TMI Blog1959 (12) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... ver of the firm at Rs. 5,00,279-5-0 and assessed it to tax on the said turnover at the prescribed rates. This assessment was by consent and was completed on 7th February, 1952, and against the said order of assessment there was no appeal. For the same assessment year, one Venkataswami (a local dealer) was assessed to sales tax on a turnover of Rs. 4,62,390 under section 14-A of the Madras General Sales Tax Act (hereinafter referred to as "the Act") on the basis that he was an agent of a non-resident principal, the Berar Oil Industries. For the subsequent assessment year 1951-52 the Deputy Commer- cial Tax Officer, Kurnool, determined the total turnover of the Berar Oil Industries at Rs. 6,00,858-13-3 and levied tax at the prescribed rates. The firm unsuccessfully preferred an appeal to the Deputy Commissioner and then to the Sales Tax Appellate Tribunal. For the same assessment year, Venkataswami, Dharma Reddi and Messrs Nevatia, Ltd., three local dealers, were assessed to sales tax on turnovers of Rs. 5,63,042-10-1, Rs. 2,93,946-7.3 and Rs. 6,12,560-1-3 respectively, as agents of the Berar Oil Industries, a non-resident principal. These three dealers contested their liability in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the period of limitation prescribed by that rule having expired by the date the Deputy Com- missioner issued notices to the petitioners the assessments were barred by time. During the year of assessment 1951-52, with which we are now concerned, the Madras General Sales Tax Act and the Rules made there- under were in operation, and it is with reference to that Act and those Rules that these cases have to be decided. It will be convenient at this stage to refer to the relevant provisions. Section 12 is in these terms: "(1) The Board of Revenue may suo motu call for and examine the record of any order passed or proceeding recorded by any authority, officer or person subordinate to it, under the provisions of this Act, including sub-section (2) of this section, for the purpose of satisfying itself as to the legality or propriety of such order, or as to the regularity of such proceeding and may pass such order in reference thereto as it thinks fit. (2) Powers of the nature referred to in sub-section (1) may also be exercised by such authority or officer and in such class of cases as may be prescribed, including cases where an inferior authority or officer has exercised its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A Full Bench of the Madras High Court, consisting of Raja- mannar, C.J., Rajagopalan and Rajagopala Ayyangar, JJ., considered the precise scope of rules 14(2) and 17(1) in State of Madras v. Louis Dreyfus and Company Ltd.[1955] 6 S.T.C. 318., and at page 329, they observed: "No doubt in a general sense both rule 14(2) as well as rule 17(1) serve a common purpose, viz., to gather revenue which has improperly escaped, but while rule 14(2) is directed to the correction of improper or illegal assessment orders which have levied less or more tax than justified, rule 17(1) lays emphasis on escaped turnover. The distinction between the two provisions might be expressed by saying that rule 14(2) deals with escaped assessments and 17(1) with escaped turnovers, notwithstanding that the latter also would mean that a lesser amount of tax has been levied. So understood the two provisions would be completely reconcilable and the two jurisdictions-to revise assessments and to reopen them-would each be assigned to the proper authority." The Full Bench further pointed out: "'Turnover' escapes when it is not noticed by the officer either because it is not before him by reason of an inadvertence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the earlier part of this judg- ment, it is clear that the petitioners did not include the purchases made by the local dealers as part of their turnover. It may also be noted that the local dealers themselves did not include these transactions in their turnover. But latterly, on an examination of the returns submit- ted by Venkataswami, Dharma Reddi and Nevatia Ltd., the assessing authorities held that the purchases made by them on behalf of the Berar Oil Industries should be included in their turnover as they were of the view that the local dealers were the agents of a non-resident principal, within the meaning of section 14-A of the Act. The assess- ing authority in the case of Venkataswami was the Commercial Tax Officer, Anantapur. In the case of Dharma Reddi and Nevatia Ltd., the assessing authority was the Commercial Tax Officer, Adoni. The respective assessing authorities assessed the local dealers but the Tribunal held that section 14-A was not attracted as the Berer Oil Industries has its place of business at Adoni, within the limits of this State. It was then that the Deputy Commissioner of Commercial Taxes, in the purported exercise of his powers of revision under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s' assessment. The intermediate case envisaged by the Full Bench is a case between a truly escaped turnover and a case where the turnover has not escaped, that is, where it has only escaped assessment by reason of some error on the part of the assessing officer. The intermediate case which the Full Bench contemplated is not akin to the present case where the initial assessing authority had at no time included the disputed turnover in the "record". We are, therefore, of opinion that the case is clearly one coming under rule 17(1). As already indicated, Mr. Ramachandra Row, learned Government Pleader, strongly relied upon rule 14-A as giving the Deputy Commis- sioner jurisdiction to what he calls "revision of assessment". Rule 14-A reads: "14-A. Where the tax as determined by the initial assessing authority appears to the appellate authority under section 11 or revising authority under section 12 to be less than the correct amount of the tax payable by the dealer, the appellate or revising authority shall, before passing orders, determine the correct amount of tax payable by the dealer issuing a notice to the dealer and after making such enquiry as such appellate or revising au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the first time that the Deputy Commissioner seeks to include that turnover and a fortiori a revising authority functioning under rule 14-A is certainly not competent to do so. As already pointed out, the revising authority is not an "assessing authority" and cannot make an assessment or re-assessment in respect of an escaped turnover. His duties are purely revisional, that is, they are confined only to revise an order already passed by the initial assessing authority. We are fortified in this conclusion by a judgment of a Division Bench of this Court consisting of Chandra Reddy, C.J., and Srinivasachari, J., in Manepalli Venkata Narayana v. State of Andhra Pradesh [1959] 10 S.T.C. 524. The learned Judges there were also considering the powers of a revisional authority vis-a-vis original assessing authority under rule 31(5) framed under the powers vested in the Government under the Andhra Pradesh General Sales Tax Act (VI of 1957) which is almost analogous to rule 14-A. In our opinion, there- fore, rule 14-A cannot justify the re-assessment made by the Deputy Commissioner in the present case. For these reasons, we hold that the view taken by the Appellate Tribunal cannot be s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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