2015 (2) TMI 1151 - HC - VAT and Sales Tax

Validity of order passed in exercise of powers under Section 32 of the APGST Act, 1957 - Petitioner suppressed sales turnover for the assessment years 1993-94 to 1996-97 - Inspection was done during the period from May 15, 1996 to May 20, 1996 - Amount of ₹ 3,000/- collected towards composition fee for the offence under section 32(1)(a) of the Act - Held that - as per the provision under section 32(2) of the Act, any order passed or proceeding recorded by the prescribed authority under sub-section (1) shall be final and no appeal or application for revision shall lie therefrom. In view of the said provision, when the offence was compounded by collecting fee as per provisions contemplated under section 32(1)(b) of the Act, it is not open to the respondent to reopen the matter and increase composition amount by invoking power under section 32(1) (a) of the Act. Further it is also to be noticed that inspections were made during the year 1996 from May 15, 1996 to May 20, 1996, however, proceedings are initiated in May, 2002 nearly after 5% years. Even for the revision of assessment, the limitation contemplated is only 4 years. Further, in view of the absence of any enabling provision to review the order passed under section 32 of the Act, the impugned order passed by the respondent is without any jurisdiction and at the belated stage. - Decided in favour of petitioner

Summary

Issues:
Challenge to orders passed by Deputy Commercial Tax Officer for assessment years 1993-94 to 1996-97 under A. P. General Sales Tax Act, 1957.

Analysis:
The petitioner, a registered dealer operating a saw mill, contested orders passed by the Deputy Commercial Tax Officer for the assessment years 1993-94 to 1996-97 under the APGST Act. The petitioner's tax liability for these years was previously completed through assessments. An inspection conducted in May 1996 revealed alleged suppression of sales turnover by the petitioner. The petitioner was charged a composition fee of Rs. 3,000 as per section 32(1)(b) of the Act. However, in 2002, the respondent issued notices to increase the composition amount under section 32(1)(a) of the Act, leading to the petitioner's challenge through a writ petition.

The petitioner argued that compounding fees should only be collected at the time of inspection, and since no further action was taken after the assessments were completed, the notices issued by the respondent in 2002 were unwarranted. The respondent contended that the offence proceedings were distinct from assessment proceedings, justifying the increased composition amount. The High Court examined the case, noting that the inspection took place in 1996, and the respondent's actions in 2002 were beyond the permissible time limits for such revisions. Additionally, the absence of provisions for reviewing orders passed under section 32 of the Act rendered the respondent's order jurisdictionally flawed and untimely.

Ultimately, the High Court allowed the writ petition, setting aside the impugned order issued by the respondent in May 2002. The court emphasized the lack of jurisdiction in the respondent's actions due to the absence of enabling provisions for such revisions and the extended time lapse between the inspection and the initiation of proceedings. The judgment favored the petitioner, leading to the closure of any related pending miscellaneous petitions without costs.