Revisional jurisdiction on later income-tax material and loss of tax was upheld under Kerala sales tax law.

Revisional jurisdiction under the Kerala General Sales Tax Act was held available where the revision rested on later-acquired material from income-tax proceedings and on a point not decided in the earlier appeal. The earlier appeal concerned only the reasonableness of the original turnover estimate on the materials then available, while the revision was based on the assessee's admission of unaccounted sales before the Income-tax Settlement Commission. The text also states that an assessment causing loss of tax is prejudicial to revenue for purposes of section 35(1), because non-interference would permit underassessment and loss to the State.

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Issues: (i) Whether the Deputy Commissioner could invoke revisional jurisdiction under section 35(2)(b) read with section 35(2A) of the Kerala General Sales Tax Act on the basis of subsequent information from income-tax proceedings when the original turnover estimation had already been challenged in appeal. (ii) Whether an assessment resulting in loss of tax is prejudicial to the interest of revenue so as to attract revisional power under section 35(1) of the Kerala General Sales Tax Act.

Issue (i): Whether the Deputy Commissioner could invoke revisional jurisdiction under section 35(2)(b) read with section 35(2A) of the Kerala General Sales Tax Act on the basis of subsequent information from income-tax proceedings when the original turnover estimation had already been challenged in appeal.

Analysis: The limitation in section 35(2)(b) bars revision of matters already made the subject of appeal, but section 35(2A) permits revision on any point not decided in appeal. The original assessment was based on stock variation and doubt about the correctness of accounts, whereas the revisional action was founded on a distinct and later-acquired material, namely the assessee's admission before the Income-tax Settlement Commission that unaccounted sales had been made. The point decided in appeal was the reasonableness of the earlier estimation on the materials then available, not the later information revealing suppressed sales. A revisional authority is not barred merely because the subject broadly relates to turnover if the basis for revision is different from the issue decided in appeal.

Conclusion: The Deputy Commissioner was competent to revise the assessment under section 35(2A), and the objection to jurisdiction failed.

Issue (ii): Whether an assessment resulting in loss of tax is prejudicial to the interest of revenue so as to attract revisional power under section 35(1) of the Kerala General Sales Tax Act.

Analysis: The revisional power under section 35(1) is available where the order is prejudicial to revenue. An assessment that leads to loss of tax is prejudicial because the purpose of revenue is collection of tax due. The Court held that, for this statute, the practical test is whether non-interference would result in loss of tax to the State. Since the assessee had admitted unaccounted sales and additional income in the income-tax settlement proceedings, the original assessment had in fact allowed underassessment of sales tax and was therefore prejudicial to revenue.

Conclusion: The assessment was prejudicial to the interest of revenue and justified revision under section 35(1).

Final Conclusion: The revisional orders were sustained, the assessee's challenge failed, and the State's challenge succeeded, leaving the Deputy Commissioner's revision intact.

Ratio Decidendi: Revisional jurisdiction is not barred where the basis of revision is distinct from the issue decided in appeal, and an assessment causing loss of tax is prejudicial to revenue for purposes of statutory revision.

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