2000 (7) TMI 924 - HC - VAT and Sales Tax

Summary

Issues:
1. Jurisdiction of Deputy Commissioner under section 35(2A) of the Kerala General Sales Tax Act, 1963.
2. Validity of exercising suo motu power during pendency of appeal.
3. Interpretation of "any point not decided in appeal" under section 35(2A).
4. Requirement of order to be prejudicial to the Revenue for revision.

Jurisdiction of Deputy Commissioner under section 35(2A) of the Kerala General Sales Tax Act, 1963:
The revision petitioner, a dealer in jewellery, challenged an order enhancing turnover to Rs. 58,57,130 from Rs. 18,74,739 for the assessment year 1991-92. The Deputy Commissioner invoked suo motu power under section 35, stating a higher suppression amount. The revision petitioner argued that this power can only be exercised after appeal disposal. The court analyzed the amendment in section 35(2A), allowing Deputy Commissioner's intervention before appeal conclusion if a specific point remains undecided. A previous case highlighted various scenarios where pre-appeal intervention is justified, emphasizing the need for a balanced approach. The court concluded that in this case, the Deputy Commissioner's interference was unwarranted as the appeal focused on the same suppression issue.

Validity of exercising suo motu power during pendency of appeal:
The Deputy Commissioner's action during the pending appeal raised concerns about the legality of intervening under section 35(2A). The revision petitioner argued that such power should only be exercised post-appeal decision. The court examined the legislative intent behind the amendment, emphasizing the need for specific unresolved points to justify pre-appeal intervention. It was determined that in this case, the Deputy Commissioner's interference was premature as the appeal addressed the suppression issue, rendering his intervention unnecessary.

Interpretation of "any point not decided in appeal" under section 35(2A):
The court delved into the interpretation of "any point not decided in appeal" under section 35(2A), emphasizing the necessity for unresolved specific issues to warrant Deputy Commissioner's pre-appeal intervention. Previous judgments provided guidance on scenarios where such intervention is justified, stressing the importance of a cautious approach and balancing considerations. The court clarified that the Deputy Commissioner's intervention should only occur in exceptional circumstances where the appellate authority is unlikely to address the specific point in question.

Requirement of order to be prejudicial to the Revenue for revision:
The court discussed the requirement for an order to be prejudicial to the Revenue for revision under section 35. Citing previous cases, the court highlighted that mere loss of revenue should not be the sole consideration for invoking revisionary powers. The judgment underscored the need for errors in the order impacting revenue administration to justify revision. The court emphasized that differences in estimating revenue should not be equated with legal errors, reinforcing the significance of errors affecting revenue administration to invoke revisionary powers.

In conclusion, the court held that the Deputy Commissioner's exercise of power under section 35 during the appeal against the original assessment was illegal. Consequently, the orders of the Sales Tax Appellate Tribunal were set aside, and the appeal by the revision petitioner was to be reinstated and decided by the competent authority.