1989 (2) TMI 369 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the assessing authority can reopen an assessment on a mere change of opinion under section 14(4) of the Andhra Pradesh General Sales Tax Act, 1957.
2. The scope and interpretation of section 14(4) and section 20 of the Andhra Pradesh General Sales Tax Act, 1957.
3. The relevance of material de hors the assessment record in reopening assessments under section 14(4).

Summary:

Issue 1: Reopening Assessment on Change of Opinion
The primary issue was whether the assessing authority can reopen an assessment based on a mere change of opinion regarding the classification of goods u/s 14(4) of the Andhra Pradesh General Sales Tax Act, 1957. The court held that mere change of opinion cannot be a basis for reopening under section 14(4). The court emphasized that there must be material de hors the assessment record to justify reopening. The opinion of the audit party does not constitute such material.

Issue 2: Scope and Interpretation of Section 14(4) and Section 20
Section 14(4) allows reopening of assessment when turnover has escaped assessment, been under-assessed, or assessed at a lower rate. The court clarified that this power is distinct from the power of revision u/s 20, which is based on the assessment record. The court noted that the revisional authority can also exercise the power to reopen u/s 14(4) if there is material de hors the assessment record.

Issue 3: Material De Hors the Assessment Record
The court held that to exercise the power u/s 14(4), there must be material outside the assessment record indicating escaped turnover or wrong exemption. Decisions of higher authorities like the Supreme Court, High Court, or Sales Tax Appellate Tribunal can be considered as material de hors the assessment record. However, instructions from an audit party do not qualify as such material.

The court concluded that the assessing authority's action to reopen the assessment based on audit instructions was without jurisdiction. Consequently, the appeal was rightly allowed by the Appellate Tribunal, and the tax revision petition was dismissed.