2011 (8) TMI 1014 - SC - VAT and Sales Tax

Whether power of revision vested in the Commissioner having been circumscribed under sub-section (2A) of section 20 of the Andhra Pradesh General Sales Tax Act, 1957 nothing could be read therein which would confer a wide power upon the Commissioner as a consequence of which the purport of object of sub-section (2A) of section would be defeated?

Summary

Issues:
1. Interpretation of sub-section (2A) of section 20 of the Andhra Pradesh General Sales Tax Act, 1957.
2. Validity and legality of the show-cause notice issued by the Deputy Commissioner of Commercial Tax.
3. Applicability of the principles of res judicata in the case.

Analysis:

Issue 1: Interpretation of sub-section (2A) of section 20
The primary issue in this case revolves around the interpretation of sub-section (2A) of section 20 of the Andhra Pradesh General Sales Tax Act, 1957. The provision restricts the Commissioner of Commercial Tax from exercising suo motu powers of revision in cases where the issue or question is pending consideration before or has been decided by the Appellate Tribunal under section 21. The High Court, after considering various decisions, held that the power of revision vested in the Commissioner is limited by sub-section (2A) of section 20. The Court emphasized that the Commissioner cannot reopen an issue already decided by the Tribunal, as it would defeat the purpose of the provision. The term "issue" or "question" was interpreted to refer to the point in controversy between the parties, irrespective of the time factor. The Supreme Court concurred with the High Court's interpretation, concluding that the show-cause notice seeking to reopen a previously decided issue was impermissible under the explicit language of sub-section (2A) of section 20.

Issue 2: Validity of the show-cause notice
The case also involves the validity and legality of the show-cause notice issued by the Deputy Commissioner of Commercial Tax to treat stock transfers as inter-State sales instead of branch transfers for the assessment years 1981-82 to 1987-88. The respondent challenged the notice before the Andhra Pradesh High Court through a writ petition. The High Court, relying on sub-section (2A) of section 20, quashed the show-cause notice. The Supreme Court, upon reviewing the legal provision and the facts of the case, upheld the High Court's decision, emphasizing that the notice sought to reopen an issue already decided by the Tribunal, which was impermissible under the law.

Issue 3: Applicability of res judicata
Another issue raised in the case pertains to the applicability of the principles of res judicata. The appellant argued that res judicata does not apply to fresh assessment years, as each year is considered a new assessment. However, the High Court did not address this issue, leaving it open for consideration in a future case. The Supreme Court did not delve into this issue, as it was not addressed by the High Court. Therefore, the question of the applicability of res judicata remains unresolved in this judgment.

In conclusion, the Supreme Court dismissed the appeals, affirming the High Court's decision to quash the show-cause notice based on the interpretation of sub-section (2A) of section 20. The Court upheld that the Commissioner cannot reopen issues already decided by the Appellate Tribunal, as mandated by the law. The issue of res judicata was left open for consideration in a future case, as it was not addressed in the present judgment.