9911796707
TMI Blog1999 (9) TMI 959X X X X Extracts X X X X X X X X Extracts X X X X ..... t and machinery to M/s. Lohiya Machines Ltd. worth ₹ 8,64,819/-. This sale was not disclosed either in the returns or in Form 82 and also not at the time of assessment proceedings. Thus, the said turnover could not be assessed tax. The assessee was called upon to show cause why the assessment order dated 22nd March, 1986 be not revised under Section 10-B. 2. The dealer submitted reply to the show cause in which it was stated that as a matter of fact in the assessment year in question machinery worth ₹ 5,05,000 was sold to Lohiya Machines Ltd. which sale was not disclosed at the time of assessment on which no tax has been imposed. However, such turnover cannot be taxed in exercise of the revisional powers under Section 10-B of me Act because such powers are vested in the assessing authority under Section 21 of the Act. Since the limitation for initiating proceedings under Section 21 has expired and no proceedings have been initiated, such proceedings cannot be initiated under Section 10-B of the Act. 3. Deputy Commissioner after bearing the parties and considering the arguments advanced by them passed order dated 19th December, 1988 holding that Lohiya Machines Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnover. He further points out that notice under Section 21 on 20th March, 1986 was issued by mistake as on that date there existed no assessment regarding which notice could be issued under Section 21 of the Act. He has also drawn the attention of this Court to Explanation 3 to Section 21 (1) of the Act which provides that notwithstanding the issuance of the notice under this sub-section, where an order of assessment or reassessment exists from before the issuance of such notice it shall continue to be effective as such, until varied by an order of assessment or reassessment made under this section in pursuance of such notice. Submission of the learned Standing Counsel is that the Tribunal has misinterpreted the law as the powers under Section 21 and Section 10-B of the Act are independent and are exercised by different authorities. The powers under Section 10-B according to the learned Standing Counsel are supervisory powers which can be exercised even in relation to escaped turnover. 8. Sri Bharatji Agrawal, learned Senior Counsel for the dealer has strenuously argued that when specific provision for reassessment of escaped turnover is given in Section 21 of the Act, such powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , whichever is latter. Section 21 (1). If the assessing authority has reason to believe, that the whole or any part of the turnover of the dealer, for any assessment year or part thereof, has escaped assessment to tax or has been under assessed or has been assessed to tax at a rate lower than that at which it is assessable under this Act, or any deductions or exemptions have been wrongly allowed in respect thereof the assessing authority may, after issuing notice to the dealer and making such inquiry as it may consider necessary, assesse or reassess the dealer or tax according to law : Provided that the tax shall be charged at the rate at which it would have been charged had the turnover not escaped assessment, or full assessment as the case may be. Explanation I : Nothing in this sub-section shall be deemed to prevent the assessing authority from making an assessment to the best of its judgment Explanation II : For the purposes of this section and of Section 22, assessing authority means the officer or authority who passes the earlier assessment order, if any, and includes the officer or authority having jurisdiction for the time being to asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... propriety of such an order. It further provides that if any illegality or impropriety is found, the revising authority may pass such order as he thinks fit. Sub-section (3) (c) of Section 10-B provides that no order under sub-section (1) shall be passed after the expiration of the four years from the date of me order in question or after expiration of two years from me date of commencement of Section 19 of U.P. Sales Tax (Amendment and Validation) Act, 1978, whichever may be latter. The powers under Section 10-B are exercised by Superior authority in given circumstances. The revisional powers exercised by me Commissioner or me Deputy Commissioner as the case may be, are exercised in supervisory capacity to find out the legality or propriety of the order passed by an authority subordinate to such authority. Two questions, however, arise for determination viz., (1) What is the scope of me powers conferred under Section 10-B of me Act; and (2) What orders can be passed by me revising authority under Section 10-B of me Act. 13. Submission of Sri Bharatji Agarwal, learned Senior Counsel is that when there is specific provision under Section 21 (1) of the Act providing for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order for the year under consideration was passed on 22nd March, 1986 and the period of two years as provided under Section 21 of the Act for initiating proceedings of re-assessment by way of issuing of notice expired on 21st March, 1988 and notice under Section 10-B of the Act was served on 7th November, 1988, i.e. beyond the period of limitation provided under Section 21 of the Act but well within the period provided under Section 10-B of the Act The question, therefore, is whether in such circumstances, the powers can be exercised under Section 10-B of the Act. 15. As already pointed out about the provisions contained under Section 10-B provided that in exercise of revisional powers the revising authority may pass such order as he thinks fit Plain reading of these words contained in sub-section (1) of Section 10-B convey that there is no limitation on the powers of revising authority as to what orders could be passed by the revising authority while exercising powers under Section 10-B of the Act. A limited question that arises is whether in cases where there is specific provision for re-assessment of the escaped turnover, can such powers be also exercised by the revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lear and deals with a situation where during any assessment year the whole or any part of any turnover of a dealer escaped assessment. After reading the provisions, we are of the definite view that where whole or any part of the turnover of assessee escaped assessment, then the only provision under which such proceeding can be initiated for assessment is Section 21, of course, subject to the period of limitation contained in sub-clause (2) of the Act. That was a case in which turnover of the assessee for assessment year under consideration was fully examined and after full scrutiny the same was subjected to the tax by the Sales Tax Officer, subsequently, on the basis of some material not already on record, it was found that part of turnover of the assessee had escaped assessment. In these circumstances, the Court had held that only course available to the authorities under the Act was to issue notice under Section 21 of the Act for assessment and the impugned notice issued under Section 10-B of the Act could not have been issued as there appeared to be no illegality or impropriety in the assessment order passed by the Sales Tax Officer. 17. In the instant case, as already point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sdiction under Sections 10-B and 21 of the Act may be overlapping but the jurisdiction under Section 10-B of the Act can be exercised only on the material which existed at the time of passing of the assessment order by the assessing authority. Any fresh material found or detected after passing of the order by the assessing authority cannot be a ground for revising an order passed by the assessing authority. The powers under Section 10-B of the Act are wider in the sence that the Commissioner may re-examine the material and the question of law and on finding that some illegality or impropriety has been committed he may come to a different finding than the finding of the assessing authority and then he can pass an order of re-assessment. Under Section 21 on the same material with change of opinion with regard to the material on record or with regard to the question of law, the assessing authority cannot pass an order of re-assessment. It is only when turnover by inadvertence has escaped assessment or on the fresh material having been found that the assessing authority can pass an order of re-assessment under Section 21. Powers under Section 10-B of the Act are exercised by superior a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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