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Pioneer Electronics Vs. State of Andhra Pradesh - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case NumberTax Revision Case Nos. 80 to 81 of 1977
Judge
Reported in[1980]45STC14(AP)
AppellantPioneer Electronics
RespondentState of Andhra Pradesh
Appellant AdvocateS. Dasaratharama Reddi, Adv.
Respondent AdvocateThe Government Pleader for Comercial Taxes
Excerpt:
.....of sub-section (4)(a) of section 14. according to that sub-section, an assessment or levy under subsection (4) may be made within a period of six years if the event has occurred on account of the failure of the dealer to disclose the turnover or any of the particulars correctly. the tribunal was of the opinion that the assessee failed to disclose the nature of these leather cases and that was why, instead of the normal period of four years for reopening, this enlarged period of limitation of six years would apply. this is wholly unwarranted for the reason that there was no failure on the part of the assessee to disclose. this would clearly show that there was no suppression on the part of the assessee. since the parties have succeeded and failed in one case each, we direct them to bear..........'tax officer, who assessed the sales of leather cases only as general goods at 3 per cent. the deputy commissioner suo motu took notice of this taxation and issued a notice to the assessee why the sales of the leather cases should not be taxed at the rate of 10 per cent treating them as 'radio accessories'. for giving this notice, the deputy commissioner was inspired by the decision of the sales tax appellate tribunal in t.a. no. 159 of 1975 dated 23rd december, 1975. after taking into consideration the representation of the assessee, he revised the tax on the leather cases by enhancing it to 10 per cent. the assessee's appeal before the tribunal was not successful.2. as many as three contentions were raised before the tribunal. they are: (1) the leather cases are not accessories,.....
Judgment:

Sambasiva Rao, C.J.

1. The assessee is a dealer in radios, radio parts and leather cases. The dispute now arose in respect of the assessment years 1971-72 and 1972-73. That is why there are two tax revision cases before us, the first one relating to the earlier year and the second case relating to the later year. Before the Commercial Tax Officer, when the return was filed, the assessee claimed that he was liable to pay sales tax only at the rate of 3 percent on the leather cases saying that they come under the category of 'general goods'. This was accepted by the Commercial 'Tax Officer, who assessed the sales of leather cases only as general goods at 3 per cent. The Deputy Commissioner suo motu took notice of this taxation and issued a notice to the assessee why the sales of the leather cases should not be taxed at the rate of 10 per cent treating them as 'radio accessories'. For giving this notice, the Deputy Commissioner was inspired by the decision of the Sales Tax Appellate Tribunal in T.A. No. 159 of 1975 dated 23rd December, 1975. After taking into consideration the representation of the assessee, he revised the tax on the leather cases by enhancing it to 10 per cent. The assessee's appeal before the Tribunal was not successful.

2. As many as three contentions were raised before the Tribunal. They are: (1) the leather cases are not accessories, (2) there was no jurisdiction in the Deputy Commissioner to revise the assessment under section 20 of the Andhra Pradesh General Sales Tax Act since there was no dispute before the assessing authority as to whether the leather cases were 'general goods' or 'radio accessories' and, consequently, there was no decision given by the assessing officer. Therefore, there was no jurisdiction in the Deputy Commissioner to suo motu revise the assessment under section 20, and (3) the reopening, if it was under section 14(4), the revision of the assessment for the year 1971-72 was barred by limitation. It may be noted here that this revision by the Deputy Commissioner in respect of 1971-72 was made on 11th January, 1977, while the assessment year for which the revision was made, viz., 1971-72, ended with 31st March, 1972. Thus, it was beyond four years after the completion of the relevant assessment year. None of these contentions found favour with the Tribunal. Hence these tax revision cases.

3. Sri Dasaratharama Reddi reiterated before us all the aforesaid three arguments urged before the Tribunal. His first contention is that the leather cases are not accessories to radios. We cannot accept this contention. Accessories are not necessarily confined to particular machines for which they may serve as aids. The same item may be an accessory of more than one kind of instrument. The deciding factor is the predominant or ordinary purpose or use. It is not enough to show that the article can be put to other uses also. It is its general or predominant user which seems to determine the category in which the article will fall. This is the view expressed by the Supreme Court in A.C. Industries v. State of Andhra Pradesh [1976] 37S.T.C. 378 (S.C.). That was also the view taken by a Division Bench of this Court in K.V. .Narasimulu v. State of Andhra Pradesh [1971] 27 S.T.C.178, and by another Division Bench of this Court in S.M. Brothers v. Deputy Commissioner of Commercial Taxes [1977] 39 S.T.C. 182. The last one relates to cycle covers and this Court held that such covers are accessories. Now there is no doubt that these leather cases for the radios are intended for the radios. They are generally made to fit the radios and to suit them. It is well-known that every radio has its own size with its different gadgets. The cases also for these radios are made separately to fit and suit the different varieties of radios with their gadgets. We have, therefore, no doubt, following the principles laid down by the Supreme Court, that these radio leather cases are 'accessories'.

