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2011 DIGILAW 38 (KAR)

O. P. Developers v. State of Karnataka

2011-01-07

N.KUMAR, RAVI MALIMATH

body2011
JUDGMENT N. Kumar, J.—This appeal is by the assessee challenging the order passed by the Additional Commissioner of Commercial Tax in his revisional jurisdiction under section 22A(1) of the Karnataka Sales Tax Act, 1957 (for short, hereinafter referred to as, "the Act"). The assessee is engaged in the execution of civil works contract and also undertakes construction of apartments. The assessee filed annual return of turnover in form No. 4 for the assessment year 2003-04, disclosing the total taxable turnover of Rs. 27,73,055 and Rs. 2,94,860, respectively. For the assessment years 2004-05, the appellant has not filed annual return of turnover in form No. 4. The authority has passed ex parte assessment orders for both the years resorting to best judgment assessment, as the assessee failed to produce books of account before them inspite of call notice and proposition notice, also without note of a report which discloses suppression of contract rules, penalty was also levied. Aggrieved by these ex parte orders and penalty order, the assessee preferred two appeals before the Joint Commissioner of Commercial Taxes (Appeals). 2. The Joint Commissioner by his order dated September 3, 2003 partly allowed both the appeals by modifying the assessment orders and directed the parties to issue revised demand notice accordingly for each assessment year under appeal. Aggrieved by that portion of the order of the appellate authority which did not upheld the claim of the assessee, he has preferred an appeal before the Karnataka Appellate Tribunal and it is pending consideration. During the pendency of the said appeal, the Additional Commissioner of Commercial Taxes I, Bangalore in exercise of his revisional power under section 22A(1) of the Act reviewed that portion of the order of the appellate authority which had granted the benefit to the assessee. After hearing the assessee he had set aside the order and directed the assessing authority to re-do the assessment. It is that order which is challenged by the assessee in this appeal. 3. The learned counsel for the appellant assailing the impugned order contends, when once the assessee has preferred a statutory second appeal before the Karnataka Appellate Tribunal, in respect of the very same subject-matter of the appeal, the Additional Commissioner of Commercial Taxes has no jurisdiction to revise the said order under section 22A(1) of the Act. 3. The learned counsel for the appellant assailing the impugned order contends, when once the assessee has preferred a statutory second appeal before the Karnataka Appellate Tribunal, in respect of the very same subject-matter of the appeal, the Additional Commissioner of Commercial Taxes has no jurisdiction to revise the said order under section 22A(1) of the Act. Therefore, he submits that the order passed by the revisional authority is wholly without jurisdiction and is liable to be set aside. 4. If the subject-matter of appeal before the Karnataka Appellate Tribunal is the subject-matter of the revision, the assessee is right. No revisional jurisdiction is to be exercised in respect of the matter which is the subject-matter of appeal. However, there is no prohibition in law for the revisional authority to exercise the revisional jurisdiction in respect of the matter which is not the subject-matter of appeal. Merely because appeal is pending his power is not denuded. 5. It is clear from the material on record that the subject-matter of the appeal before the Karnataka Appellate Tribunal is, that portion of the order of the appellate authority which is against the interest of the assessee. The subject-matter of the revision is that portion of the order which is in favour of the assessee and against the Revenue. In those circumstances, we do not see any substance in the said contention. 6. Further, it was contended that he has issued a direction which run counter and against the right of the assessee. In the event of his succeeding in the appeal, the direction issued by the appellate authority which would prevail, otherwise the authority has to consider the case in accordance with law. Even if the matter is remanded, the assessing authority has to consider the claim and counter-claim in accordance with law and pass appropriate orders. In those circumstances, we do not see any merit in this appeal. Accordingly, the appeal is dismissed.