TMI Blog1975 (7) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter in revision under s. 21 of the Act questioning the legality and property of the earlier order of the assessing authority in the order dt. 29th Jan., 1971. The revisional authority in his common order in SMR/33 34/75, dt. 28th Feb., 1975 has rejected the applications of the appellant-firm filed under s. 21 of the Act. Thus, the appellant-firm has come up in these two appeals. 2. The learned Advocate of the appellant-firm Mr. P.V. Aithala contended that the assessing authority issuing notices under s. 12-A of the Act has proceeded to pass the orders under s. 25 of the Act and that he has failed to give the reasonable opportunity contemplated under s. 25-A of the Act and that the revisional authority has erred still treating those earlier notices as notices under s. 25-A of the Act. In spite of the request to the revisional authority to investigate that matter of refund of the tax collected under the CST Act refunded earlier to the promulgation of the Central Sales Tax (Ordinance) of 1969 (hereinafter called the Ordinance) and consequently to assert that the decision of our Hon'ble High Court reported in 26 STC page 36 in the case of Rallies India Ltd., that the very t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear in unambiguous terms the intention of the authority whether it is to assess the escaped turnover or whether it is to rectify the mistake apparent from the record. It is clear that merely because a particular notice issued with reference to a wrong section by itself, will not have the garb of the notice purported to have been issued under that particular section alone. A notice if issued under s. 12-A of the Act must necessarily mention that the proceedings are to assess an escaped turnover or to tax a turnover if otherwise assessed at a lower rate that at rate at which it should have been assessed. It may even mention that the authority can proceed to assess that turnover so escaped assessment to the best of its judgment. But, the notice issued under s. 25-A of the Act must necessarily be with a view to rectify any mistake apparent from the record and in the process to amend the earlier order. 6. The original notice issued by the assessing authority dt. 10th Feb., 1970 is sent along with the appeal papers. We feel it necessary to extract in full a copy of the notice which is identical for both the assessment year "No 945/64-65 Phone No. 3837. Office of the Commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to STA 194/75 it is corrected and revised and a similar correction apparently appears in the copy filed along with the appeal papers. The notices have specially made clear that the disputed turnovers were earlier exempted in the light of the decision of the Supreme Court in Yaddalam's case. It refers to the refund of the tax under the CST Act consequent upon that assessment based on the decision in Yaddalam case. In the second paragraph, we find reference to the Amendment of the CST Act by insertion of s. 6(1-A) with retrospective effect from 1st July, 1956 and the validity of the assessments made by the Amendment Act. The very turnovers earlier exempted are referred to, proposing them to tax at 2 per cent as which 'C' Forms. The notice is also clear that in view of the retrospective Amendment those turnovers earlier exempted are "liable for assessment". Then it says that the earlier order dt. 29th Aug., 1968 are proposed to be rectified/revised. Then in the last paragraph reference is made to the opportunity to file the written objections within 7 days from the date of receipt of the notice. 7. Mr. P.V. Aithala read that notice as one under s. 12-A of the Act. According to hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessing authority later in the course of his order states that the notice was with reference to r. 38 of the Rules. We do not like to base our finding only to the subsequent reference to r. 38 of the Rules in the endorsement to hold the earlier notice as issued under s. 25-A of the Act. What is glaring is the absence of the words "escaped to assessment" or "turnovers are subjected to a lesser rate of tax than they should have been assessed to" which are the essential ingredients of any notice under s.12-A of the Act. That sense is not at all forthcoming from both the notices. Therefore, we are very well convinced that in spite of the erroneous reference to s. 12-A of the Act in the main heading of the notice nevertheless in law and spirit it is a notice under s. 25-A of the Act. 8. It is urged by Mr. P.V. Aithala that the notice was taken by the appellant-firm as the notice under s. 12-A of the Act and that the proceedings were in a process to assessee of an escaped turnover. We have the objection statement of the appellant-firm on page 57 of the assessment records. That vaguely takes the stand that there is no turnover escaped to assessment to take recourse to s. 12-A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication is made clear in the earlier paragraphs. The appellant-firm has replied those notices. In the written objection it is not urged to provide further opportunity to represent its case in person. The opportunity contemplated under s. 25-A of the Act is not the one of making a personal representation. What is utmost necessary is that one whose purse is likely to be touched shall not be subjected to any tax without allowing an opportunity to express one point of view on the proposed course of action. Beyond that filing of the objection, the appellant firm has not expressed anxiety to have further opportunity to represent its case by continuous objection or representing in person. A similar opportunity is contemplated is s. 154 of the IT Act,, 1961 and in the earlier IT Act, 1922 in s. 35. On that aspect of the opportunity, the Supreme Court in the decision reported in 48 ITR page 34 earlier citing the decision of an English case has held that the requirement is to give a fair hearing to a person before deciding against him". It is observed that the proviso regarding the opportunity applies whenever effect of the order is to touch the pocket of the Assessee". In the famous case d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pportunity. We are convinced that such an opportunity which is provided for in the spirit of natural justice is given by the assessing authority. The spirit of the proviso is made quite clear in the decision of the Supreme Court which we have referred to earlier. Viewed in that context, we are convinced that the appellant-firm is given the required opportunity to put forth its case in the light of the proceedings initiated by the assessing authority. That is our finding on the second issue. 