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1996 DIGILAW 20 (GAU)

Kamrup Rolling Mills (Pvt) Ltd. v. State of Assam

1996-02-08

J.N.SARMA

body1996
This application under Article 226 of the Constitution of India has been filed against the order dated 23 .5.94 passed by the Commissioner of Taxes Assam, Guwahati 6. This was a suo motu revisional order passed by the Commissioner respect of the petitioner for the periods ending 30.9.85, 31.3.86, 30.9.86, 31.3,87, 30.9.87 and 3 1.3 .88 under the Assam General Sales Tax Act, 1993. The . order is at Annexure XXV to the writ application which is quoted below : "Order Dated Dispur, the 23.5.94. The dealer failed to comply to our show cause notice No.CTF.33/94/(2) EA/8 dated 15.3.94 nor did it show any reason for it. As contemplated in the said notice, I therefore quash appellate order passed by the Assistant Commissioner of Taxes (Appeals), Guwahati relating to period ending 30.9.85, 31.3.86, 30.9.86, 3 1.3.87, 30.9.87 and 31.3.88 in respect of me dealer and restore original assessment orders as passed by the Superintendent of Taxes, Guwahati Unit C for periods mentioned above under section 36 (1) of the Assam General Sales Tax Act, 1993. Sd/- HR Keot, Commissioner of Taxes, Assam Dispur, Guwahati 6" 2. I have heard Sri GK Joshi, learned Advocate for the petitioners and Dr. BP Todi, learned Advocate for the respondents. No affidavit-in-opposition has been filed, but Dr. Todi has produced before me the records of the case. 2A. The brief facts are as follows : The petitioner No. 1 is a private limited company incorporated under the Companies Act, 1956 which is registered at Guwahati. The petitioner company is carrying on the business of manufacture and sale of MS Rounds, Steel & Iron Angles, Steel & Iron Plates etc. It is stated that there are scheme for giving certain benefits to the company i.e. 1982 Scheme and 1 982 Incentive Scheme framed by the Govt. of Assam. Earlier the petitioner company was assessed by the Superintendent of Taxes, Guwahati Unit C under IT the Assam Finance (Sales Tax) Act, 1 956. That was for the periods as mentioned above. Against that order of assessment seven appeals were filed before the Assistant Commissioner of Taxes (Appeals) at Guwahati. of Assam. Earlier the petitioner company was assessed by the Superintendent of Taxes, Guwahati Unit C under IT the Assam Finance (Sales Tax) Act, 1 956. That was for the periods as mentioned above. Against that order of assessment seven appeals were filed before the Assistant Commissioner of Taxes (Appeals) at Guwahati. The appellate authority came to the following findings : "Therefore, in view of the above discussion, I have no doubt that the appellant is an eligible industrial unit to get exemption from payment of local taxes on the sale of goods manufactured in his industrial unit as per the Package Incentive Scheme of 1982. Hence, in terms of Govt. notification No.FTX-28/77/PM 1/40, the appellant is not liable to pay taxes under the AF (ST) Act, 1956 upto period ending 31.12.87. Since the E/C does not cover the period from 1.1.88 to 31.3.88, he is liable to pay taxes due as per law on his sales during the said period. Therefore, I hereby set aside the assessments made by the learned Superintendent of Taxes from period ending 30.9,85 to 31.3.88 with the direction to reasons as the appellant allowing full exemption from prevent of taxes upto 31.12.87 in terms of the Eligibility Certificate No.US/EC/83 after due verification. The exemption is applicable only on the goods produced in his industrial unit and sold and not for other purpose. But mis exemption is not applicable on his such sales during the period from 1.1.88 to 30.3.88. The ST should assessed him to tax for this period after observing all formalities." Thereafter under old Act i.e. in exercise of the power under section 20 of the Asssam Finance (Sales Tax) Act, 1956 the Commissioner issued a notice for suo motu revision. The notice was issued by the Deputy Commissioner of Taxes, Assam at Guwahati. That is Annexure XXI which is quoted below : "Please refer to the above mentioned letter to which you did not respond in connection with scrutiny of appellate order dated 72.90. The matter had been referred to M/s Udoyog Sahayak, Assam Industrial Development Corporation Ltd, RG Baruah Road, Guwahati 24 on matters of eligibility certificate with effect from 1.1.88 M/s Udyag Sahayak expresses inability to trace out documents submitted by you on the basis of which eligibility certificate was granted from 1.1.83 whereas as per assessment records commencement of production was from 1 .2.82. You are, therefore requested to produce the details of documents submitted to the Udyog Sahayak, as regards commencement of production for scrutiny under section 20 of the Assam Finance (Sales Tax) Act on 27. 