1. This case has been referred to al Full Bench by Basi Reddy, J., and one of us (Sambasiva Rao, J.,) on the ground that the view of the Division Bench in State of Andhra Prades v. Varre Pothuraju, (1963) 2 Andh LT 201 = (1964) 15 STC 222 as to the scope and meaning of Section 14 (4) of the Andhra Pradesh General Sales Tax Act, 1957, vis--vis the revisional jurisdiction under Section 20 of the said Act has cut down the amplitude of the powers of the revisional authority, although there are no restictive words in Section 20 of that Act, and that the decision therefore, requires re-consideration.
2. The relevant for a determination of the question referred to us are as follows:--The petitioner is an individual carrying on business in butter and ghee, and registered as a dealer under the Andhra Pradesh General Sales Tax Act (n0. 6 of 1957) (hereinafter referred to as the Act). For the assessment year 1956-57, he reported a gross turnover of Rs. 1, 58,514-7-9 and a net turnover of Rs. 35,824-13-6, claiming exemption on a turnover of Rs. 122,689-13-0. The Deputy Commercial Tax Officer, Gudivade, who was the assessing authority, checked the accounts for that year and found that the gross turnover was Rs. 1, 58, 524-12-0, and after allowing the exemptions to which he was entitled the taxable turnover as per his accounts was found to be Rs. 35,984-14-9. the Deputy Commercial Tax Officer inspected the petitioner's shops on 17-5-1956, and found that certain bills were not issued for cash and credit sales till the time of his inspection. He made a second inspection on 9-10-1956, and recovered some slips of paper. By his order dated 27 -3-1958, the Deputy Commercial Tax Officer held that Ts. 1,500 had to be added to the turnover of October, 1956, for not accounting for the advances and other defects and Rs. 2,000 had to be added towards the estimated suppressions, but determined the net turnover of the dealer for 1956-57 at Ts. 37, 984-14-9, and assessed him to tax on the same. The Commercial Tax Officer, Masulimpatna, examined the accounts on 19-5-1959, and found that in fact Rs. 1,500 was not added to the turnover for the month of October, 1956, on account of suppression.
He also found that as per the slips of paper and the Anamath Book recovered by the Deputy Commercial Tax Officer on 9-10-1956 , the sales amounted to Rupees 1,574-5-6 during the period 1-10-1956 to 9-10-1956, while the cash and credit sales shown in the regular accounts amounted only to Rs. 579-0-3, and that during that period the proportion between the turnover in the regular accounts and the turnover suppressed was 1:3. For these reasons, he was of the opinion that the assessment made by the Deputy Commercial Tax Officer require revision, and issued notice of the proposed assessment. He declined to accept the explanation on behalf of the dealer, and assessed him to tax on further turnover of Rs. 71970.
3. Against the order of the Commercial Tax Officer, an appeal was preferred to the Assistant Commissioner Commercial Taxes, Guntur, who, by his order dated 28-3-62 refused to interfere and dismissed the appeal. Against that decision, an appeal was preferred to the Sales Tax Appellate Tribunal, Hyderabad, In T. A. No. 473 of 1962, and the Tribunal by its order dated 3rd March 1964 dismissed the appeal, and upheld the order of the Commercial Tax Officer. Against the order of the Tribunal the Revision petition has been preferred under Section 22 91) of the Act.
4. The contention raised before the Appellant Tribunal was that the turnover of Rs. 71,970 on which additional tax was levied by the C. T. O. was an escaped turnover, which he had no jurisdiction to assess, and relied on (1963) 2 Andh LT 201 = (1964) 15 STC 222. The Tribunal held that the facts and the observations in that case were distinguishable from the instant case, as the authority which assessed the escaped turnover is the Commercial Tax Officer, who is also the assessing authority under G. O. Ms. No. 1091, Revenue, dated 107-112 of the Rules Supplement to part I of the Andhra Pradesh Gazette, dated 15-6-1957. According to this G. O., it may be noted, the Governor of Andhra Pradesh in exercise of his powers under Section 2(1) (b) of the Act and in suppression of the previous Notifications, authorised Commercial Tax Officers to exercise the powers of an assessing authority in the case of dealers whose total turnover is Rs. 3 lakhs or more a year; and by the provision, he was authorised in his discretion to exercise the powers of a lower authority within his jurisdiction in respect of any dealer. It is, therefore, clear that the Commercial Tax Officer, Masulipatnam, could exercise the powers in respect of the petitioner. The Tribunal thus held that the Commercial Tax Officer assessed the escaped turnover as an assessing authority, but not as a revisional authority, and that he was competent to do so. The Tribunal distingushed the decision cited on the ground that in that case the Commissioner purported to exercise his revisional jurisdiction for assessing the escaped turnover.
