1978 (7) TMI 235 - HC - VAT and Sales Tax

Summary

Issues:
Assessment under different provisions of the Kerala General Sales Tax Act for the same dealer in iron scraps for three different assessment years.

Analysis:
The judgment pertains to three tax revision cases by the same assessee for different assessment years. The assessee, claiming to be a dealer in iron scraps, was initially assessed at the general rate of 3 percent by the Sales Tax Officer. However, a successor officer revised the assessment under entry 8 of the First Schedule of the Kerala General Sales Tax Act, classifying the items as motor spare parts and taxing at 12 percent. The Appellate Assistant Commissioner set aside the revised assessment, but the Sales Tax Appellate Tribunal reinstated the revised assessment under section 19(2) of the Act. The validity of this order was challenged in the revision. The Sales Tax Officer's initial assessment stated that the turnover would be taxed at 3 percent, considering the items as old iron and motor scraps. In contrast, the successor officer, in revising the assessment, argued that the dealer also dealt with old motor parts purchased from outside the State, falling under item 8 of Schedule I of the Act. The Tribunal's decision was based on a detailed analysis of the dealer's transactions and the applicable provisions of the Act.

The crux of the issue lies in the interpretation and application of section 19(1) of the Kerala General Sales Tax Act, 1963, which allows for the assessment of escaped turnover. The section empowers the assessing authority to determine, to the best of its judgment, any turnover that has escaped assessment or has been under-assessed. The provision mandates issuing a notice to the dealer and conducting a necessary inquiry before reassessment. The wide language of the section indicates that reassessment can be triggered for any reason, irrespective of whether it is a mere change of opinion by the assessing officers. The judgment cites precedents emphasizing that the term "escape" refers to the turnover evading assessment, regardless of the reason behind it. The court's analysis underscores the broad scope of the reassessment power conferred by the Act.

Furthermore, the judgment discusses the distinction between "escaped turnover" and "escaped assessment," highlighting that any part of the turnover that evades assessment falls within the purview of reassessment provisions. The court also references previous decisions by the Supreme Court and the High Court, emphasizing the expansive language of the relevant statutory provisions governing reassessment proceedings. Based on the interpretation of the statutory language and the principles laid down in judicial precedents, the Court upholds the Sales Tax Appellate Tribunal's decision as correct and declines to interfere with the revision cases. The judgment concludes by dismissing the petitions without costs, affirming the Tribunal's ruling on the revised assessments for the dealer in iron scraps across the three assessment years.