2004 (12) TMI 658 - HC - VAT and Sales Tax

Issues Involved:

1. Challenge to the notice issued under section 36(1) of the Assam General Sales Tax Act, 1993.
2. Validity of the assessment orders for the years 1993-94, 1994-95, and 1996-97.
3. Inclusion of excise duty in the assessable turnover.
4. Jurisdiction and powers of the Joint Commissioner of Taxes for revision of assessment orders.
5. Applicability of the Supreme Court judgments in McDowell & Company Limited cases (1977 and 1985).
6. Maintainability of the writ petitions challenging the show cause notice.

Detailed Analysis:

1. Challenge to the Notice Issued Under Section 36(1):

The petitioner challenged the notice dated June 22, 2004, issued by the Joint Commissioner of Taxes, Assam, under section 36(1) of the Assam General Sales Tax Act, 1993. The notice contemplated revision of the revised assessment orders for the years 1993-94, 1994-95, and 1996-97, stating that the orders were erroneous and prejudicial to the interest of government revenue.

2. Validity of the Assessment Orders:

The Superintendent of Taxes completed the assessment for the years 1993-94 and 1994-95 on April 29, 1996, which was challenged by the petitioner. The Deputy Commissioner of Taxes (Appeals) allowed the appeals and directed fresh assessments, excluding excise duty, freight, and discount from the turnover. The assessing officer complied with these directions.

3. Inclusion of Excise Duty in the Assessable Turnover:

The core issue was whether excise duty should be included in the assessable turnover. The Deputy Commissioner of Taxes (Appeals) relied on the Supreme Court's 1977 judgment in McDowell & Company Ltd. v. Commercial Tax Officer, which excluded excise duty from the turnover. However, this judgment was overruled by the Supreme Court's 1985 judgment in McDowell & Company Limited v. Commercial Tax Officer, which held that excise duty is a component of the sale price and should be included in the turnover.

4. Jurisdiction and Powers of the Joint Commissioner of Taxes:

The Joint Commissioner issued the impugned notice under section 36(1) for revision, arguing that the assessment orders were erroneous and prejudicial to the interest of the Revenue. The court examined whether the Joint Commissioner had the jurisdiction to revise orders passed by the Deputy Commissioner of Taxes (Appeals). It was concluded that the Joint Commissioner, having been delegated the powers of the Commissioner, was within jurisdiction to invoke section 36(1) for revision if the orders were erroneous and prejudicial to the Revenue.

5. Applicability of the Supreme Court Judgments:

The Deputy Commissioner of Taxes (Appeals) relied on the 1977 Supreme Court judgment, which was not the law at the time of the disposal of the appeals due to the 1985 overruling judgment. The appellate authority's decision was deemed erroneous as it contradicted the 1985 judgment, which mandated the inclusion of excise duty in the turnover.

6. Maintainability of the Writ Petitions:

The petitioners argued that the show cause notice was without jurisdiction. However, the court held that the Joint Commissioner had the authority to issue the notice under section 36(1) and that the conditions for exercising revisional powers were met. The writ petitions were dismissed as the notice was deemed within jurisdiction.

Conclusion:

The court upheld the validity of the notice issued by the Joint Commissioner of Taxes under section 36(1) of the Assam General Sales Tax Act, 1993, for revision of the assessment orders. It was concluded that the assessment orders were erroneous and prejudicial to the interest of the Revenue due to the exclusion of excise duty from the turnover, contrary to the Supreme Court's 1985 judgment. The writ petitions challenging the show cause notice were dismissed.

← Previous Next →