Holding

In the absence of a prescribed limitation, the revisional authority must exercise its jurisdiction within a reasonable period—generally three years and not exceeding five years—so the High Court’s decision was not unreasonable and the appeal is dismissed.

Summary

The State of Punjab issued a show‑cause notice on 4 September 2006 under section 21(1) of the Punjab Cooperative Societies Act, 1948 to revise an assessment order dated 20 March 2001, more than five years after the assessment was completed. The respondent, Bhatinda District Cooperative Milk Producers Union Ltd., did not appear before the revisional authority and instead filed a writ petition under Article 226 of the Constitution, which the Punjab and Haryana High Court allowed, holding the notice time‑barred. On appeal, the Supreme Court examined whether a specific limitation period exists for the revisional authority’s suo‑moto power and whether the authority must act within a reasonable time. The Court observed that although the statute does not prescribe a fixed period, the authority must exercise its jurisdiction within a reasonable period, ordinarily within three years and not exceeding five years as indicated by the residuary provision of section 11. Consequently, the High Court’s view was not unreasonable, and the appeal was dismissed, upholding the revisional authority’s power subject to the reasonable‑time requirement.

Issues considered

Whether section 21(1) of the Punjab Cooperative Societies Act, 1948 imposes a specific limitation period for exercising revisional jurisdiction.
Whether the revisional authority must exercise its suo‑moto power within a reasonable time in the absence of a statutory period.
Whether the writ petition challenging the show‑cause notice is maintainable as a question of limitation (jurisdictional).
Whether the High Court erred in quashing the revisional notice on the ground of being time‑barred.

Legislation cited

Constitution of Indias. Article 226

Subjects

limitation periodrevisional jurisdictionsuo moto powerPunjab Cooperative Societies Acttax assessmentwrit petitionArticle 226reasonable time

Judgment

A STATE OF PUNJAB AND ORS. "!
v.
BHATINDA DISTRICT COOP. MILK P. UNION LTD.

OCTOBER 11, 2007
B ':·
[S.B. SINHA AND HARJIT SINGH BEDI, JJ.]

Punjab Cooperative Societies Act, 1948: ss.11, 21-Revisional
authority issued show cause notice after 5-112 years-High Court set '>-
c aside the same as time barred-On appeal, held: No limitation period
for filing revision prescribed in the statute-Therefore, revisional
Ct
authority is to exercise its jurisdiction within reasonable time-
Authority did not assign any reason as to why notice was issued after
long delay-High Court rightly held revisional order to be
D unsustainable.
Constitution of India, 1950: Article 226-Writ petition-
Maintainability of, if question pertains· to limitation-Held:
Maintainable as question raised is a jurisdictional question.
'>.
E In respect of the assessment for the year ending 31.3.2000, the
assessment proceedings were completed on the basis of the return
filed by the appellant on 20.3.2001. Indisputably, in terms of s.11 of
the Punjab Cooperative Societies Act, 1948 three years has been
prescribed as a period oflimitation for completing assessment from
F the last date for filing of return.

The revisional authority-cum-Assistant Excise and Taxation
commissioner issued a notice dated 4.9.2006 to show cause as to why
the proposed action under s.21(1) be not taken on the premise that 1
"illegalities, irregularities and improprieties", as enumerated therein
G
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. Instead assessee-
respondent filed writ petition before the High Court. The High Court f---

14
H
STATEv. BHATINDADISTRICTCOOP.MILKP. UNION 15
LTD.
-,, · allowed the writ petition opining that the order of assessment having A
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.
B
In appeal to this Court, appellant contended that the High Court
failed to take into consideration that no time limit has been fixed
for exercise of suo mo to jurisdiction of the Revisional Authority and
that as it was open to the respondent to raise all contentions before
the Revisional Authority itself, and High Court ought not to have
exercised its power of judicial review. C
Dismissing the appeal, the Court
HELD: 1. Respondent has been filing quarterly returns before
the assessing authority showing sales turnover and purchase turn
over of the goods. Under the Punjab General Sales Tax Act deposit D
of sales tax and purchase tax as per returns is provided for. It casts
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. The
respondent flied returns for all the quarters for the year ending E
31.3.2000 and the assessment proceedings were completed on
28.3.2001. [Para 12] [20-E-F]
2.1. Sub-section (1) of s.11 of Punjab Cooperative Societies Act,
1948, provided for a three years limitation. Sub-section (3) of s.11 F
also provides for a three years' limitation. Sub-section (6) of s.11
which is the residuary provision provides for five years' limitation.
[Para 14] [20-H; 21-A)
2.2. Sub-section (1) of s.11 empowers the Commissioner to
extend the period of three years for passing the order of assessment G
wherefor reasons are required to be recorded in writing subject,
however, to the maximum 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. In cases where an
assessment order is to be reviewed, the same should be done within H
16 SUPREME COURT REPORTS [2007] 11 S.C.R.

A a period of one year. [Para 15] [21-B]

3. A bare reading of s.21 of the Act would reveal'that although
no period oflimitation has been prescribed therefor, the same would
not mean that the suo moto power can be exercised at any time.
B [Para 16] (21-C]
4. It is trite that if no period oflimitation 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
C other relevant factors. (Para 17] (21-D]
5. Revisional jurisdiction 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
D five years. The view of the High Court, thus, cannot be said to be
unreasonable. Reasonable period, must be found out from the
statutory scheme. The maximum period oflimitation provided for
in sub-section (6) of s.11 of the Act is five years.
[Para 18] (21-E-F]
,
E The State ofOrissa v. Debaki Debi & Ors., AIR (1964) SC 1413;
SB. Gurbaksh Singh v. Union of India & Ors., (1976) 37 STC 425
and Commissioner ofSales Tax, Orissa & Anr. v. Mis. Halari Store
etc., (1997] 7 sec 715, referred to.

