1985 (8) TMI 333 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Legality of the Commissioner's action to revise the assessment orders for the assessment year 1973-74.
2. Scope and ambit of the revisional power of the Commissioner under section 22A of the KST Act.
3. Validity of the notice issued under section 22A read with section 9 of the CST Act.

Issue-wise Detailed Analysis:

1. Legality of the Commissioner's Action to Revise the Assessment Orders:

The petitioner, Indian Aluminium Co. Ltd., challenged the notices issued by the Commissioner under section 22A of the KST Act and section 22A read with section 9 of the CST Act. The Commissioner proposed to revise the assessment order to bring to tax the turnover of Rs. 7,35,030.42, which was initially treated as inter-State sales but later considered as local sales. The petitioner argued that the Commissioner was seeking to assess a turnover that had escaped assessment, which is outside the scope of section 22A. The Court examined whether the Commissioner's action was justified in law and concluded that the Commissioner's action was within his jurisdiction as the turnover in dispute was part of the gross turnover returned by the assessee and was already subjected to assessment under the KST Act. The Commissioner had the authority to propose a revision if he found that a part of the turnover was not an inter-State sale.

2. Scope and Ambit of the Revisional Power of the Commissioner under Section 22A of the KST Act:

The Court analyzed the true ambit and scope of the revisional power of the Commissioner under section 22A of the KST Act. The petitioner contended that the Commissioner cannot initiate proceedings relying on material outside the records of assessment. However, the Court referred to the Supreme Court's decisions in Cheria Abdulla [1965] 16 STC 875 (SC) and Ram Kanai Jamini Ranjan Pal Pvt. Ltd. [1976] 38 STC 1 (SC); AIR 1976 SC 1545, which clarified that the revising authority is not necessarily confined to the record of the proceedings of the assessing officer and can travel outside the same and reassess the turnover. The Court held that the Commissioner's action to examine "C" forms and other relevant material was within his jurisdiction and that the revisional power includes the authority to make or direct further enquiry to rectify any illegality or impropriety in the order.

3. Validity of the Notice Issued under Section 22A Read with Section 9 of the CST Act:

The petitioner argued that the notice issued under section 22A read with section 9 of the CST Act was invalid as the revisional power is not meant for excluding a turnover but for inclusion. The Court found this notice to be consequential. If the assessment under the KST Act undergoes a modification, the same turnover cannot be assessed under the CST Act. Therefore, the deletion of this turnover from the assessment under the CST Act has to follow if the said turnover is treated as a local sale. The Court held that it was unnecessary to quash the said notice.

Conclusion:

The Court upheld the notices issued by the Commissioner under section 22A of the KST Act and section 22A read with section 9 of the CST Act. Both writ petitions were dismissed, and the rule issued was discharged. The Court found that there was adequate material for the Commissioner to form an opinion that the assessment order was erroneous and prejudicial to the interests of the Revenue.