2018 (3) TMI 907 - HC - VAT and Sales Tax

Suo motu power of revision to the Deputy Commissioner - transfer of goods otherwise than by way of sale - sub-section (2) of Section 9 of the CST Act - Held that - the suo motu power conferred on the Deputy Commissioner under Section 35 of the KGST Act could be availed in respect of assessments made under the CST Act in the light of subsection (2) of Section 9 of the CST Act - petition dismissed - decided against petitioner.

Summary

Issues:
1. Jurisdiction of Deputy Commissioner under the CST Act and the KVAT Act.
2. Exercise of suo motu power under Section 56 of the KVAT Act.
3. Applicability of sub-section (2) of Section 9 of the CST Act.
4. Comparison with similar cases under the KGST Act.

Jurisdiction of Deputy Commissioner under the CST Act and the KVAT Act:
The petitioner, a dealer in arecanut under the CST Act, challenged an order by the Deputy Commissioner under the KVAT Act, setting aside an assessment completed by the first respondent. The petitioner contended that the Deputy Commissioner's power of revision is limited under Section 6A of the CST Act. However, the Deputy Commissioner invoked his powers under Section 56 of the KVAT Act in this case, based on sub-section (2) of Section 9 of the CST Act. The court noted that the Deputy Commissioner's powers under the KVAT Act were exercised in line with the provisions of the CST Act, allowing state authorities to assess, collect, and enforce payment of tax on behalf of the Government of India.

Exercise of suo motu power under Section 56 of the KVAT Act:
The petitioner argued that the Deputy Commissioner's suo motu powers under the KVAT Act were more administrative in nature and not conferred under sub-section (2) of Section 9 of the CST Act. However, the court referred to a previous case where a similar contention was raised under the KGST Act. In that case, it was established that the Deputy Commissioner could exercise revisional powers under the KGST Act for assessments made under the CST Act. The court emphasized that the revisional authority was justified in invoking powers to tax escaped turnover under the CST Act, in line with a decision by the Apex Court.

Applicability of sub-section (2) of Section 9 of the CST Act:
The court highlighted that sub-section (2) of Section 9 of the CST Act empowers state authorities to assess, re-assess, levy penalties, deal with appeals, recover tax, and perform other necessary functions related to tax matters. This provision allows state authorities to apply provisions of the general sales tax law of the State to assess and collect tax under the CST Act, ensuring effective enforcement and administration of tax laws.

Comparison with similar cases under the KGST Act:
The court referenced a previous case where the Deputy Commissioner's revisional powers under the KGST Act were upheld for assessments made under the CST Act. The court emphasized that the revisional authority was justified in using powers to tax escaped turnover under the CST Act, based on a decision by the Apex Court. Consequently, the court dismissed the writ petition, finding it lacking in merit based on established legal principles and precedents.