1976 (9) TMI 168 - HC - VAT and Sales Tax

Summary

Issues:
Jurisdiction of the Board of Revenue to enhance tax liability in an appeal under the Assam Finance (Sales Tax) Act, 1956.

Analysis:
The petitioner, a dealer under the Assam Finance (Sales Tax) Act, 1956, challenged the judgment and order of the Assam Board of Revenue that set aside an assessment order and restored the original tax assessment. The petitioner contended that the Board of Revenue lacked jurisdiction to enhance tax liability in an appeal under section 20A of the Act. The petitioner's counsel argued that the Board's power to enhance tax liability was not akin to provisions under the Income-tax Act, citing relevant precedents.

The court compared the relevant provisions of the Assam Finance (Sales Tax) Act, 1956, and the Income-tax Act, 1961, to determine the scope of appellate authority. It noted that under the Assam Act, the right of appeal is granted to the dealer only, while the Income-tax Act allows appeals by both the assessee and the taxing authority. The court highlighted that the power of enhancement of assessment lies with the Assistant Commissioner of Taxes under the Assam Act, similar to the Appellate Assistant Commissioner under the Income-tax Act.

The court emphasized that the Board of Revenue, under section 20A of the Assam Finance (Sales Tax) Act, lacks the authority to pass orders enhancing tax liability. It clarified that while the Board can remand an appeal to the Assistant Commissioner of Taxes, it cannot directly enhance the assessment. In the present case, the court found that the Board incorrectly upheld the tax assessment without proper consideration of the evidence, leading to an impermissible enhancement of tax liability. Consequently, the court quashed the Board's order and remanded the appeal for proper disposal in accordance with the law.

In conclusion, the court allowed the petition, remanding the case to the Board of Revenue for appropriate action, and made no order regarding costs. Justice Sadanandaswamy concurred with the decision, and the petition was allowed.