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Meenakshi Corporation Vs. the Deputy Commissioner of Commercial Taxes and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petition Nos. 702, 1806 and 1831 of 1975
Judge
Reported in[1977]40STC101(AP)
AppellantMeenakshi Corporation
RespondentThe Deputy Commissioner of Commercial Taxes and anr.
Appellant AdvocateS. Dasaratharama Reddi, Adv.
Respondent AdvocateThe Government Pleader for Commercial Taxes
DispositionPetition dismissed
Excerpt:
.....in the order or irregularity in the proceeding he cannot make or direct any further enquiry. 10. this distinction made by the supreme court between the power of revision and the power of making reassessment has been clearly followed by this court in rajmal multanmal & co. it has also been pointed out that payment of the two taxes, both under the state and central enactments, is a condition precedent before the benefit of reimbursement or refund can be availed of by a dealer and that, merely for the reason that he had paid the local tax, he will not be entitled to claim reimbursement or refund of the tax unless the conditions specified in the proviso to section 6 of the state act and in clause (b) of section 15 of the central act are satisfied......sales tax (amendment) act (28 of 1969), no central sales tax was levied on the corresponding inter-state sales turnover and hence the central sales tax was not collected by the petitioner from the buyers on the said turnover of rs. 5,71,350.98.4. after the amendment of section 15(b) of the central sales tax act by act 61 of 1972, the deputy commissioner of commercial taxes, guntur, passed an order dated 17th november, 1973, under section 20 of the andhra pradesh general sales tax act revising the order of the commercial tax officer, guntur, dated 15th november, 1969 and setting aside the exemption granted from the levy of andhra pradesh general sales tax on the said turnover of rs. 5,71,350.98 and he did so on the ground that the order of the commercial tax officer was improper and.....
Judgment:

B.J. Divan, C.J.

1. The petitioner herein is a dealer in hides and skins, which are declared goods under the Central Sales Tax Act and, as such, are taxable on the point of last purchase in the State under the Andhra Pradesh General Sales Tax Act. under Section 15(b) of the Central Sales Tax Act, before Amendment Act 61 of 1972, if any tax had been paid on declared goods under a local Act and the declared goods were sold in the course of inter-State trade, the local tax paid had to be refunded to the dealer. Proviso to Section 6 of the Andhra Pradesh General Sales Tax Act, as it stood before Amendment Act 4 of 1974, was also to the same effect. Rule 27-A of the Andhra Pradesh General Sales Tax Rules framed pursuant to proviso to Section 6 of the Andhra Pradesh General Sales Tax Act provided that, in order to claim refund, the dealer had to file an application within three months from the date of effecting the inter-State sale.

2. Section 15(b) of the Central Sales Tax Act was amended by Section 12(a) of Act 61 of 1972 with retrospective effect from 1st October, 1958. As a result of this amendment, if any tax has been paid under the local Act, it is liable to be refunded provided the goods have suffered Central sales tax. By Amendment Act 4 of 1974, the proviso to Section 6 of the Andhra Pradesh General Sales Tax Act was also amended on the same lines with retrospective effect from 1st October, 1958. This amendment was published in the Andhra Pradesh Gazette on 16th February, 1974. Rule 27-A of the Andhra Pradesh General Sales Tax Rules was amended by G. O. Ms. No. 615 dated 28th June, 1974, on the same lines so as to bring the rule in conformity with the provisions of the amended Section 15(b) of the Central Sales Tax Act and the amended Section 6 of the Andhra Pradesh General Sales Tax Act. This amendment of Rule 27-A was published in the Andhra Pradesh Gazette on 1st August, 1974. The contention of the petitioner is that the amendment to Rule 27-A is only prospective but not retrospective and that prior to the amendment of Rule 27-A, it was enough if the goods were sold in the course of inter-State trade and the dealer need not have paid Central sales tax to claim refund of the sales tax paid under the local Act.

3. So far as the petitioner's case is concerned, for the assessment year 1968-69, the Commercial Tax Officer, Guntur, by his order dated 15th November, 1969, granted exemption from levy of sales tax under the Andhra Pradesh General Sales Tax Act on the turnover of Rs. 5,71,350.98 and that was done on the ground that the goods represented by this turnover were sold in the course of inter-State trade in the same year. under Section 10 of the Central Sales Tax (Amendment) Act (28 of 1969), no Central sales tax was levied on the corresponding inter-State sales turnover and hence the Central sales tax was not collected by the petitioner from the buyers on the said turnover of Rs. 5,71,350.98.