1 1 .90 to avoid disposal of the case exparte." A reply was submitted vide Annexure XXII, but the copy of the eligibility certificate was not produced by the petitioner stating therein that the taxing authority may contact the Udyog Sahayak for any enquiry regarding issue of eligibility certificate. As a matter of fact it appears from the tenure of the letter that the petitioner took a defiant stand to the notice issued by the authority. On 25th September, 1992 the taxing authority wrote to the petitioner as follows vide Annexure XXIII which is quoted below : "You claimed production of goods from 1.1.83 as per eligibility certificate granted by the Industrial Department concerned even though your production was prior to 1.1.83 as per our records. On further enquiry from us, the Industry Department expressed inability to trace out records/documents submitted by you on me basis of which me eligibility certificate was granted. Your industry was set up with completion of all the effective steps much earlier to 15.10.82. You are therefore not entitled to tax concession. The appellate order vide KG.FT-13/89/15/1091 dated 7.2.90 is found to be erroneous and prejudicial to the interest of revenue. You are, therefore given the final opportunity of being heard under section 20 of the Assam Finance (Sales Tax) Acton 21 .10.92 at 11 AM in the office chamber of the undersigned." In the mentime the earlier Act of 1956 was repealled and the Assam General Sales fax Act, 1993 was enforced from 1.7.93. In the notice Annexure XXIV issued on 25th March, 1994 it is stated by the authority that the power to re view the order is being exercised under section 36 (1) of the Assam General Sales Tax Act, 1993. Thereafter the petitioner did not submit any reply to the notice and accordingly the impugned order Anriexyre XXV quoted above was passed. 3. Against the order dated 23.5.94 and appeal was filed before the Assam Board of Revenue being case No. 12 STA of 1994 and the appeal was admitted and the stay was granted. Thereafter the petitioner did not submit any reply to the notice and accordingly the impugned order Anriexyre XXV quoted above was passed. 3. Against the order dated 23.5.94 and appeal was filed before the Assam Board of Revenue being case No. 12 STA of 1994 and the appeal was admitted and the stay was granted. But in the meantime, the Commissioner of Taxes made submission before the Board through his counsel that under the Act of 1993 which came into force the appeal is not maintainable and accordingly by order dated 15.12.94 the memo of appeal was returned to the appellant to seek relief from the appropriate forum and thereafter this writ application has been filed. 4. Sri Joshi makes the following submissions : (i) that the order dated 23.5.94 passed under section 36 (1) of the Assam General Sales Tax, 1993 restoring the original assessment is arbitrary, illegal and without jurisdiction and the same has been passed in violation of the provisions contained in the explanation to section 36(1) itself. (ii) that no reason has been given in the order and such cryptic order cannot be said to be a quasi judicial order. 5. Dr. Todi appearing for the respondents submits that the authority may not have the power under section 36(1) of the Act of 1993, but section 74 (3) (a) of the Act, 1993 gave the power to the Commissioner to exercise the power of revision. The contention of Dr. Todi is that revisional proceeding was pending before the Commissioner on the appointed day before the Commissioner and as such he could exercise the power. Before we go to decide the controversy let us have a look on the old and the new section. Section 20 in the old Act of 1956 provides the power of revision by the Commissioner. Section 20 (1) provides inter alia as follows : "20. Before we go to decide the controversy let us have a look on the old and the new section. Section 20 in the old Act of 1956 provides the power of revision by the Commissioner. Section 20 (1) provides inter alia as follows : "20. (1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by any person appointed under section 4 to assist him, is erroneous in so far as it is prejudicial to the interest of the revenue, he may, after giving the dealer an opportunity of being heard and after making or causing to be made such enquiry as he deems necessary, pass such orders thereon as the circumstances of the case justify, including an order enhancing the assessment and directing a fresh assessment." Section 20 (4) is quoted below : "20. (4) The Commissioner shall not revise any order under this section in the following cases : (a) where an appeal against the order lies under section 19 or 20 A but has not been made and the time within which such appeal may be made has not expired, or in the case of an appeal to the Board, the dealer has not waived his right of appeal; (b) where the order is pending on appeal under section 19; or (c) where the order has been made the subject of an appeal to the Board." Section 36 (1) of the new Act with the proviso and the explanation are quoted below: "The Commissioner may call for and examine the records of any proceeding under this Act and if he considers that any order passed therein by any person appointed under sub-section (1) of section 3 to assist him is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the dealer or the person to whom the order relates an opportunity of being heard and after making or causing to be made such enquiry as he deems necessary, pass