5. In assaliling the correctness of this decision, Sri Ranganadhachari, the learned counsel for the petitioner contended that even if the Commercial Tax Officer acted as an assessing authority, he could only take note of the slops seized by the Deputy Commercial Tax Officer, but could not, on the strength of those slops, draw an inference regarding the escaped turnover for the entire assessment year, and make an assessment, as it amounted to a best of judgment assessment, which he could not do. It was also contended that the assessment by the Deputy Commercial Tax Officer itself was to the best of his judgment under Section 14 (1) of the Act, and that the same power could not be exercised by the Commercial Tax Officer as an assessing authority; alternatively it was argued that if the Commercial Tax Officer purported to act as Revisional authority, he could not do so de hors the record of assessment proceedings, and that in this case as they consisted only of certain slips seized by the Deputy Commercial Tax Officer, the Commercial Tax Officer could add only the turnover covered by those slips under Section 14(4) of the Act, but no take them the basis for increasing the turnover threefold, as if amounted to a re-determination of turnover to the best of his judgment, which is not warranted by Section 20, and that the decision of the Bench of this Court is good law.
6. The learned Acting Advocate-General, appearing for the State, in refuting the contentions on behalf of the dealer, submitted:
(1) The Commercial Tax Officer acted as a revisional authority under Section 20(2) of the Act, and made the assessment to the best of his judgment, and the language of Section 20 in no way curtails that power.
(2) The curtailment of the revisional powers under Section 20 ought not to be inferred by reference to Section 14; further even escaped turnover can be assessed by an assessing authority by was of best judgment after the addition of Section 14 (4-A) in 1963.
(3) The decision of this Court in (1963) 2 Andh LT 201 = (1964) 15 STC 222 holding that a revisional authority cannot make a best judgment assessment cannot be accepted as good law.
7. In order to decide the questions debated before us, it is necessary to advert to the relevant provisions of the Act before referring to the decisions cited.
8. Section 14 of the Act deals with the assessment of tax and is in the following terms:
'14 (1) : If the assessing authority is satisfied that any return submitted under Section 13 is correct and complete, he shall assess the amount of tax payable by the dealer on the basis thereof but if the return appears to him to be incorrect or incomplete he shall, after giving the dealer a reasonable opportunity of providing the correctness and completeness of the return submitted by him and making such inquiry as he deems necessary, assess to the best of his judgment, the amount of tax due from the dealer. An assessment under this section shall be made only within a period of four years from the expiry of the year to which the assessment relates.
(2) When making an assessment to the best of judgment under sub-section (1) the assessing authority may also direct the dealer to pay in addition to the tax assessed, a penalty not exceeding one and half times the tax due on the turnover that was not disclosed by the dealer in his return.
(3) If no return is submitted by any dealer liable to tax under this Act before the date prescribed in that behalf, the assessing authority may, at any time within a period of four years from the expiry of the years to which assessment relates, after issuing a notice to the dealer and after making such inquiry as he considers necessary assess to the best of his judgment, the amount of tax due from the dealer on his turnover for that year, and may direct the dealer to pay, in addition to the tax so assessed a penalty not exceeding one and half times the amount of that tax.
