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2015 DIGILAW 501 (AP)

State of A. P. v. Hajimiyan Saheb & Company

2015-07-21

CHALLA KODANDA RAM, G.CHANDRAIAH

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Judgment Challa Kodanda Ram, J. 1. Inasmuch as the question of fact and law and the parties in these two Tax Revision Cases are one and the same, they are taken up together for disposal by this Common Order. 2. While T.R.C. No. 89 of 2002 relating to the assessment year 1991-1992 arises from the order dated 02.11.2001 in T.A. No. 1480 of 1999, T.R.C. No. 148 of 2002 relating to the assessment year 1992-1993 arises out of the order in T.A. No. 1481 of 1999 passed by the Andhra Pradesh Sales Tax 3. Appellate Tribunal, Hyderabad (for brevity the APSTAT). In both the cases, the following three common questions of law are raised for adjudication by this Court. "i) Whether the revisional orders of the Deputy Commissioner(CT), Warangal are valid or not? ii) Whether the Hon'ble High Courts judgment in the case of M/s. Deccan Leathers Ltd. (12 APSTJ 149) is also applicable to this case? iii) Whether the STAT is justified in allowing the appeal by setting aside the revisional orders of the Deputy Commissioner (CT), Warangal?" 4. The facts are not in dispute. In both the cases, the respondent-company, who is the assessee on the rolls of the Commercial Tax Officer, Beet Bazaar, Warangal, deals in Hides and Skins falling in Entry 9 of III Schedule of the Andhra Pradesh General Sales Tax Act, 1957 (for short the A.P.G.S.T. Act). In the year 1991-92, the dealer sold tanned skins by way of export to the customers outside the State of Andhra Pradesh and the dealer was assessed under the provisions of the Central Sales Tax as well as the A.P.G.S.T. Act. In the assessments made under the provisions of the A.P.G.S.T. Act, the dealer was granted exemption with respect to the entire turnover on the ground that it had exported the goods outside the State. For the assessment year 1991-92, a sum of Rs. 1,97,644/- and for the assessment year 1992-93 a sum of Rs. 3,14,605/- were granted for refund under Rule-27-A of the A.P. General Sales Tax Rules (for short the Rules). For the assessment year 1991-92, assessment was completed on 20.02.1994 and for the assessment year 1992-93 assessment was completed on 13.07.1994. The Deputy Commissioner, in exercise of the power conferred under Section 20 of the A.P.G.S.T. Act, issued notices dated 15.07.1999 proposing to revise orders of the assessing officer. For the assessment year 1991-92, assessment was completed on 20.02.1994 and for the assessment year 1992-93 assessment was completed on 13.07.1994. The Deputy Commissioner, in exercise of the power conferred under Section 20 of the A.P.G.S.T. Act, issued notices dated 15.07.1999 proposing to revise orders of the assessing officer. The dealer filed replies on 24.07.1999, and the Deputy Commissioner, after considering the contentions of the dealer so far as the proposal to revise the assessment is concerned, dropped the proceedings, however passed orders holding that the dealer was granted refund under Rule 27-A of the Rules erroneously, as such, directed the same sum to be recovered. The dealer filed an appeal before the A.P.S.T.A.T. and the Tribunal, after considering the respective contentions and following the judgment of this Court in M/s. Deccan Leathers Ltd. allowed the appeal rendering the following findings: "i) The assessee is entitled to refund of the tax paid on the purchase of value of un-tanned raw hides and skins under the A.P.G.S.T. Act. ii) The show cause notice issued by the Deputy Commissioner is beyond limitation and thus the revisional order passed on 31.07.1999 is barred by limitation. iii) The Tribunal also took into consideration the Government Memo No. 12746/CT-II(2)/2001-4, dated 04.10.2001 typed as 01.10.2001 in the order wherein a decision was taken by the Government not to apply the judgment of the Supreme Court in K.A.K. Anwar and Company v. State of Tamilnadu to the cases decided before 27.11.1997." 5. In addition to the above three questions of law, we propose to frame the following question relating to applicability of the limitation with respect to the orders passed under the provision of Rule 27-A of the Rules, which really falls for consideration in the present case: "Whether in the facts and circumstances of the case, the Tribunal was right in holding that the revisional order passed by the Deputy Commissioner was beyond limitation?" 6. Sri M. Govinda Reddy, learned Special Government Pleader for Commercial Tax (Telangana) has strenuously contended that the order of the Tribunal holding that the proceedings initiated by the Deputy Commissioner and the orders passed thereon are beyond limitation is clearly erroneous inasmuch as the assessment orders were made on 22.06.1994 and 13.07.1994 and the show cause notices for revision were issued on 15.07.1999 and the orders came to be passed on 30.07.1999 and 31.07.1999. The Deputy Commissioner had recorded in his order that the orders relating to assessment year 1991-92 were served on the dealer on 01.08.1995 and the orders relating to the assessment year 1992-93 were served on 08.08.1995 taking 01.08.1995 and 08.08.1995 as the dates of service of notice on the dealer. The exercise of power conferred under the statute to the Deputy Commissioner is within limitation. He has further contended that in view of K.A.K. Anwars case, the Deputy Commissioner while holding that raw hides and skins are different commodities from those of tanned hides and skins, rightly came to the conclusion that the goods sold by the dealer are different from those which had suffered tax and in that view of the matter, the dealer could not have claimed refund as admittedly the dealer had purchased tanned hides and skins. Hence, as the dealers purchase had not suffered tax, he is not eligible to get the refund under Rule 27-A of the Rules, and thereby the order granting refund is erroneous and the refund is recoverable from the dealer. He further submits that in view of the judgment of the Apex Court in K.A.K. Anwars case, the judgment of this Court in Deccan Leathers Ltd. case 12 APSTJ 149 (supra) is no longer a good law. Hence, he prays to set aside the impugned orders. 