1964 (7) TMI 34 - HC - VAT and Sales Tax

Summary

Issues:
Jurisdiction of the Commissioner under section 15 of the Mysore Sales Tax Act, 1957 to revise assessment orders and tax escaped turnover.

Analysis:

The case involved a challenge to the legality of an order passed by the Commissioner of Commercial Taxes under the Mysore Sales Tax Act, 1957. The appellant contended that the Commissioner had no jurisdiction to pass the impugned order. The dispute arose from the turnover of the financial year 1955-56, where the Commercial Tax Officer held the assessee liable to pay tax on certain purchases made in the former State of Hyderabad. However, the Deputy Commissioner of Commercial Taxes, Bellary, ruled in favor of the assessee, stating that they were not liable to pay tax on the turnover in question due to a notification dated 1st April, 1956. The Commissioner, through suo motu revision, set aside the Deputy Commissioner's order and directed the turnover to be added to the assessee's 1955-56 turnover and taxed. The key question was whether the Commissioner had jurisdiction to revise the assessment order for the year 1955-56 under section 15 of the Act.

The Court analyzed section 15 of the Act, which empowers the Commissioner to examine the legality or propriety of orders passed by subordinates. It was noted that the Commissioner can only review proceedings brought under this provision and cannot extend the scope to other years not before him. The Commissioner's action in bringing a portion of the assessee's 1955-56 turnover, which had escaped assessment, within the tax net was deemed beyond his authority. The Court emphasized that section 15 does not grant the Commissioner the power to tax escaped turnover; such cases are to be handled under specific rules, with the assessing authority responsible for addressing them. The distinction between the Commissioner's revisional jurisdiction and the assessing authority's original jurisdiction in dealing with escaped turnover was highlighted, citing relevant case law to support this interpretation.

Ultimately, the Court ruled that the order made by the Commissioner was without jurisdiction and therefore set it aside. The appeal was allowed, and no costs were awarded. The judgment underscored the importance of delineating between the Commissioner's revisional powers and the authority to address escaped turnovers, affirming that the latter falls within the original jurisdiction of the assessing authority and not the revisional purview of the Commissioner.