(4) Where, for any reason, the whole or any part of the turnover of business of a dealer has escaped assessment to tax, or has been under-assessed or assessed at too low a rate, or where the license fee or registration fee has escaped levy or has been levied at too low a rate, the assessing authority may, at any time within a period of four years from the expiry of the year to which the tax or the license fee or registration fee relates, assess the tax payable on the turnover which has escaped assessment or levy the correct amount of license fee for registration fee, after issuing a notice to the dealer and after making such inquiry as he considers necessary. Such authority may also direct the dealer to pay in addition to the tax so assessed, a penalty to exceeding one and half times the amount of that tax, if the turnover had escaped assessment or had been under-assessed or assessed at too low a rate by reason of its not being disclosed by the dealer:
Provided that before issuing any direction for the payment of any penalty under sub-section (2) sub-section 93) or sub-section (4). the assessing authority shall give the dealer a reasonable opportunity to explain the omission to disclose the information, and make such inquiry as he considers necessary.
9. Section 19 deals with appeals against orders passed or proceedings recorded by an authority under the Act. Section 20 deals with revision by the Board of Revenue, and other prescribed authorities, and is as follows:
'20 (1): The Board of Revenue may suo motu call for and examine the record of any order passed or proceeding recorded by any authority, Officer or person subordinate to it, under the provisions of this Act, including sub-section (2) of this section, for the purpose of satisfying itself as to the legality or propriety of such order or as to the regularity of such proceeding and may pass such order in reference thereto as it thinks fit.
(2) Powers of the nature referred to, in sub-section (1) may also be exercised by the Deputy Commissioner and the Commercial Tax Officer in the case of orders passed or proceedings recorded by authorities, Officers or persons subordinate to them.
(3) In relation to an order of assessment passed under this Act, the powers conferred by sub-sections (1) and (2) shall be exercisable only within such period not exceeding four years from the date on which the order was served on the dealer, as may be prescribed.
(4) No order shall be passed under sub-section (1) or sub-section (2) enhancing any assessment unless an opportunity has been given to the assessee to show cause against the proposed enhancement.'
Section 39 relates to the power to make rules.
10. Rules 8 to 27 deal with the submission of returns, the permissible deductions, and the method of assessment by the assessing authority. Rule 12 enables the assessing authority to assessee dealer to the best of his judgment, where no return is submitted or even where submitted is incomplete. Rules 33 to 44 deal with appeals and revision. The relevant rule is Rule 44 which is in the following words:
'44. (1) The powers of the nature referred to in sub-section (1) of Section 20 may be exercised by the Deputy Commissioner of Commercial Taxes and the Commercial Tax Officer in the case of orders passed or proceedings recorded by authorities, officers or persons subordinate to them.
(2) In relation to order of assessment passed under the Act, the powers referred to above shall be exercised:
(i) by the Commercial Tax Officer only within a period of three years from the date o which the order was served on the assessee;
(ii) by the Deputy Commissioner of Commercial Taxes and the Board of Revenue only within a period of 4 years from the date on which the order was served on the assessee; and
(iii) No order shall be passed under sub-rule (1) or (2) enhancing any assessment, unless al opportunity has been given to the assessee to show cause against the proposed enhancement.'
11. It may be noticed that the Board of Revenue is given the power, suo motu to call fro and examine the record of any order or proceeding by a subordinate authority for satisfying itself as to the legality or propriety of that order or the regularity of such proceedings, and to pass such orders in reference thereto as it thinks fit. It cannot be doubted that the expression 'legality, propriety and regularity' is of wide import especially having regard to the fact that the Board of Revenue is empowered to pass such order in reference thereto as it thinks fit. It may then be noted that under Section 20(2), the powers of the Board of Revenue under Section 20 (1) may alsol be exercised by the Deputy Commissioner of commercial Taxes, and the Commercial Tax Officer, in respect of orders passed by officers subordinate to him, and the powers under Section 20 (1) as well as Section 20 (2) can be exercised only within a period not exceeding four years from the date on which the order was served on the dealer. Section 20(4) makes it clear that in exercise of the powers under Section 20 of the Act an assessment may be enhanced, but only after giving an opportunity to the assessee against the proposed enhancement.
12. The order of the Commercial Tax Officer, in the instant case, makes it abundantly clear that he did not act as assessing authority, but only exercised the revisonal powers, though the provision of law (viz., Section 20(2)) had not been quoted, and in the exercise of that power he levied tax on an additional turnover, which, in his judgment, had escaped. The argument on behalf of the assessee is that what is empowered by Section 20(4) is enhancement of assessment, and that there is clear distinction between escaped turnover and escaped assessement as brought out in Section 14 (1) and 14 (40 of the Act.
