1978 (2) TMI 190 - HC - VAT and Sales Tax

Court upholds Deputy Commissioner's jurisdiction under A.P.G.S.T. Act, remits case for turnover analysis

The State of AP Versus Lalitha Oil Mills and Others

The court upheld the Deputy Commissioner's exercise of revisional jurisdiction under section 20(2) of the A.P.G.S.T. Act, finding it justified based on ... - Issues Involved:1. Whether the Deputy Commissioner was justified in exercising his revisional jurisdiction under section 20(2) of the A.P.G.S.T. Act.2. Whether the disputed turnover representing the purchase value of groundnut kernel or groundnuts sold to oil-millers within the State by the assessee is liable to tax.Issue-Wise Detailed Analysis:1. Justification of Deputy Commissioner's Revisional Jurisdiction:The primary question was whether the Deputy Commissioner was justified in exercising his revisional jurisdiction under section 20(2) of the Andhra Pradesh General Sales Tax Act (A.P.G.S.T. Act). The assessee argued that the appropriate provision applicable in such cases is section 14(4) of the Act, not section 20(2), and that the Deputy Commissioner should have reopened the assessment under section 14(4-C) instead of revising it under section 20(2). The department contended that the Deputy Commissioner applied the correct law as laid down by the Supreme Court at the time of exercising his revisional power.Section 14(4) and section 20 of the Act were examined. Section 14(4) allows the assessing authority to reassess the correct amount of tax if there is an escape of turnover or under-assessment. Section 20(1) and (2) provide the revisional powers to the Board of Revenue and other prescribed authorities, including the Deputy Commissioner, to revise orders for legality or propriety.The court noted that the Deputy Commissioner was concerned with the legality of the order passed by the Commercial Tax Officer. The Deputy Commissioner applied the law as it stood at the date of exercising his revisional authority, which was based on the Supreme Court's decision in Sri Venkateswara etc. Oil Mill v. State of Andhra Pradesh. The court held that the Deputy Commissioner was justified in exercising his revisional jurisdiction under section 20(2), as the correct law to be applied was the one laid down by the Supreme Court.2. Taxability of Disputed Turnover:The second issue was whether the disputed turnover, representing the purchase value of groundnut kernel or groundnuts sold to oil-millers within the State by the assessee, is liable to tax. The Tribunal had followed the decision in Madar Khan & Co. v. Assistant Commissioner, which exempted the turnover from tax. However, the Supreme Court in Sri Venkateswara etc. Oil Mill v. State of Andhra Pradesh disapproved the view in Madar Khan's case and affirmed the decision in State of Andhra Pradesh v. Lakshmi Oil Mills.The Supreme Court observed that the event attracting tax is the act of the miller purchasing groundnut, not the act of crushing or dealing with it. The court noted that the burden is on the assessees to show that they purchased a part of the turnover for milling and the rest for sale. As the Tribunal did not provide a finding on how much of the turnover was intended for milling and how much for sale, the court remitted the case back to the Tribunal to decide this question. If the Tribunal finds that any part of the turnover was purchased with the intention of resale, the Tribunal will provide relief to that extent.Conclusion:The court set aside the Tribunal's finding that the Deputy Commissioner erred in exercising his jurisdiction under section 20(2) of the Act and remitted the case back to the Tribunal to decide the turnover intended for milling and sale. The revisions were accordingly remitted for fresh disposal in light of the court's decision.