1992 (9) TMI 341 - HC - VAT and Sales Tax

Issues Involved:
1. Validity of monthly returns and their finality.
2. Requirement of best judgment assessment for penalty imposition.
3. Jurisdiction of the Commissioner to revise orders of the Appellate Deputy Commissioner.
4. Validity of penalty orders passed by the Commercial Tax Officer (Intelligence).

Detailed Analysis:

1. Validity of Monthly Returns and Their Finality:
The appellants contended that monthly returns filed under rule 12 of the Andhra Pradesh General Sales Tax Rules, 1957, are provisional and not final. They argued that the figures in the monthly returns should not be considered final if the books of account are submitted before the final assessment. The court rejected this argument, stating that the dealer is obligated to file correct returns monthly and pay the tax accordingly. The court emphasized that the monthly returns have sanctity and cannot be disregarded until the final assessment. The rules do not provide for filing revised returns, and the scheme of the Act is to ensure tax collection without procedural delays. The court concluded that the argument undermines the Act's intent and facilitates tax evasion.

2. Requirement of Best Judgment Assessment for Penalty Imposition:
The appellants argued that since the turnovers were added based on recovered books and not estimated, there was no best judgment assessment, a prerequisite for penalty imposition under section 14(2) of the APGST Act. The court explained that best judgment assessment does not always require an estimate beyond the incriminating records. If the assessing authority finds the returns incorrect and adopts turnover figures from the recovered records, it still qualifies as best judgment assessment. The court cited the Supreme Court's definition of best judgment assessment, emphasizing that it should have a reasonable nexus to the available material. The court also referenced previous judgments, including Konatham Bhaskar Rao v. State of Andhra Pradesh, which supported the view that adopting figures from recovered records could constitute best judgment assessment.

3. Jurisdiction of the Commissioner to Revise Orders of the Appellate Deputy Commissioner:
The appellants contended that the Commissioner lacked jurisdiction to revise the Appellate Deputy Commissioner's orders under section 20(1) of the APGST Act, as the Appellate Deputy Commissioner was not a subordinate of the Commissioner per rule 44-A. The court acknowledged a previous judgment supporting this view but expressed reservations about its correctness. The court noted that the anomaly was rectified by amending rule 44-A, making the Appellate Deputy Commissioner subordinate to the Commissioner. The court deemed it unnecessary to set aside the Commissioner's order on jurisdictional grounds, as the Commissioner could now pass the same order under the amended rule, rendering such action a futile exercise.

4. Validity of Penalty Orders Passed by the Commercial Tax Officer (Intelligence):
The appellants argued that the penalty orders were invalid as they were passed by the Commercial Tax Officer (Intelligence), whose jurisdiction was struck down by the court. The court found no factual basis for this argument, noting that the penalty orders were passed by the Special Commercial Tax Officer (Evasion), not the Commercial Tax Officer (Intelligence). The court dismissed this contention, as the appellants failed to provide copies of the penalty orders to substantiate their claim.

Conclusion:
The court found no illegality in the Commissioner's orders revising the Appellate Deputy Commissioner's decisions. All special appeals were dismissed with costs, and the advocate's fee was fixed at Rs. 200 for each case.

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