13. Reliance was placed by the learned counsel on the decision of a bench of this Court in (1963) 2 Andh LT 201 = (1964) 15 STC 222. But before adverting to that judgment, it may be necessary to refer to the Full Bench decision of the Madras high Court in State of Madras v. Lousi Dreffus and Co. Ltd., (1955) 6 STC 318 = (AIR 1956 Mad 659) (FB). In that case, the question that arose for consideration was, whether Rule 14 of the Madras General Sales tax Rules prior to the amendment in 1948 was valid, and, if so, whether the powers of revision thereunder could be exercised in cases to which Rule 17 relating to escaped assessment was applicable. Section 12 of the M. C. S. T. Act as amended by Madras Act XXV of 1947 and Rule 14 of the M. G. S. T. Rules, which were considered by the Full bench, are in pari material with Section 20(1), (2) and (3) of the Act except that in the Madras Act and Rules no power was conferred on the revisional authority to enhance the assessment, as in Section 20(4) of the Act.
The procedure to be followed by the assessing authority has been laid down in Section 9 of the Madras General Sales Tax act, and Rule 17 of the Madras General Sales Tax Rules as amended in 1948 , which is in pari material with Section 1494) of the Act. section 19(1) of the Madras General Sales Tax Act empowered the government to make Rules to carry out the purpose of the Act, and Section 19(2)(f) provided that without prejudice to the generality of that power the rules may provide for the assessment to tax under that Act of any turnover which has escaped assessment within three years. It may be mentioned that in that case, the Deputy Commercial Tax Officer determined the turnover of the assesses for the assessment year 1944-45. The assessee preferred an appeal to the Commercial Tax Officer, and the appeal was dismissed. Later the Commercial Tax Officer issued a notice to the assesse to show cause why that assessment should not be revised by including in the turnover an additional sum and ultimately the Commercial Tax Officer increased the turnover.
14. The contention of the assessee before the Full Bench was that on a proper construction of the provisions of that Act, the Board of Revenue was intended to be the sole and exclusive revising authority, and Rule 14(20 which authorised the Commercial Tax Officer to exercise powers of revision was beyond the rule-making power. It was further contended that Section 19(2)(f) referred to above specifically provides for rules being made for the assessment of escaped turnover of an assessee and the period within which re-assessment proceedings could be started, and as Rule 17 framed for this purpose vested the jurisdiction to assess an escaped turnover with the assessing authority, viz., the Deputy Commercial Tax Officer, it would be contrary to the Rules of construction to read Rule 14(2) as conferring upon the Commercial Tax Officer an unfettered jurisdiction to reopen assessment and effect a reassessment even after a lapse of the period of two years prescribed by Rule 17 (1).
15. Rajamannnar, C. J., speaking for the Full Bench, stated the position thus:
'No doubt in a general sense both Rule 14(2) as well as Rule 17(1) serve a common purpose, viz., to gather revenue which has improperly escaped but while Rule 14 (2) is directed to the correction of improper or illegal assessment orders which have levied less or more tax than justified, Rule 17(1) lays emphasis on escaped turnover.
The distinction between the two provisions might be expressed by saying that R. 14 (2) deals with escaped assessments and Rule 17(1) with escaped turnover, notwithstanding that the latter also would mean that a lesser amount of tax has been paid. So understood, the two provisions would be completely reconcilable and the two jurisdictions to revise assessments and to reopen them would each be signed to the proper authority.
The language of Rule 17 (10 is consistent with this construction. The escape that serves as the foundation for the jurisdiction to reopen an assessment is that of 'turnover'' and not, be it noted, an assessment.
'Turnover' escaped when it is not noticed by the officer either because it is not before him by reason of an inadvertence, Comissionor deliberate concealment on the part of the assessee, or because of want of care on the part of the officer the turnover though in the books has not been taken notice of. This would be the natural and normal meaning of the expression 'turnover which has escaped' in Rule 17(1).'
