1992 (7) TMI 323 - HC - VAT and Sales Tax

Court restores appellate decision on assessment revision under state sales tax law, emphasizing limits on revisional powers.

M Mariappa Nadar & Sons Versus Joint Commissioner II Office of the Commissioner of Commercial Taxes, Madras

M Mariappa Nadar & Sons Versus Joint Commissioner II Office of the Commissioner of Commercial Taxes, Madras - [1999] 116 STC 627 (Mad) Issues:Assessment revision under section 16 of the Tamil Nadu General Sales Tax Act, 1959; Penalty imposition under section 16(2) of the Act; Exercise of suo motu powers of revision under section 34 of the Act by the Joint Commissioner.Analysis:The judgment of the Madras High Court involved the assessment revision under section 16 of the Tamil Nadu General Sales Tax Act, 1959, for the assessment year 1978-79. The assessing officer revised the assessment based on slip Nos. 2, 3, and 4 recovered during an inspection, alleging suppression of sales turnover. The total suppressions were calculated at Rs. 98,186, and additional tax and penalty were imposed. The appellant challenged this before the Appellate Assistant Commissioner, who accepted the explanation provided by the appellant, leading to the setting aside of the reassessment and penalty.Subsequently, the Joint Commissioner invoked suo motu powers of revision under section 34 of the Act. After considering objections and hearing the authorized representative, the Joint Commissioner upheld the assessing officer's assessment, stating that the slips did not relate to business and were not properly explained by the assessee. The appellant appealed against this decision.During the appeal, the appellant argued that the Joint Commissioner's interference with the appellate authority's findings was unwarranted and lacked proper justification. The Court noted that the exercise of suo motu powers by the Joint Commissioner must be carefully justified and not done in a mechanical fashion. Citing previous judgments, the Court emphasized that revisional powers should not be used to disturb findings of fact unless there are just and sufficient reasons to do so.The Court found that the appellate authority had provided convincing reasons to accept the appellant's explanation and had acted as a fact-finding statutory authority. Therefore, the Joint Commissioner had no basis to interfere with the well-considered findings of the appellate authority. Consequently, the Court set aside the Joint Commissioner's order and restored the order of the appellate authority, allowing the appeal.