12. It was contended by the appellant-firm before the revisional authority in the proceedings initiated under s. 21 of the Act by the application of the appellant-firm that the appellant-firm had refunded tax collected under the CST Act before the promulgation of the Ordinance amending several of the provisions of the CST Act and later to result in the Amendment Act, to several of its customers and, therefore in the light of the decision of our Hon'ble High Court reported in 26 STC page 36 that was no tax under the CST Act and therefore it was entitled to exemption under s. 10(1) of the Amendment Act and therefore the revisional authority ought to have initiated necessary investigation to exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s relied upon the decision of our Hon'ble High Court in the case of International Cotton Corporation (P) Ltd. vs. Commr. of Commercial Taxes reported in 17 STC page 604 to contend that such investigation is contemplated in the scheme of revision. in that case the Commr. of Commercial Tax took suo motu action under s. 21(2) of the Act and assessed the value of the cotton purchased by the assessee under s. 5(4) of the Act on the ground that the assessee had sold the cotton outside the State on consignment basis in the subsequent period. While the assessee contended that the purchases of the declared goods remaining unsold were not liable to tax under s. 5(4) of the Act as is stood at the relevant time. We do not find anything to suggest that it will be within the sphere of the jurisdiction of the revisional authority to examine records not relating to and based on by the assessing authority to result in that order which is the subject matter of revision under s. 21 of the Act. In that judgment reference however is made to the decision of the Madras High Court in State of Madras vs. Louis Dreypur and Company Ltd. (6 STC 318) to elaborate as what is conceived in the expression record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision in 26 STC 36. When that was not before the assessing authority and when that was not required of the assessing authority to look into that, at this stage before the revisional authority in the light of the very decision of the our High Court in International Cotton Corporation case, cannot be expected of the revisional authority to examine the aspect of the matter. The question of the subsequent refund is taken up for the first time before the revisional authority. 15. The other decision relied upon by the learned Advocate reported in 20 STC page 64 in the case of Giridharlal, Parasmal vs. The State of Mysore again is not helpful to him. That was a case when exemption was not granted of the subsequent sale of cloth merely because the assessee had not made that claim. There is was observed:— "We are clearly of the opinion that the duty of the AOs is not merely to impose tax that is lawfully exigible but to give to the assessee the benefit of any reduction or exemption that may become due to them upon facts actually found to be true by the assessing authorities, whether or not the assessee, out of ignorance or by mistake, make a claim thereto". The alleged refund by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some cases include power to make or direct such further enquiry as the Deputy Commissioner may find necessary for rectifying the illegality or impropriety of the order, or irregularity in the proceedings. It is therefore not right bladly to propound that in passing an order in the exercise of his revisional jurisdiction, the Deputy Commissioner must in all case be restricted to the record maintained by the officer subordinate to him and can never make enquiry outside that record." (on page 883) Here it is made clear that such enquiry is only to enable the revisional authority to pass an appropriate order. In the earliest part it is made clear that exercise of the power on an application will have to be only on the records relating to the year or the procedure and that record will have to be scrutinised for ascertaining the legality or propriety of the order or the regularity of the proceedings. In that very case the limitation on the powers that could be exercised by the revisional authority are conditioned thus :— "It would not invest the revising authority with power to launch upon enquiries at large so as either to trench upon the powers which are expressly reserved by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Supreme Court reported in 32 STC page 660 in the case of the Commercial-tax Officer vs. Sri Venkateswara Oil Mills Anr. The judgment of the Supreme Court is in effect to reverse the earlier decision of our High Court reported in 29 STC page 10. There is it observed that :— Sec. 10 of the Amendment Act mitigates the rigour of the amendment made to s. 6 of the principal Act. But for s. 10 of the Amendment Act, every dealer would have had to pay tax on the turnovers in question whether he had collected tax or not........If the impact of s. 10 is ignored, as the High Court has done, then the assessments in question are liable to be reopened whether the assessees had collected the tax or not". Further it is observed :— "The law gives a further opportunity to the assesses whose assessments are sought to be reopened to satisfy the assessing authorities that they had not collected tax in respect of the turnovers in question." It is clear that the appellant-firm in the instant case has not cared to convince the assessing authority to impress upon him of the subsequent refund of the tax to avail of the decision of our High Court reported in 26 STC page 36. But, that i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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