1966 (9) TMI 121 - HC - VAT and Sales Tax

Court Upholds Revenue Board's Discretionary Power, Rejects Procedural Claims

The court dismissed the appeals, upholding the Board of Revenue's discretionary power under Section 20. The appellant's claims of procedural failures in ... - Issues Involved:1. Legality of the Board of Revenue's rejection of revisions under Section 20 of the Andhra Pradesh General Sales Tax Act.2. Whether the Board of Revenue's orders are vitiated by a lack of reasonable opportunity, failure to consider contentions, and failure to assign reasons.3. Legality and validity of the tax assessment on turnover.Issue-wise Detailed Analysis:1. Legality of the Board of Revenue's Rejection of Revisions:The primary issue was whether the Board of Revenue's rejection of revisions under Section 20 of the Andhra Pradesh General Sales Tax Act was illegal and constituted a failure to exercise jurisdiction. The appellant argued that Section 20 conferred a power coupled with a duty and was designed for the benefit of the public. Thus, the Board's summary rejection without reasons indicated a failure to exercise jurisdiction. The court examined Section 20, which allows the Board to 'suo motu call for and examine the record of any order passed or proceeding recorded by any authority, officer or person subordinate to it' for legality or propriety. The court noted that the power to initiate proceedings is vested in the Board and is not a right conferred upon the assessee to compel the Board to act. The court referenced a decision in East Asiatic Company (India) Ltd. v. State of Madras, which highlighted the purpose of suo motu revisions to safeguard both the exchequer and the assessee's interests. However, the court concluded that the power under Section 20 was discretionary and not obligatory, thus rejecting the appellant's claim of a right to compel the Board to act.2. Whether the Board's Orders are Vitiated by Lack of Reasonable Opportunity, Failure to Consider Contentions, and Failure to Assign Reasons:The appellant contended that the Board's orders were vitiated by not providing a reasonable opportunity to present their case, failing to consider their contentions, and not assigning reasons for rejecting the revision petitions. The court referenced a previous decision in Kalluri Bheemalingam, In re, where it was held that the Board's orders must indicate that it applied its mind to the case's aspects and provided reasons for its decisions. However, the court reaffirmed that the Board's power under Section 20 could only be exercised suo motu and not on an application by a party. Consequently, the Board was not obligated to provide a hearing or reasons when rejecting a revision petition initiated by an assessee.3. Legality and Validity of the Tax Assessment on Turnover:The appellant argued that the assessment of tax on turnover was illegal and invalid, as the appellant was not liable to pay tax either as a buyer or as a seller's agent. The appellant highlighted that jaggery was taxable only at the point of the first sale, and the appellant acted merely as a commission agent for agriculturists. The court examined the facts, noting that the appellant mixed jaggery from various growers and sold it as their own, thus assuming responsibility for the goods. The court also considered the Government Order (G.O. Ms. No. 619) which waived tax for agriculturists. However, the court concluded that the appellant's role and the mixing of goods did not exempt them from tax liability. The court held that the appellant was not entitled to a refund of the tax paid, as the assessment was valid under the Act.Conclusion:The court dismissed the appeals, holding that the Board of Revenue's rejection of revisions was within its discretionary power under Section 20, and the appellant did not have a right to compel the Board to act. The Board's orders were not vitiated by the alleged procedural failures, and the tax assessment on turnover was deemed legal and valid. The appeals were dismissed with costs, except for Special Appeal No. 1 of 1963, where no costs were allowed.