BALAJI TRADING COMPANY Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) For the assessment year under consideration, assessment order under Rule 41(7) was passed on April 7, 1988, books of accounts were accepted. However, subsequently on receipt of some information regarding purchase against form 3-B, notice under Section 21 of the U.P. Sales Tax Act (hereinafter called "the Act") was served. Order under Section 21 of the Act was passed on September 7, 1989. The assessing authority observed that the transactions were verifiable from the books of accounts. Notice under Section 21 was discharged. Deputy Commissioner (Administration), Sales Tax, Ghaziabad, however, issued notice dated January 16, 1992 under Section 10-B for revision of the order dated September 7, 1989 passed by the assessing authority on the ground that certain purchases against form III-B were made from Star Paper Mills Ltd., Saharanpur, which were not recorded by the dealer in the books of accounts or declared in the returns whereas purchases from Shivam International Traders, Saharanpur, were disclosed. The dealer furnished his explanation to the show cause. The Deputy Commissioner, however, levied tax of Rs. 3,15,000 on escaped turnover of Rs. 50 lacs and further directed that the assessee was liable to pay interest at the rate of 2 per cent from August 1, 1984. Aggrieved by the order of the Deputy Commissioner, the dealer filed second appeal. The Tribunal partly allowed the appeal and by setting aside the order the Tribunal remanded the matter for rehearing by the Deputy Commissioner after observation and directions made in the body of the judgment.

(2.) Aggrieved by the order of the Tribunal dated December 22, 1993, the dealer has filed the present revision. The sole point canvassed by Sri Bharatji Agrawal, learned Senior Counsel for the revisionist in support of the revision is that the Deputy Commissioner had no jurisdiction to initiate proceedings under Section 10-B and hence, the order of remand is bad. The crux of his submission is that the assessing authority, by order dated September 7, 1989 held that there was no adverse material against the dealer and, therefore, the notice was discharged and original order of assessment dated April 7, 1988 was allowed to stand. Submissions of Sri Agrawal are that once the notice was discharged there was no order under Section 21 and it is order under Rule 41(7) which was sought to be revised by the learned Deputy Commissioner. In the alternative he relying upon a decision of this Court in Commissioner of Sales Tax, U.P., Lucknow v. Angan Lal Fakir Chand, Arhati 1996 UPTC 1087 argues that power of revision is not relatable to an order under Section 21 where the assessing authority merely discharges the notice on a finding that it is not a case of escaped assessment. Sri B.K. Pandey, learned Standing Counsel has however, submitted that the language of Section 10-B does not admit of such an interpretation. He submits that the observations made by the Court in para 10 in the case of Commissioner of Sales Tax v, Angan Lal Fakir Chand 1996 UPTC 1087 that order under Section 21 was not revisable under Section 10-B of the Act were in the light of the facts and circumstances of that case. He further submits that at the time of assessment, the information of furnishing of 8 form III-B by the revisionist was on record which could not be considered by the assessing authority and, therefore, notice under Section 21 was issued. It is further submitted that the order passed by the assessing authority was without consideration of the material on record as it did not speak of the relevant material against the assessee, the explanation furnished by the assessee and what sort of verification was made by the assessing authority.

(3.) Section 10-B{1) of the Act provides that "the Commissioner or such other officer not below the rank of Deputy Commissioner, as may be authorised in this behalf by the State Government by notification may call for and examine the record relating to any order (other than an order mentioned in Section 10-A) passed by any officer subordinate to him, for the purpose of satisfying himself as to the legality or propriety of such order and may pass such order with respect thereto as he thinks fit". It is evident from the bare reading of Sub-section (1) of Section 10-B that the officer authorised to revise the order under Section 10-B has power to call for and examine the record relating to any order passed by a subordinate officer and on satisfaction as to the legality or propriety of such order, the revising authority is empowered to pass any order as he thinks fit. The provision of Section 10-B(1) cannot be interpreted to mean to exclude from the scope of the powers of the revising Commissioner order passed by the assessing authority under Section 21. It is true that in the case of Commissioner of Sales Tax v. Angan Lal Fakir Chand 1996 UPTC 1087, this Court had observed in para 10 of the judgment as follows :