1990 (3) TMI 338 - HC - VAT and Sales Tax

Summary

Issues:
Jurisdiction of Assistant Commissioner to revise resale claim under section 57 of the Bombay Sales Tax Act.

Detailed Analysis:

1. Background and Assessments:
The case involves a partnership firm's assessments under the Bombay Sales Tax Act for three periods. The Sales Tax Officer computed the deduction on resale claim under section 8(ii) using the pro rata method due to the inability to identify resales with purchases from registered dealers.

2. Revision by Assistant Commissioner:
The Assistant Commissioner revised the assessment orders under section 57, reducing the deduction amounts after finding errors in the Sales Tax Officer's approach. The revised orders were confirmed in appeal but reversed by the Tribunal, which upheld the legality of the pro rata formula used by the Sales Tax Officer.

3. Dispute over Correctness of Formula:
The dispute centered on the correctness of the formula applied by the Sales Tax Officer. The Assistant Commissioner argued that the failure to further reduce gross turnover by exempt sales under section 11 before applying the percentage of purchases from registered dealers was erroneous, giving him jurisdiction to revise under section 57.

4. Examination of Special Bench Order:
The department relied on a Special Bench order to support its argument. However, the court found that the approved method in that case did not invalidate other reasonable methods, including the one used by the Sales Tax Officer. The court highlighted that different methods were previously accepted for computing deductions under section 8(ii).

5. Scope of Revisional Power under Section 57:
Citing legal precedents, the court emphasized that the revising authority's power under section 57 is limited to correcting errors. As the method used by the Sales Tax Officer was deemed reasonable and not erroneous, the Assistant Commissioner did not have valid jurisdiction to revise the assessments.

6. Conclusion:
The court answered the legal question in favor of the assessee, ruling that the Assistant Commissioner lacked the authority to revise the resale claim under section 57. The judgment highlighted the importance of adhering to legal methods and limitations in exercising revisional powers.

This detailed analysis provides a comprehensive overview of the legal judgment, addressing the issues raised and the court's reasoning in reaching its decision.