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TMI Blog2010 (11) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... t of concessional rate of tax of four per cent against certificates in terms of G.O.Ms. No. 694 dated September 10, 1998. The Commercial Tax Officer, by his assessment order dated September 30, 2004, levied tax on the spare parts at eight per cent. He also accepted the certificates issued by SCCL, and extended to the petitioner the benefit of concessional rate of tax. The Deputy Commissioner issued a revision show-cause notice dated November 11, 2005 proposing to enhance the rate of tax on the entire turnover to 13 per cent. The petitioner submitted their reply thereto vide letter dated December 23, 2005. The Deputy Commissioner, by his order dated March 31, 2006, confirmed the levy raising a demand of Rs. 1.08 crores on the ground that the petitioner had not produced their books of accounts to establish that they had not dealt in motor vehicles. Relying on the judgment of the Supreme Court, in Bose Abraham v. State of Kerala [2001] 121 STC 614 (SC), the Deputy Commissioner held that the goods sold by the petitioner were backhoe loaders, when in fact the petitioner had only sold spare parts of the said equipment during the year 2001-02. In respect of the turnover relating to sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the interests of Revenue, to initiate proceedings to revise, modify or set aside such order. Section 20(2) enables the Additional Commissioner, the Joint Commissioner, the Deputy Commissioner, the Assistant Commissioner and the Commercial Tax Officer, in relation to orders passed by persons subordinate to them, also to exercise the revisional power of the Commissioner under section 20(1) of the Act. The condition precedent for exercise of revisional jurisdiction is prejudice to the interests of Revenue in the order proposed to be revised. If no such prejudice is found, the revisional power cannot avail. (Bankatlal Satyanarayana Parikh & Co. v. Commissioner of Commercial Taxes [2001] 122 STC 236 (AP)). The words "prejudicial to the interests of Revenue" have not been defined but it would, ordinarily, mean that the order challenged is such as is not in accordance with law, in consequence whereof the lawful revenue due to the State has not been realised or cannot be realised. (Dawjee Dadabhoy & Co. v. S.P. Jain [1957] 31 ITR 872 (Cal)). Ordinarily, if the legitimate revenue due has been realised, though as a result of an erroneous order having been made in that respect, the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l to the interests of revenue" by the Madras High Court, in Venkatakrishna Rice Company [1987] 163 ITR 129 (Mad), was too narrow to merit acceptance. The words "prejudicial to the interests of Revenue" are of wide import, and they should not be limited to a case where the order passed by the Officer can be considered to be one prejudicial to the Revenue administration as such. (Malabar Industrial Co. Ltd. [2000] 243 ITR 83 (SC), Hindu Bank Karur Ltd. v. Additional Commissioner of Income-tax [1976] 103 ITR 553 (Mad)). The said expression could encompass, in the context of particular fact situations, prejudice to the interests of the Revenue in a broader sense too. (Bankatlal Satyanarayana Parikh & Co. [2001] 122 STC 236 (AP)). The wider implication of the expression "prejudicial to the interests of Revenue" is exemplified in the words of the Supreme Court in Smt. Tara Devi Aggarwal v. Commissioner of Income-tax [1973] 88 ITR 323 (SC) (pages 328 and 329 in 88 ITR): ". . . The words of the section enable the Commissioner to call for and examine the record of any proceeding under the Act and to pass such orders as he deems necessary as the circumstances of the case justify when he co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of which he has arrived at the conclusion. Failure to record reasons would vitiate any order that the revisional authority may pass in exercise of his powers of revision. (Commissioner of Income-tax v. Sunder Lal (Late) [1974] 96 ITR 310 (All), Commissioner of Income-tax v. R.K. Metal Works [1978] 112 ITR 445 (P&H) and Bankatlal Satyanarayana Parikh & Co. [2001] 122 STC 236 (AP)). It is no doubt true that the Tribunal had observed that, in view of G.O. Ms. No. 910 dated October 31, 1999, the rate of tax is eight per cent. In the light of this finding, the submission that, since the rate of tax was eight per cent irrespective of whether the goods in question fell within the ambit of entry 1 or entry 83 of the First Schedule, no prejudice is caused to the Revenue cannot be said to be without merit. It must, however, be borne in mind that the revisional authority had treated the petitioner's goods as falling within the ambit of entry 1 of the First Schedule, and had levied tax at the rate of 13 per cent. Exercise of jurisdiction by the Deputy Commissioner, under section 20(2) of the Act, was on the premise that the rate of tax, applicable to goods falling within entry 1 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (AP) and State of Andhra Pradesh v. Crown Castings (P) Limited, Hyderabad [1992] 14 APSTJ 145 (AP)). A perusal of the grounds of appeal before the Tribunal would belie the contention of the learned special standing counsel. It is evident therefrom that the petitioner had contended that the very initiation of revision, on the basis that the rate of tax on motor vehicle parts and accessories was 12 +1 per cent, was not tenable; the goods sold were machinery spare parts and were taxable under item 83 of the First Schedule; and, even assuming that earth-moving equipments are motor vehicles, the Deputy Commissioner had failed to see that the rate of tax on motor vehicle spare parts was only eight per cent under G.O.Ms. No. 910 dated December 31, 1999. These grounds undoubtedly cover the contention urged before us. It cannot, therefore, be said that this contention has been raised for the first time in revision proceedings before this court. It is not necessary for us, therefore, to examine whether this contention could have been raised for the first time in revision proceedings, under section 22 of the Andhra Pradesh General Sales Tax Act, as it is a pure question of law. The question ..... 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