It was further held that a close examination of Rule 14(2) also supported the view that the two rules were intended to be mutually exclusive, and the reference to the Full Bench was answered thus:
(1) Rule 14(2) is inter vires the rule making power of the Provisional Government under Section 19 of the Act. (2) The revisional powers under Rule 17 applies. (3) Rule 17 applies only to cases of escaped turnover as described earlier'.
In (1903) 2 Andh LT 201 = (1964) 15 STC 222, the assessee firm was provisionally assessed by the Deputy Commercial Tax Officer for the assessment year 1955-56. In the return filed by the assessee for that year, they shoed certain gross and net turnover, but the assessing authority was not satisfied that the books of account were correctly maintained, and holding that there were suppressions in the course of 2 months 15 days during that year, estimated the turnover to the best of his judgment at a higher figure. The Deputy Commissioner, who was apprised of that estimate by the Commercial Tax Officer, purporting to act in the exercise of his revisional jurisdiction, called upon the assessee to show cause why the turnover should not be enhanced by him, and eventually enhanced the turnover. On appeal to the Tribunal, majority of the members took the view that the revising authority could not enhance the turning authority could not enhance the turnover as that was the function of the assessing authority. It was against that order that revision was preferred by the State to the High Court, Chandra Reddy C. J. speaking for the Bench, compared Section 20 of the Act with Section 12 of the M. G. S. T. Act, and held that it was in identical language except for a minor difference, and that, therefore, the argument on behalf of the State that the revising authority could deal with the orders of the assessment in any was he liked, could not be accepted.
The Bench took the view that the precise contents of the power to revise must be gathered from Section 20 and 14 of the Act, analogous to S. 9 of the M. G. S. T. Act and the Rules thereunder. The learned Chief Justice summed up the position thus:
'In the context of this enquiry, we have to bear in mind the fact that it is not the Deputy Commissioner of Commercial Taxes that is the assessing authority within the contemplation of the General Sales Tax Act that duty being allotted only to the Assistant and Deputy Commercial Tax Officers. That being the position, we have first to decide whether this matter falls within the sweep and range of sub-section (1) or within the scope of sub-section (4) of Section 14. In our considered opinion, the function performed by the Deputy Commissioner in this case is the one within the connotation of Section 14(4). As already mentioned, the Deputy Commissioner felt that a considerable part of the turnover escaped assessment to tax. At the risk of repetition, we may state that the Commercial Tax Officer estimated the turnover at about Rs. 2,40,000. The revising authority determined it at about Rupees 5,00,000. In other words, he felt that turnover of nearly Rs. 3,00,000 escaped assessment to tax and that it should be brought to tax. This is not a case where the whose of the turnover, was before the assessing authority and he thought that the entirely of the turnover could not be subjected to tax but only a part of it or that reduction should be granted in regard thereto. This is a case where the revising authority increased the turnover by more than two and a half lakhs. That being so, there can be little doubt that what the revising authority did falls under sub-section (4). Sub-section (1) and sub-section (4) embody two different concepts and they are mutually exclusive. It is only in regard to matters coming under sub-section (1) that the revising authority is empowered to invoke Section 20 of the Andhra pradesh General Sales Tax Act or Section 12 of the Madras General Sales Tax Act, as the case may be. It does not extend to powers vested in the assessing authority by sub-section (4) of the Andhra Pradesh General Sales Tax Act or R. 17 (1) of the rules framed under the Madras General Sales Tax Act, which resembles Section 14(4). The duty to be discharged under Section 14(4), is vested in the assessing authority and not in the officers that constitute appellate or revisional authority. In coming to this conclusion, the Bench relied upon the decision of the Madras High Court in (1955) 6 STC 318 = (AIR 1956 Mad 659) (FB) on the ground that Rules 14 (2) and 17(1) of the M. G. S. T. Rules, 1939, are analogous to the Rules to be dealt with in that case had full vigour in the context of the enquiry before them.
