1981 (1) TMI 234 - HC - VAT and Sales Tax

Summary

Issues:
Jurisdiction under sections 35, 57, and 62 - Correctness, legality, and propriety of the order - Whether Assistant Commissioner had jurisdiction to revise assessment order suo motu under section 57.

Analysis:
The High Court of Bombay was presented with a reference from the Maharashtra Sales Tax Tribunal regarding the jurisdiction exercised by the Assistant Commissioner of Sales Tax under section 57 of the Bombay Sales Tax Act, 1959. The essential question was whether the revision order passed by the Assistant Commissioner was without jurisdiction. The case involved the omission of sales amounting to Rs. 66,866 from the turnover by the Sales Tax Officer, which was noticed by the Assistant Commissioner. The respondents contended that the Assistant Commissioner did not have the authority to revise the assessment order suo motu under section 57, arguing that the sales should be treated as escaped turnover under section 35. Despite the respondents' arguments, the Assistant Commissioner revised the assessment order to include the omitted turnover. Subsequent appeals were made to the Deputy Commissioner and the Tribunal, with differing opinions on the appropriate course of action under sections 35, 57, and 62.

In its judgment, the High Court clarified the distinction between the three jurisdictions provided under sections 35, 57, and 62 of the Act. The Court emphasized that in cases where the turnover is liable to be taxed and was not disputed, the jurisdiction under section 57 could be properly invoked to examine the correctness, legality, and propriety of the order. Citing the case of Swastik Oil Mills Ltd. v. H.B. Munshi, the Court highlighted that when a revisional power is conferred on an authority, it is entitled to assess the order's correctness and legality. Therefore, the Assistant Commissioner's actions in this case were deemed appropriate as he had examined the order's propriety before revising it under section 57.

Ultimately, the High Court ruled in favor of the department and against the assessee, answering the reference question in the negative. The respondents were directed to pay the costs of the reference, fixed at Rs. 300. The judgment provided clarity on the application of different sections of the Act concerning the revision of assessment orders, emphasizing the authority's power to rectify improprieties and irregularities in the assessment process under section 57.