1972 (7) TMI 96 - HC - VAT and Sales Tax

Court Upholds Deputy Commissioner's Revision Powers; Clarifies Section 16 Limitation; Affirms Central Sales Tax Assessment

The court upheld the Deputy Commissioner's jurisdiction to revise the assessment, emphasizing the independence of his revision powers from the limitations ... - Issues Involved:1. Jurisdiction of the Deputy Commissioner to revise the assessment.2. Applicability of the five-year limitation period under Section 16(1)(b).3. Validity of the assessment of inter-State sales.4. Double taxation under Central and State Sales Tax Acts.Issue-Wise Detailed Analysis:1. Jurisdiction of the Deputy Commissioner to Revise the Assessment:The petitioners argued that the Deputy Commissioner lacked jurisdiction to revise the assessment because the notice for revision was issued after the five-year limitation period. The court held that the power of revision under Section 32 of the Tamil Nadu General Sales Tax Act is independent and separate from the power under Section 16. The court stated, 'the power of revision of the Deputy Commissioner is a separate and independent power which can be exercised whenever he is of the opinion that the original assessing authority has committed any error of law or fact.' Therefore, the Deputy Commissioner was within his rights to revise the assessment.2. Applicability of the Five-Year Limitation Period under Section 16(1)(b):The petitioners contended that the five-year limitation period under Section 16(1)(b) should apply to the Deputy Commissioner's power to revise the assessment. The court clarified that Section 32(2)(c) specifically provides a four-year limitation period for the Deputy Commissioner to pass an order under Section 32(1). The court stated, 'the power of the original authority under section 16 and that of the Deputy Commissioner under section 32 are independent powers and each is controlled only by the respective sections.' Thus, the five-year limitation under Section 16(1)(b) does not apply to the Deputy Commissioner's revision powers under Section 32.3. Validity of the Assessment of Inter-State Sales:The petitioners argued that the inter-State sales of cotton should not be taxed under the Central Sales Tax Act. The court referred to the decision in Mohamed Salam V. Commissioner of Commercial Taxes, which held that 'the inter-State sales attract Central tax by reason of their being so and the point of their charge has been disannexed from the one at which such sales would be chargeable under the local Act, if they were intra-State sales.' Consequently, the court upheld the assessment of inter-State sales of cotton effected after 1st October, 1958, as liable to tax under the Central Sales Tax Act.4. Double Taxation under Central and State Sales Tax Acts:The petitioners contended that some transactions had already been assessed under the Tamil Nadu General Sales Tax Act, leading to double taxation. The court dismissed this argument, stating, 'the Central sales tax is payable irrespective of whether it has suffered tax under the State Act or not.' The court noted that if tax has been levied under the State law, the dealer may be entitled to a refund under Section 15(b) of the Central Sales Tax Act. However, this does not affect the imposition of Central sales tax.Conclusion:The court dismissed the revision petition, affirming the Deputy Commissioner's jurisdiction and the validity of the revised assessment of inter-State sales. The court emphasized the independence of the Deputy Commissioner's revision powers under Section 32 from the limitations of Section 16 and upheld the imposition of Central sales tax irrespective of any State tax already levied. The petitioners' arguments were found to lack substance, and the revision petition was dismissed with costs.