9911796707
TMI Blog1976 (11) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... th December, 1964, on the ground that general sales tax at 45 per cent was leviable on the sales. Set-off was allowed under rule 40-B in the next period and the stock as on 1st January, 1965, was estimated at worth Rs. 23,858.46. Retail sales tax was worked out and after adjustment of set-off, the tax assessed was Rs. 85,439.67. Thus, the balance worked out by giving credits for the payments already made was Rs. 24,817.94. For non-submission of return penalty in the sum of Rs. 7,000 was imposed under section 36(2)(c) of the Act. After this order, the Assistant Commissioner of Sales Tax purported to issue on 8th November, 1968, a notice styled under section 35 of the Act. Reply was given by the petitioner-assessee questioning the validity of that notice on 17th March, 1969. The notice was withdrawn on 7th April, 1969. Prior to the withdrawal, on 4th April, 1969, the Assistant Commissioner of Sales Tax issued the notice under section 57 of the Act. Accompanied to that notice was the gist of the order proposed to be made. By that order it was proposed that the sales of Rs. 6,730.50 were wrongly taxed under entry No. 22 of Schedule E, while they were taxable under entry No. 70 of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as imposed. Thus, the original order with regard to matters, firstly, fixing of the liability with reference to Schedule C, entry No. 70, secondly, with regard to question of deductions and, thirdly, the set-off and the Rules concerning the same as on 17th December, 1964, and, lastly, the liability to pay penalty under section 36(3) and application of law with regard that the learned counsel appearing for the petitioner has raised no dispute. The main and sole contention of the petitioner as is raised before us eventually in this petition rests upon the objection which was also raised before the revisional authority, and relates to the ambit, scope and power conferred by section 57 of the Act in the matters of tax revision. It is submitted that the power itself is of limited authority and in its exercise it cannot conceivably take in the process and the power conferred by other provisions of the statute upon the authorities in the matter of tax. Thus the plea upon the limitation of the power is raised and it is submitted that the order is made entirely without jurisdiction or at any rate is in excess thereof upon true contemplation and construction of section 57. It is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Act concerned. Here we are in the domain of public law that concerns with the matters of taxation on sales of goods. As is implicit in the scheme of such Acts, provisions are enacted for the determination of the liability to pay the given tax. Such enactments follow the two-fold statutory system that can be classed as enacting statutory provisions giving rise to the charging of the tax and, secondly, enacting provisions that may be termed as formal or procedural as distinct from substantive and that concerns itself with the mode and manner of assessment, enforcement, procedure, coercive measures, administrative and judicial adjudications and other ancillary matters in that regard. No doubt the primary principle is the taxing statute both in its substantive and formal aspects shall have to be complied with before a citizen can be asked to pay and it will be legitimate for a citizen to set up its breach in both of these departments as a valid defence which may eventually affect the liability or the demand emanating under the process of that law. Further, it is rudimentary in modern legislations of tax to lay down a three-phased provision interconnected with each other in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he identity of jurisdiction to be exercised in appeal as well as in revision, subject, however, to the limits imposed upon that jurisdiction by the statute, is one and the same. There is undoubtedly difference between appellate and revisional jurisdiction and it is noteworthy that revisional jurisdiction is treated as supervisory and operative with in built limitations in exercise of the same. These higher jurisdictions, either called appellate or revisional, thus enable the juridical examination by the higher authorities of the decisions of the inferior or the lower authorities: see Sk. Wahiduddin v. MakhanlalA.I.R. 1944 Lah. 458 (F.B.)., Mela Ram v. Income-tax Commissioner[1956] 29 I.T.R. 608 (S.C.); A.I.R. 1956 S.C. 367., Nagendra v. SureshA.I.R. 1932 P.C. 165., J.P. Ojha v. R.R. TandanA.I.R. 1962 All. 485. and a decision of this court in Asmita Dharaskar v. City of Nagpur Corporation1976 Mh. L.J. 363. We have made these observations to underpin the distinctive difference of jurisdiction exercised by the authorities under section 57 which cannot be confused with the jurisdiction that is created and can be exercised under section 35 of the Act. If the order can be sustained on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive one and, in that, it can reach to the errors of law or errors of procedure which are apparent on the face of the record. There is nothing contra-indicative in the terms of section 57 in this regard. In fact, the legislature has used the wide phrase permitting the Commissioner to make an order which "he thinks just and proper". The generality of that phrase, however, is controlled and limited because of the very concept of correction by supervisory exercise of powers as contemplated by section 57 as distinct and distinguished from the original power of wider scope available to an appellate authority conferred by the provisions of appeal like that of section 55 of the Act. Thus far we have indicated that the nature, scope and purpose of section 57 is to subject the orders of the subordinate authorities to the superior scrutiny of the Commissioner in the matter of assessment originally initiated under the provisions of the Act and except for the inbuilt and conceptual limitations, no further limitations are conceived. If all the conditions are satisfied, in that, there is an order made by the officer or