2009 (2) TMI 769 - HC - VAT and Sales Tax

Whether the Deputy Commissioner had jurisdiction under section 35(1) of the KGST Act to revise the original assessments after the assessing officer issued revised orders under section 19(1) of the KGST Act? Held that - The Deputy Commissioner is well within his powers to revise the assessment and Tribunal rightly upheld the validity of the orders. It is also to be mentioned that the writ petition filed by the petitioner has become infructuous because after the declaration of the revised assessment issued under section 19(1) as invalid by the Deputy Commissioner, the order impugned in the writ petition no longer survives. We therefore dismiss the revision petitions with this observation.

Summary

Issues:
Validity of suo motu revisional orders under section 35 of the Kerala General Sales Tax Act, 1963 by Deputy Commissioner of Commercial Taxes after revised assessments under section 19(1) were issued by the assessing officer.

Analysis:
The revision petitions were filed by the assessee challenging the Sales Tax Appellate Tribunal's order confirming the validity of suo motu revisional orders issued by the Deputy Commissioner of Commercial Taxes under section 35 of the Kerala General Sales Tax Act, 1963. The assessing officer had initially granted exemption to the petitioner in the original assessments for the years 1997-98 and 1998-99, which were later revised under section 19(1) to withdraw the exemption and bring escaped turnover to tax. The Deputy Commissioner initiated revisional proceedings under section 35 after finding the revised assessments invalid due to being issued beyond the limitation period. The assessee contended that the original assessments do not survive after revised orders are issued under section 19(1), but the Deputy Commissioner set aside the original assessments and directed a fresh revision. The main issue raised was whether the Deputy Commissioner had jurisdiction under section 35(1) to revise original assessments after revised orders under section 19(1) were issued.

The court analyzed a Division Bench judgment and noted that the Deputy Commissioner, in this case, declared the revised order under section 19 as invalid, leading to the only surviving assessment being the original assessment. The court held that the Deputy Commissioner had the authority to revise the original assessment, as the purpose of both sections 19(1) and 35 was to prevent evasion of tax. It was emphasized that the higher authority did not forfeit the right to revise an assessment merely because the original attempt to correct the mistake was ineffective. The Deputy Commissioner's power to revise even a revised assessment under section 19(1) was confirmed, provided it was done within the time limit. The court upheld the Tribunal's decision validating the Deputy Commissioner's orders and dismissed the revision petitions, stating that the writ petition challenging the revised assessment became infructuous after the Deputy Commissioner declared it invalid.

In conclusion, the court affirmed the Deputy Commissioner's jurisdiction to revise the original assessment under section 35 after declaring the revised assessment as invalid, as long as it was done within the time limit. The court emphasized that the purpose of both sections 19(1) and 35 was to prevent evasion of tax, and the Deputy Commissioner had the authority to consider the validity of revised orders while revising assessments.