1969 (3) TMI 74 - HC - VAT and Sales Tax

Issues Involved:
1. Scope and meaning of section 14(4) of the Andhra Pradesh General Sales Tax Act, 1957.
2. Revisional jurisdiction under section 20 of the Andhra Pradesh General Sales Tax Act, 1957.
3. Authority of the Commercial Tax Officer to assess escaped turnover.
4. Distinction between escaped turnover and escaped assessment.
5. Validity and scope of revisional powers vis-`a-vis assessment powers.

Detailed Analysis:

1. Scope and Meaning of Section 14(4) of the Andhra Pradesh General Sales Tax Act, 1957:
The court examined the interpretation of section 14(4), which deals with the assessment of tax on turnover that has escaped assessment. The section allows the assessing authority to assess the tax payable on the escaped turnover within four years from the expiry of the relevant year. The court noted that section 14(4) is confined to assessing such turnover as is shown to have escaped assessment and does not extend to estimates based on inferences drawn by the department from certain circumstances. This section empowers the assessing authority to add the escaped turnover to the total turnover after issuing a notice and conducting necessary inquiries.

2. Revisional Jurisdiction Under Section 20 of the Andhra Pradesh General Sales Tax Act, 1957:
Section 20(1) and (2) confer revisional powers on the Board of Revenue, Deputy Commissioner, and Commercial Tax Officer to call for and examine the record of any order passed by subordinate authorities to ensure legality, propriety, and regularity. The court emphasized that the language of section 20 is of wide amplitude, allowing the revisional authority to pass such orders as it thinks fit, including enhancing the assessment after giving the assessee an opportunity to show cause against the proposed enhancement. The court held that the revisional powers under section 20 are not restricted by section 14(4).

3. Authority of the Commercial Tax Officer to Assess Escaped Turnover:
The Commercial Tax Officer, Masulipatnam, acted as a revisional authority under section 20(2) and assessed additional turnover based on slips and anamath books recovered during inspections. The court held that the Commercial Tax Officer exercised his revisional powers within the scope of section 20(2) and was competent to assess the escaped turnover. The court rejected the argument that the Commercial Tax Officer could only add the turnover covered by the slips and not make a best judgment assessment.

4. Distinction Between Escaped Turnover and Escaped Assessment:
The court distinguished between escaped turnover and escaped assessment. Escaped turnover refers to turnover that has not been accounted for in the original assessment due to omission or suppression, while escaped assessment refers to an incorrect or incomplete assessment that needs correction. The court held that the revisional authority could enhance the assessment by including escaped turnover, provided the procedure under section 20(4) is followed.

5. Validity and Scope of Revisional Powers Vis-`a-vis Assessment Powers:
The court referred to several Supreme Court decisions to support the view that revisional powers are distinct from assessment powers and can be exercised to correct illegal, improper, or irregular orders. The court held that the revisional authority could make additional inquiries and assess escaped turnover without encroaching on the powers of the assessing authority. The court expressed dissent with the contrary view stated in State of Andhra Pradesh v. Varre Pothuraju, which restricted the revisional authority's power to make a best judgment assessment.

Conclusion:
The court upheld the order of the Sales Tax Appellate Tribunal, affirming that the Commercial Tax Officer acted within his revisional jurisdiction under section 20(2) and validly assessed the escaped turnover. The tax revision petition was dismissed with costs.

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