1982 (7) TMI 253 - HC - VAT and Sales Tax

Issues Involved:
1. Applicability of Rule 14-A(8) of the Central Sales Tax (Andhra Pradesh) Rules, 1957.
2. Non-disclosure of turnover or particulars by the assessee.
3. Distinction between intra-State and inter-State sales.
4. Obligation of the dealer versus the obligation of the assessing authority.
5. Relevance of previous judgments in similar cases.

Detailed Analysis:

1. Applicability of Rule 14-A(8) of the Central Sales Tax (Andhra Pradesh) Rules, 1957:
Rule 14-A(8) empowers the assessing authority to reopen the assessment within six years if the escapement of turnover occurred due to the dealer's failure to disclose correctly, and within four years for other causes. The rule states:
"If, for any reason, the whole or any part of the turnover of business of a dealer has escaped assessment to tax or has been underassessed in any year, the assessing authority may after issuing a notice to the dealer and after making such inquiry as he considers necessary determine to the best of his judgment the correct turnover, and assess the tax payable on such turnover."

2. Non-disclosure of turnover or particulars by the assessee:
The primary issue is whether the assessee failed to disclose the turnover correctly, thus justifying the reopening of the assessment under Rule 14-A(8). The assessee did not disclose the transaction in question in the return filed under the Central Act, claiming it was an intra-State sale. The court held that the form C.S.T. VI requires the dealer to disclose all sales, both inter-State and intra-State. The failure to disclose the transaction in the Central Act return constituted non-disclosure.

3. Distinction between intra-State and inter-State sales:
The assessee argued that the transaction was disclosed as an intra-State sale in the State Act return. However, the court emphasized that the point of enquiry under both enactments is different. The State Act concerns whether a transaction is the last purchase within the State, while the Central Act examines whether there has been an inter-State sale. The mere disclosure of the transaction as an intra-State sale under the State Act does not suffice for the Central Act.

4. Obligation of the dealer versus the obligation of the assessing authority:
The court distinguished between the dealer's obligation to disclose all material particulars correctly and the assessing authority's obligation to apply the law correctly. The dealer's failure to disclose the transaction under the Central Act cannot be excused by any remissness on the part of the assessing authority. The court stated:
"The two obligations must be kept apart, namely, the obligation of the dealer to disclose all the material particulars correctly and truly and the obligation of the assessing authority to apply the law correctly to the facts of each case and to arrive at the correct tax payable."

5. Relevance of previous judgments in similar cases:
The assessee relied on the judgment in Srinivasa & Co. v. Commercial Tax Officer, where a similar issue was decided in favor of the assessee. However, the court disagreed with the reasoning in that case, noting that the form prescribed for filing a return was not brought to the judge's notice. The court also discussed other cases under the Income-tax Act but found them not directly applicable due to different factual circumstances.

Conclusion:
The court dismissed the tax revision case, holding that the assessee failed to disclose the transaction correctly under the Central Act, justifying the reopening of the assessment under Rule 14-A(8). The petition was dismissed without costs.

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