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R.P.M. Srinivasalu and Brothers Vs. the State of Karnataka - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKarnataka High Court
Decided On
Case NumberSales Tax Appeal No. 8(A) of 1978
Judge
Reported in[1984]57STC89(Kar)
ActsKarnataka Sales Tax Act, 1957 - Sections 6 and 22A
AppellantR.P.M. Srinivasalu and Brothers
RespondentThe State of Karnataka
Appellant AdvocateS.G. Sarangan, Adv.
Respondent AdvocateS. Rajendra Babu, High Court Government Pleader
Excerpt:
.....construed to mean a direction to the assessing authority to consider those two points urged in the appeal and not a direction for de novo disposal of the case in regard to every matter not complained of by the assessee. the assessing authority must, therefore, carefully examine the points complained of by the assessee and the opinion expressed by the appellate authority......of commercial taxes made under his suo motu revisional power, reversing the order of the deputy commissioner of commercial taxes (appeals), bangalore. 2. the matter arises in this way : the appellant - a partnership firm - is a dealer registered under the karnataka sales tax act, 1957. it carries on business in purchase and sale of foodgrains. for the assessment year 1971-72 it submitted a return of taxable turnover of rs. 16,27,401.96 claiming certain exemptions and deductions in respect of containers (gunny bags) and the consignment of sale of foodgrains not taxable under section 6 of the act. but the assessing authority did not allow the exemptions on both the points. he assessed the turnover with the addition of the following : (a) rs. 1,37,000 being the turnover of.....
Judgment:

Jagannatha Shetty, J.

1. This appeal is directed against the order of the Commissioner of Commercial Taxes made under his suo motu revisional power, reversing the order of the Deputy Commissioner of Commercial Taxes (Appeals), Bangalore.

2. The matter arises in this way :

The appellant - a partnership firm - is a dealer registered under the Karnataka Sales Tax Act, 1957. It carries on business in purchase and sale of foodgrains. For the assessment year 1971-72 it submitted a return of taxable turnover of Rs. 16,27,401.96 claiming certain exemptions and deductions in respect of containers (gunny bags) and the consignment of sale of foodgrains not taxable under section 6 of the Act. But the assessing authority did not allow the exemptions on both the points. He assessed the turnover with the addition of the following :

(a) Rs. 1,37,000 being the turnover of containers (gunny bags) in which sugar had been filled and sold by the assessee.

(b) The turnover of rice and wheat products amounting to Rs. 9,01,907.62 taxable under section 6 of the Karnataka Sales Tax Act.

3. The assessee appealed to the Deputy Commissioner and contended that the above additions were not warranted. While accepted the contentions, the Deputy Commissioner set aside the assessment order and remanded the case for fresh disposal as per law.

4. In the appellate order of the Deputy Commissioner, there is no reference to any other point save those two additions of turnover.

5. Upon remand, the assessing authority found substance in the contentions raised by the assessee before the Deputy Commissioner and accordingly, he allowed the exemption sought for. But, in the course of examining the account books of the assessee, he found that the turnover of Rs. 2,27,423.57 relating to the consignment of sale from the commission agents had escaped the tax and that part of the turnover was liable to tax since it was a sale from the commission agents to his own account. Accordingly, he assessed the turnover of Rs. 2,27,423.57.

6. The assessee took up the matter again before the Deputy Commissioner on the principal ground that the assessing authority has gone beyond the terms of the remand order. The Deputy Commissioner found substance in that contention and set aside the tax on the additional turnover of Rs. 2,27,423.57.

7. The Commissioner of Commercial Taxes in exercise of his suo motu revisional power under section 22-A of the Act, after issuing a notice to the assessee reversed the order of the Deputy Commissioner and restored the order of the assessing authority. The Commissioner was of the opinion that the remand order of the Deputy Commissioner was not limited in its scope and effect and since the entire case stood remanded, it was open to the assessing authority to dispose of the matter afresh in accordance with law.

8. The short point that arises in this appeal relates to the effect of the order of the Deputy Commissioner dated 23rd February, 1974; whether it was an open remand by setting aside the whole of the assessment order for de novo disposal, or it was intended to be a limited or partial remand to consider only those points urged in the appeal.

9. We have perused the said order of the Deputy Commissioner. We are unable to agree with the view taken by the Commissioner. The assessee urged only two points in his appeal; first, related to the exemption of the turnover pertaining to containers (gunny bags). It was contended before him that there was no express or implied contract for the separate sale of the containers. The Deputy Commissioner without expressing any opinion directed the assessing authority to consider that question on the material on record. The second contention urged before the Deputy Commissioner was that the assessee purchased rice and wheat supported by bills and permits issued from the Government and since it had already suffered tax from the registered dealers, the turnover relating to such sale was not liable to tax under section 6 of the Act. The Deputy Commissioner again without expressing any opinion directed the assessing authority to re-examine that point also. There was no argument before the Deputy Commissioner in regard to any other matter. After noticing the said two contentions the Deputy Commissioner set aside the assessment order and remanded the case to the assessing authority for fresh disposal as per law.

10. The direction for fresh disposal in the context should be construed to mean a direction to the assessing authority to consider those two points urged in the appeal and not a direction for de novo disposal of the case in regard to every matter not complained of by the assessee. The statutory authorities have limited jurisdiction and they must look to the powers conferred and the limitations imposed by the Act. In a case of remand, it is the remand order which gives jurisdiction to the authority to redo the assessment. The assessing authority must, therefore, carefully examine the points complained of by the assessee and the opinion expressed by the appellate authority. The revised assessment order must fall strictly within the four corners of the remand order. The remand order at the instance of the assessee cannot be used to reopen the assessment for the purpose of taxing the escaped turnover. The Act provides a separate procedure for such purpose.

11. Since the remand order cannot be construed to be an open remand, the Commissioner Taxes has erred in holding otherwise.

12. In the result, the appeal is allowed; in reversing the order of the Commissioner of Commercial Taxes, the order of the Deputy Commissioner restored.

13. The appellant is entitled to its costs. Advocate's fee Rs. 250.


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