TMI Blog1972 (11) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... mmercial Taxes. Two contentions were raised by the dealer before the Assistant Commissioner. The first contention raised by the dealer was that the rice, that was sold by it, was obtained from paddy which met tax at the rate of 3 paise per rupee under the Andhra Pradesh General Sales Tax Act (hereinafter referred to as the "A.P.G.S.T. Act") and hence the turnover of sales of rice under item 66(b) of the First Schedule to the A.P.G.S.T. Act, read with section 8(2A) of the C.S.T. Act, was taxable at the rate of 1 paisa per rupee, and the Commercial Tax Officer erred in taxing it at the rate of 2 paise per rupee. The second contention was that the sum of Rs. 6,385 represented the value of the gunny bags in which the rice was sold, and no separate price was charged for the gunnies and, hence, Rs. 6,385 should not have been included in the taxable turnover. By his order dated 17th September, 1965, the Assistant Commissioner of Commercial Taxes agreed with the legal contention raised by the dealer that if it had effected purchases of paddy and paid tax under the A.P.G.S.T. Act at 3 paise per rupee, converted the paddy into rice and sold the rice in the course of inter-State trade or co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer to levy tax on the turnover of Rs. 6,29,707.85 at one paisa per rupee. After service of notice on the dealer, the Deputy Commissioner of Commercial Taxes, by his order dated 12th September, 1969, modified the Assistant Commissioner's order, holding thus: "....... As the matter stands, the Assistant Commissioner (C.T.), Kakinada, failed to adopt the correct rate of tax and erred in directing the Special Commercial Tax Officer (Evasions), Kakinada, to levy tax at 1 per cent only on the above turnover Thus the impropriety and illegality that set into his order has to be set right. .........I, therefore, pass order confirming the assessment of a turnover of Rs. 6,29,707.85 to tax at the extra 1 per cent under the C.S.T. Act for the year 1964-65 duly modifying the appellate order. The Commercial Tax Officer, Ramachandrapuram, shall give effect to this order......." It may be noted here that the mention of the assessment year as "1964-65" in the order of the Deputy Commissioner of Commercial Taxes is a mistake and the correct assessment year is "1963-64". The dealer then preferred an appeal to the Sales Tax Appellate Tribunal against the order of the Deputy Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making the assessment on 12th December, 1967, if at all there was any illegality or impropriety, it was in the fresh assessment dated 12th December, 1967. The Deputy Commissioner should have revised that assessment and, instead, wrongly revised the Assistant Commissioner's order dated 17th September, 1965; (2) under section 20(3) of the A.P.G.S.T. Act, the time-limit fixed for revision applied to the revision of an order in relation to an "assessment" and the order that has been revised by the Deputy Commissioner was not an order in relation to "assessment", but was the order of the Assistant Commissioner passed in an appeal setting aside the levy on a part of the taxable turnover; and (3) an assessment under section 9 of the C.S.T. Act has to be made subject to the provisions of the C.S.T. Act and the Rules made thereunder. Under sub-rule (9) of rule 14-A of the C.S.T. (Andhra Pradesh) Rules, 1957, if for any reason, tax has been assessed at too low a rate in any year, the assessing authority, after issuing notice to the dealer and making such enquiry as it considers necessary, revise the assessment within six years from the expiry of the concerned assessment year, if such event ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e either generally exempt from payment of tax or generally subjected to a lower rate than 2 per cent, then, notwithstanding anything contained in section 6(1A) or section 8, subsection (1) or sub-section (2), the sales tax that is leviable under the A.P.G.S.T. Act will be either "nil" or at the lower rate, as the case may be. Under item 66(b) of the First Schedule to the A.P.G.S.T. Act, tax on sales of rice obtained from paddy that has met tax under the A.P.G.S.T. Act is one paisa in a rupee at the point of sale. Under section 9(1) tax leviable under the C.S.T. Act is levied and collected by the Government of India, in accordance with the provisions of sub-section (3) in the State from which the movement of the goods commenced. By virtue of sub-section (3) of section 9, the authorities under the A.P.G.S.T. Act empowered to assess, collect and enforce payment shall, on behalf of the Government of India, and subject to the Rules made under the C.S.T. Act, assess, collect and enforce payment of tax, including any penalty payable by a dealer under the C.S.T. Act in the same manner as the tax on sale or purchase of goods is assessed, paid and collected