Escaped turnover versus revisional power: omitted taxable turnover must be dealt with under escaped-assessment provisions, not revision.

Disclosed turnover not considered on merits by the assessing authority is treated as escaped assessment, and must be dealt with under the escaped-turnover provisions rather than by revisional jurisdiction. The Karnataka HC applied the distinction between escaped turnover and erroneous assessment and held that the Deputy Commissioner could not invoke section 21(2) of the Karnataka Sales Tax Act to revise turnover the assessing authority had omitted to tax without applying its mind to it. As the disputed turnover fell within the escaped-assessment field, revision was without jurisdiction and the assessee's challenge succeeded.

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Issues: Whether the Deputy Commissioner could invoke revisional power under section 21(2) of the Karnataka Sales Tax Act in respect of turnover which the assessing authority had not applied its mind to and had omitted to tax.

Analysis: The distinction between escaped turnover and erroneous assessment was treated as controlling. Where the assessing authority had not applied its mind to a part of the turnover, that turnover was held to have escaped assessment, bringing the matter within the scope of reassessment under section 12-A. Revisional power under section 21(2) could not be used to trench upon that field, because the revising authority cannot assume the function reserved to the assessing authority for escaped turnover. The record showed that the disputed turnover had not been considered on merits by the assessing authority.

Conclusion: The Deputy Commissioner had no jurisdiction under section 21(2) to revise the assessment in respect of the disputed turnover, and the challenge by the assessee succeeded.

Ratio Decidendi: Where the assessing authority has not applied its mind to a disclosed turnover, the amount is to be treated as escaped assessment and can be dealt with only under the escaped-turnover provisions, not by revisional jurisdiction.

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