1961 (6) TMI 14 - HC - VAT and Sales Tax

Summary

Issues: Jurisdiction of Deputy Commissioner to make additional assessment during appeal, Validity of penalty based on additional assessment

In this case, the petitioner, a dealer in paddy and rice, had a final assessment for the year 1956-57 made by the Deputy Commercial Tax Officer, Bandar. Subsequently, during an appeal process, incriminating accounts were seized, revealing a turnover suppression, leading to an additional assessment. The appellant did not appeal this additional assessment, and it became final. A penalty notice was issued by the Deputy Commercial Tax Officer, which the petitioner contested, claiming inadvertent mistake. The penalty was upheld through appeals to higher authorities. The main argument raised was regarding the jurisdiction of the Deputy Commissioner to make an additional assessment during an appeal and the validity of the penalty based on this assessment.

The Court analyzed Section 14(4) of the Andhra Pradesh General Sales Tax Act, 1957, which empowers the assessing authority to assess escaped turnover and levy penalties. The Court interpreted the provision, emphasizing that only the authority conducting the additional assessment can impose a penalty. The language of the section indicates that the assessing authority making the additional assessment is best suited to decide on the penalty, as both the assessment and penalty are part of the same proceeding. The Court concluded that since the penalty in this case was imposed by an authority different from the one conducting the additional assessment, it lacked competence. Consequently, the Court set aside the penalty order, ruling it to be beyond the Deputy Commercial Tax Officer's jurisdiction. The tax revision case was allowed, with no order as to costs.