2004 (11) TMI 533 - HC - VAT and Sales Tax

Issues Involved:
1. Quashing of notices, the order of suo motu revision, and the order of assessment.
2. Legality of the destruction of damaged goods without certification.
3. Validity of the suo motu revision by the Deputy Commissioner of Taxes.
4. Power of the revisional authority versus the assessing authority.
5. Compliance with the Assam General Sales Tax Act, 1993.

Issue-wise Detailed Analysis:

1. Quashing of Notices, the Order of Suo Motu Revision, and the Order of Assessment:
The petitioner sought the quashing of notices and orders issued under the Assam General Sales Tax Act, 1993, specifically under sections 17(4) and 36, for the assessment years 1993-94 and 1994-95. The petitioner argued that the initiation of suo motu revision by the Deputy Commissioner of Taxes and the subsequent assessment orders were unjustified.

2. Legality of the Destruction of Damaged Goods Without Certification:
The petitioner-company, engaged in the sale and supply of food products, claimed that damaged goods were destroyed at the distributor's premises to prevent them from re-entering the market. The Deputy Commissioner of Taxes contended that the destruction was not certified by the Food Inspector, which was not mentioned in the assessment order. However, the court clarified that under the Prevention of Food Adulteration Act, 1954, there is no requirement for such destruction to be certified by a Food Inspector. The responsibility for ensuring that unfit goods are destroyed lies with the vendor, distributor, or manufacturer.

3. Validity of the Suo Motu Revision by the Deputy Commissioner of Taxes:
The petitioner argued that there was no material to justify the suo motu revision. The Superintendent of Taxes had issued a notice for alleged escapement of turnover, to which the petitioner replied. The Superintendent did not proceed further, implying satisfaction with the explanation. The court noted that the revisional authority cannot step in where the assessing authority has jurisdiction, especially in matters of reassessment of escaped turnover.

4. Power of the Revisional Authority Versus the Assessing Authority:
Sections 18, 37, and 36 of the Assam General Sales Tax Act, 1993, delineate the powers of the assessing officer, the authority for rectification, and the Commissioner for revision, respectively. The court emphasized that these are distinct provisions with specific scopes and limitations. The revisional authority cannot usurp the powers of the assessing authority. This principle was supported by precedents from the Punjab and Haryana High Court and the Supreme Court, which highlighted that the revisional authority's role is to ensure the legality and propriety of orders, not to reassess escaped turnover.

5. Compliance with the Assam General Sales Tax Act, 1993:
The court examined whether the case involved escapement of turnover. The petitioner had shown the return and destruction of damaged goods in the annual return, which was accepted by the assessing authority. The revisional authority's interference was based on an audit objection, but the court held that there was no suppression of sales. The revisional authority's action was deemed inappropriate as it was based on an audit objection rather than an independent exercise of discretion.

Conclusion:
The court concluded that no case for entertaining revision by the Deputy Commissioner of Taxes was made out. Consequently, the impugned orders dated August 27, 1999, and October 22, 1999, were set aside, and the earlier assessment orders dated May 31, 1996, and November 21, 1996, were restored. The writ petition was allowed without any order as to costs.

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