4. After the amendment of Section 15(b) of the Central Sales Tax Act by Act 61 of 1972, the Deputy Commissioner of Commercial Taxes, Guntur, passed an order dated 17th November, 1973, under Section 20 of the Andhra Pradesh General Sales Tax Act revising the order of the Commercial Tax Officer, Guntur, dated 15th November, 1969 and setting aside the exemption granted from the levy of Andhra Pradesh general sales tax on the said turnover of Rs. 5,71,350.98 and he did so on the ground that the order of the Commercial Tax Officer was improper and illegal in vie of the amended Section 15(b) of the Central Sales Tax Act, because under Section 15(b), as amended, payment of Central sales tax was a condition precedent for claiming refund of the Andhra Pradesh general sales tax.

5. It is the petitioner's contention that the order purporting to have been passed by the Deputy Commissioner of Commercial Taxes on 17th November, 1973, was actually served on the petitioner on 22nd January, 1975, i. e., more than one year and two months after the order was purported to have been passed by the Deputy Commissioner. The petitioner has contended that the period of limitation for reassessment for the assessment year 1968-69 expired on 31st March, 1973 and it is further contended that, in effect and substance, the order of the Deputy Commissioner was an order of reopening of the assessment under Section 14(4-A)(b) read with Section 14(4-C) of the Andhra Pradesh General Sales Tax Act. It is contended in this connection that the amendment of the la with retrospective effect was 'fresh information' and hence the remedy of the department was to reopen the assessment under Section 14(4) within a period of four years and, therefore, the order of the Deputy Commissioner, though purporting to have been passed under Section 20, should be deemed to have been made under Section 14(4). In the alternative, it is contended that the order passed by the Deputy Commissioner must be presumed to have been passed immediately before January, 1975 and it is for the Deputy Commissioner to explain the delay to the satisfaction of this court, viz., the delay between 17th November, 1973, when the Deputy Commissioner purported to act suo motu and pass the order and 22nd January, 1975, when the order was actually served on the petitioner. It was further contended that the Deputy Commissioner has no jurisdiction to pass the impugned order, unless, on the date of the passing of the order, Section 6 of the Andhra Pradesh General Sales Tax Act had been amended. Merely because Section 6 was amended with retrospective effect, the order passed by the Deputy Commissioner on 17th November, 1973, could not be said to have been passed under the amended section and, hence, the order must be held to be bad.

6. As regards the first point, viz., that the subsequent amendment of the law, though retrospective in effect, constitutes 'fresh information' within the meaning of Section 14(4) and hence the order passed by the Deputy Commissioner must be deemed to have been passed under Section 14(4) in exercise of the power to reopen the assessment and not in exercise of the power of revision, there are two decisions of this High Court directly on the point.

7. In State of Kerala v. Cheria Abdulla & Co. [1965] 16 S.T.C. 875 (S.C.), the Supreme Court has pointed out the distinction between the power of revision and the power of reopening assessment. At page 883 of the Reports, Shah, J. (as he then was), delivering the judgment on behalf of himself and Sikri, J. (as he then was), that being the majority judgment, has observed :

Turning then to the jurisdiction which the revising authority may exercise under Section 12(2), attention must first be directed to the phraseology used by the legislature. The Deputy Commissioner is thereby invested with power to satisfy himself about the legality or propriety of any order passed or proceeding recorded by any officer subordinate to him, or the regularity of any proceeding of such officer and to pass such orders with respect thereto as he thinks fit. For exercising this power, he may suo motu or on application call for and examine the record of any proceeding or order. There is no doubt that the revising authority may only call for the record of the order or the proceeding and the record alone may be scrutinised for ascertaining the legality or propriety of an order or regularity of the proceeding. But there is nothing in the Act that for passing an order in exercise of his revisional jurisdiction, if the revising authority is satisfied that the subordinate officer has committed an illegality or impropriety in the order or irregularity in the proceeding he cannot make or direct any further enquiry. The words of Sub-section (2) of Section 12 that the Deputy Commissioner 'may pass such order with respect thereto as he thinks fit' means such order as may in the circumstances of the case for rectifying the defect be regarded by him as just. Power to pass such order as the revising authority thinks fit may in some cases include power to make or direct such further enquiry as the Deputy Commissioner may find necessary for rectifying the illegality or impropriety of the order, or irregularity in the proceeding. It is therefore not right baldly to propound that in passing an order in the exercise of his revisional jurisdiction, the Deputy Commissioner must in all cases be restricted to the record maintained by the officer subordinate to him and can never make enquiry outside that record.

8. At page 887, the instance when the revising authority may exercise its revisional jurisdiction, as distinguished from the power of reassessment is given as follows :

For instance, the power to reassess escaped turnover is primarily vested by Rule 17 in the assessing officer and is to be exercised subject to certain limitations and the revising authority will not be competent to make an enquiry for reassessing a taxpayer.

