1976 (3) TMI 222 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Whether the Appellate Assistant Commissioner had the jurisdiction to permit the raising of additional grounds in respect of turnover not disputed in the original appeal.
2. Whether the Tribunal erred in directing the Appellate Assistant Commissioner to decide the assessability of the additional turnover on merits.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Appellate Assistant Commissioner to Permit Additional Grounds:

The assessees, dealers in electric and electro medical goods, submitted a return for the assessment year 1962-63 under the Tamil Nadu General Sales Tax Act, 1959, reporting a total turnover of Rs. 75,56,894.89, including Rs. 24,54,389.12 representing import transactions, without claiming any exemption. The assessing authority determined the taxable turnover at Rs. 57,77,434.12, disallowing certain turnovers. The assessees appealed to the Appellate Assistant Commissioner disputing a different turnover but did not raise any dispute regarding the Rs. 24,54,389.12 import transactions. After the Supreme Court's decision in Khosla & Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes, the assessees sought to raise additional grounds claiming exemption for the Rs. 24,54,389.12 turnover. The Appellate Assistant Commissioner dismissed this petition, adhering only to the originally disputed turnover. The Tribunal, however, held that the Appellate Assistant Commissioner should have permitted the additional grounds and remanded the appeal for consideration of the Rs. 24,54,389.12 turnover.

The court examined Section 31 of the Tamil Nadu General Sales Tax Act, 1959, which provides for appeals to the Appellate Assistant Commissioner. The court noted that the Appellate Assistant Commissioner could confirm, reduce, enhance, or annul the assessment, but his jurisdiction was limited to the turnover disputed in the original grounds of appeal. It was argued that the Appellate Assistant Commissioner could not permit raising new disputes not included in the original memorandum of appeal. The court agreed with this contention, stating that allowing additional grounds for a different turnover would lead to anomalies and was not contemplated under Section 31.

The court referenced the decision in State of Madras v. Voltas Ltd.: No. 2, which held that a memorandum of revision petition is limited to the matters set out in the form and does not allow for new disputes to be raised under the guise of additional grounds. The court concluded that the Appellate Assistant Commissioner did not have the jurisdiction to permit raising additional grounds for turnover not disputed in the original appeal.

2. Tribunal's Direction to the Appellate Assistant Commissioner:

The Tribunal had directed the Appellate Assistant Commissioner to consider the assessability of the Rs. 24,54,389.12 turnover on merits, which the State contested. The court held that the Tribunal erred in this direction, as it was based on the incorrect assumption that the Appellate Assistant Commissioner had the jurisdiction to entertain additional grounds for turnover not originally disputed. The court emphasized that Section 31 did not allow for such an expansion of the appeal and that the Tribunal's direction was therefore invalid.

Conclusion:

The court allowed the revision petition, setting aside the Tribunal's order on this point. The court reaffirmed that the Appellate Assistant Commissioner did not have the jurisdiction to permit raising additional grounds for turnover not disputed in the original appeal, and the Tribunal erred in directing the Appellate Assistant Commissioner to decide the assessability of the additional turnover on merits. The revenue was entitled to its costs, with counsel's fee set at Rs. 250.