under the A.P.G.S.T. Act. For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of tax,(3) assess at the correct rate the turnover that has been assessed at a lower rate, and (4) levy the registration fee that has escaped levy, or levy the correct amount of licence or registration fee, and in any of those circumstances, penalty may also be imposed [section 14(4)]. An assessment order under section 14(4) shall be made within six years or four years from the expiry of the concerned tax year depending upon the fact that such assessment has been occasioned by the dealer's failure to disclose the turnover or the particulars correctly, or for any reason other than the one attributable to the dealer [section 14(4-A)], but after giving reasonable opportunity to the dealer to explain the reasons of the default. The powers to assess are also exercisable by the higher authorities [section 14(4-C)]. Provisional assessment may also be made under section 15, and also on a casual trader under section 15-A. The assessment on a firm, or an A.O.P. (association of persons) after its dissolution, or on a H.U.F. after its disruption, may be made under section 15-B as if no such dissolution or disruption had taken place. The tax and penalty have to be paid as laid down in sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, licensing or revising authority may be corrected by such assessing, licensing, appellate or revising authority at any time within four years from the date of the order, provided such mistake is apparent on the face of the record. Thus, in brief, is the procedure for making an assessment under the A.P.G.S.T. Act. Rule 14-A of the C.S.T. (Andhra Pradesh) Rules, 1957, provided the manner in which the returns under the C.S.T. Act are to be filed, and the manner in which the assessment has to be made (which is practically the same as section 14 and rule 31 of the A.P.G.S.T. Act, and the Rules made thereunder). Rule 14-A(8) and (9) deal with the manner in which a reassessment is to be made [corresponding to the procedure laid down in section 14(4) of the A.P.G.S.T. Act, and rule 31 of the A.P.G. S.T. Rules], and the period for making such assessment. Rule 14-A(10) of the C.S.T. (Andhra Pradesh) Rules corresponds to rule 50 of the A.P.G. S.T. Rules in regard to the correction of clerical and arithmetical mistakes in the order. On a careful perusal of both the A.P.G.S.T. Act and the C.S.T. Act and the concerned Rules, it is manifest that no rules regarding the exercise of the revisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to the legality or propriety of the order or the regularity of the proceeding passed by the Assistant Commissioner. Even a decision rendered by the Assistant Commissioner, under section 19 of the A.P.G.S.T. Act in an appeal against any order, whether an assessment or any other order or proceeding recorded by the assessing officer, if it is prejudicial to the revenue, can be revised by the Deputy Commissioner under section 20(2) of the A.P.G.S.T. Act. If on examining the record the Deputy Commissioner is of the opinion that the Assistant Commissioner's order is either illegal or improper, then it is open to him, as the higher authority, to pass such order as he thinks fit in order to bring the final order in conformity with law. While making the original assessment on 15th March, 1965, the Specia Commercial Tax Officer did not at all consider the applicability of section 5-A of the A.P.G.S.T. Act to the facts of this case, although the turnover was more than Rs. 3,00,000. The entire turnover was assessed by him at the rate of 2 paise per rupee under section 5 of the A.P.G.S.T. Act. In appeal, the dealer contended before the Assistant Commissioner that since the rice that it ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond the record. The legality or the propriety of the order under revision should be justified with reference to the material on record. If the Assistant Commissioner had, either when raised by a party to the appeal before him, or suo motu, considered the question and recorded a finding that the additional tax of per cent was not leviable in an assessment under the C.S.T. Act, then an illegality or impropriety would have occurred in his order. That is not the case here. The direction given by the Assistant Commissioner to tax the turnover at 1 per cent, if the contention of the dealer was found correct, did not fetter the hands of the Special Commercial Tax Officer from levying the additional tax at 1/4 per cent on the said turnover under section 5-A of the A.P.G.S.T. Act. When once the assessment is set aside and a remand order is made directing a fresh assessment, then, even though the order of the remanding authority confines the jurisdiction of the assessing officer to a specific field of enquiry, still it is open to the assessing officer to proceed beyond the field and traverse the entire range of jurisdiction as if it were an