RAMDAS PUROSHATTAM Vs. ADDITIONAL COMMERCIAL TAX OFFICER KARWAR

JUDGEMENT

(1.) THE petitioner is an assessee under the Karnataka Sales Tax Act, 1957 (hereinafter referred to as "the Act" ). By an assessment order dated 20th May, 1989, he was assessed to pay tax at Rs. 7,303 on a turnover of sale of gold ornaments in the sum of Rs. 3,65,166. 70. The assessment in question was from 1st April, 1987 to 31st March, 1988, i. e. , the assessment year 1987-88.

(2.) THE assessee is aggrieved by the show cause notice issued by the Deputy Commissioner of Commercial Taxes, Dharwad Division, Dharwad, respondent 2, under section 21 (4) of the Act. The power exercised to issue is a suo motu power of revision conferred on the superior officers to call for and examine the records, if any officer below their rank has committed any error which has resulted in loss of revenue to the State. The assessment order is found fault with on account of the fact that a sum of Rs. 1,60,334. 60 paid for ornaments purchased from the unregistered dealers has not been included in the total turnover and therefore he proposes to add the sum to the admitted turnover of Rs. 3,65,166. 70 and thereafter compute the tax due. Aggrieved by the same, the present writ petition is preferred under article 226 of the Constitution, inter alia, contending that the show cause notice is without jurisdiction inasmuch as the purchase turnover was liable to exemption from payment of tax under a notification issued by the State Government and gazetted on 24th September, 1970, issued in exercise of the powers conferred by section 8a of the Act.

(3.) I have carefully gone through the assessment order in question which is at annexure-A to the petition. Though there is a reference to the purchase of gold worth Rs. 1,60,334. 60, there is no discussion as to whether that should be exempted from the payment of turnover tax in view of the notification as at annexure-C. Admittedly, the assessing authority has taken the opening stock of gold of Rs. 3,05,512. 88. But it has failed to add the gold ornaments purchased in the course of the relevant assessment year which is at annexure-B. Nevertheless, he has arrived at Rs. 3,65,166. 70 as the total taxable turnover without any discussion or without assigning any reason. In other words, the petitioner did not make a specific claim for exemption of his purchase turnover, nor did the assessing authority independently examine with reference to the books of accounts produced the entitlement of the assessee to the exemption. What has been returned as the taxable turnover has been accepted by the assessing authority without question. If the assessment order is analysed in that manner then exclusion of purchase turnover without satisfying the conditions of the Government notification as at annexure-C is clearly an act which has caused loss of revenue and as such the Deputy Commissioner of Commercial Taxes may invoke his revisional jurisdiction under section 21 (4) of the Act. I, therefore, do not see any error of law or error of jurisdiction in the impugned show cause notice.