1976 (4) TMI 188 - SC - VAT and Sales Tax

Whether on the facts and circumstances of the case in exercise of his powers under section 20(3) of the Bengal Finance (Sales Tax) Act 1941 the Additional Commissioner was competent to reassess the gross turnover of the petitioner by taking into consideration additional material which had not been made available to the assessing officer? Held that - Appeal dismissed. The whole thing was duly processed. As already stated the Commercial Tax Officer Central Section by his notice dated October 25 1960 gave adequate opportunity to the appellant to explain the discrepancies in its cash memos and books of account. Another opportunity to explain the suspicious circumstances relating to the alleged suppression of the turnover as also to refute the material collected by the Commercial Tax Officer Central Section as a result of the investigation made by him and to show cause why action to subject the escaped turnover to tax be not taken was afforded to the appellant by the Additional Commissioner Commercial Taxes when on receipt of the aforesaid report dated December 27 1960 of the Commercial Tax Officer Central Section he gave a notice to the former and furnished him with a full copy of the report. It cannot therefore be maintained with any show of force that in admitting and relying on the aforesaid report dated December 27 1960 of the Commercial Tax Officer Central Section the Additional Commissioner Commercial Taxes committed any illegality or breach of any statutory provision or rule or transgressed the limits of his jurisdiction.

Issues Involved:
1. Scope and extent of the revisional power of the Commissioner, Commercial Taxes, under section 20(3) of the Bengal Finance (Sales Tax) Act, 1941.
2. Competence of the Additional Commissioner to reassess the gross turnover by taking into consideration additional material not available to the assessing officer.
3. Legality of relying on the report dated December 27, 1960, of the Commercial Tax Officer, Central Section, in the revisional proceedings.

Detailed Analysis:

1. Scope and Extent of Revisional Power under Section 20(3) of the Act:
The Supreme Court examined the scope and ambit of the revisional jurisdiction of the Commissioner or Additional Commissioner under section 20(3) of the Bengal Finance (Sales Tax) Act, 1941. The Court noted that the section is "very widely worded" and the term "revise" is not limited by any conditions or qualifications. The Court emphasized that the revisional power is more extensive than the power exercisable by the High Court under section 115 of the Code of Civil Procedure. The Court cited its previous decisions, including *Indira Sohanlal v. Custodian of Evacuee Property, Delhi* and *East Asiatic Co. (India) Ltd. v. State of Madras*, to support the view that the revisional authority has a broad supervisory jurisdiction that includes the duty to ensure that subordinate tribunals or officers act within the bounds of the law.

2. Competence to Reassess Gross Turnover with Additional Material:
The Court addressed whether the Additional Commissioner could reassess the gross turnover by considering additional material not available to the assessing officer. The Court referred to the majority judgment in *State of Kerala v. K. M. Cheria Abdulla & Co.*, which held that the revising authority could make or direct further inquiries to rectify defects. The Court also cited *Swastik Oil Mills Ltd. v. H.B. Munshi*, where it was held that the revising authority could hold or direct an inquiry and admit additional material. The Court distinguished the present case from others cited by the appellant, noting that those cases involved specific provisions for assessing escaped turnover, which were absent in the Bengal Finance (Sales Tax) Act. The Court concluded that the Commissioner's revisional power included the authority to reassess the gross turnover by considering additional material.

3. Legality of Relying on the Report Dated December 27, 1960:
The Court examined whether the Additional Commissioner could rely on the report dated December 27, 1960, of the Commercial Tax Officer, Central Section, in the revisional proceedings. The Court referred to section 14 of the Act and rule 80A of the Rules, which empower the Commissioner to make or cause inquiries and require dealers to produce documents or furnish information. The Court observed that the Commissioner could exercise these powers before or after the filing of a revision petition, provided the affected person was given a reasonable opportunity of being heard. The Court noted that the appellant was given multiple opportunities to explain discrepancies and show cause against the proposed action. The Court found no illegality or breach of statutory provisions in the Additional Commissioner's reliance on the report and upheld the High Court's affirmative answer to the second question.

Conclusion:
The Supreme Court dismissed the appeals, affirming the High Court's judgment that the Additional Commissioner was competent to reassess the gross turnover by considering additional material and that reliance on the report dated December 27, 1960, was lawful. The Court emphasized the broad scope of the revisional power under section 20(3) of the Act and the procedural fairness afforded to the appellant. The appeals were dismissed without any order as to costs.

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