1978 (12) TMI 180 - HC - VAT and Sales Tax

Summary

Issues: Assessment of sales tax on leather cases as radio accessories, Jurisdiction of Deputy Commissioner to revise assessment, Limitation period for reopening assessment.

Assessment of sales tax on leather cases as radio accessories: The assessee, a dealer in radios and radio parts, claimed to pay sales tax at 3% on leather cases, considering them as "general goods." However, the Deputy Commissioner revised the tax rate to 10% treating the leather cases as "radio accessories." The Tribunal upheld the revision, stating that the leather cases were indeed accessories to radios. The court agreed with this view, citing precedents that accessories are determined by their predominant use, and since the leather cases were specifically made to fit and suit different varieties of radios, they qualified as accessories. The court also noted a legislative amendment introducing taxation on leather goods other than footwear at 6% from 1974, applicable to the assessment years in question.

Jurisdiction of Deputy Commissioner to revise assessment: The assessee contended that the Deputy Commissioner lacked jurisdiction to revise the assessment under section 20 of the Andhra Pradesh General Sales Tax Act as there was no dispute before the assessing authority regarding the classification of leather cases. However, the court held that the Deputy Commissioner's revision was valid under section 14(4) read with section 14(4-C) since the assessing officer had accepted the assessee's claim of 3% tax rate on leather cases, even though no reasons were provided for such acceptance. The court emphasized that the Deputy Commissioner had the same powers as the assessing authority under section 14(4-C), ensuring no lack of jurisdiction.

Limitation period for reopening assessment: The Tribunal attempted to justify the reopening of the assessment for the year 1971-72 beyond the four-year limitation period by invoking section 14(4)(a), which allows a six-year period if there is a failure to disclose turnover or particulars correctly. However, the court found no failure on the part of the assessee to disclose information regarding the nature of the leather cases, as the assessment order clearly indicated the sales of leather cases. Consequently, the extended period of limitation was deemed unwarranted, and the court held that the reopening of the assessment for 1971-72 was barred by limitation, while the same did not apply to the subsequent year 1972-73.

In conclusion, Tax Revision Case No. 80 of 1977 was allowed, while Tax Revision Case No. 81 of 1977 was dismissed. Each party was directed to bear their own costs, with an advocate's fee specified for each case.