person subordinate to the Commissioner and there being no other impediment e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are satisfied and the matter being within time as indicated by law, the power can be exercised to assess or reassess to the best of the judgment the dealer or to the amount of the tax due. The proceedings taken under section 57 or section 62 cannot be subjected to the process of reassessment because of sub-section (2) of section 35 nor the provisions of section 57 or section 62 affect the provisions of section 35, because of sub-section (3) of section 35. These two sub-sections also indicate that the nature of the proceedings under sub-section (1) is more or less original and compartmentally conceived as the process of reassessment. Moreover, the opening clause of sub-section (1) of section 35 clearly indicates that the proceedings for reassessment can only be taken if the dealer has been assessed under section 33 or under section 4 or under section 41 and none other. If the case is of an assessment, it follows that sub-section (1) permits opening of the proceedings under section 33; so would be the case with regard to dealers covered by section 4 or matters covered by section 41 regarding exemptions. All this indicates that the nature of the proceedings under section 35 which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to act on conjectures or to institute any enquiry so as to include additional material in order to judge the correctness of the order sought to be revised. Reliance was placed on the decision of the Andhra Pradesh High Court in the case of State of Andhra Pradesh v. T.G. Lakshmaiah Setty Sons[1961] 12 S.T.C. 663., where the High Court had found that the revisional authority had no jurisdiction to travel beyond the record that was available to the assessing authority and the basis should be found on the record already in existence. With regard to this part of the matter, the Supreme Court observed: ".......We are unable to accept this principle laid down by that High Court as correct. 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 circumstances of the particular case before it. When exercising such powers, there is no reason why the authority should not be entitled to hold an enquiry or direct an enquiry to be held and, for that purpose, admit additional material. The proceedings for revision, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he return is initially filed by an assessee. In fact, when a revisional power is to be exercised, we think that the only limitations, to which that power is subject, are those indicated by this court in K.M. Cheria Abdulla Co.'s case[1965] 16 S.T.C. 875 (S.C.). These limitations are that the revising authority should not trench upon the powers which are expressly reserved by the Acts or by the Rules to other authorities and should not ignore the limitations inherent in the exercise of those powers. In the present case, the Deputy Commissioner, when seeking to exercise his revisional powers, is clearly not encroaching upon the powers reserved to other authorities. Under the Act of 1946, the first assessment is made by the Sales Tax Officer under section 11. If information comes into his possession that any turnover in respect of sales or supplies of any goods chargeable to tax has escaped assessment in any year or has been under-assessed or assessed at a lower rate or any deductions have been wrongly made therefrom, proceedings can be taken afresh under section 11A. On the face of it, if a first assessment order is made under section 11 and any turnover escapes assessment, the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction conferred by the provisions of section 57. The very concept of reassessment to which we have made a little elaborate reference and assessment structurally, in our view, are independent and distinct and do not by any implication control the exercise of the authority expressly conferred by law. At least with regard to escaped assessment, by the very concept, it takes in the matters which did not fall for assessment or its considerations. The revisional jurisdiction operates upon the considerations of the legality, propriety and regularity of the assessment as such and not on the matters with regard to escaped assessment. This distinction has been applied in the case of State of Kerala v. K.E. Nainan[1970] 26 S.T.C. 251 (S.C.). by the Supreme Court while considering the matters of similar jurisdiction under the provisions of Kerala General Sales Tax Act and the Rules. There, for the assessment years 1955-56 and 1956-57, revisional powers were exercised under section 15(1) by the Deputy Commissioner cancelling the assessment and remanding the case for fresh disposal and the argument was that the revisional power was exercised in respect of the turnover in which exemption was gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repelling this part of the submission, reference was made to the decision of the Supreme Court in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax, Nagpur[1963] 14 S.T.C. 976 (S.C.)., and, from that case, the following observations by Subba Rao, J., with regard to the provisions of section 11A of the C.P. and Berar Sales Tax Act, 1947, were quoted: "On the said analogy, the assessment proceedings under the Sales Tax Act must be held to be pending from the time the said proceedings were initiated until they were terminated by a final order of assessment. Before the final order of assessment, it could not be said that the entire turnover or a part thereof of a dealer had escaped assessment, for the assessment was not completed and, if completed, it might be that the entire turnover would be caught in the net......... It is manifest that in the case of a registered dealer the proceedings before the Commissioner start factually when a return is made or when a notice is issued to him either under section 10(3) or under section 11(2) of the Act." The court further indicated that in that case it was observed that "a case would be pending till a final order of assessment wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