9. It is thus clear that, according to the Supreme Court, it is not open to the revising authority to reassess a taxpayer on the ground that certain turnover had escaped sales tax.

10. This distinction made by the Supreme Court between the power of revision and the power of making reassessment has been clearly followed by this court in Rajmal Multanmal & Co. v. Commercial Tax Officer [1976] 37 S.T.C. 252, where the same contention, which has been urged by Mr. S. Dasaratharama Reddi in support of his first contention, also appears to have been urged before the Division Bench of this High Court consisting of Obul Reddi, C. J. and Madhava Reddy, J. In that case also, after the amendment of the Central Act by Act 28 of 1969, which nullified the effect of the decision of the Supreme Court in State of Mysore v. Yaddalam Lakshminarasimhiah Setty & Sons [1965] 16 S.T.C. 231 (S.C.), the Deputy Commissioner, acting under Section 20 of the Andhra Pradesh General Sales Tax Act, 1957, revised the order of the Assistant Commissioner and restored the order of the Commercial Tax Officer and it was held that no part of the turnover of the business of the petitioner had escaped assessment to tax on account of any inadvertence on the part of the officer or omission or deliberate concealment on the part of the assessee; but exemption was granted by the appellate authority, which exemption the petitioner was no longer entitled to in vie of the retrospective amendment of the la by Act 28 of 1969. It was, therefore, not a case of reassessment falling within Section 14(4) of the Act but it was a case where the Deputy Commissioner could exercise jurisdiction under Section 20(2) of the Act and revise the order passed by the Assistant Commissioner. At page 255, Obul Reddi, C. J., delivering the judgment of the Division Bench, observed :

According to Mr. Dasaratharama Reddi, it is a case of escaped assessment but not a case of any wrongful assessment made under any mistaken impression of la and, therefore, the Deputy Commissioner should have made reassessment within four years as provided in Section 14(4) of the Act.

11. Dealing with this contention and relying upon the Full Bench decision of the Madras High Court in State of Madras v. Louis Dreyfus and Company Ltd. [1955] 6 S.T.C. 318 (F.B.), the Division Bench cited with approval the following passage from the judgment of the Full Bench of the Madras High Court :

'Turnover' escapes when it is not noticed by the officer either because it is not before him by reason of an inadvertence, omission or 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'.

12. It was in the light of these principles that the Division Bench pointed out that, if the Deputy Commissioner had exercised his jurisdiction under Section 20(2), it was not for the reason that there was any inadvertence on the part of the officer who made the assessment, but for the reason that the assessee was entitled to exemption under the la as it then stood. In vie of the decision of the Supreme Court in State of Kerala v. Cheria Abdulla & Co. [1965] 16 S.T.C. 875 (S.C.) and particularly in vie of the distinction between reassessment and revision, it is obvious that in the instant case, it was not within the power of the Deputy Commissioner to reopen the assessment and the only thing which the Deputy Commissioner could have done was to revise the order of assessment. Hence the exemption under the Andhra Pradesh General Sales Tax Act could not be said to have been legally granted in vie of the provisions of the Central Sales Tax Act as amended by Act 61 of 1972 and of the Andhra Pradesh General Sales Tax Act as amended by Act 4 of 1974.

13. It may also be pointed out that, in Deputy Commissioner v. Dhanalakshmi Vilas Cashe Co. [1969] 24 S.T.C. 491 (S.C.), the Supreme Court held that the revisional jurisdiction under Section 15(l)(i) is quite distinct and separate from the one created under Rule 33 to tax the escaped turnover, that the Deputy Commissioner, while exercising revisional jurisdiction under Section 15(l)(i) would be restricted to the examination of the record for determining whether the order of assessment was according to la and that Rule 33, which confers power to assess escaped turnover, is normally to be exercised In matters de hors the record of assessment proceedings. Thus, in the Instant case, since the Deputy Commissioner was only confining himself to the record of the case and was not exercising any powers in matters de hors the record of assessment proceedings, it would not be said that he was exercising powers in reassessment proceedings or was trying to assess any escaped turnover.

