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2015 (4) TMI 1084 - ANDHRA PRADESH HIGH COURT

2015 (4) TMI 1084 - ANDHRA PRADESH HIGH COURT - [2015] 85 VST 218 (T&AP) - Powers of revision and leviability of tax at applicable rates - Section 6A of the APGST Act for the year 1992-93 - Purchase turnovers of fuel, coal and miscellaneous goods - Issue not decided and dealt by the Deputy Commissioner - Appellant contended that adequate opportunity was not given for obtaining and producing before the Commissioner the necessary and relevant information - Held that:- the powers of revision, can b .....

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are not assessable to tax and for fresh consideration of the subject issue by the concerned.

Validity of second revision of same assessment order - Assessment order duly passed by the CTO and Deputy Commissioner took suo motu revision on two issues - Deputy Commissioner did not advert to the issue concerning section 6A, hence the Commissioner having found that revisional order insofar asnon-adjudication of issue concerning section 6A is prejudicial to the interests of the revenue of t .....

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mmissioner and therefore, the contention that the Commissioner had revised the orders of the CTO a second time is a contention without any merit and therefore, stands rejected.

Period of limitation - Sub-section (3) of section 20 of the Act - Appellant contended that order of Commissioner passed after about 5 years of the order of assessment of Deputy Commissioner - Held that:- Commissioner had initiated the revision proceedings by a show cause notice dated May 3, 1999 proposing to re .....

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further fact that the impugned orders were passed within four years from the date of the orders of the Deputy Commissioner, the contention of the appellant that the impugned order is passed beyond period of limitation is devoid of merit. - Decided partly in favour of appellant - Special Appeal No. 19 of 2000 - Dated:- 30-4-2015 - K. C. Bhanu and M. Seetharama Murti, JJ. For the Appellant : B. Srinivas For the Respondent : M. Govind Reddy, Government Pleader for Commercial Tax JUDGMENT This spe .....

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in brief, are as follows: "The appellant, who is the registered dealer, was engaged in the manufacture of rerolled products of iron and steel. During the course of the trade, the appellant had purchased various raw materials and consumables for the purpose of manufacture of the said finished goods. The appellant was assessed by the Commercial Tax Officer ("the CTO", for short) for the assessment year 1992-93 under the APGST Act vide order dated March 24, 1994. According to the app .....

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rawing the excess set-off of ₹ 4,73,946. Accordingly, a show-cause notice was issued by the Deputy Commissioner; and, finally the Deputy Commissioner by his order dated March 7, 1996 had allowed a set-off of ₹ 58,92,050 as against the set-off of ₹ 61,39,374 granted by the CTO. The Commissioner having examined the said revision order of the Deputy Commissioner with reference to the records had found that the order of the Deputy Commissioner is incorrect and is prejudicial to the .....

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ection 6A of the Act certain turnovers in the show cause notice, namely, turnover of ₹ 1,85,845 relating to purchase of fuel; turnover of ₹ 16,46,574 relating to purchase of coal; and, turnover of ₹ 13,33,578 relating to purchase value of miscellaneous goods. The appellant had contended, inter alia, that the Commissioner cannot raise a fresh issue while revising the order of the lower authority and that the same would amount to revising the assessment order dated March 24, 1994 .....

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he Deputy Commissioner if need be. The Commissioner thus having dropped the part of the proposed revision insofar as it related to the first issue aforementioned had brought the turnovers of fuel, coal and miscellaneous goods to tax and had subjected the same to tax at the applicable rates under section 6A of the Act for the year 1992-93. Therefore, the aggrieved appellant/assessee is before this court." In view of the facts delineated, now the issue of set-off is not the subject-matter of .....

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e is not justifiable and valid. The Commissioner was not within his powers in revising the order of the Deputy Commissioner in respect of an issue which has not been decided and dealt with by the Deputy Commissioner. Therefore, the Commissioner is not justified in levying tax under section 6A of the Act. In any view of the matter, the levy of tax under section 6A of the Act is not justified and correct as the appellant has purchased the goods from registered dealers within the State. In the pres .....

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limitation prescribed in sub-section (3) of section 20 of the Act. On the other hand, the learned Special Government Pleader would contend as follows:-"The Commissioner had revised the orders of the Deputy Commissioner and not the orders of the CTO. In view of the fact that the appellant had preferred an appeal before the STAT assailing the restriction of the set-off by the Deputy Commissioner in the revisional order, the Commissioner had rightly dropped the revisional proceedings on that .....

