N RANGA RAO Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) This civil appeal is filed by the assessee and is directed against the judgment and order delivered by the Division Bench of the Karnataka High Court on 5.08.2006 in Tax Appeal No. 22/1996 holding the proceedings u/s. 15(2) of Karnataka Tax on Entry of Goods Act, 1979 ("the said 1979 Act") are not barred by time.

(2.) A short question which arises for determination in this civil appeal is : Whether mere calling for the records for examination of the case on 16.03.1996 by Additional Commissioner constitute exercise of power within the meaning of Sec. 15(4) of the said 1979 Act so as to fall within limitation period specified therein

(3.) The appellant is the manufacturer of branded agarabathis having its manufacturing unit at Mysore. It causes entry of various raw materials into the local area of Mysore. For the Assessment Years 1986-87 to 1989-90, the Assessing Officer ("AO") passed an order of assessment levying tax on all the items imported into the local area of Mysore. According to the appellant, packing material was not to be taxed as raw material. This was not accepted by the AO. Aggrieved by the said decision, an appeal was filed. The Appellate Authority excluded the packing material from taxation. The decision of the Appellate Authority was delivered on 28.03.1992. On 20.05.1996 a show cause notice was given to the appellant-assessee by the Additional Commissioner u/s. 15(1) stating that, upon scrutiny of the records, he found the order dated 28.03.1992 to be erroneous and prejudicial to the Revenue for the reason that as per Serial No. 16-A of the Schedule to the 1979 Act, packing material was liable to be taxed @ 2%, which has not been noticed by the First Appellate Authority and, therefore, it had committed an error in setting aside the tax levied by the AO on the value of packing material. In the circumstances, the Additional Commissioner called upon the assessee to show cause as to why the order of the First Appellate Authority should not be set aside and restore the assessment order levying tax on the value of packing materials. In the show cause notice, the Additional Commissioner stated that the order of the First Appellate Authority was examined on 16.03.1996 and, therefore, the revision proceedings were within time.