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2021 (11) TMI 429 - HC - VAT and Sales TaxRevisional powers under Section 15 (2) of the Karnataka Tax on Entry of Goods Act, 1979 - Additional Commissioner is empowered under Section 15 (2) of the Act to revise the orders passed by a Joint Commissioner of Commercial Taxes or an Appellate Authority of the rank of a Deputy Commissioner, or not - levy of Entry Taxes on the purchase turnover of RS Emulsion which was not the subject matter of the appeal - HELD THAT - In the present case, the Revisional Authority has acted under the provisions of Section 15 (2) of the Act in setting aside the order of the Assessing Authority and remanding the matter to the said Authority to reconsider the matter. Under the provisions of Karnataka Value Added Tax Act, 2003, by virtue of the amendment which has come into effect from 01.04.2013, it was made clear that the revisional authority can cancel the order and direct a fresh assessment. The word and would make the difference. Both the limbs namely cancelling the assessment order and direct fresh assessment have to be read in conjunction as the word or was substituted by the word and But in the present case, under Section 15 (2) of the Act, the word or remains as it is in between the words cancelling the assessment and directing a fresh assessment. The Revisional Authority has not passed the reassessment order but only directed the Assessing Authority to recompute the Turnover and Tax liability regarding the RS Emulsion issue. Thus, the Additional Commissioner is empowered not only to revise the order but also to enhance or cancel an assessment, or modify an assessment or direct a fresh assessment under Section 15(2) of the Act - language employed in sub-sections (1) to (3) of Section 15 of the Act would indicate the intention of the Legislature. Everything short of a re-assessment is permissible in the circumstances of the case and if such re-assessment is warranted, the matter requires to be remanded to the Assessing Authority. There are no reason to hold that the impugned order passed by the Additional Commissioner of Commercial Taxes suffers from infirmity for lack of jurisdiction. Thus, the questions of law are answered in favour of the Revenue and against the assessee.
Issues Involved:
1. Jurisdiction of the Additional Commissioner of Commercial Taxes under Section 15(2) of the Karnataka Tax on Entry of Goods Act, 1979. 2. Legitimacy of invoking Section 15(2) to review the order regarding the levy of Entry Taxes on RS Emulsion which was not the subject matter of the original appeal. Issue-wise Detailed Analysis: 1. Jurisdiction of the Additional Commissioner of Commercial Taxes under Section 15(2) of the Karnataka Tax on Entry of Goods Act, 1979: The primary issue was whether the Additional Commissioner of Commercial Taxes was correct in exercising revisional powers under Section 15(2) of the Karnataka Tax on Entry of Goods Act, 1979. The appellant argued that the Additional Commissioner exceeded his jurisdiction by revising an order passed by the Commercial Tax Officer, as Section 15(2) only empowers the Additional Commissioner to revise orders passed by a Joint Commissioner of Commercial Taxes or an Appellate Authority of the rank of Deputy Commissioner. The court examined the provisions of Section 15 of the Act, which delineates the revisional powers of the Commissioner, Additional Commissioner, and Joint Commissioner. It was noted that: - Section 15(1) allows the Commissioner to revise orders by any subordinate officer. - Section 15(2) empowers the Additional Commissioner to revise orders passed by a Joint Commissioner or an appellate authority of the rank of Deputy Commissioner. - Section 15(3) permits the Joint Commissioner to revise orders by officers not above the rank of Deputy Commissioner. The court concluded that the Additional Commissioner had the authority to call for and examine records of any proceeding and revise orders passed by the Joint Commissioner or an appellate authority. The Additional Commissioner acted within his jurisdiction by revising the order of the First Appellate Authority, which was a Joint Commissioner of Commercial Taxes. 2. Legitimacy of invoking Section 15(2) to review the order regarding the levy of Entry Taxes on RS Emulsion: The second issue was whether the Additional Commissioner was justified in invoking Section 15(2) to review the order concerning the levy of Entry Taxes on RS Emulsion, which was not the subject matter of the original appeal. The appellant contended that the Additional Commissioner overstepped by addressing an issue not raised in the original appeal. The court referred to precedents, including the cases of Shankar Construction Co. and M/s Solidus Hi Tech Products Pvt. Ltd., to elucidate the scope of revisional powers. It was established that while the revisional authority has wide powers to modify or cancel assessments, it cannot step into the shoes of the Assessing Authority to redo the assessment. The revisional authority can only direct the Assessing Authority to reassess. In this case, the Additional Commissioner did not reassess but directed the Assessing Authority to recompute the turnover and tax liability regarding RS Emulsion. This action was deemed within the permissible scope of Section 15(2), as the Additional Commissioner did not pass a fresh assessment order but remanded the matter to the Assessing Authority for reconsideration. Conclusion: The court found no infirmity in the Additional Commissioner's actions under Section 15(2) of the Act. The revisional authority was within its jurisdiction to set aside the order of the Assessing Authority and remand the matter for reassessment. The appeal was dismissed, and the questions of law were answered in favor of the Revenue and against the assessee.
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