1981 (2) TMI 214 - HC - VAT and Sales Tax

Summary

Issues:
1. Scope of revisional jurisdiction under the Sales Tax Act.
2. Whether revisional authority can assess escaped turnover.
3. Taxability of poultry feed under specific entry.
4. Validity of best judgment assessment by Assistant Commissioner.

Analysis:
1. The judgment deals with the scope of revisional jurisdiction under the Sales Tax Act. The Assistant Commissioner revised the assessments of a dealer under section 20(3) of the Act, which was challenged by the dealer. The issue was whether the revisional authority could investigate assessments for escaped turnover. The judgment referred to relevant sections like 11A, 20(2), and 20(3) of the Act to determine the limits of revisional powers. The court analyzed the provisions and held that the power to assess escaped turnover lies with the assessing authority under section 11A, not with the revisional authority under section 20(3). The court cited precedents to support the distinction between revisional powers and the power to assess escaped turnover.

2. The next issue was whether the revisional authority could assess escaped turnover. The court examined the statutory provisions outlining the powers of different authorities in assessing and reassessing turnover. It concluded that the power to reassess escaped turnover is vested in the assessing authority and cannot be exercised by the revisional authority under section 20(3). The judgment emphasized that the revisional authority should not encroach upon powers reserved for other authorities and should not ignore inherent limitations in exercising those powers. It cited Supreme Court decisions to support the limitations on revisional powers.

3. The judgment also addressed the taxability of poultry feed under a specific entry in the Act. The dealer contended that poultry feed was tax-free under a particular entry in the Second Schedule of the Act. However, the Financial Commissioner rejected this contention, stating that the entry only mentioned "cattle feed including fodder." The court did not delve further into this issue due to the resolution of the first two questions in favor of the assessee.

4. Lastly, the validity of the best judgment assessment made by the Assistant Commissioner was questioned. The court found that the Assistant Commissioner had encroached upon the powers reserved for the assessing authority under rule 71 by exercising revisional powers to assess escaped turnover. Consequently, the court ruled against the department and in favor of the assessee on the first two questions, rendering the need to address the remaining questions unnecessary. The judgment concluded by leaving the parties to bear their own costs, and the reference was answered accordingly.