2000 (3) TMI 1056 - HC - VAT and Sales Tax

Issues Involved:
1. Jurisdiction of the Deputy Commissioner to initiate proceedings under Section 10-B.
2. Legality and propriety of the order passed by the assessing authority under Section 21.
3. Scope of the revisional power of the revising authority under Section 10-B.
4. Error in remanding the matter to the Deputy Commissioner for further inquiry.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Deputy Commissioner to initiate proceedings under Section 10-B:
The core argument presented by the revisionist was that the Deputy Commissioner lacked jurisdiction to initiate proceedings under Section 10-B of the U.P. Sales Tax Act. It was contended that once the notice under Section 21 was discharged by the assessing authority, there was no order under Section 21 to be revised. The assessing authority had initially held that there was no adverse material against the dealer, thus allowing the original assessment order to stand. The revisionist relied on the precedent set in Commissioner of Sales Tax, U.P., Lucknow v. Angan Lal Fakir Chand, arguing that the power of revision does not extend to an order under Section 21 where the notice is merely discharged.

2. Legality and propriety of the order passed by the assessing authority under Section 21:
The Tribunal found that the assessing authority had committed illegality and impropriety by discharging the notice under Section 21 without proper inquiry. The Tribunal observed that the dealer had not disclosed any purchases against form III-B from M/s. Star Paper Mills, Saharanpur, and this information was already on the record of assessment. The Tribunal held that the discharge of the notice was not justified, given the material on record indicating purchases from M/s. Star Paper Mills. The Deputy Commissioner, therefore, had jurisdiction to revise the order dated September 7, 1989, passed under Section 21.

3. Scope of the revisional power of the revising authority under Section 10-B:
Section 10-B(1) of the Act empowers the revising authority to call for and examine the record relating to any order passed by a subordinate officer and to pass such order as it thinks fit upon satisfaction of the legality or propriety of the order. The court clarified that this provision does not exclude the power to revise an order passed under Section 21. The court distinguished the present case from the precedent cited, noting that the facts and circumstances were different. The court emphasized that the revising authority has the power to correct errors in the assessment order if the material on record was not properly considered by the assessing authority.

4. Error in remanding the matter to the Deputy Commissioner for further inquiry:
The Tribunal remanded the matter to the Deputy Commissioner for further examination and decision after giving the dealer an opportunity to address the objections. However, the court found that this was an error. The revising authority is limited to examining the legality and propriety of the order based on the material already on record and does not have the authority to conduct further inquiries or gather additional material. The court held that the matter should have been remanded to the assessing authority instead, to pass an appropriate order after complying with the directions given by the Tribunal.

Conclusion:
The court concluded that the Deputy Commissioner had the jurisdiction to revise the order dated September 7, 1989, under Section 10-B. However, the Tribunal erred in remanding the matter to the Deputy Commissioner for further inquiry. The proper course was to remand the matter to the assessing authority for a fresh decision. The revision was partly allowed, upholding the Tribunal's decision to remand the matter but directing that it be remanded to the assessing authority instead of the Deputy Commissioner. The petition was partly allowed.

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