1994 (7) TMI 319 - HC - VAT and Sales Tax

Summary

Issues:
Validity of the order of the Commissioner of Commercial Taxes dated December 5, 1985 in Ref. No. Liii(1)/ 4205/81 for assessment year 1976-77. Challenge to the cancellation of exemption granted by the assessing authority based on a change of view by the Tribunal. Contention regarding reopening of assessment based on a mere change of opinion.

Analysis:
The High Court of Andhra Pradesh addressed the validity of the order of the Commissioner of Commercial Taxes dated December 5, 1985, in Ref. No. Liii(1)/ 4205/81 for the assessment year 1976-77. The appellant, a dealer in tractors and tractor parts, challenged the cancellation of exemption granted by the assessing authority amounting to Rs. 10,00,393 based on a change in view by the Sales Tax Appellate Tribunal. The Tribunal's altered perspective in T.A. No. 47 of 1978 led to the cancellation of the exemption previously granted, which was initially based on a judgment in T.A. No. 573 of 1971. The Appellate Deputy Commissioner allowed the appeal against the cancellation, but the Commissioner of Commercial Taxes, in the exercise of revisional jurisdiction, reversed the decision and reinstated the assessing authority's order.

The main contention raised by the appellant's counsel was that a mere change of opinion regarding the granting or non-granting of exemption should not be a ground to reopen the assessment. The Court acknowledged that a change of opinion alone cannot justify reopening an assessment. However, the Court highlighted that if the assessing authority reopens an assessment based on the law declared by superior authorities like the Commissioner of Commercial Taxes, Sales Tax Appellate Tribunal, High Court, or Supreme Court, it should be viewed as acting on information rather than a mere change of opinion. The Court cited a Division Bench judgment in State of Andhra Pradesh v. Ratna Sree Box Makers [1989] 75 STC 82 to support this view. The judgment emphasized the importance of not allowing endless reconsideration of decisions based on differing opinions within the assessing authority.

In conclusion, the Court dismissed the appeal, finding no merit in the argument presented by the appellant's counsel. The Court clarified that if an assessment is reopened based on a decision by superior authorities, it should be considered as acting on information rather than a change of opinion. As a result, the Court upheld the order of the Commissioner of Commercial Taxes and made no order as to costs in the circumstances of the case.