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fuel, coal and miscellaneous goods and had rightly brought the turnovers of the said goods to tax at the applicable rates under section 6A of the Act for the year 1992-93 and gave necessary directions to the CTO for giving effect to the orders in that regard. The orders impugned are not barred by law of limitation as the revisional power was exercised in accordance with the provisions of law. The revision is devoid of merit and is liable to be dismissed." We have thus taken note of the mate .....

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r facts and in law ?" Points 1 and 2: 8.1 The introductory facts and the facts leading to the present stage of the matter are already stated supra, in detail. The CTO passed the assessment order for the year 1992-93 on March 24, 1994. The Deputy Commissioner's revisional order was passed on March 7, 1996. The Commissioner who was of the view that the order of the Deputy Commissioner was prejudicial to the interests of the Revenue of the State had decided to revise the said order of the .....

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pondent had merely revised the orders of the Deputy Commissioner or in-fact he had revised the orders of the CTO under the guise of revising the orders of the Deputy Commissioner ? The contention of the learned counsel for the appellant is that the order of the Deputy Commissioner insofar as the proposal to levy tax under section 6A is silent and that, therefore, there was no adjudication on this issue by the Deputy Commissioner and that therefore, the proposal to revise the order of the Deputy .....

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d issue and his order is silent on the aspect concerning the said issue and that, therefore, the Commissioner had rightly exercised the powers of revision as the Deputy Commissioner had dropped from consideration the said issue. He would further contend that section 20(1) of the APGST Act enables the Commissioner of Commercial Taxes to suo motu call for and examine the order passed by any officer subordinate to him and, if such an order is prejudicial to the interests of Revenue of the State, to .....

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djudicating an issue is erroneous and that the said order is prejudicial to the interests of the revenue of the State, the Commissioner has ample jurisdiction to exercise the powers of revision which are vested in him. 8.3 Be it noted that the Deputy Commissioner who had initiated suo motu revision proceedings under section 20(2) of the Act against the orders of the CTO had also proposed to bring to tax under section 6A of the Act, the turnovers related to fuel, coal and miscellaneous goods and .....

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be held that the said issue was not adjudicated or the proceedings on the said issue were dropped after considering the facts and contentions, which were relevant. In the said circumstances, the Commissioner who was of the view that the order of the Deputy Commissioner is prejudicial to the interests of the revenue of the State had entertained a revision suo motu by exercising powers vested in him under section 20(1) of the Act. The powers of revision, in our well considered view, can be invoke .....

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er and that, therefore, the same is bad in law. The substance of the contention is that since the Deputy Commissioner did not adjudicate the present issue and as the order of the Deputy Commissioner is silent on this issue it shall be deemed that the Commissioner was in essence revising the orders of the CTO under the guise of revising the orders of the Deputy Commissioner and that therefore, the order impugned of the Commissioner is liable to be set aside. A perusal of the material record would .....

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nd hence, the said issue is now not a subject-matter of the present appeal. However, the Deputy Commissioner did not advert to the issue concerning section 6A and therefore, his order is silent on the said issue. Hence, as already noted supra, the Commissioner having found that the revisional order insofar as the nonadjudication of the issue concerning section 6A is prejudicial to the interests of the revenue of the State had taken up the suo motu revision on this particular issue which was not .....

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Commissioner. The law is well-settled that a second revision of the same order by the same authority on the same facts and issues is impermissible. But, in the case on hand, the Commissioner had sought to revise and had infact revised the orders of the Deputy Commissioner as already held supra and, therefore, the contention that the Commissioner had revised the orders of the CTO a second time is a contention without any merit. The said contention, therefore, stands rejected. 8.5 In this factual .....

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out five years from the date of order of assessment and that therefore, the initiation of proposal for revision by the respondent and the impugned order passed by the respondent are clearly barred by law of limitation prescribed in sub-section (3) of section 20 of the Act. Section 20(3) of the Act reads as under: 'In relation to an order of assessment passed under this Act, the powers conferred by sub-sections (1) and (2) shall be exercisable only within such period not exceeding four years .....

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s passed by the CTO, the revising authority issued a notice dated September 25, 1981 to the assessee proposing to initiate revisional proceedings on the ground that dry batteries fell under entry 137 and deserved to be taxed at 12 per cent. and not at eight per cent. as electrical goods under entry 38 of Schedule I of the APGST Act. When it was brought to the notice of the revisional authority that certain appeals were pending regarding the earlier assessment years in respect of the same issue, .....

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ry of four years from the date of order of the assessment by the assessing authority. Therefore, the State filed tax revision cases before this court. This court considered the question as to whether section 20(3) of the APGST Act was not applicable to the case and had finally held that the view taken by the STAT is in consonance with the consistent view taken by this court. Thus, it was held in the cited case that where the notice proposing revision was issued within the period prescribed by se .....