14. In Ram Kanai Jamini Ranjan Pal Pvt. Ltd. v. Board of Revenue [1976] 38 S.T.C. 1 (S.C.), the Supreme Court has considered the scope of the revisional power under the relevant sales tax enactment of the West Bengal Sales Tax Act and it has been held that the powers of revision under the West Bengal Sales Tax Act can be easily equated with the power exercisable by the appellate authority in an appeal under Sub-section (2) of Section 20 of the Act; and that the Commissioner of Commercial Taxes can, in exercise of his revisional power, reassess the turnover and, while doing so, rope in escaped items of turnover and thereby enhance the gross turnover. In vie of this decision of the Supreme Court, the provisions of the West Bengal Sales Tax Act being similar to the provisions of the Andhra Pradesh General Sales Tax Act, there is no scope for the contention that is sought to be urged before us by Mr. Dasaratharama Reddi as regards the power of revision.

15. We may point out that, in Paluru Rosaiah Setty v. State of Andhra Pradesh [1975] 36 S.T.C. 430, a Division Bench of this High Court, on the facts of that case, held that, when the Deputy Commissioner set aside the appellate order and restored the original order of assessment made by the Commercial Tax Officer, there was no fresh determination of turnover by him and that what the Deputy Commissioner exercised was only a power of revision under Section 20(2) of the Andhra Pradesh Act and that would not amount to a reassessment or a fresh assessment.

16. The next contention is that, at the date when the order of revision was passed by the Deputy Commissioner, i. e., on 17th November, 1973, the Andhra Pradesh General Sales Tax Act had not been amended by Act 4 of 1974 and, hence, at the time when the Deputy Commissioner passed the order of revision, only the amended section of the Central Sales Tax Act was on the statute book. Under these circumstances, the Andhra Pradesh General Sales Tax Act not having been amended, it is not open to the Deputy Commissioner to revise the order of the Commercial Tax Officer dated 15th November, 1969.

17. In this connection, it must be noticed that, as a result of the amendment of Section 15(b) of the Central Sales Tax Act by Act 61 of 1972, where a tax has been levied under the la of a State in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter-State trade or commerce and tax has been paid under the Central Act in respect of the sale of such goods in the course of inter- State trade or commerce, the tax levied under such local la shall be reimbursed to the person making such sale in the course of inter-State trade or commerce, in such manner and subject to such conditions as may be provided in any la in force in that State. It is, therefore, clear that, after the amendment with retrospective effect of Section 15(b) of the Central Sales Tax Act by Act 61 of 1972, it was only when the Central sales tax had been paid on declared goods in the course of inter-State trade or commerce that the tax levied under the local la should be reimbursed. If no Central sales tax was paid, there was no question of any exemption from the local Sales Tax Act. As the petitioner has rightly pointed out in the writ petition, Section 6 of the Andhra Pradesh General Sales Tax Act was amended so as to bring it in line with the provisions of the amended Section 15(b) of the Central Sales Tax Act. It is true that the Andhra Pradesh General Sales Tax Act was amended by Act 4 of 1974 and under the proviso to Section 6, after the amendment, where any declared goods on which a tax has been levied under the local Act are sold in the course of inter-State trade or commerce and tax has been paid under the Central Sales Tax Act, 1956, in respect of the sale of such goods in the course of inter. State trade or commerce, the tax so levied shall be reimbursed to the person making such sale in the course of inter-State trade or commerce, in such manner and subject to such conditions as may be prescribed. Rule 27-A of the Andhra Pradesh General Sales Tax Rules, after the amendment by G. O. of 28th June, 1974, provides that the refund shall not be made unless the tax payable under the Central Sales Tax Act is paid. Even though Rule 27-A is not retrospectively amended by virtue of the fact that Section 6 of the Andhra Pradesh General Sales Tax Act has been retrospectively amended, no exemption from the levy of local tax was available in respect of these declared goods if the Central sales tax had not been paid. It is true that, in the instant case, the exemption from the levy of local tax was granted in vie of the la as it then stood, i. e., on 15th November, 1969 and since there was exemption from the levy of Central sales tax, the Central sales tax was not collected from the buyers by the petitioner. Under the scheme of the two Acts, viz., the Central Sales Tax Act and the Andhra Pradesh General Sales Tax Act, as they stand after the amendment carried out by Act 61 of 1972 so far as the Central Sales Tax Act is concerned and by Act 4 of 1974 so far as the Andhra Pradesh General Sales Tax Act is concerned, it is clear that declared goods sold in the course of inter-State trade or commerce can suffer only one levy, viz., under the Central Sales Tax Act. If, however, the sales tax has been paid under the local law, then the sales tax collected under the local la has to be refunded. Under these circumstances, the fact that, at the time when the Deputy Commissioner passed the order on 17th November, 1973, the Act had not been amended, does not affect the situation.

