RAJ TRADING COMPANY Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) These two tax revision cases are filed by the same assessee and the questions raised in the tax revision cases are also identical. They are, therefore, disposed of by this common judgment. T.R.C. No. 202 of 1989 is directed against the order of the Sales Tax Appellate Tribunal dated 19/07/1989 in T.A. No. 688 of 1985. T.R.C. No. 205 of 1989 is directed against the order of the Sales Tax Appellate Tribunal dated 19/07/1989 in T.A. No. 487 of 1986.

(2.) Mr. Murthy, learned counsel for the petitioners, raised two contentions, viz., (i) the proceeding was initiated for reopening the assessment under section 14-B of the Andhra Pradesh General Sales Tax Act, 1957 (for short "the Act") and as that section was introduced in 1985, the reassessment proceedings and the consequential penalty proceedings are wholly illegal; and (ii) even if the assessment is taken under section 14(4) of the Act, then there was no new material for the Deputy Commissioner to reopen the case and for making reassessment of the alleged escaped turnover.

(3.) To appreciate the contentions advanced by the learned counsel it would be necessary to refer to the facts giving rise to these tax revision cases. The assessee is a trader in wines. The transactions relate to the turnovers of beer for the assessment years 1980-81 and 1981-82. During these assessment years, what the assessee did was that he sold the beer bottles to a sister concern at a low price and repurchased the same from it at a higher price and sold them in the market. Thus it showed the first sale at low price to reduce the turnover and as the second sale was not taxable it showed the actual price for the turnover of the second sale. This scheme of the petitioner was noticed by the Deputy Commissioner who issued notice under section 14(4) of the Act for reopening the assessment. He accordingly made the reassessment and initiated penalty proceedings.