16. We have already pointed out that the question for consideration before the Full Bench of the Madras High Court was, whether Rule 14 of the M. G. S. T. Rules was valid, and if so, whether the powers thereunder could be exercised in cases to which Rule 17 relating to escaped assessment was applicable. The Full Bench in answering that question, as stated above, pointed out the disctintion between the two rules, that Rule 14 (2) was inter vires, and that the revisional power under Rule 14 could not be exercised in a case to which Rule 17 applied. In the case before the bench of this Court, the question turned upon the construction of Section 20 which has already been extracted. We have noticed how the language of Section 20 (1) is of wide amplitude, and Section 20 (4) expressly empowered the revising authority to enhance the assessment. In that situation, the question for consideration is, whether the amplitude of the language used is Section 20 in relation to revisional powers can be whittled down by a reference to Section 14 (4), which specifically related to the power of an assessing authority who has already made in assessment, but not of a revision authority.
17. In support of his argument that the revisional powers cannot be so restricted or circumscribed, the learned Acting Advocate-General has invited our attention to some decisions of the Suprme Court. In the State of Kerala v. M. Appukutty, : AIR1963SC796 after the assessment was made by the Deputy Commercial Tax Officer and an appeal against that order was dismissed, the Deputy Commissioner of Commercial Taxes, after issuing a notice proposing to determine the escaped turnover for the period of assessment, levied the tax o enhanced turnover. An appeal against that order was dismissed by the tribunal, and in revision before the High Court a contention was raised that the notice issued by the Deputy Commissioner was without jurisdiction. That contention was upheld, and the order of the Appellate Tribunal was set aside. On appeal to the Supreme Court against that judgment, tow contentions were raise, one on behalf of the State that the notice issued by the Deputy Commissioner was not without jurisdiction, and the other on behalf of the asessee that if the notice was not without jurisdiction, the Rule under which the notice was issued was ultra vires as it was beyond the substantive provisions of the Act. The Act which governed that case was the Madras General Sales Tax Act, No., 9 of 1939. Kanpur, J., who spoke for the Court, referred to Section 9, 12 and 19 of the Act, and Rules 17, 17 (1), 17 (1-A) and 17 (3-A) of the M. G. S. T. Rules. It was contended that the power under Section 12 (2), which corresponds to Section 20 of the Act, was distinct from Rule 17(3-A) which empowered the revising authority also to exercise the powers of the assessing authority under sub-rules (1) and (3), viz., determining to the best of judgment the turnover which has escaped assessment. That contention was accepted by the Tribunal, but reversed by the High Court.
The Supreme Court first of all held that Rule 17 and the various clauses thereof made under Section 19 were not beyond the rule-making power of the State under Section 19, Adverting to the argument that Rule 17 was ultra vires of the provisions of the Act, the Supreme Court held that Section 2(b) authorised the State government to appoint as many deputy Commissioners of Commercial Taxes as it thinks fit for performing the functions conferred on them under the Act, and such officers shall perform their functions within such local limits as the government may assign. Rule 17 conferred on the Deputy Commissioner the power to determine and tax the escaped turnover in cases where revisions have been taken to them (under sub-rule (1-A) and also where revisions have not been taken to them (sub-rule(3-A) ). It was further held that Section 9 does not deal with escaped turnover, but is a provision to determine the turnover of a dealer in the first instance, and that Rule 17 cannot be said to be in conflict with Section 12(2). That Section, it was held, dealt with cases where the Deputy Commissioner, suo motu, or on application, called for the record and determined the legality or propriety of an order made by one of the subordinate officers.
In view of Rule 17, their Lordships held that the power of revision of the Deputy Commissioner is not limited to the powers under Section 12(2), and that Rule 17 dealt with a separate and independent jurisdiction in regard to determining and taxing escaped turnovers, and that the provisions of Section 12(2) are in no way in conflict with the powers conferred under Rules 17 (1-A) and 17 (3-A). The argument that Rule 17 (3-A) was confined to cases of revisions filed under Section 12(2) was also rejected. Referring to the decision of the Full Bench of the Madras High Court in (1955) 6 STC 318 = (AIR 1956 Mad 659) (FB), the Supreme Court, observed that that case id not deal with sub-rule (3-A) , which came into force later. It must, therefore, be noted that in this case, the Supreme Court no doubt, held that the revisional Authority, viz., the Deputy Commissioner, could tax an escaped turnover by reason of the language of Rule 17 (3-A).