F 6. 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 5Yz years.
(Para 22) (23-B]
7. Question of limitation being a jurisdictional question, the writ
G petition was maintainable. [Para 23] (23-C]
8. 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
H
STATE v. BHA TINDA DISTRICT COOP. MILKP. UNION 17
LTD. [SINHA,J.]
--( A
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 s.21(1) of the Act. The High Court cannot be
said to have committed any jurisdictional error in passing the B
impugned judgment. (Para 24] [23-D-E]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4808 of
2007.
-.-
From the Judgment/Order dated 22.12.2006 of the High Court of c
Punjab and Haryana at Chandigarh in C.W.P. No. 15477 of2006.
Ajay Pal, Preeti Singh and Sukhla for the Appellants.
P.S. Patwalia, Aman Preet Singh Rahi, Davesh Tripathi and Jagjit
Singh Chhabra for the Respondent. D
The Judgment of the Court was delivered by
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 E
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, F
Bhatinda to the respondent was allowed.

y 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 G

-
--1
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 H
18 SUPREME COURT REPORTS [2007] 11 S.C.R. t'
A when purchased for use in the manufacture of goods which are specified
'r
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
B
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 oflimitation
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 : ..,..
c
"If 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
D 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
E
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 halftimes that amount."
Section 21 of the said Act provides for revision. Section 21 of the
Act with which we are concerned herein reads as under:
F
"21. 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
G
in relation thereto as he may think fit.
(2) TI1e State Government may by notification confe~ 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 '~

H as may be specified in the notification.
STATEv. BHATINDADISTRICTCOOP.MILKP.UNION 19
LTD. [SINHA, J.]
(3) A Tribunal, on application made to it against an order of the A
Commissioner under sub-section (I) 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 B
affects any person unless such person has been given a reasonable
opportunity of being heard."
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 C
taken on the premise that "illegalities, irregi.tlarities and improprieties", 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 D
praying, inter alia, for the following reliefs :
.A "(i) A writ in the nature of certiorari calling for the records of the
case from the respondents and quashing Notice (Annexure Pl)
as time barred. E
(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'ble Court may F
deems fit and appropriate in the facts and circumstances of
the case."
8. Appellant, in its affidavit in opposition, took a preliminary objection
that the said writ petition was pre-mature and, thus, should not be G
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
H
20 SUPREME COURT REPORTS [2007] 11 S.C.R.

A 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.
B 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 moto jurisdiction of the Revisional Authority. It was further submitted
C 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.
D 13 whereof reads as under :
"Milk - when purchased for use in the manufacture of any goods
other than tax free goods for sale."
12. Respondent indisputably has been filing quarterly returns before
E the assessing authority showing sales tum over and purchase tum 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
F 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
G 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 oflimitation was introduced
H by reason of Punjab Act No.12 of 1998 and prior thereto a period of
)
STATEv. BHATINDADISTRICTCOOP.MILKP. UNION 21
- .,I
"'"'(
LTD. [SINHA,J.]
five years was prescribed therefor. Sub-section (3) of Section 11 also A
provides for a three years' limitation. Sub-section (6) of Section 11 which
is the residµary provision provides for five years' limitation.
15. Sub-section ( 1) of Section 11 empowers the Commissioner to
extend the period of three years for passing the order of assessment
B
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 o.tthe assessment in terms of
'r
the provisions of the Act. We may also notice that in cases where an

period of one year.
.
assessment order is to be reviewed, the same should be done within a
c
16. A bare reading of Section 21 of the Act would reveal that
although no period oflimitation 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, D
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.
E
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 F
hereinbefore, must be found out from the statutory scheme. As indicated
hereinbefore, maximum period oflimitation provided for in sub-section
-r (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) G
of the Orissa Sales Tax Act, 194 7, 36 months' time was considered to
-~
be the period of limitation for exercise of the revisional jurisdiction.
20. In SB. Gurbaksh Singh v. Union ofIndia & Ors., (1976) 37
STC 425, Untwalia J., speaking for the Bench, opined :
H
r
22 SUPREME COURT REPORTS [2007] 11 S.C.R. L

A "Appropos the fourth and last submission of the appellant, suffice
y
r
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
B Commissioner proceeded to revise and revised the said order.
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
c appellate or the revisional powers ih 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, C-
D )
however, will depend upon the facts of each case."
l
21. Our attention has been drawn to a decision in Commissioner
of Sales Tax, Orissa & Anr. v. Mis. Halari Store etc., [1997) 7 SCC )..
t
715] wherein this Court, while considering the provisions of Orissa Sales
E Tax Act, 1948 and the Rules framed thereunder, held:
" ... 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 "on his own motion"
occurring in the enactment are conspicuously present in the proviso
F
the legislature has excluded the revisional jurisdiction of the
Commissioner of Sales Tax to revise an appellate order if invoked ~
I
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
G
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
H
--1
/

STATEv. BHATINDADISTRICTCOOP.MILKP.UNION 23
LTD. [SINHA,J.]
Commissioner to exercise suo motu revisional power to revise an A
appellate order."
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 B
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 5Y:z years.
c
23. Question oflimitation 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 D
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 th~ reasonable period for exercising the revisional jurisdiction in terms
of Section 21 (1) of the Act. The High Court, furthermore in its judgment, E
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. F
No costs.
D.G. Appeal dismissed.