1986 (4) TMI 331 - HC - VAT and Sales Tax

Issues Involved:
1. Repugnancy between Section 21(2) and Section 22A of the Karnataka Sales Tax Act.
2. Competence of the Deputy Commissioner (Administration) to revise orders.
3. Alleged violation of Article 14 of the Constitution due to discriminatory treatment.
4. Legality of the Deputy Commissioner issuing multiple show cause notices for the same assessment period.
5. Validity of the show cause notices issued by the Deputy Commissioner.

Issue-wise Detailed Analysis:

1. Repugnancy between Section 21(2) and Section 22A of the Karnataka Sales Tax Act:
The petitioner argued that Section 21(2) of the Act was repugnant to Section 22A of the Act and should be struck down. However, the court rejected this contention, referencing the Full Bench decision in Md. Samiulla v. Commissioner of Commercial Taxes, which found no repugnancy between the sections. The court concluded, "A cursory or careful reading of sections 21 and 22A incorporated by Karnataka Act No. 9 of 1964 shows that there is no repugnancy whatsoever between them."

2. Competence of the Deputy Commissioner (Administration) to Revise Orders:
The petitioner contended that the Deputy Commissioner (Administration) was not competent to revise the orders of the CTO. The court dismissed this argument, stating, "Section 21(2) of the Act confers power of revision on the DC of the area over the proceedings and orders of the ACCT and CTO." The court clarified that the designation of DCs as "Administration" or "Appeals" was for administrative purposes and did not affect their jurisdiction under Section 21(2).

3. Alleged Violation of Article 14 of the Constitution:
The petitioner claimed that Section 21(2) subjected similarly situated persons to hostile, discriminatory, and arbitrary treatment, violating Article 14 of the Constitution. The court referenced the Full Bench ruling in Md. Samiulla's case, which upheld the validity of Section 22A, and applied the same reasoning to Section 21(2). The court noted, "We are of the view that section 21 of the Act does not subject anybody to a hostile, discriminatory and arbitrary treatment at all." The court emphasized the procedural safeguards, including the right to appeal, which ensured fairness.

4. Legality of the Deputy Commissioner Issuing Multiple Show Cause Notices for the Same Assessment Period:
For the assessment year 1979-80, the DC issued multiple show cause notices. The court found that the DC had become functus officio after making an order on 30th June, 1983, and thus could not issue another notice for the same period. The court stated, "The power of revision cannot be exercised on more than one occasion and successively." Consequently, the second notice was quashed.

5. Validity of the Show Cause Notices Issued by the Deputy Commissioner:
For the assessment period 1980-81, the DC issued a second show cause notice, claiming it was a continuation of the first. The court found no merit in the petitioner's contention that the DC had already made an order on the first notice. The court stated, "When the DC had not made an order on the first show cause notice, his power to revise is not exhausted." The court allowed the DC to proceed with the revision.

Conclusion:
The writ petitions challenging Section 21(2) of the KST Act were dismissed. The show cause notice for the assessment year 1979-80 was quashed due to the DC being functus officio. Other writ petitions were dismissed, granting the petitioner one month to file objections before the DC. The court directed the parties to bear their own costs and ordered the communication of the order to the Deputy Commissioner within 10 days.

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