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TMI Blog1994 (11) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... d that in the subsequent years 1983-84 and 1984-85, jute hessian had been assessed at 10 per cent while the assessee was subjected to tax only at 4 per cent in the year 1982-83 under the assessment in question. There was thus loss of revenue to the extent of Rs. 41,085.47. The assessment was thus set aside in exercise of the powers under section 35(2A) of the Act. 2.. The assessee challenged the order in appeal before the Sales Tax Appellate Tribunal, who allowed it in toto. The Tribunal took notice of the fact that an appeal was pending against the order of assessment before the Appellate Assistant Commissioner, though on certain other grounds. The revisional order cancelling the assessment therefore violated sub-section (2)(b) of section 35 of the Act. On merits, the Tribunal held that Government had issued a clarification under section 59A that jute hessian was taxable at the general rate of 4 per cent, and not at 10 per cent. So far as rubber cess was concerned, the point was covered in favour of the assessee by the decision of the Full Bench of this Court in Madras Rubber Factory Limited v. State of Kerala [1989] 74 STC 56. Therefore the appeal was allowed on merits as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years have expired after the passing of the order referred to therein. (2A) Notwithstanding anything contained in sub-section (2), the Deputy Commissioner may pass an order under sub-section (1) on any point which has not been decided in an appeal or revision referred to in clause (b) of sub-section (2), before the expiry of a period of one year from the date of the order in such appeal or revision or before the expiry of the period of four years referred to in clause (c) of that sub-section, whichever is later." Sub-section (2A) was introduced with effect from April 1, 1978, by the amending Act 21 of 1978, but neither the objects and reasons nor the memorandum accompanying the amending Bill throw any light on the circumstances attending that amendment, so that we have to decide the issue before us without any such extraneous aids. 6.. Sub-section (1) vests the Deputy Commissioner with the power to call for and examine any order passed or proceedings recorded under the Act by any officer or authority subordinate to him, other than an Appellate Assistant Commissioner, which in his opinion is prejudicial to the Revenue, and pass such order thereon as he thinks fit after making, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he point in appeal or revision. 9.. After having given our anxious consideration to the various possible contingencies, we are of the opinion that sub-section (2A) must bear an interpretation which will sustain the power of the Deputy Commissioner, at the same time without infringing the powers of the appellate authorities or of this Court. In taking this view, we are aware that the Appellate Assistant Commissioner and the Tribunal functioning under the Act possess the power to enhance the assessment, so that the assessing authority could on discovering any mistake leading to under-assessment or escape of assessment, request the Appellate Assistant Commissioner or the Tribunal to enhance the assessment by rectifying that mistake. 10.. Various contingencies can be visualised in the interpretation of this section. A point might have been expressly decided by the assessing authority in favour of the assessee; or he might have omitted to consider a particular point, and not levied tax, as in the case of the rubber cess in the assessment before us. In that event, the appeal before the Appellate Assistant Commissioner at the instance of the assessee will be only on other points and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower is precluded. The fact that no decision has yet been rendered in appeal on the point will not justify the exercise of the power in such cases. The period of time fixed in the sub-section is only the outer limit for exercise of the power and does not signify that the power becomes exercisable only after the disposal of the appeal or revision, as contended by counsel for the assessee. 14.. We draw inspiration for this view of ours from certain decisions. In State of Madras v. Madurai Mills Co. Ltd. [1967] 19 STC 144, the Supreme Court held against the merger of the order of the Deputy Commercial Tax Officer in the proceedings of the Deputy Commissioner in revision, on a particular point, when that point was not the subject-matter of the revision before the Deputy Commissioner. This view has been consistently applied in such cases. A collection thereof has been made by this Court in Commissioner of Income-tax v. Travancore Tea Estates Co. Ltd. [1988] 172 ITR 733; [1988] 1 KLT 787. In that case speaking with reference to section 263 of the Income-tax Act, 1961, this Court stated that the doctrine of merger when considered in the context of the provisions of a taxing statute can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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