9911796707
TMI Blog2007 (5) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... power within the meaning of section 15(4) of the said 1979 Act so as to fall within the limitation period specified therein. The appellant is the manufacturer of branded agarbathis having its manufacturing unit at Mysore. It causes entry of various raw materials into the local area of Mysore. For the assessment years 1986-87 to 1989-90, the assessing officer ("AO") passed an order of assessment levying tax on all the items imported into the local area of Mysore. According to the appellant, packing material was not to be taxed as raw material. This was not accepted by the AO. Aggrieved by the said decision, an appeal was filed. The appellate authority excluded the packing material from taxation. The decision of the appellate authority was delivered on March 28, 1992. On May 20, 1996 a show cause notice was given to the appellant-assessee by the Additional Commissioner under section 15(1) stating that, upon scrutiny of the records, he found the order dated March 28, 1992 to be erroneous and prejudicial to the Revenue for the reason that as per serial No. 16A of the Schedule to the 1979 Act, packing material was liable to be taxed at two per cent, which has not been noticed by the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titute exercise of power within the meaning of section 15(4) of the said 1979 Act. Consequently, according to the assessee, the revisional proceedings (suo motu) were time-barred. The Karnataka Tax on Entry of Goods Act, 1979 was enacted to provide for the levy of tax on entry of goods into local areas for consumption, use or sale therein. Section 3 is the charging section. Under section 3 a tax was levied and collected on entry of goods mentioned in the First Schedule into a local area for consumption, use or sale therein at the rates prescribed. Section 3A dealt with collection of tax by registered dealer. Chapter III dealt with filing of return, making of assessment, payment of taxes, recovery and collection of taxes. Under section 5, every registered dealer was required annually to submit a return to the AO within the period prescribed. Section 5(4) and 5(5) provided for passing of assessment orders. Section 8 dealt with payment and recovery of tax. Chapter V dealt with appeals and revision. Section 15 formed part of Chapter V. We quote hereinbelow section 15 and section 15B: "15. Revisional powers of Commissioner, Additional Commissioner, Joint Commissioner and Deputy Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt shall be excluded. . . . 15B. Limitation in regard to passing orders in respect of certain proceedings.-(1) Notwithstanding anything contained in sections 6 and 15, where any proceeding is initiated under section 6 or any records have been called for under section 15, the authority referred to in the said sections shall pass orders within a period of three years from the date of initiation of such proceedings or calling for the records, as the case may be: Provided that in respect of the proceedings initiated or records called for before the date of commencement of the Karnataka Taxation Laws (Amendment) Act, 1997, orders shall be passed within a period of four years from such commencement. (2) In computing the period specified in sub-section (1), the period during which a proceeding has been deferred on account of any stay granted by any court or any other authority shall be excluded." A bare reading of section 15(1) indicates that the Commissioner, Additional Commissioner, Joint Commissioner and Deputy Commissioner could suo motu call for and examine the records of any proceedings under this Act if he considered that any order passed therein by any officer sub- ordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he concept of exercising the power is important, particularly in the absence of any provision for issuance of a show cause notice. When the revisional authority suo motu calls for the records for examination and when he examines that records, the exercise of power under section 15(4) of the Act takes place. This can be equated to initiation of proceedings. There is one more aspect which needs to be considered. Conceptually, there is a distinction between initiation of proceedings and completion of proceedings within the stipulated period. The limitation prescribed in section 15(4) was the limitation for initiation of proceedings whereas limitation prescribed in section 15B was in respect of completion of proceedings within the prescribed period. In our view, a bare reading of section 15B with the proviso indicates that section 15B was retrospective. Firstly, the head note indicates limitation in regard to passing of orders, inter alia, under section 15. It stated clearly that, notwithstanding anything contained in section 15, where any proceeding is initiated under section 6 or where any records have been called for under section 15, the authority shall pass orders within a period ..... X X X X Extracts X X X X X X X X Extracts X X X X
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