C C TRANSPORT COMPANY Vs. STATE OF KERALA

JUDGEMENT

(1.) THESE Tax Revision Cases arise from a common order of the Kerala Sales Tax Appellate Tribunal, Trivandrum, in respect of the years 1966 67,1967-68 an 11968-69. The assssee is the same and the question of law raised is common in all these three cases. We shall therefore dispose of these cases by a common judgment. The question of law arising for our consideration's whether an order of remand made by the Deputy Commissioner under S. 35 of the kerala General Sales Tax Act, 1963 (hereinafter called the Act) amounts to a direction to assess escaped income.

(2.) THE taxable turnover of the assessee was determined by the Sales Tax Officer at Rs. 48,456. 87 for the year 1966 67, Rs. 1,70,730. 70 for the year 1967 68 and Rs. 75,036. 45 for the year 1968 69. When the assessment records were examined by the Deputy Commissioner, North Zone, Kozhikod e , he found that the Sales Tax Officer had wrongly exempted the entire turnover of spare parts sold by the assessee to its sister-concerns. In his order under S 35 the Deputy Commisioner stated that the assessee was entitled to claim exemption only in respect of goods which had already been subjected to a single point tax under the Act. He pointed out that the records showed that some of the goods sold by the assessee were purchased by it from persons outside the S ate and such goods would not have been subjected to tax. It is only in the case of goods purchased by the assessee from persons inside the State and sold by it to its sister-concerns that the assessee could claim exemption. The Deputy Commissioner therefore by his order dated 8th August 1971 set aside the assessment orders in respect of the years 1966-67,1967-68 and 1968-69 and directed the assessing authority to separate the inside purchases from the rest and limit the exemption to the former. This order was challenged by the assessee before the Tribunal contending that the order of remand is a direction to assess escaped income and such direction was illegal as it trenched upon the powers of the assessing authority under S. 19 of the Act which deals with assessment of escaped turnover. It was further contended that in any case the proceedings initiated by the order of remand would be barred by limitation at least in so far as the assessment for the year 1966-67 was concerned The Tribunal held that the order of the Deputy commissioner was neither illegal nor time-barred. The assessee's appeal was accordingly dismissed by the Tribunal.

(3.) THE impugned order was made by the Deputy Commissioner by virtue of his suo mote revisional power under S. 35 This section reads as follows: "35. Powers of revision of the Deputy Commissioner suo mote. (1) The Deputy Commissioner may, of his own motion, call for and examine any order passed or proceedings recorded under this Act by the inspecting Assistant Commissioner or any Officer or authority of rank below that of an Inspecting Assistant Commissioner and may make such enquiry or cause such enquiry to be made and, subject to the provisions of this Act, may pass such order thereon as he thinks fit. (2) The Deputy Commissioner shall not pass any order under sub-section (1) if (a) the time for appeal against the order has not expired; (b) the order has been nude the subject of an appeal to the Appellate Assistant Commissioner or the Appellate Tribunal or of a revision in the High Court; or (c) more than four years have expired after the passing of the order referred to therein. (3) No order under this section adversely affecting a person shall be passed unless that person has had a reasonable opportunity of being heard. " It is not contended before us that sub-section (2) of S. 3 has been violated. The grievance of the petitioner is that the impugned order was beyond the powers vested in the Deputy Commissioner under sub-section (1)of S. 35 Counsel for the assessee Sri V Sivaraman Nair relies upon the decision of this Court in O. Kassim Kannu v. State of Kerala (1970) 27 STC 530 where it was held that the revisional power of the Deputy Commissioner under S. 35 was to be used only for the purpose of correcting any irregularity, illegality or impropriety of an order which he was empowered to revise and it was not to be used to infringe upon the jurisdiction of the Sales Tax Officer to assess escaped turnover under S. 19. This court pointed out that the powers under S 35 and s. 19 operated in different fields. The Deputy Commissioner might, while exercising power under S. 35, call for the records and on examining them if he found that the order of the Sales Tax Officer was illegal, irregular or improper, direct a further investigation; but such further investigation could not interfere with the power of the Sales Tax Officer to assess escaped turnover Counsel contends that these principles have been violated by the deputy Commissioner by remitting the case to the assessing authority for the purpose of bringing to tax turnover which bad escaped assessment.