7. On the other hand, Sri Dwarkanath, learned counsel for the respondent-dealer, submits that the orders dated 22.06.1994 were served on the dealer on 01.08.1994 itself and not on 01.08.1995 as contended by the Department. Likewise, the order dated 13.07.1994 was served on 08.08.1994 and not on 08.08.1995. He further contends that only for the purpose of saving limitation, the Deputy Commissioner had put the year as 1995 and it is incomprehensible for someone to imagine that the orders made in 1994 were served in the year 1995 that too almost after one year. He further submits that a specific ground was raised by the dealer before the Tribunal that even though the Tribunal had not decided on this issue and gave any finding, it allowed the case on other grounds. However, the learned counsel urges that this aspect may be considered. He further submits that a specific ground was raised by the dealer before the Tribunal that even though the Tribunal had not decided on this issue and gave any finding, it allowed the case on other grounds. However, the learned counsel urges that this aspect may be considered. By drawing our attention to the Memo No. 12746/CT-II(2)/2001-4, dated 04.10.2001 issued by the Government of Andhra Pradesh, he would submit that at any rate, the Government had accepted that the law declared by this Court in Deccan Leathers case to be valid and the law declared by the Apex Court in K.A.K. Anwars case (cited supra) shall not be not made applicable to all transactions prior to 27.07.2011 i.e. the date of judgment of the Apex Court in K.A.K. Anwars case. 8. Having considered the rival submissions, we are in agreement with the learned counsel for the respondent for the following reasons: "When we analyze the order of the Deputy Commissioner, two things would emerge: a) The Deputy Commissioner while proposing to revise the order of the assessment, ordered recovery of the refund amount granted in the year 1992 on the ground that refund was granted erroneously. b) So far as the revision of the assessment is concerned, after analysis of the facts, the Deputy Commissioner recorded a finding to the effect that the contention of the dealer is examined and found genuine, hence accepted. Accordingly, further levy of tax on tanned hides and skins under the provisions of the A.P.G.S.T. Act as proposed in the pre-revision notice is hereby dropped. In other words, the Deputy Commissioner had accepted the contention of the dealer that the assessment orders allowing exemption of the sale of the tanned hides and skins by the dealer outside the State is not assessable under the provisions of the A.P.G.S.T. Act and thereby the assessment orders do not require any interference. So far as the refund granted under Rule 27-A of the Rules is concerned, the Deputy Commissioner had given his reasoning to deny the refund on the judgment of the Apex Court in K.A.K. Anwars case holding that the raw hides and skins are different from tanned hides and skins. In the process, the Deputy Commissioner had overlooked the Memo issued by the Government for the purpose of completed transactions prior to the judgment of the Apex Court. In the process, the Deputy Commissioner had overlooked the Memo issued by the Government for the purpose of completed transactions prior to the judgment of the Apex Court. The law declared by this Court in Deccan Leathers case shall be considered valid. In other words, the Government itself had taken a decision not to upset the concluded transactions prior to the date of the judgment of the Apex Court in K.A.K. Anwars case. This aspect of the matter was taken into consideration by the Tribunal in moulding the relief. Hence, we find no error in the order of the Tribunal in appreciation of the legal position." 9. Further, with respect to limitation, the order of refund came to be passed on 24.04.1992 under Rule 27-A of the Rules. 10. Section 20 of the A.P.G.S.T. Act reads as under: "Section 20(1): Section 20(2): Section 20(2-A):.......... Section 20(3): In relation to an order of assessment passed under this Act, the powers conferred by Sub-sections (1) and (2) shall be exercisable only within such period not exceeding four years from the date on which the order was served on the dealer, as may be prescribed; Sections 20(4 to 6): In the present case, there is no dispute that the show cause notices proposing to revise the orders of refund granted in 1992 came to be issued in the year 1999. The very notices are beyond doubt and outside the limitation prescribed under Section 20(3) of the A.P.G.S.T. Act. We are not impressed by the contention put forth by the learned Special Government Pleader for Commercial Tax that Section20(3) applies only to assessment orders and not with regard to the refund orders granted under Rule 27-A of the A.P.G.S.T. Rules. We may notice that the word assessment is not defined under the A.P.G.S.T. Act or under the Rules made thereunder. Further, Section 29(1) empowers the Commissioner to call for and examine the record of any order passed or proceeding recorded by any authority, officer, or person subordinate to it, under the provisions of this Act (emphasis applied). In that view of the matter, the order dated 31.07.1999 passed by the Deputy Commissioner revising the refund order dated 24.04.1992, is barred by limitation, as such, the finding of the Tribunal cannot be found fault with as the same is in conformity with the provisions of the Act." 11. In that view of the matter, the order dated 31.07.1999 passed by the Deputy Commissioner revising the refund order dated 24.04.1992, is barred by limitation, as such, the finding of the Tribunal cannot be found fault with as the same is in conformity with the provisions of the Act." 11. In the light of the above discussion, question Nos. (i), (iii) & (iv newly framed) are answered in the affirmative and against the Revenue and we refrain from answering question No. (ii) in view of the Memo issued by the Government. 12. Accordingly, these Tax Revision Cases are disposed of. No order as to costs. 13. As a sequel to disposal of the Tax Revision Cases, Miscellaneous Petitions, if any pending, shall stand disposed of as infructuous.