1977 (12) TMI 122 - HC - VAT and Sales Tax

Summary

Issues:
- Jurisdiction of the Commercial Tax Officer to reassess turnovers under the Andhra Pradesh General Sales Tax Act, 1957.
- Applicability of section 14(4) of the Act in reassessment cases.
- Scope of revisional powers under section 20 of the Act.
- Interpretation of "turnovers that have escaped assessment" under section 14(4).
- Comparison with relevant Supreme Court judgments on revisional jurisdiction.
- Validity of exemptions granted by the assessing authority.

Analysis:
The judgment delivered by the High Court of Andhra Pradesh addressed the issue of reassessment of turnovers under the Andhra Pradesh General Sales Tax Act, 1957. The petitioners, who were dealers in textiles and cotton yarn, challenged the notices issued by the Commercial Tax Officer, Tirupathi, proposing to assess escaped turnovers for the year 1973-74. The Commercial Tax Officer relied on section 14(4) of the Act to reassess the turnovers that had allegedly escaped assessment. The petitioners contended that the Commercial Tax Officer lacked jurisdiction to reassess the turnovers already exempted by him and argued that only revisional authorities under section 20 of the Act had the power to deal with such matters.

The Court analyzed the relevant provisions of section 14(4) of the Act, which empowers the assessing authority to assess turnovers that have escaped assessment, been under-assessed, or assessed at a lower rate. The Court noted that if turnovers were wrongly exempted earlier and were liable to tax, they could be considered as turnovers that have either escaped assessment or been under-assessed, thus falling within the jurisdiction of the assessing authority under section 14(4). The Court rejected the argument that the matter could only be dealt with through revision under section 20, emphasizing that revisional authorities could only examine the legality or regularity of orders passed by subordinate authorities based on the existing record.

In considering the applicability of section 14(4), the Court distinguished the case from relevant Supreme Court judgments, including Deputy Commissioner v. Dhanalakshmi Vilas Cashew Co. and State of Kerala v. M. Appukutty. The Court highlighted that the assessing authority could assess turnovers based on subsequent information, such as the transfer of stocks by purchaser-dealers to branch offices, even if the turnovers were initially exempted. The Court concluded that the impugned notices by the Commercial Tax Officer were not without jurisdiction, leading to the dismissal of the civil revision petitions.

The judgment emphasized that the petitioners could still contest the assessment of turnovers before the assessing authority despite the dismissal of the petitions. Overall, the Court affirmed the jurisdiction of the assessing authority to reassess turnovers under section 14(4) of the Act based on subsequent developments affecting the exemptions granted earlier.