2015 (2) TMI 1144 - HC - VAT and Sales Tax

Validity of order passed by revisional authority in exercise of powers under Section 9C of the A.P. Entertainments Tax Act 1939 - Master cable operator providing signals to subscribers through other cable operators - Evasion of entertainment tax by not furnishing correct and full information - Held that - in view of the specific provision under section 9C of the Act conferring the revisional powers only on Entertainments Tax Commissioner or the Entertainments Tax Joint Commissioner the Additional Commissioner is not empowered to review the order passed by the Appellate Deputy Commissioner in the absence of valid delegation. The office order dated June 19 2014 issued by the Commissioner of Commercial Taxes allocating the subjects/functions among the various posts in the office of the Commissioner of Commercial Taxes also would not give any authority for the first respondent-Additional Commissioner (CT) (Legal) to exercise powers under section 9C of the Act. Such allocation order issued by the Commissioner is only for the purpose of internal administration in the office of Commissioner but basing on such orders of allocation statutory powers conferred under section 9C of the Act cannot be bypassed. Therefore the Additional Commissioner (CT) (Legal) is not competent to pass orders under section 9C of the Act in the absence of any authority contemplated in the said Act. - Decided in favour of petitioner

Summary

Issues:
1. Validity of the order passed by the revisional authority under section 9C of the A. P. Entertainments Tax Act, 1939.
2. Jurisdiction of the Additional Commissioner (CT) (Legal) to review the order passed by the Appellate Deputy Commissioner (CT), Guntur.
3. Compliance with legal procedures in assessment proceedings and consideration of objections raised by the petitioner.

Analysis:
1. The petitioner challenged the order passed by the revisional authority under section 9C of the A. P. Entertainments Tax Act, 1939. The petitioner, a cable operator, filed monthly returns based on information from cable operators, but the Commercial Tax Officer initiated proceedings alleging incorrect information. The Entertainment Tax Officer confirmed tax evasion without providing material or considering objections. The Appellate Deputy Commissioner set aside the order due to lack of ground survey and material disclosure. The Additional Commissioner (CT) (Legal) reviewed and confirmed the tax, leading to the writ petitions. The court found the Additional Commissioner lacked authority under section 9C, and the Appellate Deputy Commissioner's order was not irregular. The writ petitions were allowed, setting aside the Additional Commissioner's orders and reviving the Appellate Deputy Commissioner's order for fresh consideration with proper material supply and hearing opportunity.

2. The jurisdictional issue arose concerning the Additional Commissioner (CT) (Legal)'s power to review the Appellate Deputy Commissioner's order. The court noted section 9C empowers only the Entertainments Tax Commissioner or Joint Commissioner for revision. The Additional Commissioner's authority was based on an internal office order for administrative purposes, not statutory delegation. The court held the Additional Commissioner lacked the competence to pass orders under section 9C without proper authority. The Appellate Deputy Commissioner's order, being a valid remand for fresh consideration, did not warrant revision by the Additional Commissioner.

3. The compliance aspect focused on the assessment proceedings and consideration of objections. The court observed that the assessing authority did not provide material to the petitioner or address objections before passing the order. The Appellate Deputy Commissioner rightfully set aside the order for fresh consideration due to denial of opportunity. The court emphasized the importance of following legal procedures and giving proper opportunities to parties involved in assessment proceedings. The judgment highlighted the necessity of furnishing material, addressing objections, and ensuring a fair hearing before passing orders in tax assessment matters.

Overall, the court's detailed analysis emphasized adherence to legal procedures, jurisdictional boundaries, and the importance of providing opportunities for parties to present their case effectively in tax assessment disputes under the A. P. Entertainments Tax Act, 1939.