1967 (5) TMI 66 - HC - VAT and Sales Tax

Issues Involved:
1. Admissibility of additional evidence collected after assessment and appellate orders.
2. Admissibility of evidence collected after the expiration of the limitation period under section 21 of the U.P. Sales Tax Act in revision.

Issue-wise Detailed Analysis:

1. Admissibility of Additional Evidence Collected After Assessment and Appellate Orders:

The primary question was whether the Judge (Revisions) had the power to admit additional evidence offered by the departmental representative. The court noted that there is no express provision in the U.P. Sales Tax Act or the Rules permitting the Judge (Revisions) to admit additional evidence in a revision application. Rule 68(1) specifically grants this power to the Assistant Commissioner (Judicial), but no corresponding provision exists for the Judge (Revisions).

The court examined rules 4 and 75, which confer powers similar to those of a civil court for enforcing attendance, compelling the production of documents, and issuing commissions for witness examinations. However, these powers do not include the authority to admit additional evidence. The court emphasized that the power to take additional evidence is distinct and is explicitly provided for appellate authorities in Rule 68(8) but not for revising authorities.

The court concluded that the revising authority must base its decision on the material already on record and does not have the power to admit fresh evidence. The revising authority's function is to satisfy itself as to the legality or propriety of any order made by an appellate or assessing authority, which inherently limits its scope to the existing record.

2. Admissibility of Evidence Collected After the Expiration of the Limitation Period Under Section 21 of the U.P. Sales Tax Act in Revision:

The second issue was whether evidence collected after the expiry of the four-year limitation period under section 21 could be admitted in revision. The court held that admitting such evidence would violate the limitation period prescribed by section 21. The court referenced the Supreme Court's judgment in State of Kerala v. K. M. Cheria Abdulla and Co., which emphasized that the power to reassess escaped turnover is vested in the assessing authority and must be exercised within the prescribed limitations.

The court noted that allowing additional evidence collected after the limitation period would effectively enable the reassessment of the taxpayer beyond the statutory period, which is not permissible. The revising authority cannot circumvent the limitation period by admitting new evidence in revision proceedings.

Separate Judgments:

JAGDISH SAHAI, J.:

Justice Jagdish Sahai delivered a detailed judgment, emphasizing that the revising authority does not have the power to admit additional evidence. He highlighted the clear distinction between the powers of appellate and revising authorities, noting that the latter must base its decisions on the existing record. He also stressed that admitting new evidence would undermine the finality of appellate orders and violate the statutory limitation period.

BEG, J.:

Justice Beg concurred with the conclusion but provided additional reasoning. He acknowledged the discretionary nature of revisional jurisdiction but emphasized that it is not a continuation of the original proceedings. He argued that while the revising authority might have the power to direct further inquiries in certain circumstances, it cannot admit additional evidence to rectify the department's failure to present it earlier. He also noted that invoking revisional powers to circumvent the limitation period is unjustifiable.

Order of the Court:

The court collectively answered both questions in the negative, favoring the assessee and directing the department to pay Rs. 100 as costs. The judgment underscored the limitations of revisional jurisdiction and the importance of adhering to statutory provisions and procedural rules.

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