4. Before we part with this part of the case we may notice the amendment which has been introduced by the State Legislature under Act No. 5 of 1974 with effect from 1st March, 1974, whereby a new item numbered as item 90 has been introduced in the First Schedule, whereunder 'leather goods other than footwear' are taxable at the rate of 6 per cent. What we have observed above refers only to the two assessment years we are now concerned with, viz., 1971-72 and 1972-73.

5. The second contention as to the jurisdiction of the Deputy Commissioner also is without much substance. Sri Dasaratharama Reddi contends that, in order to invoke the powers under section 20, there should have: been an order passed or proceeding recorded by the assessing authority on the basis of lis raised before it. He cited a decision of this Court in State of A.P. v. Sri Rama Laxmi Satyanarayana Rice Mill [1975] 35 S.T.C. 601. On a perusal of that decision, we do not find anything therein useful to the contention of Sri Dasaratharama Reddi. As we have pointed out even at the threshold of our order, the assessee filed a return showing the sales of leather cases and claiming that he was liable to pay only at 3 per cent on these sales. This claim was accepted by the assessing officer. Consequently, there was a claim made by the assessee, which, on consideration, was accepted by the assessing officer. It is true that the assessing officer did not give reasons for such an acceptance. But the assessment order and other parts of the assessment record would show that a claim in this behalf was made by the assessee and that the same was accepted by the assessing authority. Thus, there was an order passed by the assessing authority on a claim made by the assessee. Therefore, this argument as to jurisdiction cannot be countenanced.

6. However, all the argument is unnecessary because the Tribunal has treated the revision made by the Deputy Commissioner as one effected in exercise of the powers under section 14(4) read with section 14(4-C). Even considering it as a case under section 14(4), the view of the Deputy Commissioner was that this part of the turnover of the assessee was assessed at a rate lower than the correct rate. Section 14(4) is a specific provision to enable the appropriate authority to reopen the assessment and revise it. Thus, there is no lack of jurisdiction in the Deputy Commissioner who is conferred with the same powers as the assessing authority by virtue of sub-section (4-C) of section 14.

7. Now remains the question of limitation. We have already pointed out how Sri Dasaratharama Reddi works out the bar of limitation. He confines his argument only to the first year 1971-72. That assessment year ended with 31st of March, 1972. As per section 14(4)(b), this reopening can be done within a period of four years from the expiry of the assessment year. The reopening and the revision were effected in respect of 1971-72 on 11th January, 1977, more than four years after the completion of the relevant assessment year. The Tribunal saw this difficulty but tried to bring it within the ambit of sub-section (4)(a) of section 14. According to that sub-section, an assessment or levy under subsection (4) may be made within a period of six years if the event has occurred on account of the failure of the dealer to disclose the turnover or any of the particulars correctly. The Tribunal was of the opinion that the assessee failed to disclose the nature of these leather cases and that was why, instead of the normal period of four years for reopening, this enlarged period of limitation of six years would apply. This is wholly unwarranted for the reason that there was no failure on the part of the assessee to disclose. Even the assessment order would show that an amount of Rs. 38,874.33 was realised by the sale of leather cases. The Deputy Commissioner started his order of revision by saying that a perusal of the assessment filed would show that the assessing authority assessed the turnover relating to the sale of leather cases of radios at 3 per cent treating the same as general goods. This would clearly show that there was no suppression on the part of the assessee. Otherwise, it would not have been so evident to the Deputy Commissioner from the perusal of the assessment file. We have no hesitation to hold that the Tribunal erred in thinking that the assessee had suppressed the nature of the leather cases which he had sold. Consequently, the extended period of six years, which the Tribunal applied, was not available. The result is that the reopening of the assessment for the year 1971-72 was barred by limitation. This does not apply to the later year 1972-73.

8. In the result, T.R.C. No. 80 of 1977 is allowed and T.R.C. No. 81 of 1977 is dismissed. Since the parties have succeeded and failed in one case each, we direct them to bear their own costs. Advocate's fee Rs. 150 in each case.


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