1985 (2) TMI 230 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of D form certificates issued by non-governmental institutions.
2. Jurisdiction and legality of reopening assessments.
3. Applicability of the concept of change of opinion in tax reassessment.
4. Relevance of cited case laws to the current case.

Detailed Analysis:

1. Validity of D Form Certificates Issued by Non-Governmental Institutions
The petitioner, a dealer under the Andhra Pradesh General Sales Tax Act and the Central Sales Tax Act, sold goods to Delhi dealers during the assessment years 1972-73 and 1975-76. The Delhi dealers issued D form certificates, which are meant to be issued by governmental institutions under the Central Sales Tax Act. The Commercial Tax Officer initially accepted these D forms and assessed the tax at concessional rates. However, it was later discovered that the Delhi buyers were private parties, making the D forms invalid. Consequently, the Commercial Tax Officer reassessed the sales at a higher tax rate of 10%.

2. Jurisdiction and Legality of Reopening Assessments
The petitioner contested the reopening of assessments, arguing it was illegal and without jurisdiction. The Commercial Tax Officer reopened the assessments under Rule 14-A(9) of the Central Sales Tax (Andhra Pradesh) Rules, which allows reassessment if tax has been assessed at too low a rate. The court held that the reassessment was lawful, emphasizing that the rule empowers the assessing authority to revise the assessment if the tax was assessed at a lower rate for any reason, including neglect, ignorance, or error.

3. Applicability of the Concept of Change of Opinion in Tax Reassessment
The petitioner argued that the reassessment was merely a change of opinion based on the same materials available during the initial assessment. The court rejected this argument, stating that Rule 14-A(9) does not invoke the concept of change of opinion. The rule focuses on whether the tax was assessed at too low a rate, irrespective of the reasons behind it. The court cited the Supreme Court's distinction between charging provisions and machinery provisions in tax statutes, emphasizing that machinery sections should be construed to ensure tax collection is not defeated.

4. Relevance of Cited Case Laws to the Current Case
The petitioner relied on several judgments, including Sales Tax Officer, Ganjam v. Uttareswari Rice Mills and Indian and Eastern Newspaper Society v. Commissioner of Income-tax, to argue against the reassessment. The court found these cases irrelevant, noting that they interpreted different statutes with distinct provisions. The court also dismissed the petitioner's reliance on cases like State of Madras v. Radio and Electricals Ltd., which dealt with the use of C form certificates by outside State buyers, as they did not pertain to the mandatory requirement of proper declaration in inter-State sales.

Conclusion
The court dismissed the tax revision cases, upholding the reassessment at a higher tax rate due to the invalidity of the D form certificates. The court directed appropriate legal action against the Delhi dealer who issued the invalid certificates and the Commercial Tax Officer who initially accepted them. The petitions were dismissed with costs, and the court emphasized the importance of adhering to statutory requirements for tax assessments.