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TMI Blog1963 (5) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... ember, 1960, after the coming into force of the Madras General Sales Tax Act, 1959, the Deputy Commissioner purported to start proceedings under section 32 of that Act. He issued a notice on that date, and despite the objections of the assessees, he made an order cancelling the exemption to the tune of a turnover of Rs. 4,12,400. His order was to the effect that "on further investigations, it was found that the documents produced by the dealers in certain cases in support of the purchases alleged to have been made from outside the State were not reliable and that the vouchers issued by the auctioneers at Kallar in Kerala State, and the vouchers for the transport by other means than by the ropeway prepared by the dealers themselves were not genuine and were designed to shift the situs of purchase from the Madras State to places outside the State". Against this order, an appeal was taken to the Sales Tax Appellate Tribunal. The appeal of these assessees was heard along with some other appeals. The principal point that was urged before the Appellate Tribunal was that the Deputy Commissioner had no jurisdiction to pass the said order, inasmuch as the original order of assessment had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e upon any fresh material outside the record, the record being the record of the order sought to be revised and of ancillary records such as the files of assessment relevant thereto. In State of Madras v. Louis Dreyfus and Company Limited [1955] 6 S.T.C. 318., the question arose as to the distinction between the power conferred by rule 14(2) and rule 17. Broadly stated, rule 14(2) is directed to the correction of improper or illegal assessment orders, while rule 17 is the power of assessment of escaped turnover. Rule 14 virtually reiterated the power of revision contained in section 12 of the Act of 1939. It was held in the above decision by a Full Bench that the two powers were distinct from each other and covered two different jurisdictions. Rajamannar, C.J., observed: "Now what exactly is the meaning to be attached to the expression 'the record of any order passed'? The records which the revising authority calls for are the records of the assessment. They would include the assessment order as well as the other files of the assessing authority which would furnish the basis upon which the assessment order is passed. If in the assessment order the turnover which a dealer has return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion that the statute gave the power of reassessment in express terms only to the assessing authority and to no one else. Rule 31(5) of the Andhra Pradesh Sales Tax Rules, which purported to confer such a power upon the appellate or revisional authority, was attacked there as beyond the rule-making power of the Government. The learned Judges observed: "This section (section 20) confers revisional jurisdiction upon the Board of Revenue, Deputy Commissioners and Commercial Tax Officers in the case of orders passed or proceedings recorded by officers subordinate to them. It also prescribes the limits within which this jurisdiction could be exercised. This power is not of such a wide amplitude so as to enable the revising authority to correct assessments based on information subsequently gathered. According to the learned Government Pleader, the revising authority need not confine itself to the material already on record but could call for fresh evidence and determine the assessment on the strength of it. We find it difficult to assent to this proposition. In our opinion, the legality or the propriety of the order under revision could be judged with reference to the material on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uce the original books themselves and if those entries in the accounts purported to be based upon other records, such other records can also be scrutinised. Virtually, therefore, this decision only supports the proposition later laid down by the Full Bench in State of Madras v. Louis Dreyfus and Company Limited [1955] 6 S.T.C. 318., that the records of assessment would include all the files of the assessment and the accounts and other material upon which the order under revision was passed. It is clear from the above decisions that the revisional jurisdiction conferred by section 12 of the Madras General Sales Tax Act of 1939 did not warrant the collection of additional material in the light of which the order sought to be revised could be examined. In the present case, the power exercised by the Deputy Commissioner is that conferred by section 32 of the Act. It is undoubtedly a revisional power. It reads: "The Deputy Commissioner may, of his own motion, call for and examine an order passed or proceeding recorded by the appropriate authority under section.........and may make any such enquiry or cause such enquiry to be made and, subject to the provisions of this Act, may pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviso clearly saves any right, title, obligation or liability already acquired, accrued or incurred thereunder and the result of any proceeding under the 1959 Act is made "subject thereto". Under the 1939 Act, an assessment made by the assessing authority did not become final for all purposes. There was always the possibility of the order of assessment being subjected to a revision contemplated under that Act. A liability must necessarily connote a corresponding right and if an order of assessment made under the 1939 Act stood under the danger of being revised by the proper authority, equally so it can be revised only within the ambit of the power of revision conferred by that Act. There was therefore a right on the part of the assessees that the assessment was subject to revision within the scope of the power of revision outlined in that Act. The saving of rights and liabilities contemplated by the proviso to section 61(1) of the 1959 Act would be meaningless if by reason of any provision contained in the 1959 Act, the assessee should be regarded as likely to be prejudiced to a greater extent than under the 1939 Act. It is true that as observed by us in Deputy Commissioner of Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was accepted by the Tribunal. The State preferred a revision petition contending that section 31(3) of the 1959 Act specifically provided for the enhancement of the turnover during the appeal. We had to examine the scheme of the Act and the particular provisions enacted by section 61(2) of the 1959 Act for the continuance of pending proceedings. We observed thus: "The assessee had undoubtedly a vested right at the time when the new Act came into force to prevent the then appellate authority, the Commercial Tax Officer, from enhancing the assessment in the course of an appeal preferred by him. It may be that there was always the peril of the Commercial Tax Officer, who was also the revising authority, revising the assessment to his prejudice in exercise of his revisional power. But that peril effectively disappeared when under the new Act, the revisional power was conferred upon the Deputy Commissioner for Commercial Taxes and not upon the Appellate Assistant Commissioner. Any interference by the Appellate Assistant Commissioner with the assessment order passed by the Deputy Commercial Tax Officer to the prejudice of the assessee, in the purported exercise of his appellate pow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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