Revisional power and purchase tax: omission by the assessing officer and proportional estimation upheld, with penalty also sustained.

Revision under the Gujarat Sales Tax Act could be used to correct an assessing officer's omission to levy purchase tax where the record showed breach of form 19 and resulting liability. The court also accepted a proportionate basis for taxing 30 per cent of hexine oil purchases because the goods were mixed in a common tank and no reliable evidence showed the exact quantity used for own manufacture. Penalty under section 45(1)(b) could likewise be imposed in suo motu revision where the assessing authority had already issued a penalty notice but failed to decide it, as the penalty jurisdiction had been invoked.

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Issues: (i) Whether the revisional authority could validly levy purchase tax under section 16(1)(a) of the Gujarat Sales Tax Act, 1969, when the assessing officer had omitted to do so; (ii) whether purchase tax was correctly levied at 30 per cent of the purchases of hexine oil made against form 19; (iii) whether penalty under section 45(1)(b) of the Gujarat Sales Tax Act, 1969 could be imposed in suo motu revision where the assessing authority had issued notice for penalty but had not imposed it.

Issue (i): Whether the revisional authority could validly levy purchase tax under section 16(1)(a) of the Gujarat Sales Tax Act, 1969, when the assessing officer had omitted to do so.

Analysis: The revision power under section 67(1)(a) of the Gujarat Sales Tax Act, 1969 was of wide amplitude and empowered the revisional authority to pass such order as was just and proper. Where the record before the assessing officer disclosed breach of the declaration in form 19 and consequent liability to purchase tax, omission by the assessing officer to levy such tax did not bar correction in revision.

Conclusion: The revisional levy of purchase tax was valid and the issue was decided against the assessee.

Issue (ii): Whether purchase tax was correctly levied at 30 per cent of the purchases of hexine oil made against form 19.

Analysis: The hexine oil purchased against form 19 was mixed with other purchases and stored in a common tank, and no satisfactory evidence established what exact quantity was used for the assessee's own manufacture. The lower authorities adopted a proportionate method on the basis that job-work production for third parties accounted for about 30 per cent of total production, and that rough-and-ready estimate was upheld in the absence of contrary proof.

Conclusion: The levy of purchase tax on 30 per cent of the form 19 purchases was upheld and the issue was decided against the assessee.

Issue (iii): Whether penalty under section 45(1)(b) of the Gujarat Sales Tax Act, 1969 could be imposed in suo motu revision where the assessing authority had issued notice for penalty but had not imposed it.

Analysis: Penalty proceedings under section 45(1)(b) are independent of assessment proceedings, but revisional imposition of penalty is permissible only where the original authority had itself invoked penalty jurisdiction and then failed or omitted to pass an order. Since the assessing authority had issued a show-cause notice for penalty, penalty jurisdiction had been initiated, and the omission to impose penalty was revisable.

Conclusion: The revisional imposition of penalty was valid and the issue was decided against the assessee.

Final Conclusion: All the referred questions were answered in favour of the Revenue, and the legal effect of the decision was to uphold both the purchase tax levy and the penalty imposed in revision.

Ratio Decidendi: A revisional authority may correct omission to levy tax from the record, and may impose penalty only where the original authority had already invoked penalty jurisdiction but failed to decide it.

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