1968 (2) TMI 112 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of revision made by Assistant Commissioner of Sales Tax under section 31 of the Bombay Sales Tax Act, 1953.

Detailed Analysis:
The case involved dealers in artificial silk and other products for two periods: (1) from 1st October, 1948 to 31st March, 1950, and (2) from 1st April, 1950 to 31st October, 1952. The Assistant Commissioner of Sales Tax issued notices to the dealers alleging suppression of sales amounting to Rs. 20,00,000 for each of the two years. The Assistant Commissioner proposed to revise the sales tax orders by adding the alleged suppressed sales to the turnover for each year. The dealers challenged the jurisdiction of the Assistant Commissioner to reassess the escaped turnover under section 31 of the Bombay Sales Tax Act, 1953, through revisional powers (para. 3-5).

The dealers contended that the revising authority exceeded its powers by attempting reassessment, a function reserved for the assessing authority. They relied on a recent Supreme Court judgment emphasizing that revising authorities cannot reassess taxpayers or assume powers reserved for assessing officers. The Supreme Court clarified that revisional powers should not be used for reassessment purposes (para. 6-8).

The High Court analyzed the legal arguments and held that the Assistant Commissioner was not justified in exercising revisional powers under section 31 of the Bombay Sales Tax Act. The power to bring escaped turnover to tax was vested in another authority under the Act, not the revising authority. The Court agreed with the contention raised by the dealers and answered the question accordingly (para. 9).

The State did not contest the reference, leading the Court to rule in favor of the dealers. Despite the decision in favor of the assessee, no costs were awarded to either party. The dealers were entitled to a refund of the fees paid (para. 10).