2011 (1) TMI 1188 - HC - VAT and Sales Tax

Revision petition - additional sales tax under Section 5D of the Act - ground raised by the assessee was not considered by the Tribunal earlier while disposing of the appeal of the assessee, there are no fixed rules governing the scope of the jurisdiction either to review an order or correct mistakes or errors apparent on the face of record, power of review is not confined only to the errors apparent on the face of the record. But in a case like the present one where the power to review is limited only to the cases where the review is sought on the discovery of a new fact, the power to rectify mistakes, no merit in the revision and it is dismissed.

Summary

Issues Involved:
1. Legality of invoking Section 19 of the Kerala General Sales Tax Act, 1963 for assessing additional tax.
2. Jurisdiction of the Tribunal under Section 43 of the Act.
3. Application of precedents and interpretation of relevant sections of the Act.

Detailed Analysis:

1. Legality of Invoking Section 19 of the Kerala General Sales Tax Act, 1963 for Assessing Additional Tax:

The respondent, a registered dealer under the Kerala General Sales Tax Act, 1963, opted for compounded tax assessment under Section 7(1)(a) for the year 2001-02. The initial assessment did not include the additional tax under Section 5D. Realizing this omission, the revision petitioner issued a notice under Section 43 for rectification, which was later dropped due to being time-barred. Subsequently, a notice under Section 19 was issued.

Section 19 allows assessment in three scenarios:
(i) escaped turnover,
(ii) under-assessed turnover,
(iii) wrongly deducted turnover.

The court found that no part of the turnover escaped assessment; it was a lapse in applying Section 5D. The Tribunal's conclusion that Section 19 could not be invoked was upheld, emphasizing the principle that tax laws should be interpreted in favor of the taxpayer when two interpretations are possible.

2. Jurisdiction of the Tribunal under Section 43 of the Act:

The Tribunal rectified its earlier order under Section 43, which allows correction of errors apparent on the face of the record within three years. The revision petitioner argued that the Tribunal overstepped its jurisdiction and that the issue should fall under Section 39(7), which pertains to review based on new facts.

The court rejected this argument, stating that the respondent's case was about an unaddressed specific ground in the appeal, qualifying it as an error apparent on the face of the record under Section 43. The Tribunal's jurisdiction was thus correctly exercised.

3. Application of Precedents and Interpretation of Relevant Sections of the Act:

The court examined two precedents:

(i) M/s. Joy Alukkas vs. State of Kerala: This case involved a different context where the Deputy Commissioner's powers under Section 35 were discussed, not Section 19. The court found the reliance on this decision misplaced.

(ii) Deva Metal Powders Pvt. Ltd vs. Commissioner, Trade Tax, U.P.: This case interpreted Section 22 of the Uttar Pradesh Sales Tax Act, which is similar to Section 43 of the Kerala Act. The Supreme Court held that rectification should not substitute the original order. However, the court distinguished this case, noting that the current issue was about a specific unaddressed ground, fitting within the scope of Section 43.

The court emphasized that the scope of jurisdiction for rectification or review depends on the language of the provision and the scheme of the enactment. In this case, the Tribunal's action under Section 43 was appropriate.

Conclusion:

The revision was dismissed, affirming that:
- Section 19 was not applicable for assessing additional tax under Section 5D due to the nature of the omission.
- The Tribunal correctly exercised its jurisdiction under Section 43 to rectify an error apparent on the face of the record.
- The precedents cited by the revision petitioner did not apply to the specific context of this case.