such order as the circumstances of the case justify, including an order enhancing or modifying the assessment of tax or penalty or cancelling such order and directing that a fresh order should be made : Provided that no order under this sub-section shall be made after the expiry of eight years from the end of the financial year in which the order sought to be revised was made. The provisions of this sub-section shall apply, notwithstanding that the order sought to be revised has been made the subject of any proceeding by way of appeal, in respect of matters not actually considered and decided in such proceeding." Mr. Joshi makes the submission that now the Assistant Commissioner of Taxes (Appeals) is not the officer appointed under sub-section (1) of section 3 to assist the Commissioner for the collection of revenue. But at the same time he fairly concedes that under the Act of 1956 the Assistant Commissioner of Taxes (Appeals) was an officer to assist the Commissioner for the collection of revenue. But at the same time he fairly concedes that under the Act of 1956 the Assistant Commissioner of Taxes (Appeals) was an officer to assist the Commissioner for the collection of revenue. But his whole thrust is that the matter has been considered and decided by the appellate authority and that cannot be reopened by the Commissioner in exercise of his suo motu power of revision because if that power is given to the Commissioner the appellate order itself shall be nugatory and shall be non est in the eye of law. That cannot be accepted as the interpretation of section. On the other hand, Dr. Todi points out and submits that this proceeding shall be governed by the old Act. The power of revision is not available only when an appeal is pending under section 19 (old Act). It is submitted that the appeal has been disposed of and as such this power can be exercised. Further, earlier the Assistant Commissioner of Taxes (Appeals) was an officer appointed to assist the Commissioner in the collection of revenue. So, the Commissioner can exercise the power of revision suo motu. In support of the contention Sri Joshi relies on the following decision : 167 ITR 671 (Commissioner of Income Tax vs. P. Muncherji and Company) wherein the Bombay High Court pointed out that once an appeal is preferred and the decision is given that will not be subject to suo motu revision by the Income Tax Commissioner. Sri Joshi also relies on a Division Bench judgment of this Court reported in (1991) 93 CTR Reports wherein this Court considering a case under the Income Tax Act pointed out that once an order is passed by the appellate authority, the Income Tax Commissioner will not have the power for suo motu revision. But this Court pointed out that in spite of this the Income Tax Commissioner shall have the right to exercise the suo motu power of revision in respect of the matter which are not decided by the appellate authority inasmuch as these matters cannot be deemed to have merged with the order of appellate authority. These two cases cited by Sri Joshi do not help him inasmuch as the scope of Income Tax Act and the General Sales Tax are different. These two cases cited by Sri Joshi do not help him inasmuch as the scope of Income Tax Act and the General Sales Tax are different. In the Act of 1956 the power of suo motu revision was given to the Commissioner in spite of an order passed by the appellate authority. So, it must be deemed that the order passed by the Assistant Commissioner of Taxes (Appeals) can be made a subject of revision by the Commissioner. It is correct that under section 36 (1) now that power cannot be exercised by the Commissioner inasmuch as the appellate authority is not now an officer appointed under this Act to assist the Commissioner for the collection of the revenue. On the other hand, Dr. Todi draws my attention to section 3 (5) of the Act, 1993 and he submits that the Assistant Commissioner of Taxes even now is an officer appointed under sub-section (1) and as such the Commissioner will have that power. It is not necessary to decide it as the proceeding was initiated under the old Act and it is saved by the new Act. 6. In that view of the matter, I find that the Commissioner had jurisdiction to pass the revisional order. But the next question which arises for consideration is that whether this order on fact of it can be sustained. By the impugned order the valuable right of the petitioner is being taken away. The order which is quoted above is absolutely a cryptic one passed without any reason whatsoever and such ail order cannot be sustained in judicial review. After all the Commissioner is exercising the quasi judicial power and in exercise of quasi judicial power, he has to give reason in support of the order, but that was not done in the instant case. Accordingly, on this ground, the order passed by the Commissioner vide Annexure XXV shall stand quashed and the whole matter shall go back to the Commissioner to pass an appropriate reasoned order after giving hearing to the parties. This shall be done within a period of three (3) months, from today. 7. The writ application is disposed of. No costs.