9911796707
TMI Blog1977 (10) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... d the set-off under R. 41A granted at the time of assessment. Thereafter it came to the knowledge of the STO that the assessee had purchased one old ship, namely, "ss. Bhudh Jayanthi" for Rs. 8,10,000 from M/s Jayanti Shipping Company, who was an unregistered dealer and that the assessee had dismantled that Ship and then sold the dismantled parts. According to the STO the purchase of the Ship had escaped the levy of purchase tax under s. 13 at the time of assessment. He therefore initiated action under s. 35 of the Bombay ST Act, 1959. Accordingly the STO issued notice in Form 28 and served the same on the assessee on 5th March, 1974. The assessee was called on 18th March, 1974. This notice was found to be defective. The STO, therefore, iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot correctly determined. 4. We will deal with these objections seriatim. According to Shri Sheth the order under s. 33 for this period, i.e. 1st July, 1965 to 30th June, 1966 was passed on 9th May, 1969 and this order was revised by the Asstt. Commissioner on 7th March, 1972. According to Shri Sheth in view of the fact that the order was revised, proviso (2) to s. 35 came into play and therefore the proper course for the STO would have been to make a report to the appropriate revising authority, who alone was competent to pass orders in the matter. According to Shri Sheth as the STO has not followed this procedure and has himself passed the order, the order is bad. In this connection Shri Sheth has relied upon the decision of the larger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reply of Shri Nadkarni was that the ratio of the Tribunal's decision in the case of Ramtirth Yogashram will not apply because the case of Ramtirth Yogashram dealt with the turnover which had escaped the assessment whereas in the assessee's case the revision order passed by the Asstt. Commissioner was in respect of set off. Shri Nadkarni further submitted that s. 35 was amended with retrospective effect to incorporate the words "any draw-backs, set-off or refund had been wrongly granted" and that this amendment was made with retrospective effect, According to Shri Nadkarni the revised order dealt with set-off whereas what was now taxed was purchase tax and as the two issues were different it cannot be said that there was merger of the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appropriate appellate or revising authority and not with the STO. The STO had no jurisdiction to pass orders under s. 15 in those cases. The Tribunal justified above finding also on the reason why the legislature thought it necessary that the jurisdiction to tax an escaped turnover should be vested in the Appellate or Revising Authority which had decided the appeal or revision arising out of regular assessment." It is worthy of mention that on the day on which the STO passed the order under s. 35, there was an operative order of the Asstt. Commissioner, wherein he had removed the set-off. On the other hand the STO's order passed under s. 35 not only levied purchase tax of Rs. 24,300 but also granted set off of Rs. 8,100 under R. 41-A, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aler had concealed such sales or purchases or any material particularly relating thereto or has knowingly furnished incorrect returns. Shri Nadkarni admitted that the balance sheet, a copy of which handed over to us at the time of hearing is on the file of the STO, who initially passed the order under s. 33 on 9th May, 1969. Shri Nadkarni, however submitted that the assessee had not shown the purchase of this ship in the return and therefore he has knowingly furnished incorrect returns and therefore, s. 35(1)(b) was attracted. In reply Shri Sheth pointed out that the assessee's system of account was that when the ship is purchased initially it is shown as a capital asset and it is only when the major part of it is broken then only it is tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter this discovery the ITO had in his possession all the primary facts, and it was for him to make necessary enquiries and draw proper inference as to whether the amounts invested in the purchase of the drafts could be treated as part of the total income of the assessee during the relevant year. This the ITO did not do. It was plainly a case of oversight, and it cannot be said that the income chargeable to tax for the relevant asst. yr. had escaped assessment by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts. The ITO had all the material facts before him when he made the original assessment. He cannot now take recourse to s. 147(a) to remedy the error resulting from his own over ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