original proceeding. In the original assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P.G.S.T. Act could have been exercised with reference to that order, but subject to rule 14-A, sub-rule (9), of the C.S.T. (Andhra Pradesh) Rules, 1957. In reply, the argument of the learned counsel for the State was that the assessment order goes merged into the appellate order and, therefore, the Assistant Commissioner's order was an "assessment". In case it was not considered as an assessment but only an order, then there is no revision under the A.P.G.S.T. Act or the Rules made thereunder, laying down any time-limit for revising such an order and hence the order of the Deputy Commissioner was not time-barred. Rule 14-A(9) of the C.S.T. (Andhra Pradesh) Rules did not apply to revisions. For this purpose, we have to consider the language used in section 20 of the A.P.G.S.T. Act. The relevant portion of section 20 reads thus: "Section 20. Revision by Board of Revenue and other prescribed authorities.-(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 subsection (2) of this section, for the purpose of satisfying itself as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 20, subsection (3), of the A.P.G.S.T. Act, the order of the Deputy Commissioner should have been passed within a period not exceeding four years from the date on which the order was served on the dealer. According to the learned counsel appearing for the dealer, the order that was made on 15th March, 1965, was served on the dealer on 29th March, 1965, and the Deputy Commissioner's order, on revision, was made on 12th September, 1969, i.e., long after four years. Even the notice of revision was served on the dealer on 2nd September, 1969, and that was also beyond the period of four years. There is good deal of force in this argument unless the contention advanced on behalf of the State that since the original assessment merged in the appellate order of the Assistant Commissioner dated 17th September, 1965, the Assistant Commissioner's order is an order of assessment is accepted. We have, therefore, to consider the question of merger of assessment order in an appellate order. In this connection, the learned counsel appearing for the State relied upon the decision of the Bombay High Court in Commissioner of Income-tax, Bombay North v. Tejaji Farasram Kharawala[1953] 23 I.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Overruling the decision of the High Court, the Supreme Court held that the order granting registration did not merge in the order passed by the Appellate Assistant Commissioner in appeal, or in the order of the Commissioner of Income-tax passed in revision, for the reason that the order of the Income-tax Officer granting registration, could not be deemed to have merged in the order of the Appellate Assistant Commissioner in an appeal taken against the composite order of assessment. An order granting registration to a firm, under section 26-A of the Indian Incometax Act, 1922, merely affected or governed the procedure in collecting or recovering the tax found due from a firm, and was separate and independent of the order of assessment. His Lordship, Gajendragadkar, J., observed thus: "...........however wide the powers of the Appellate Assistant Commissioner may be in an appeal from an order of assessment, they can be exercised only in respect of the matters which are specifically made appealable under section 30(1), and if any order has been deliberately left out from the jurisdiction of the Appellate Assistant Commissioner, it is not open to him to entertain a plea about the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sum of Rs. 6,57,971-4-9 collected by the respondent by way of tax should not be included in the taxable turnover. This was the only point raised before the Deputy Commissioner and was rejected by him in the revision proceedings. On the contrary, the question before the Board of Revenue was whether the Deputy Commercial Tax Officer, Madurai, was right in excluding from the net taxable turnover of the respondent the sum of Rs. 7,74,62,706-1-6, which was the value of cotton purchased by the respondent from outside the State of Madras With those observations, the Supreme Court dismissed the appeal of the State. In the case before us the only question that was agitated by the dealer before the Assistant Commissioner was whether the turnover was taxable at the rate of 2 per cent or at 1 per cent. The question of levy of additional tax of per cent under section 5-A of the A.P.G.S.T. Act was neither before the assessing officer nor before the Assistant Commissioner in appeal. Before the Deputy Commissioner, who revised the order of the Assistant Commissioner, the question was whether the additional tax of per cent was leviable on the turnover. The levy of additional tax at per cent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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