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TMI Blog1985 (8) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... documents produced by the assessee in support of its claim so far as the inter-State transactions were concerned, exempted the turnover as claimed by the assessee and treated it as inter-State turnover. 4.. Correspondingly, assessment was completed for the year ending 31st March, 1974 under the CST Act and this turnover was brought to tax under the CST Act and these assessments have become concluded. It appears, thereafter, the assessing officer issued show cause notices under section 12A of the KST Act and also notices under section 25A proposing to bring to tax the turnover in respect of the inter-State sales of Rs. 7,35,030.42 effected by the petitioners in favour of Mohan Aluminium Co. Ltd., Bangalore, and M/s. Ideal Jawa, Yavagiri, Mysore. These notices were challenged by the petitioner before this Court and on a memo being filed on behalf of the State seeking to withdraw the impugned notices the writ petitions came to be disposed of. 5.. What happened thereafter is relevant for the purpose of these cases. The Commissioner, in exercise of his powers conferred under section 22A of the Act, issued a notice to the petitioner proposing to revise the assessment order comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not conform to the requirements of section 22A of the KST Act. I will revert to this notice again after dealing with the notice issued under section 22A of the State Act. 7.. Section 22A is a power vested in the Commissioner under which he can call for the records of any proceedings under the Act and if he is of the opinion, that it is prejudicial to the interests of the Revenue, he may, after such enquiry as he deems necessary, modify the said assessment or cancel the assessment or direct fresh assessment. In this case, the Commissioner has stated in his notice dated 21st October, 1978 that on a perusal of the assessment order passed by the Assistant Commissioner of Commercial Taxes, Dharwar, for the year 1973-74 under the KST Act, he was of the opinion that the assessing officer had erroneously considered the turnover of Rs. 7,35,030.42, which represented the sales of aluminium ingots made to M/s. Ideal Jawa, Yavagiri, Mysore, and Mohan Aluminium Co. Ltd., as inter-State sales. As a result, the turnover, which according to the Commissioner represented sales to local dealers, had suffered a concessional tax at 3 per cent instead of 6 per cent. The Commissioner before issuin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1976 and under section 25A on 6th September, 1976 by the assessing authority concerned with a view to subject the turnover of Rs. 7,35,030.42 to tax at 6 per cent under the local law." 8.. The questions that arise for consideration therefore are: (i) whether the Commissioner's action in initiating action to revise the assessment orders for the assessment year 1973-74 is justified in law?; and (ii) what is the true ambit and scope of the revisional power of the Commissioner under section 22A of the KST Act? Sri Venugopal has relied upon the decision of the Supreme Court in State of Kerala v. Cheria Abdulla Co. [1965] 16 STC 875 (SC) in support of his contention that the Commissioner cannot rely upon any information which is collected after the assessment and outside the record of assessment. Sri Venugopal has drawn my attention to paragraph 19 in Cheria Abdulla's case [1965] 16 STC 875 (SC) wherein, the Supreme Court has dealt with the limitation while exercising the power under section 12 of the Madras General Sales Tax Act. The particular passage to which he has drawn my attention is at paragraph 19, page 886, extracted below: "It would not invest the revising auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al power under the Act cannot be exercised to reassess an escaped turnover. The other decisions quoted and relied upon by Sri Venugopal are, Mewa Lal Kewal Kishore v. Commissioner of Sales Tax [1974] 34 STC 110 of the Allahabad High Court for the proposition that there can be an inter-State sale between two persons belonging to the same State if the goods move from one State to another as a result of a contract of sale or the goods are sold while they are in transit by transfer of documents and in such a case, it is immaterial where the property in goods passes from the seller to the purchaser. 9.. In this case also, both the seller and purchaser are in the same State, but the question the Commissioner wants to probe into is, whether that turnover in dispute relates to a local sale or an inter-State sale. The Commissioner is yet to decide this question and he had jurisdiction to initiate proceedings on the basis of the material on record. It is, therefore, premature to interfere at this stage. G.K. Chikanarasimhiah v. Assistant Commissioner of Commercial Taxes, Bangalore City Division, Bangalore [1971] 28 STC 98. This was a case where the turnover of the assessee had been a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er under section 12 of the Act read with rule 14A framed under the Madras General Sales Tax Act. Though the Supreme Court was mainly concerned with the interpretation of rule 14A, under which the revising authority could take further evidence, the Supreme Court also dealt with the scope of the revisional power under section 12(2) of the Act. The Supreme Court's observations made in para 15 are extracted below: "Turning then to the jurisdiction which the revising authority may exercise under section 12(2), attention must first be directed to the phraseology used by the Legislature. The Deputy Commissioner is thereby invested with power to satisfy himself about the legality or propriety of any order passed or proceeding recorded by any officer subordinate to him, or the regularity of any proceeding of such officer, and to pass such orders with respect thereto as he thinks fit. For exercising this power, he may suo motu or on application call for and examine the record of any proceeding or order. There is no doubt that the revising authority may only call for the record of the order or the proceeding, and the record alone may be scrutinised for ascertaining the legality or proprie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12(2) are not confined to errors patent on the face of the records but would extend to probing further into the records like calling for despatch registers and other evidence. " The decisions of the Supreme Court in Cheria Abdulla [1965] 16 STC 875 (SC) and in Ram Kanai's case [1976] 38 STC 1 (SC); AIR 1976 SC 1545 support the case of the Department. The learned Government Advocate has also relied upon two decisions of the Supreme Court, viz., (i) Balabhagas Hulaschand v. State of Orissa [1976] 37 STC 207 (SC) and (ii) Manganese Ore (India) Ltd. v. Regional Assistant Commissioner of Sales Tax, Jabalpur [1976] 37 STC 489 (SC). Their Lordships interpreted section 3(a) of the Central Sales Tax Act in both the cases and laid down the tests that are to be applied for determining an inter-State sale. It is unnecessary to go into the details of discussion as to what is an interState sale and when a sale becomes an inter-State sale. 17.. Since the Commissioner has only proposed to revise the assessment for the reason that the turnover in question was erroneously treated as an interState sale by the assessing officer, it is sufficient to observe that the decisions laid down by the Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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