2005 (9) TMI 592 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of section 39(1) of the Madhya Pradesh General Sales Tax Act, 1958 regarding the power of revision by the Commissioner. Jurisdiction of the Sales Tax Officer and Additional Commissioner of Sales Tax in making fresh assessments after remand. Correct procedure for assessments when turnover exceeds Rs. 30 lakhs.

Analysis:
The case involved a reference under section 44(3) of the Madhya Pradesh General Sales Tax Act, 1958. The applicant was assessed for sales tax under both the State Act and the Central Sales Tax Act. The Additional Commissioner of Sales Tax set aside the original assessments and remanded the case for fresh assessments. Subsequent appeals and orders by various authorities led to a dispute over the jurisdiction for making the fresh assessments. The Board of Revenue held that the Additional Commissioner should make the final orders under section 39(2) of the State Act due to the turnover exceeding Rs. 30 lakhs. However, the High Court disagreed with this interpretation.

The High Court referred to the provisions of section 39(1) of the State Act, emphasizing that the Commissioner's power of revision is subject to the Act's provisions and cannot be used to issue directions contrary to the law. Citing the case of K.L. Kochar & Co. v. Sales Tax Officer, the Court highlighted that the Commissioner's order in a revision must be based on the records of the proceedings and cannot exceed the statutory limitations.

In this case, the Additional Commissioner's orders of remand were final and not disturbed by any authority. The Sales Tax Officer lacked jurisdiction to make fresh assessments due to the turnover exceeding Rs. 30 lakhs. The High Court concluded that the Board of Revenue erred in directing the Additional Commissioner to make the final orders under section 39(2) of the State Act. The Court held that the correct procedure was for the Additional Assistant Commissioner of Sales Tax to make the assessments in the given circumstances.

The Court answered the reference question in the negative, ruling that the Tribunal was incorrect in directing the Additional Commissioner to pass final orders. The reference was disposed of accordingly, and the Tribunal was instructed to pass orders under section 44(5) of the M.P. General Sales Tax Act, 1958. The case was reported as Chhota Bhai Jetha Bhai Patel and Company v. Commissioner of Sales Tax [1991] 81 STC 80 (MP).