18. In T. R. C. Nos. 35 to 38 of 1975 and W. P. Nos. 3163 and 4352 of 1974 Daita Suryanarayana & Co. v. State of Andhra Pradesh [1977] 39 S.T.C. 500, decided by a Division Bench of this Court, it has been pointed out that the proviso to Section 6 of the State Act makes it obligatory that the declared goods must have suffered local tax and that such goods on which tax has been levied should be sold in the course of inter-State trade or commerce and that what is refundable under Section 6 is not the tax payable under the Central Act, but the tax payable under the State Act. It has also been pointed out that payment of the two taxes, both under the State and Central enactments, is a condition precedent before the benefit of reimbursement or refund can be availed of by a dealer and that, merely for the reason that he had paid the local tax, he will not be entitled to claim reimbursement or refund of the tax unless the conditions specified in the proviso to Section 6 of the State Act and in Clause (b) of Section 15 of the Central Act are satisfied. As has been rightly pointed out by the Division Bench Rule 27-A cannot override the statutory requirement imposed by Section 6 of the State Act and Section 15(b) of the Central Act. In vie of this decision of the Division Bench of this Court, with which we are in complete agreement, it is obvious that merely from the fact that the petitioner has not paid the Central sales tax as it was not payable as the la stood at the time when the sales took place and because the Central sales tax was not collected from the buyers, the petitioner is not absolved of his liability to pay the tax under the Andhra Pradesh General Sales Tax Act. Even on declared goods, there must be one levy of tax either under the Central Act or under the local Act. What is provided for after the amendment with retrospective effect is the exemption from one or the other of the two Acts, but not the total exemption.

19. The grievance, which Mr. S. Dasaratharama Reddi sought to urge before us, that the petitioner had not collected the Central sales tax from the buyers as, at the time when the transactions took place, there was exemption from the levy of Central sales tax, cannot be sustained because, for the purpose of getting the benefit under Section 6 of the Andhra Pradesh General Sales Tax Act, as it no stands, it is the factum of payment of the Central sales tax and not the liability to pay the Central sales tax which counts. He has contended that the word 'paid' in the proviso to Section 6 of the Andhra Pradesh General Sales Tax Act, after the amendment, should be read as 'payable' and that, since no Central sales tax was payable in respect of these transactions, the benefit should be given to the petitioner. This contention must be rejected in vie of the clear language of the proviso to Section 6 as it stands after the amendment by Act 4 of 1974.

20. As regards the contention that the Deputy Commissioner's order must be deemed to have been made immediately prior to January, 1975 and, therefore, barred by limitation, there is in the counter-affidavit a clear statement that the order was passed by the Deputy Commissioner on 17th November, 1973. In vie of that categorical statement, it cannot be said that, at the date when the order was passed by the Deputy Commissioner, it was barred by limitation. The Division Bench of this Court in Rajmal Multanmal & Co. v. Commercial Tax Officer [1976] 37 S.T.C. 252 has held that Section 20(3) of the Andhra Pradesh General Sales Tax Act provides that the power of revision was to be exercised by the Deputy Commissioner within a specified period and did not speak of serving the order passed by him within that period and that, if the jurisdiction was exercised by the Deputy Commissioner by passing an order within the specified period of limitation, the fact that It was communicated to the petitioner only after that period was not at all material. We respectfully agree with that conclusion.

21. It is true that, according to a recent decision of a Division Bench of this Court Khetmal Parekh & Company v. State of Andhra Pradesh [1976] 38 S.T.C. 531, if the order passed by the Deputy Commissioner in revision is communicated beyond reasonable time, then effect cannot be given to such an order. But, in that particular decision, the Tribunal recorded a finding that the order was communicated beyond reasonable time and that there was no explanation why the Deputy Commissioner's office communicated the order beyond reasonable time. In the instant case, no such finding is available to us and merely from the fact that the order was communicated late, no inference can be drawn that there was unreasonable delay on the part of the Deputy Commissioner in communicating the order. The facts, which would lead to such an inference, are not before us.

22. Since there is no material available to us, it is not possible to say that there is unreasonable delay on the part of the Deputy Commissioner in communicating his order dated 17th November, 1973 and the third contention of Mr. S. Dasaratharama Reddi also fails.

23. Since each of the three contentions urged by Mr. S. Dasaratharama Reddi fails, this writ petition fails and is dismissed with costs.

Writ Petitions Nos. 702 and 1831 of 1975.

24. The contentions urged in each of these two writ petitions are on the same lines as the first two contentions urged on behalf of the petitioner in W. P. No. 1806 of 1975. By our judgment in W. P. No. 1806 of 1975, we have rejected each of those two contentions for the reasons recorded in the judgment. These two writ petitions are, therefore, dismissed with costs.

25. Rule is discharged in each of these three writ petitions. Advocate's fee Rs. 150 in each.0


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