1969 (10) TMI 63 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the Deputy Commissioner has the power to direct assessment of escaped turnover under section 35 of the Kerala General Sales Tax Act of 1963, or is it a power exclusively conferred on the assessing authority under a different provision of law?

Analysis:
The judgment revolves around the issue of the Deputy Commissioner's power to direct assessment of escaped turnover. The petitioner challenged the Deputy Commissioner's order setting aside a nil assessment and directing the Sales Tax Officer to investigate further. The argument was that the power of revision under section 35 cannot be used to assess escaped turnover, a power vested in the assessing authority under section 19. The court referred to several Supreme Court decisions, emphasizing that the revisional power is distinct and independent, operating in a separate field from the power to assess escaped turnover. The court concluded that the Deputy Commissioner's direction for further investigation and assessment of escaped turnover was beyond his jurisdiction, as it encroached upon the assessing officer's exclusive power in this regard.

2. Whether the order of the Deputy Commissioner directing the Sales Tax Officer to make further investigation regarding escaped turnover and to assess the same is legal?

Analysis:
The court found the Deputy Commissioner's order directing the Sales Tax Officer to investigate and assess escaped turnover to be illegal. Relying on the principles derived from Supreme Court decisions, the court held that the revisional power of the Deputy Commissioner is limited to correcting illegality, irregularity, or impropriety in the assessment order under revision. The Deputy Commissioner cannot use this power to intrude into the jurisdiction of the Sales Tax Officer to assess escaped turnover. Therefore, the court set aside the Deputy Commissioner's order, allowing the Sales Tax Officer to proceed with the assessment of escaped turnover independently.

3. Whether the direction of the Deputy Commissioner prejudiced the petitioner and if setting aside the order resolves the issue?

Analysis:
The court acknowledged that the Deputy Commissioner's direction had influenced the Sales Tax Officer's proceedings, potentially prejudicing the petitioner. By setting aside the order, the court aimed to remove this influence and allow the Sales Tax Officer to conduct the assessment of escaped turnover without any hindrance. The court clarified that the petitioner's objection to the Deputy Commissioner's direction was valid, and the Sales Tax Officer could now proceed with the inquiry independently, as per the law.

In conclusion, the court held that the Deputy Commissioner exceeded his jurisdiction by directing the assessment of escaped turnover and set aside the order. The judgment emphasized the distinct nature of the revisional power and the assessing authority's power to assess escaped turnover, ensuring that each operates in its designated field without encroaching upon the other's jurisdiction.