KERALA HIDES AND SKINS Vs. STATE OF KERALA

JUDGEMENT

(1.) These revisions relate to the assessment years 1983-84, 198-85 and 1985-86. The petitioner is a dealer in Hides and Skins and is an assessee on the rolls of the Assistant Commissioner (Assessment)., Special Circle - 1, Ernakulam. The assessments in respect of the assessment years were completed by the assessing authority on 30th March 1989. While completing the assessments, the assessing authority allowed exemptions on export sales as per S.5 (3) of the Central Sales Tax Act on the strength of Form H declarations submitted by the assessee, But its claim was not fully allowed. Being dissatisfied with the assessments thus finalised, the assessee filed appeals before the Deputy Commissioner (Appeals), Ernakulam. The Deputy Commissioner (Appeals) set aside the assessments and remitted the cases back to the assessing authority, observing that the exemptions already allowed by the assessing authority under S.5 (3) of the Central Sales Tax Act were irregular inasmuch as the disputed transactions at the hands of the assessee were not penultimate sales qualifying for exemption under S.5 (3) of the Central Sales Tax Act. Aggrieved by that order, the assessee filed appeals before the Appellate Tribunal. The Appellate Tribunal by Order dated 28th March 1993 remanded the cases to the first appellate authority with a direction to that authority to dispose of the appeals afresh after giving an opportunity to the assessee to substantiate its claims for exemption. The first appellate authority, in turn, remanded the proceeding to the assessing authority inter alia directing the assessing authority to examine the entire claim for exemption under S.5 (3) of the Central Sales Tax Act made by the assessee. This Order of remand by the first appellate authority was again challenged in appeal before the Tribunal. The Tribunal by Order dated 19th March 1997 rejected the contentions of the assessee and dismissed the appeals. Against the orders of the Tribunal, the assessee filed T.R.G. Nos. 80, 81 and 82 of 1998 before this Court. It was argued on behalf of the assessee that it raised a question of limitation and argued the same before the Tribunal and that question had not been considered or decided by the Tribunal. This Court, thereupon, set aside the orders of the Tribunal and remanded the cases to the Tribunal to decide the appeals afresh after recording a clear finding on the plea of limitation raised by the assessee. Thereafter the Tribunal considered the plea of limitation raised by the assessee and held that the argument of the assessee that the period of limitation as provided under S.19 of the Kerala General Sales Tax Act would also govern the exercise of power by the first appellate authority while exercising jurisdiction under S.34 (3) (a)(i) of the Act while enhancing the original assessment was unsustainable. The Tribunal also found that the decision of the first appellate authority was well within its jurisdiction. Thus, the Tribunal dismissed the appeals confirming the order of the first appellate authority dated 24th April 1993. It is challenging the decisions of the Tribunal thus rendered that these revisions are filed.

(2.) The contention urged before us on behalf of the assessee is that even though under S.34 (3) (a)(i) of the Act an appellate authority, while disposing of an appeal filed by the assessee, may have the power to enhance the assessment, the said power is also circumscribed by the limitation prescribed in S.19 of the Act. According to counsel, what was wrongly exempted by the assessing authority was escaped assessment and when the appellate authority exercising jurisdiction under S.34 of the Act was bringing the exempted turnover for assessment, it was really a case of escaped turnover and consequently S.19 of the Act was attracted. Learned counsel referred to the decision of the Lahore High Court in Commissioner of Income Tax, Punjab v. Nawab Shah Nawaz Khan (1938) 6 ITR 370 and the decision of the Andhra Pradesh High Court in Produce Commercial Syndicate v. State of A. P. (1978) 42 STC 215. The decision of the Lahore High Court was rendered under the Income Tax Act of 1922 and that division does take the view that the exercise of power by the appellate authority to enhance the assessment was also circumscribed by the power to get at the escaped assessment and the limitation prescribed therefor under the Act. But, a, scrutiny of the decision of the Andhra Pradesh High Court shows that there was no argument before that Court based on the power of the first appellate authority. The argument was on the ground that what was done by the appellate authority in that case was only a correction of a mistake. The Andhra Pradesh High Court overruled that contention and took the view that the appellate authority could not act beyond the period of limitation prescribed under S.14 of the concerned Act.

(3.) In Deputy Commissioner, Sales Tax v. Abdul Salam (1988) 69 STC 144, relying on the decision of the Supreme Court in Commissioner of Income Tax, U.P. v. Kanpur Coal Syndicate (1964) 53 ITR 225, this Court has held that the jurisdiction of the Appellate Assistant Commissioner is co - terminus with that of the assessing authority. This Court has also held that the appellate authority has the power even to enhance the assessment even though the appeal is at the assessee's instance and this was a special and exceptional attribute of the jurisdiction of an appellate authority under fiscal enactments. Thus, the exercise of power under S.34 of the Act by an appellate authority is seen to be independent of any power that may be" available to the original authority in terms of S.19 of the Act or under any other provision of the Act. In Deputy Commissioner of Agricultural Income Tax and Sales Tax, Quilon and another v. Dhanalakshmi Vilas Cashew Co. (1969) 24 STC 491, the Supreme Court held, reversing the decision of this Court, that the revisional jurisdiction under S.15 (l) (i) of the Kerala General Sales Tax Act, 11.25 - M.E. was quite distinct and different from the one conferred under R.33, to tax escaped turnover. The Deputy Commissioner while exercising revisional jurisdiction under S.15 (1) (i) would be restricted to the examination of the record for determining whether the order of assessment was according to law. R.33, which confers power to assess escaped turnover, was normally to be exercised in matters de hors the record of assessment proceedings. The same view was adopted by the Supreme Court in State of Kerala v. K. E. Nainan (1970) 26 STC 251. There again, reversing the decision of the High Court ana following the decision in Dhanalakshmi Vilas Cashew Company's case , the Supreme Court held that the bar of limitation provided for bringing in escaped turnover under assessment was not applicable to the exercise of revisional power by the Deputy Commissioner under S.15(1) of the Act, Though not on the point of limitation, the decision of the Full Bench of this Court in Madras Rubber Factory v. State of Kerala (1979) KLT 572 is also to the effect that the powers are distinct and different,