1982 (12) TMI 154 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Limitation period for revising tax assessment.
2. Applicability of Section 14(4) versus Section 20(2) of the Andhra Pradesh General Sales Tax Act.
3. Entitlement to rebate under Entry 8 to the Second Schedule.

Detailed Analysis:

1. Limitation Period for Revising Tax Assessment:
The primary contention raised by the petitioner was that the Deputy Commissioner's order was barred by limitation. The petitioner argued that the order should be related to Section 14(4) of the Act, which prescribes a limitation period of four years for such actions. The court examined the relevant provisions of the Act, noting that Section 14(4) deals with escaped assessments and has a specific limitation period. However, the court concluded that the Deputy Commissioner's order was rightly passed under Section 20(2), which allows for revision within four years from the service of the order to be revised. The court held that the order was within the permissible period under Section 20(3).

2. Applicability of Section 14(4) versus Section 20(2) of the Andhra Pradesh General Sales Tax Act:
The court distinguished the powers under Section 14(4) and Section 20(2) of the Act. Section 14(4) pertains to escaped assessments based on fresh material or information not available at the time of the original assessment. In contrast, Section 20(2) involves revising the order based on the material already on record to ensure its legality, propriety, and regularity. The court emphasized that these are independent and distinct powers. The Deputy Commissioner's order was based on the same material as the original assessment and hence fell under Section 20(2). The court referred to the Full Bench decisions in Pitchaiah v. State and State of Madras v. Louis Dreyfus and Company Ltd., which clarified the distinct fields occupied by these sections.

3. Entitlement to Rebate under Entry 8 to the Second Schedule:
The petitioner was initially assessed at a lower tax rate of 3 percent instead of the correct rate of 5 percent for paddy. The court noted that according to Entry 8 to the Second Schedule, a rebate of 2 paise in the rupee is allowed on paddy purchased and consumed within the state, provided the dealer first pays tax at the rate of 5 percent. The court found that the Commercial Tax Officer (C.T.O.) erred in directly levying tax at 3 percent without following the correct procedure. The Tribunal and the Deputy Commissioner were correct in revising this to 5 percent. However, the court observed that the petitioner should be given an opportunity to apply for the rebate as per the relevant rules and Entry 8.

Conclusion:
The court dismissed the tax revision case, holding that the Deputy Commissioner's order was valid and within the limitation period prescribed by Section 20(3). The court allowed the petitioner to apply for the rebate under Entry 8 to the Second Schedule, directing the assessing authority to consider such an application on its merits and in accordance with the law. The court emphasized the distinct and independent nature of the powers under Sections 14(4) and 20(2) of the Act. No costs were awarded, and the advocate's fee was set at Rs. 250.