P.A. ABDUL MAJEED Vs. STATE OF KERALA

JUDGEMENT

(1.) Revision is filed by the assessee challenging the order of the Sales Tax Appellate Tribunal confirming revised assessment issued against the assessee under the Central Sales Tax Act, for the assessment year 1997-98. We have heard Sri. E.P. Govindan, counsel appearing for the petitioner and Government Pleader for the respondent. The assessee, a dealer in old gunny bags, was engaged in purchase and local as well as inter-State sale of gunny bags during the year 1997-98. The assessee made inter-State sales of gunny bags at an average sale price of Rs. 4.68. The CST assessment was originally completed without any contest. However, in the KGST assessment, the assessing officer estimated the sale price at the rate of Rs. 6 per gunny bag. When the assessee filed appeal against the KGST assessment, the first appellate authority reduced the price to Rs. 5.5 per gunny bag. On further appeal by the assessee, the Tribunal not only confirmed the first appellate authority's order, but issued a direction to the assessing officer to refix the turnover, both under the KGST and CST Acts. Even though Tribunal's order to revise the CST assessment is not tenable as the matter was not before them, the assessee did not choose to challenge the order which became final. Consequent upon the order issued by the Tribunal, the assessing officer revised CST assessment vide annexure B order dated December 12, 2002 which was challenged by the assessee in appeal before the first appellate authority as well as before the Tribunal, but without success. It is against this order of the Tribunal assessee has come up with this revision raising several grounds.

(2.) Counsel for the petitioner contended that annexure C order issued by the Tribunal in the appeal filed by the assessee against the KGST assessment is illegal and unauthorised because the Tribunal has no jurisdiction to direct revision of CST assessment which had become final and against which no appeal was filed even before the first appellate authority. Government Pleader contended that since the Tribunal enjoys the power to enhance assessment under section 39(4) of the KGST Act, the Tribunal enjoys the power to, order revision of CST assessment on higher value. Counsel for the assessee contended that, Tribunal's power to enhance assessment is limited to the subject-matter of appeal and not beyond. Section 39(4) of the Act reads as follows :

(3.) From the above provision what we notice is that the Tribunal enjoys the power to confirm, reduce, enhance or annul demand of tax or penalty or both in the course of disposal of an appeal. This obviously means that enhancement should be with reference to demand, i.e., subject-matter of appeal. When KGST assessment alone is subject-matter of appeal, the Tribunal cannot go into the question of value adopted or the turnover assessed under the CST Act, though for the same year. Of course when the commodity sold both within the State and outside the State as inter-State sales is one and the same and when the question raised is estimation of value after rejection of the value declared by the assessee, it is open to the Tribunal to make their observations pertaining to CST assessment also. At the maximum such observation will constitute information for the assessing officer to reopen the CST assessment under rule 6(8) of the CST (Kerala) Rules or enable the Deputy Commissioner to exercise suo motu revisional power under section 35 of the KGST Act to bring to tax escaped turnover. In this case the Tribunal directed revision of CST assessment in the course of disposal of an appeal filed against the KGST assessment, which in our view is impermissible. However, since the earlier order issued by the Tribunal was not challenged and had become final, we cannot interfere with the said order. The next question to be considered is whether the assessment in this case is tenable. The Tribunal could not have directed revision of CST assessment while disposing of an appeal filed against KGST assessment, though for the very same year. Therefore, the observation of the Tribunal on valuation could be considered as a ground for reopening of the CST assessment under rule 6(8) of the CST (Kerala) Rules referred above, by the officer. The time available to the officer for revision of assessment under the above provision is only four years from the expiry of the year to which the tax relates. In this case admittedly the CST assessment for the year 1997-98 was revised only on February 12, 2002 which is clearly outside the period of limitation provided therein. Moreover, on facts also, we do not find any justification for the officer to revise the assessment. We, therefore, allow the revision by vacating the order of the Tribunal and by cancelling the revised CST assessment issued against the assessee for the year 1997-98.