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TMI Blog1976 (1) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... adras High Court in the case of Deputy Commissioner of Commercial Taxes vs. Thirumagal Mills(1). It also appears that the assessing officer himself had left out a turnover of Rs. 2,50,019.21 representing the sale value of gunnies, discarded machinery and empty drum in the then prevailing view that such sales are not taxable, notwithstanding s. 2(B)(ii) of the Act, which was not considered to have had the intended effect of expanding the meaning of the word business as held by the Madras High Court in Thirumagal Mills(1) case. The view of the Masras High Court in Thirumagal Mills (1) case however reversed by the Supreme Court in Burmah Shell s (2) case. The Deputy Commissioner sought to revise the order of the assessing authority under s. 32 of the Act in order to bring the said turnover of Rs. 2,50,019.21 to tax. In response to his notice, the appellant replied that since there was no finding that the sales were incidental or ancillary to appellant s business the revision was not maintainable. It was also stated that the sale were not sales in the course of business, since, according to the appellant, the sales were neither identical nor ancillary nor otherwise connected with app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely on the ground. He claimed that s. 32 (2) (b) does not contemplate any theory of merger. It is not the appellant s case that the jurisdiction of the Deputy Commissioner is ousted under s. 32 (2) because of "merger". The jurisdiction is shut out "where the order has been made the subject matter of appeal" and not any part of the order. Hence the question of merger, he submitted, is irrelevant in this content. He pointed out that the order of an Appellate Asst. Commissioner can be revised only by the Board under s. 34. He argued that the Deputy Commissioner was, in effect, revising the order of the Appellate Asst. Commissioner. He Stated that he could not do so. He also sought to dispute the addition on merits. He further repeated that the absence of a finding disabled the Deputy Commissioner from interfering by the said order. For this preposition he relied upon the decisions reported in 6 STC 318; 16 STC 875 and 24 STC 491. 4. Thiru J. Venugopal, the learned State Representative on the other hand, sought to support the order of the Deputy Commissioner. He stoutly opposed our entertaining the additional grounds. Even otherwise, he submitted, that any part of the order which did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of appeal before the Appellate Asstt. Commissioner though on another point. The records clearly show this position. In fact the D.C. s record also shows that this point was brought to the notice of the Deputy Commissioner by the Commercial Tax Officer, as seen from his report available at page 7 and 8 of the assessment file. The Commercial Tax Officer therefore wanted a common revision by the Board of Revenue under s. 34 of the Act, both for the turnover left to be assessed by the assessing officer and the turnover considered and "wrongly" allowed in appeal by the Appellate Asstt. Commissioner. It is not clear as to what prompted the Deputy Commissioner to invoke his powers under s. 32 though the jurisdiction of the Board under s. 34 would appear prima facie to put the matter beyond any pale of doubt as the Board is empowered to revise both the orders of the assessing authority and the A.A.C. We are however not concerned with any alternative line of action that might have been more profitably pursued. The D.C. possibly took the view that in view of the limited application of doctrine of merger it is open to him to revise that part of the order which did not become the subje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o in clause (c) of sub-s (2), the time during which the proceedings before the Deputy Commissioner remained stayed under the order or a civil Court or other competent authority shall be excluded. s. 32(2) (b), supra, bars jurisdiction by the use of the words "shall not pass any order under the sub-s. (1)" where, inter alia, "the order has been made the subject matter of an appeal to the Appellate Asstt. Commissioner or the Appellate Tribunal......" The assessment order was made the subject matter appeal to the Appellate Assistant commissioner who passed orders thereon though an another point on 4th February, 1972. This fact is a matter on record. It appears to us that once an order becomes the subject matter of appeal, there cannot be any revision. It stands to reason because the Appellate Asst. Commissioner has powers of enhancement under s. 31 of the Act. Once an appeal has been filed by a tax payer it would appear that the law envisages that the error, if any, in the order could be rectified by the Appellate Asst. Commissioner, in view of his power of enhancement under s. 31 of the Act. In other words, the very Act of filing an appeal to Appellate Asstt. Commissioner deprives ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... independent order which had not become the subject matter of appeal before the Appellate Asst. Commissioner. Hence we find that the facts are easily distinguishable. In appellant s case, the order of computation of turnover is itself the subject matter of appeal. Similarly reliance on the decision of the Madras High Court in Madurai Mills (5) case reported in 13 STC 124 subsequently confirmed by the Supreme Court in 19 STC 144 is also misplaced. In this case, the State sought to apply the doctrine of merger to get over the time for revision under the provision relating to Board s powers of revision under s. 12(4)(B) of MGST Act, 1939 (analogous to s. 34 of the TNGST Act, 1959). In this case, there was an error in the order of the Deputy Commercial Tax Officer in the original assessment. This order had become the subject matter of appeal before the Commercial Tax Officer on another point. The Deputy Commercial Tax Officer, thereafter passed further order giving effect to the appellate order. Later on the order became subject matter of revision before the Deputy Commissioner also. The Board however sought to set right what it considered a mistake in the original assessment. This acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation sought to be suggested by the learned counsel. In fact, decisions cited by the learned counsel deal with provisions which are not at all similar. We are also not satisfied with the appellant s objections on merits as to the alleged non-application of Burmah Shell s(2) case to appellant s facts. s. 2(d) (ii) as amended by Act 15/64 deems that any transaction in connection with or incidental or ancillary to such trade, commerce, manufacture, adventure or concern has to be treated as a transaction in the course of business. The authorities have inferred that the sales are sales of empty drums, old gunnies and discarded machinery parts. These have been assumed by the authorities to have been acquired by the appellant in its manufacturing business as a textile mill owner and in its ordinary business as a dealer. The appellant has not placed any facts before us to suggest that the inference is in any manner incorrect. The appellant is certainly not a dealer in gunnies, old drums or discarded machinery. But these were acquired in the course of its business as a manufacturer of textiles, yarn, etc. And otherwise during the course of its business. When this was pointed out to the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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