18. In State of Orissa v. Debaki Debi, : 5SCR253 the Supreme Court, by a majority, construed the second proviso to Section 12(6) of the Orissa Sales Tax Act, 1947, which laid down that an order assessing in amount of tax passed after a lapse of 36 months from the expiry of the period, was not in substnace a real provisio to that section, but an independent legislative provision of the Act, and is not limited to orders of assessment made under Sec. 12, but on its language applies to and governs any order assessing the amount of tax which will include an assessment under any provision of the Act besides Section 12. It was accordingly held that an order of assessment made in the exercise of revisional powers under Section 23 of that Act was governed by that period. It was also held that the power of revision under Section 20(3) is a distinct and separate power from the power to assess under Section 12(7) of the Act, calling for a return in case of under-assessment or escaped assessment, and that Section 12 97) does not include reassessment made by la revising authority under Section 23 (3)
19. In State of Andhra Pradesh v. Ravuri Rarasimloo, (19650 16 Stc 54 (Andh Pra), Chandras Reddy, C. J., and Narasimham, J., held that while sub-sections (1) and (3) of section 14 of the Act deal with the power to make best of judgment assessment at the time of original assessment, sub-section (4) of that section concerns itself with bringing to tax turnover which has escaped assessment, and it is confined to assessing such turnover as is shown to have escaped assessment, and has not extended it to estimates depending upon inferences to be drawn by the Department form certain circumstances, and it does not clothe the department with power to make a best of judgment assessment. Relying upon this decision, the learned counsel for the assessee contends that it was not open in the instant case for the Commercial Tax Officer to have made a best of judgment assessment under Section 14 (4). But that contention lacks substance because the learned counsel himself had to admit that the assessment was made by the Commercial Tax Officer not as an assessing authority, but as a revisional authority.
20. The Supreme Court in State of Kerala v. K. M. Charia Abdulla and C0., : 1SCR601 held that the words in Section 12 (1) of the M. G. S. T. Act, that the revisional 'may pass such orders with respect thereto as he thinks fit', mean such order as in the circumstances of the case for rectifying the defect be regarded as just. It was held that power may in some cases include power to make or direct such enquiry as the Deputy Commissioner may find necessary for rectifying the illegality or impropriety in the Order or irregularity in the proceeding. It was pointed out that while the Act in that case conferred on the prescribed authority the power to entertain an appeal under Section 11, and a petition in revision under Section 12, it did not prescribe the procedure to be followed by the authorities, and it was left to the State governments to prescribe by Rules under Section 19 the procedure of the appellate and revising authorities, and that a provision authorising the making of further enquiry for effectively exercising the appellate or revisional power would, in the case of a taxing stature, fall within the scope of the Rules.
Meeting the objection that even so. Rule 14-A must be so read as to deal with the 'Arithmetical aspect rather than on the aspect of the merits of an assessment', and that there was no such restriction in either Rule 14-A or in Section 12(2) of the Act. It was further held that the power to hold an enquiry to take additional evidence is a procedural power in aid of the exercise of the revisioanl jurisdiction and if the revision jurisdiction and if the revision jurisdiction was not if the revisional jurisdiction was not restricted only to cases of arithmetical errors or 'arithmetical aspect', there was no reason to assume that the power under the Rule to make such enquiry as the appellate or the revising authority considered it just to order or to make would be so restricted. It was point out:
'The revisional power has to be exercised for ascertaining whether the order passed is illegal or improper or the proceeding recorded is irregular and it is in aid of that power that such orders may be passed as the authority may think fit. One of the inquires in considering the legality or propriety of the orders passed by the subordinate officer which the revising or the appellate authority may make is about the correctness of the tax levied and if after perusing the record the authority is prima facie satisfied about the illegality or impropriety of the order or about the irregularity of the proceedings, it may in passing kits order direct an additional enquiry. Neither Section 12 nor Rule 14-A authorises the revising authority to enter generally upon enquries which may properly be made by the assessing authorities and to reopen assessments.'
