1. The only point canvassed in this tax case is as to whether the revisional authority functioning under Section 32 of the Tamil Nadu General Sales Tax Act, 1959, has the power to revise and refix the taxable turnover. According to the learned counsel for the assessee, the revisional authority acting under section 32, if he comes to the conclusion that the order passed by the subordinate authority is erroneous, can only remit the matter to the lower authority, for a fresh determination of taxable turnover and he has no power to modify the order of the assessing authority and himself refix the turnover. For appreciating the said contention it is necessary to refer to the relevant facts as also the relevant statutory provisions.
2. The assessees in this case are tanners and dealers in hides and skins and tanning materials. The assessee-company returned a total and taxable turnover of Rs. 5,32,999 for the assessment year 1975-76 in their form A-2 return. However, the correct total turnover as per the books of account was found by the assessing authority to be Rs. 29,59,354.90. The assessee claimed exemption in respect of turnover of Rs. 4,72,115.44, being the turnover of local purchases of raw hides which were later tanned and sold locally. The exemption was allowed by the assessing authority in respect of the said purchases of raw hides and skins in the State for Rs. 4,72,115.44 on the ground that such raw hides and skins had suffered tax at the dressed stage and therefore they are entitled to exemption. Excluding the said sum of Rs. 4,72,115.44, the assessing authority determined the taxable turnover at Rs. 24,87,240.
3. The assessing authority's order was the subject-matter of revision by the Deputy Commissioner, Commercial Taxes, under section 32 of the Act as amended. The Deputy Commissioner found that the exemption allowed by the assessing authority on local purchases of raw hides and skins on the ground that the hides and skins had suffered tax at the dressed stage in the same assessment year was erroneous, and therefore cancelled the exemption and brought the concerned turnover to charge. The matter was taken to the Tribunal contending that the Deputy Commissioner had no power to modify the order of the assessing authority and refix the taxable turnover and that therefore the Deputy Commissioner had exceeded his jurisdiction under section 32 as amended. The Tribunal relying on the decisions of this Court in East India Corporation Ltd., Madurai v. State of Madras  31 STC 330, D. Padmavathi v. State of Tamil Nadu  44 STC 446 and Bava Prima Tannery v. State of Tamil Nadu  47 STC 7 held that the Deputy Commissioner had the power to modify the order of the lower authority and to refix the turnover. In that view the Tribunal dismissed the appeal. The said order of the Tribunal is under challenge before us.
4. According to the learned counsel for the appellant, the decision of the Tribunal is contrary to the view expressed by a Bench of this Court in Rajagopala Naicker v. Government of Pondicherry  40 STC 228 that the revising authority may either restore the order of the assessing authority or may set aside the order of the assessing authority and direct the assessing authority to revise the turnover. The learned counsel also submits that the Tribunal's decision is contrary to the decisions in State of Kerala v. Cheria Abdulla and Co. : 1SCR601 , East India Corporation Ltd., Madurai v. State of Madras  31 STC 330 and Velayutha Raja v. Board of Revenue, Madras  26 STC 176.
5. Rajagopala Naicker v. Government of Pondicherry  40 STC 228 was a case arising under section 3 of the Pondicherry General Sales Tax Act, 1967. Section 37 had used the expression 'may pass such order as he thinks fit'. That expression was considered by the Bench and they had stated that that will enable the revisional authority to set aside the order of the appellate authority by restoring the order of the original authority or set aside the order of the appellate authority also and direct the assessing authority to redetermine the turnover and that it has no power to modify the order of the Appellate Assistant Commissioner so as to redetermine the turnover to be in excess of the turnover determined by the assessing authority because the appellate order was passed at the instance of the assessee and therefore the assessee cannot be placed in a worse position than what he would have been if he had not preferred the appeal, by modifying the order of the Appellate Assistant Commissioner to the prejudice of the assessee. Thus it will be seen that the Bench was dealing with a different situation. There an appeal was filed against the order of the assessing authority and the assessee succeeded in appeal. That order of the appellate authority was sought to be modified by refixing the turnover in excess of the turnover determined by the assessing authority and thus placing the assessee in a worse position than he would have been if he had not filed an appeal against the assessment order. The position before us is different. In this case, the assessing authority has given an exemption in respect of the turnover disclosed which, according to the revisional authority, is erroneous, and therefore, he has disallowed the exemption claimed by the assessee. Therefore, in this case, there is no question of a fresh determination of the taxable turnover and there is only a disallowance of the exemption claimed by the assessee and granted by the assessing authority wrongly. Therefore the decision in Rajagopala Naicker v. Government of Pondicherry  40 STC 228 cannot help the assessee in this case. The other decisions referred to by the learned counsel, in our view, are not of any assistance to the assessee in this case. In these decisions the turnover which was directed to be included by the revisional authority was a turnover which was not before and considered by the assessing authority and as such the revisional authority was held to have no power to make more or less a best judgment assessment and include the turnover which was not before the assessing authority or other subordinate authorities. These decisions cannot be applied to a case as the one before us where the revisional authority has not brought in any new turnover but merely cancelled the exemption granted by the assessing authority wrongly. Section 32 as it stood before the amendment used the expression 'pass such order thereon as he thinks fit'. After the amendment, the section uses the expression : 'may .............. revise, modify, or set aside such order or proceeding and may pass such order thereon as he thinks fit'. We do not think that the amendment made any substantial difference. So far as the power of the Deputy Commissioner under section 32 of the Act is concerned it remains the same, and he can pass such order in revision as he thinks fit. As a matter of fact, the expression 'pass such order as he thinks fit' came up for judicial consideration with reference to section 33(4) of the Income-tax Act in Hukumchand Mills Ltd. v. Commissioner of Income-tax : 63ITR232(SC) and the Supreme Court has taken the view that the said expression includes all the powers except possibly the power of enhancement. Therefore, both before and after the amendment of section 32, the Deputy Commissioner acting under that section had all the powers except the power of enhancement. The power to pass 'such order as he thinks fit' will take in the widest possible power excluding the power of enhancement which has to be conferred expressly by the statue. We are therefore of the view that the expression 'pass such order as he thinks fit' will include a power to modify the order of the subordinate authority by refixing the taxable turnover as a result of the cancellation of the exemption granted by the assessing authority.
6. In the decision in East India Corporation Ltd., Madurai v. State  31 STC 330, this Court has expressed the view :
'When exercising the power under section 32, the Deputy Commissioner is not assessing or reassessing any escaped turnover, but revises the order of the assessing authority after examining the order passed or the proceedings recorded.'
7. However, in that case, what the Deputy Commissioner did was to bring in an escaped turnover for assessment in the face of section 16 which specifically gives power to the assessing authority to make an escaped assessment. It is for that reason the court held in that case that the power under section 32 is subject to the other provisions of the Act such as section 16 and therefore the Deputy Commissioner cannot make an assessment on an escaped turnover without reference to the assessing authority and also without reference to the period of time prescribed by the Act for bringing to assessment any escaped turnover.
8. In D. Padmavathi v. State of Tamil Nadu  44 STC 446 a Division Bench of this Court has held that section 32 provides for the examination of the order passed by a subordinate authority under certain conditions set out therein and so long as the jurisdiction in exercised with respect to an order contemplated by the section, there would be no error in the exercise of the jurisdiction.
9. We therefore feel that the Tribunal has come to the right conclusion when it said that the Deputy Commissioner can modify the order and refix the taxable turnover taking note of the wrong exemption granted by the assessing authority. The tax case is therefore dismissed.