must be treated as an order of the Commissioner himself. Such an order cannot thereafter be revised under Section 85 by another delegate, even if that officer holds a higher administrative post.

The Court observed:

The fact that a Senior Joint Commissioner occupies a higher administrative position than a Joint Commissioner does not alter the legal position. Both officers exercise delegated authority derived from the same superior source, namely the Commissioner. In the absence of an express statutory provision, one delegatee cannot revise or sit in appeal over the exercise of delegated power by another delegatee when such power is exercised on behalf of the Commissioner himself."

Noting that both Sections 85 and 86 confer revisional powers, the Court held that allowing repeated revisions would lead to an endless cycle not intended by the statute. The Bench concluded:

"Accordingly, it must be held that an order passed under Section 86 by a Joint Commissioner acting as a delegatee of the Commissioner cannot be subjected to further revision under Section 85 by a Senior Joint Commissioner. Section 85 does not authorise revision of an order which, in law, is deemed to be an order of the Commissioner himself"

Accordingly, the High Court dismissed the review petition and clarified that the revenue was free to pursue any other remedy available in law.

For Petitioner: Senior Advocate, Md. T. M. Siddiqui, Advocates, Tanoy Chakraborty and Saptak Sanyal

For Respondent: Advocates, Prabhat Kr. Singh and Prashant Kr. Singh