1992 (10) TMI 248 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the 'C' forms could be produced by the dealer at the appellate or second appellate stage.

Issue-wise Detailed Analysis:

Issue: Whether the 'C' forms could be produced by the dealer at the appellate or second appellate stage.

Facts and Procedural History:
The assessee produced some "C" forms before the assessing authority on March 10, 1988, which were accepted. Subsequently, the assessee appealed to the Deputy Commissioner under section 20 of the Karnataka Sales Tax Act, 1957, claiming he was not informed of the hearing date at the Madikere camp. The appellate authority rejected this contention, stating the assessee had not sought additional time to produce further "C" forms. The Appellate Tribunal also rejected the "C" forms submitted by the assessee, citing the proviso to section 8(4) of the Central Sales Tax Act, 1956, and rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957, which require "C" forms to be produced before the assessing authority.

Arguments:
The assessee's counsel argued that the Appellate Tribunal failed to exercise its power under section 22, which grants it the same powers as the assessing authority. The counsel contended that appeals under sections 20 and 21 are continuations of assessment proceedings, and thus, the Tribunal could consider the "C" forms produced during the appeal.

The Government Advocate argued that section 8(4) and rule 12(7) clearly mandate that "C" forms must be produced before the assessing authority within the prescribed time or any extended time permitted by the said authority, emphasizing the peremptory nature of these provisions.

Legal Analysis:
The court examined whether the appellate authority and the Appellate Tribunal have the power to entertain "C" forms not produced before the assessing authority. It noted that the appellate power is generally co-extensive with the power of the original authority, allowing the appellate authority to confirm, reduce, enhance, annul, or remand the assessment. Section 20(5) of the Karnataka Sales Tax Act provides the appellate authority with wide powers, including setting aside the assessment and remanding the matter.

Section 22(4) of the Act grants the Appellate Tribunal the authority to pass orders as it deems fit after giving both parties a reasonable opportunity to be heard. The court found no limitation on the Tribunal's power to entertain additional evidence, including "C" forms, provided the assessee shows sufficient cause for their earlier non-production.

The court referenced several precedents supporting the view that appellate authorities can consider additional evidence. In C. Govindaswamy v. State of Mysore, the court recognized the broad scope of the Appellate Tribunal's power to pass orders, including remanding cases. The Supreme Court in Tel Utpadak Kendra v. Deputy Commissioner of Sales Tax and the Full Bench of the Madras High Court in State of Tamil Nadu v. Arulmurugan and Company also affirmed that appeals are continuations of assessment proceedings, allowing appellate authorities to consider "C" forms.

Conclusion:
The court concluded that the Appellate Tribunal has the power to entertain "C" forms at the appellate stage if the assessee demonstrates sufficient cause for their earlier non-production. The Tribunal failed to consider the circumstances under which the assessee could not produce the forms earlier.

Judgment:
The court set aside the orders of the assessing authority, the first appellate authority, and the Appellate Tribunal. It remanded the matter to the assessing authority to consider the sufficiency of the cause under rule 12(7) of the Central Rules and make an appropriate order regarding the acceptance of the "C" forms filed by the assessee. The assessee was instructed to take back the "C" forms and produce them before the assessing authority.

Petition Allowed.