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als. Thus, the cited case is a case where the Deputy Commissioner who had sought to revise the orders of the CTO had again issued fresh notices to the assessee on December 20, 1984 and had later passed an order on April 15, 1985 confirming the proposal in the show-cause notice. Therefore, the Tribunal had held that the exercise of powers by the Deputy Commissioner was barred by limitation as the Deputy Commissioner has passed the order after expiry of four years from the date of order of the ass .....

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998 had set aside the orders of the Appellate Deputy Commissioner (D.T.) and had restored the orders of the assessing authority. The Commissioner had thus passed the order of revision on July 31, 1998, which admittedly went beyond the period of four years from the date of service of appellate order. To get over the said difficulty the learned Government Pleader argued that the period of four years is the outer-limit prescribed to initiate the legal proceedings and it is not necessary that the fi .....

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e) was dissented from by the Division Bench of this court in the decision first cited." Finally this court had held as follows: "Having regard to the fact that the language of section 20(1) and 20(3) is susceptible of interpretation that the period of limitation of four years could as well apply to the actual passing of the final order of revision and in view of the consistent view taken by this court, we are not inclined to reconsider the decision in Toshiba Anand's case [1995] 96 .....

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ate of the service of the order of the Appellate Deputy Commissioner. From the ratio in this cited decision, the principle laid down appears to be is that the whole exercise, i.e., the initiation of the revision proceedings including the passing of the order of the revision shall be completed within a period of four years from the date of the service of the order or proceeding sought to be revised. (iii) In the decision in Agarwal Industries Limited v. Commissioner of Commercial Taxes, Andhra Pr .....

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he appellant as 'consignment sales'. The appellant/assessee's appeal was disposed of by the Appellate Deputy Commissioner by an order dated June 14, 2001. Thereupon, the Deputy Commissioner (CT), Abids, took up the assessment of the appellant under the CST Act for the year 2000-01 and passed orders dated March 15, 2003. The Additional Commissioner (CT) vide notice dated October 28, 2006 had proposed to revise the order dated March 15, 2003 of the Deputy Commissioner (CT) Abids Divisi .....

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ion." Having regard to the facts of the case, this court held as follows: -"In our view, it would have been a valid exercise of revisional power by the respondent if he had undertaken to revise the order dated February 28, 2007 of the Additional Commissioner (CT) Legal on the ground that (a) the two decisions relied upon by the latter were wrong in law or (b) that he did not agree with the said decisions, or (c) that the said decisions, on a proper consideration would be inapplicable t .....

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issioner (CT), Abids dated March 15, 2003 and not a mere revision of the order of the Additional Commissioner of Commercial Taxes (CT) Legal dated February 28, 2007." Therefore, this case was decided on the facts peculiar to the case and a finding was recorded that the respondent therein had in fact revised the order of the Deputy Commissioner (CT), Abids dated March 15, 2003 and not the order of the Additional Commissioner of Commercial Taxes (CT), Legal dated February 28, 2007 and that, t .....

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on of an order of assessment can be done either under sub-section (1) or (2) of the said section only within a period of four years on which the order was served on the dealer. Therefore, in our well considered view, an order of the CTO can be revised exercising the powers under sub-section (1) or (2) of section 20 of the APGST Act by the authority concerned within four years from the date of service of the order of the CTO on the dealer. However, the initiation of proposal for revision as well .....

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ner may initiate proceedings and pass revisional orders within the prescribed period of limitation of four years from the date of service of the order of the subordinate, under revision, on the dealer. 8.8 This being the legal position, in the case on hand, the facts show that the Commissioner had initiated the revision proceedings by a show cause notice dated May 3, 1999 proposing to revise the order dated March 7, 1996 of the Deputy Commissioner (CT) Panjagutta Division. Further, the Commissio .....

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he Deputy Commissioner, the contention of the appellant that the impugned order is passed beyond period of limitation is devoid of merit. 8.9 Coming to the contentions of the appellant/dealer on the merits of the matter in regard to levy of tax under section 6A of the APGST Act, one of the contentions of the appellant is that adequate opportunity was not given for obtaining and producing before the Commissioner the necessary and relevant information regarding the details of purchases of goods. I .....

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mmissioner is not justified in passing the orders subjecting the turnovers relating to purchase of fuel, coal and miscellaneous goods to tax under section 6A of the Act and in directing the assessing authority to give effect to the said orders. The fact remains that the Commissioner had exercised the powers of revision vested in him on an issue raised but, not adjudicated by the Deputy Commissioner and therefore, as rightly contended by the learned counsel for the appellant, the appellant can be .....

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