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TMI Blog1968 (6) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... e materials and the evidence on record, the Assistant Commissioner of Sales Tax was justified in the adoption of ratio proportion method for arriving at the turnover for the purpose of deduction under section 11(1)(a), Bombay Sales Tax Act, 1953 (unamended) and rule 6(1) of the Bombay Sales Tax Rules, 1952?" The facts giving rise to this reference are as follows: The applicants are registered dealers and at the relevant time were holding a registration certificate and a licence under the Bombay Sales Tax Act, 1953. The applicants were carrying on business of purchasing raw cotton from agriculturists as well as from licensed dealers and of selling cotton and cotton-seeds after getting raw cotton ginned. The assessees were also doing business of reselling raw cotton, cotton bales and cotton-seeds. The applicants were assessed by the Sales Tax Officer under section 14 of the Bombay Sales Tax Act, 1953. In the course of the proceedings before the Sales Tax Officer, the assessees claimed deduction under section 11(1)(a) of the Bombay Sales Tax Act, 1953 (unamended) and also under rule 6(1) of the Rules then in force in respect of certain sales. The Sale Tax Officer passed the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od 1st November, 1952, to 30th September, 1953, on the ground that the deductions granted by the Sales Tax Officer were erroneous and not according to law, and secondly, that the assessment order was not in accordance with the provisions of section 14(1) of the Act. The Assistant Commissioner came to the same conclusion also as regards the period 1st October, 1953, to 31st March, 1954. The Assistant Commissioner seems to be right in view of the provisions of section 14 of the Bombay Sales Tax Act, 1953 (unamended), that the relevant assessment periods that should have been considered by the Sales Tax Officer in the first instance were 1st November, 1952, to 31st March, 1953, and 1st April, 1953, to 31st March, 1954. To that extent it is obvious that there was an error so far as the Sales Tax Officer was concerned. Again, the Assistant Commissioner has pointed out in his order that in order to provide for deduction under section 11(1)(a) and under rule 6(1)(i), the Sales Tax Officer had not adopted any rational basis in view of the facts and circumstances of the case. The scheme of the Act which was in force at the relevant time was that if a licensed dealer purchased goods from a l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any year or has been under-assessed or assessed at a lower rate or any deductions have been wrongly made therefrom, the Collector may, in any case where he has reason to believe that the dealer has concealed the particulars of such sales or purchases or has knowingly furnished incorrect returns, at any time within five years, and in any other case, at any time within three years, of the end of that year, serve on the dealer liable to pay the tax in respect of such turnover a notice containing all or any of the requirements which may be included in a notice under sub-section (3) of section 14 and may proceed to assess or reassess the amount of the tax due from such dealer and the provisions of this Act shall apply accordingly as if the notice were a notice served under that sub-section." It is, therefore, clear that the powers of reassessment under section 15 could only have been exercised by the Sales Tax Officer concerned, who was the Collector for that purpose, if there was any information before him on the basis of which the Sales Tax Officer was satisfied that any turnover in respect of sales of any goods had escaped assessment in any year or had been under-assessed or ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessing authorities and if the revising authority proposes reassessment, then the revising authority could not have exercised any such powers; and it was held in that case that the relevant rule 14-A would not invest the revising authority with power to launch upon enquiries at large so as either to trench upon the powers which are expressly reserved by the Act or by the Rules to other authorities or to ignore the limitations inherent in the exercise of those revisional powers. The same question regarding the scope of the powers of the revising authority came up again for consideration before the Supreme Court in Swastik Oil Mills v. H.B. Munshi[1968] 21 S.T.C. 383. In that case, the provisions of the Bombay Sales Tax Act, 1953, with which we are concerned in the instant case, came up for consideration before the Supreme Court. Bhargava, J., delivering the judgment of the Supreme Court has observed at page 395 of the report as follows: "Whenever a power is conferred on an authority to revise an order, the authority is entitled to examine the correctness, legality and propriety of the order and to pass such suitable orders as the authority may think fit in the circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is is, therefore, not a case where the powers are being exercised for the purpose of assessing or reassessing an escaped turnover. The case is one where the revisional powers are sought to be exercised to correct what appears to be an incorrect order passed in appeal by the Assistant Collector, and, for such a purpose, proceedings could not possibly have been taken under section 11-A. In exercising his revisional powers, therefore, the Deputy Commissioner is not encroaching upon the jurisdiction of any other authority specially entrusted with taking such proceedings." In the instant case, it is true that the Assistant Commissioner has revised the first assessment order passed by the Sales Tax Officer but what is done in substance is to correct the illegalities, which, according to the Assistant Commissioner, were found on the record of the Sales Tax Officer. He found two such illegalities-(1) regarding the assessment year and (2) regarding the deductions which were to be allowed under section 11(1)(a) and under rule 6(1). He was not dealing with a case of any deduction which had been wrongly made from the turnover after having come in possession of some information. If the deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Swastik Oil Mills' case[1968] 21 S.T.C. 383., where it was held that so far as the question of limitation was concerned, under the provisions of section 31 no period of limitation having been prescribed for the exercise of revisional powers, no period of limitation had necessarily to be read in the provisions of section 31 of the Act. It was urged before us that in the exercise of the revisional powers of the Assistant Commissioner, it was not open to him to set aside the orders of the Sales Tax Officer and to remand the case back to the Sales Tax Officer giving him direction to assess the applicant de novo according to law and that contention is covered by question No.(3) referred by the Sales Tax Tribunal to this Court. Under section 31 of the Act it was provided that subject to such rules as may be prescribed and for reasons to be recorded in writing, the Collector may, upon application or of his own motion, revise any order passed under this Act or the rules thereunder by a person appointed under section 3 to assist him. No indication has been given in section 31 or the rules anywhere as to the amplitude of the powers which the revising authority can exercise under section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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