21. The decision in State of Madras v. P. M. Batcha and Co., : 3SCR617 is not of much assistance in deciding the question before us, as it was laid down there in that in a case where an assessee was not levied with tax, there was no rule which compelled the assessing authority to inform the assessee that the tax levied against him was nil. Since there was no assessment to tax against the respondent, it was held there could be no appeal under Section 11 of the Madras Act of 1939 against an order of nil assessment, and no bar to the jurisdiction of the Deputy Commissioner under Section 32(1) of the M. g. S. T. Act of 1959 could arise, and that the proceedings taken by him under that Section were, therefore, valid.
22. In Swastik Oil Mills Ltd. v. H. B. Munshi, : 2SCR492 one of the contentions was that the revisonal authority exercising its power of suo motu revision under Section 31 of the Bombay Sales Tax Act, 5 of 1953, could not travel beyond the order sought to be revised, and that be cannot order a further enquiry or rely on material extraneous to the record of the order under revision. Bhargava, J., speaking for the Court followed the decision in : 1SCR601 , and stated the position thus:
'In fact, when a revisional power is to be exercised, we think that the only limitations to which that power is subject, are those indicated by this Court in K. M. Cherin Abdulla & Co., Case, : 1SCR601 . These limitations are that the revising authority should not trench upon the powers which are expressly reserved by the Acts or by the Rules to other authorities and should not ignore the limitations inherent in the exercise of those powers. In the present case, the Deputy Commissioner, when seeking to exercise his revisional powers, is clearly not encroaching upon the powers reserved to other authorities. . . . . . . . . . . ... . . . . .. . In this case, as we have indicated earlier the first assessment of tax was made by the Sales Tax Officer, and the turnover now in question was assessed to tax by him. Having once assessed that turnover to tax, he could not initiate a fresh proceeding in respect of it under Section 11-A. The assessment made by him was set aside in appeal by the Assistant Collector and it is this order of the Assistant Collector which is sought to be revised by the Deputy commissioner. This is therefore, not a case where the powers are being exercised for the purpose of assessing or reassessing an escaped turnover. the case is one where the revisional powers are sought to be exercised to correct what appears to be an incorrect order passed in appeal by the Assistant Collector, and for such a purpose, proceedings could not possible have been taken under Section 11-A. In exercising his revisional powers, therefore, the Deputy Commissioner is not encroaching upon the jurisdiction of any other authority specially entrusted with taking such proceedings.'
23. Our attention has been drawn to the Supreme Court short Notes, Note No. 195, Deputy Commr. of Agricultural Income-Tax and Sales Tax Quilon v. Dhanalakshimi Vilas Cashew Co., Quilon (C. A. Nos. 803 and 804 pf 1967) to the effect that the Deputy Commissioner, while exercising revisional jurisdiction would be restricted to the examination of the record for determinating whether the order of assessment was according to law, and that the Rule which confers power to assess escaped turnover is normally to be exercised 'on matters dehors the record of assessment proceedings before the assessing authority.' The Supreme Court followed the decision in : AIR1963SC796 . The full report has not been made available, and we are not in a position to say from the Short Note placed before us that the Supreme Court has taken a view differing from what has been laid down in : 1SCR601 and : 2SCR492 .
24. Applying the Principle enunciated by the Supreme Court in : 1SCR601 , and : 2SCR492 , we hold that by making the assessment to tax on the additional turnover, the Commercial Tax Officer has not trenched on the powers of the assessing authority, and has exercised a power which is within his competence under section 20 (2) as the revisonal authority. We, therefore, express our respectful dissent with the contrary view stated in (1963) 2 Andh LT 201 = 91964) 15 STC 222. We may also point out that there cannot be any doubt in this regard after the addition of Section 14 (4-A) in 1963.
25. The Tribunal distinguished the decision in 1963-2 Andh LT 201 = (1964) 15 STC 222 on the ground that the commercial Tax Officer acted not as a revision authority, but only as an assessing authority a view which we have not accepted. But, even so, fro the reasons stated above, the order passed by him is within his competence as revisional authority, and is not illegal or without jurisdiction. Though for different reasons, the order of the Sales Tax Appellate Tribunal is upheld, and the Tax Revision Petition is dismissed with costs. Advocate's fee, Rs. 100.
26. Petition dismissed.