1971 (2) TMI 103 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Exercise of Revisional Powers by the Deputy Commissioner.
2. Interpretation of "suo motu" under Section 20 of the Andhra Pradesh General Sales Tax Act.
3. Alleged Prejudgment by the Deputy Commissioner.
4. Justification for Revision of Assessment Order.

Issue-wise Detailed Analysis:

1. Exercise of Revisional Powers by the Deputy Commissioner:
The Tribunal allowed the appeal on the grounds that the Deputy Commissioner did not exercise his revisional powers suo motu but acted on an office note prepared by his staff. The Tribunal held that this practice was contrary to the spirit of Section 20 of the Andhra Pradesh General Sales Tax Act. The court disagreed with the Tribunal, stating that the Deputy Commissioner is entitled to rely on information from his staff, provided he applies his mind to the facts before issuing a notice. The court emphasized that the Deputy Commissioner's reliance on an office note does not negate the exercise of his own judgment.

2. Interpretation of "suo motu" under Section 20 of the Andhra Pradesh General Sales Tax Act:
The Tribunal's interpretation of "suo motu" as requiring the Deputy Commissioner to act without any external input was rejected by the court. The court clarified that "suo motu" means "on his own motion" as opposed to "on an application by a party." The Deputy Commissioner can act on any information that comes to his knowledge, including audit objections, provided he applies his mind to it. The court underscored that the Deputy Commissioner's action based on an office note does not invalidate the exercise of his revisional powers.

3. Alleged Prejudgment by the Deputy Commissioner:
The Tribunal found that the Deputy Commissioner had prejudged the issue before hearing the respondent-assessee, as evidenced by a letter to the Joint Secretary, Board of Revenue, indicating that the revision would be confirmed upon receipt of the respondent's reply. The court condemned this conduct, stating that the Deputy Commissioner failed to discharge his quasi-judicial functions impartially. The court highlighted that the Deputy Commissioner must bring an unbiased mind to the objections and decide the matter according to the principles of natural justice.

4. Justification for Revision of Assessment Order:
The Tribunal found no justification for the Deputy Commissioner's revision of the Assistant Commissioner's order, particularly regarding the inclusion of the estimated cost of gunnies in the turnover. The court upheld the Tribunal's finding, noting that there was no material to suggest an implied contract to sell the gunnies. Consequently, the court did not interfere with the Tribunal's decision on this issue.

Conclusion:
The revision petition was dismissed, with the court affirming the Tribunal's decision that there was no justification for the Deputy Commissioner's revision of the assessment order. However, the court clarified that the Tribunal's interpretation of "suo motu" was erroneous. The court emphasized the importance of the Deputy Commissioner applying his mind to the information before taking action and condemned the prejudgment of the issue by the Deputy Commissioner. The petition was dismissed with no costs, and an advocate's fee of Rs. 100 was awarded.