1989 (11) TMI 305 - HC - VAT and Sales Tax

Summary

Issues: Assessment under Kerala General Sales Tax Act, 1963 for the years 1981-82 and 1982-83, non-liability for tax under section 5A, opportunity to produce purchase bills, rejection of claim for non-liability, rectification of assessment orders under section 43, maintainability of appeals against modified orders of assessment, compliance with appellate orders, jurisdiction of appellate authority, challenge to revised assessment orders, quashing of assessment orders, opportunity for reassessment.

Analysis:
The judgment concerns assessment under the Kerala General Sales Tax Act, 1963 for the years 1981-82 and 1982-83. The petitioner had filed appeals against the original assessment, seeking non-liability for tax under section 5A for certain purchases. The Appellate Assistant Commissioner allowed the appeals in part and directed the assessing authority to amend the assessment based on the observations in the appellate order, specifically paragraph 12 of exhibit PI. The Appellate Assistant Commissioner noted that exemption for single point goods purchased with bills would be allowed if proved. However, the assessing authority amended the orders without giving the petitioner an opportunity to produce evidence to support the claim for non-liability, resulting in the rejection of the claim.

The petitioner sought rectification of the assessment orders under section 43 of the Act, believing that the orders were passed mistakenly without notice or opportunity to produce evidence. The petition for rectification was rejected, and subsequent appeals against the revised assessment orders were also dismissed by the Appellate Assistant Commissioner on the grounds of maintainability. The petitioner challenged the revised assessment orders and the dismissal of the appeals.

The High Court analyzed the provisions of the Act regarding appeals against assessment orders. Section 34 allows for an appeal against any order of assessment, without limitation on challenging revised or modified orders. The appellate authority can examine compliance with earlier orders and directions in the revised assessment. Failure to afford opportunities as directed in the appellate order can vitiate the revised assessment, allowing the assessee to challenge it in appeal.

In this case, the petitioner challenged the revised assessment orders for non-compliance with the directions and benefits conferred by the appellate order, exhibit PI. The High Court held that the failure to provide the opportunity to prove the claim for exemption as directed in paragraph 12 of exhibit PI was sufficient to challenge the revised assessment orders in appeal. The Appellate Assistant Commissioner's rejection of the appeals as not maintainable was deemed contrary to the provisions of the Act and an abdication of jurisdiction.

Consequently, the High Court quashed the revised assessment orders for the years 1981-82 and 1982-83, as well as the order dismissing the appeals. The assessing authority was directed to provide the petitioner with an opportunity to prove the claim for non-liability of single point goods as directed in exhibit PI and complete the reassessment within three months from the date of the judgment.