DY COMMISSIONER Vs. COCHIN AGENCIES

JUDGEMENT

(1.) The Revenue is the petitioner in this Revision. The respondent is an assessee under the Kerala General Sales Tax Act. We are concerned with the assessment year 1979-80. The assessment was completed on 28-2-1983 by adding 50 per cent of the admitted taxable turnover of Rs. 11,31,544/-. The taxable turnover was determined at Rs. 16,97,316/-. The assessee filed an appeal before the Appellate Assistant Commissioner as S. T. A. No. 986/83, which was dismissed on 30-7-1984. In the meanwhile; the Deputy Commissioner of Sales tax noticed that the assessee had paid excise duty on foreign liquor to the tune of Rs. 12,70,624.10 and this point or aspect was totally ignored in the assessment. He initiated suo motu revision proceedings under S.35 of the K. G. S. T. Act, by notice dated 26-8-1985, The assessee objected to the initiation of proceedings. Notwithstanding the objections of the assessee, the Deputy Commissioner of Sales tax passed an order dated 4-10-1985 setting aside the assessment for the year 1979-80 and directed the assessing authority to make a fresh assessment in accordance with law. The assessee took up the matter in appeal before the Sales Tax Appellate Tribunal, as T. A. No. 785 of 1985, and contended that the original assessment order dated 28-2-1983 was the subject of an appeal before the Appellate Assistant Commissioner and in this view of the matter, the initiation of proceedings under S.35 of the K G S.T. Act is patently barred. The Appellate Tribunal held that the Deputy Commissioner of Sales tax has no jurisdiction to issue the notice dated 26-8-1985 and pass the impugned order. It was held that the assessment order had merged with the appellate order and the Deputy Commissioner could not initiate proceedings under S.35 of the K.G.S.T. Act. The Revenue, being aggrieved by the said order passed by the Sales Tax Appellate Tribunal dated 26ib September, 1986, has come up in revision.

(2.) We beard counsel for the Revenue, Mr. N. N Divakaran Pillai, as also counsel for the respondent/assessee. The sole question that arises for consideration is, whether the order passed in revision by the Deputy Commissioner dated 4-10-1985 is valid and proper According to the Appellate Tribunal and the respondent/assessee, the proceedings initiated by the Deputy Commissioner is patently barred. It is stated that the original order of assessment was the subject of an appeal before the Appellate Assistant Commissioner and so the assessment cannot be suo motu revised by the Deputy Commissioner of Sales tax under S.35 of the K. G. S. T. Act. On the other hand, counsel for the Revenue contended that though ordinarily the Deputy Commissioner of Sales tax cannot revise The order of assessment, once it was subject of an appeal before the Appellate Assistant Commissioner under S.35 (2) of the Act, the Deputy Commissioner can exercise the powers of revision under S.35 (2A), on any point which has not been decided in an appeal or revision, before the expiry of a period of. one year from the date of the order passed or within four years of the order of assessment. In this case, the excise doty paid by the respondent/assessee was not reckoned in the original assessment and it escaped assessment. The payment of excise duty was not denied by the respondent/assessee That is a point which has not been decided in the appeal, either. So, it was open to the Deputy Commissioner to initiate suo motu revision proceedings under S.35 (2A) of the K. G. S. T. Act within the period of limitation provided therein. In this case, the revisional proceedings were initiated within the time limit specified in S.35 (2A) of the Act. The excise duty paid by the assessee was not reckoned; nor was it in issue; nor decided in the appeal disposed of by the Appellate Assistant Commissioner on 30-7-1984. So, the order passed by the Deputy Commissioner dated 4-10-1985 is competent and valid, in view of S.35 (2A) of the K. G. S. T. Act. In order to decide the controversy involved in this revision, it will be useful to quote S.35 of the Kerala General Sales Tax Act:

(3.) It is true that the original order of assessment was passed on 28-2-1983 adding 50 per cent to the taxable turnover returned. The order of assessment dated 28-2-1983 was "the subject of an appeal" to the Appellate Assistant Commissioner. But, it is common ground that the amount of excise duty paid by the assessee was never in issue in the said proceedings. It escaped assessment. The said point was not mooted or decided, in the appeal, which was disposed of by the Appellate Assistant Commissioner on 30-7-1984. The mere fact that the order of assessment was "the subject of an appeal" to the Appellate Assistant Commissioner by itself will not preclude the Deputy Commissioner from exercising the powers vested in him under S.35 (2A) of the K. G. S. T. Act, unless the precise point or exact point, on the basis of which the revisional powers are initiated under S.35 (2A) of the Act, was one "decided" in the appeal. This seems to follow from a plain reading of S.35 (2) (b) along with S.35 (2A) of the Act. The exercise of the revisional jurisdiction under S.35 (2A) of the Act will be incompetent only if the precise point, on the basis of which the revisional order is passed, was not only the subject of an appeal but was also decided therein.