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2021 (4) TMI 965 - HC - VAT and Sales TaxSuo moto revision - Eligibility for deduction of the entire sub-contractors' payments made - payments made to the sub-contractors - assessment years 2008-09 to 2011-12 - the contention of the appellant’s counsel is that it was wholly unnecessary to have initiated the suo moto revisional proceedings - HELD THAT:- There must be two circumstances which co-exist to enable the respondent to exercise power of revision under Section 64 of the KVAT Act, which is a suo moto revisional power. Firstly, the order passed by the first appellate authority or any other inferior authority not above the rank of the Joint Commissioner is erroneous. Secondly, the erroneous order must prejudice the interest of the Revenue. Therefore, the revisional authority has to first determine what is the erroneous order and thereafter determine as to whether the erroneous order has adversely affected the interest of the Revenue. Both the circumstances must co-exist before the revisional authority can initiate suo moto revisional proceedings. That, it is not sufficient to vest power in the respondent/authority to exercise suo moto revision merely because an order is erroneous - there must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. While discussing the aspects regarding the payments made to the sub contractors, there is no categorical finding given as to whether the assessee was, indeed, entitled to claim such benefit or not entitled to the same. In the absence of such finding being given by the respondent/revisional authority, the matter has been simply remanded to the Prescribed Authority under the KVAT Act to verify the issue based on certain observations made - the respondent/Authority was not right in remanding the matter to the Prescribed Authority to verify the issues with regard to certain observations made during the course of the order of purchases and sub contractors and to make a fresh re-assessment under Section 39(1) of the KVAT Act without giving a finding as such and in categorical terms as to whether the appellant/assessee was, indeed, entitled to make a claim regarding the deductions vis-a-vis the payments made to various sub-contractors in the respective assessment years. Matters remanded to the respondent/Authority to reconsider the same afresh - Appeal allowed by way of remand.
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