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TMI Blog1988 (9) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... in gold-thread under entry 49 of the Second Schedule and that the said turnover should have been taxed under section 5(1) of the Act treating it as sale of imitation jari. The petitioners' case is that they are all dealers in gold-thread and they are not dealers in any imitation jari. It is, therefore, contended on behalf of the petitioners that there was no material for the Deputy Commissioner to invoke the revisional jurisdiction on the assumption that the petitioners had dealt with imitation jari and not gold-thread. It is also argued that from the very inception of the business of the petitioners, who deal exclusively in gold-thread, their turnover was being taxed under entry 49. Entry 49, it is pointed out, has been on the statute book since 1957. This entry underwent a change in the year 1985 by Act 27 of 1985 when entry 49 was substituted by the following entry: "All kinds of jari including metallic yarn, metallic jari yarn, metallic plastic yarn, polyester film yarn, and radiant yarn." The further argument is that the other kinds of imitation jari which were brought within the net of taxation only with effect from 1st August, 1985 and for the period prior to the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Deputy Commissioner revising the assessments were themselves erroneous and should fail for want of jurisdiction. This Court held that there was no material before the revisional authorities on the basis of which they could have held that lime was a heavy chemical in order that its sale could have been subjected to levy at a higher rate. In Sri Veerarajendra Corporation's case [1985] 58 STC 199 this Court was dealing again in heavy chemicals. The revision petitions filed by the assessees before the High Court were allowed and the orders of the Tribunal and the Deputy Commissioner of Commercial Taxes were reversed. The Deputy Commissioner had initiated proceedings under section 21 of the Act and has subjected the turnover of the petitioners to a higher rate treating trichloroethylene as a heavy chemical. This Court held, that there was no material or other information brought on record on the basis of which the Deputy Commissioner could have revised the assessments. It was also observed that the assessments which had been accepted for decades should not ordinarily be revised without any compelling reason, which was lacking in those cases. In Gondakar's case [1983] 54 STC 190 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to be revised, and that the said orders were prejudicial to the interests of the Revenue? The learned Government Pleader has produced before me the file relating to the issue of notices impugned in these writ petitions. It is seen that the provision of section 21(4) was invoked in these cases on the basis of a report submitted by the Commercial Tax Officer, and the Deputy Commissioner ordered issue of notices on receipt of the said report. It is seen that the Deputy Commissioner being a revisional authority has not recorded any reason or had brought on record any other information or material which warranted the revision of the assessments. On the other hand, the Commercial Tax Officer's report, which was submitted in the light of the audit objections pointed out by the Accountant-General, the Commercial Tax Officer suggested the revision of assessment orders. The Accountant-General appears to have taken a view that the sale in gold-thread should appropriately be brought to tax under section 5(1) and not under entry 49 of the Second Schedule. It is very interesting to note the reasons for this recording of objections. The amendment brought about to the Act by substituting ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evy under section 5(1), or under entry 49 of the Second Schedule, I propose to deal with this point also in these writ petitions. The point that arises for consideration is, how the "gold-thread" or "jari" occurring in entry 49 of the Second Schedule should be understood? The petitioners' contention is that gold-thread is understood in common parlance as jari or jarthari and also known in the trade as "kalabattu" which may include both pure and art gold-thread. It is also submitted on behalf of the petitioners who are the exclusive traders in jari that no jari is made out of pure gold and it is always made out of an alloy which is a combination of silver or any other metal from which the jari thread is drawn which is later used in weaving of silk sarees. Sri Gandhi has also relied upon the orders made by several Deputy Commissioners before entry 49 was substituted with effect from 1st August, 1985 to include imitation jari. One such order is produced as annexure Q which was an appeal against the order made by the Additional Deputy Commissioner of Commercial Taxes (Appeals), Bangalore, under section 25A of the Karnataka Sales Tax Act. The assessing officer had rectified the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in all these writ petitions are jari dealers and Bangalore appears to be the centre for the jari trade in the South. The assertion made on behalf of the petitioners that all the petitioners are dealers in jari only, namely, gold-thread and not in imitation jari, is not controverted by the department. The Deputy Commissioner of Commercial Taxes (Administration), Bangalore, has proposed to revise the assessments only because of the Accountant-General's objections. That this is the only ground and sole ground on which notices have been issued, is clear from the record of the Deputy Commissioner which contains the report of the Commercial Tax Officer who has recommended for revision of assessment on account of the audit objections. Therefore, this is not the first time such objections are raised by the Accountant-General. It is seen from one of the Deputy Commissioner's order that even during the year 1976-77 such assessments were rectified and assessments were done relying upon the objections raised by the Accountant-General. Those assessments were set aside by the Deputy Commissioner in appeal who held that the turnover of sale in gold-thread should brought to tax only under entr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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