TaxTMI 
TaxTMI 
2000 (4) TMI 802
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....ax, the claim is that sales of bus bodies are only second sales. On that basis, exemption was granted. Subsequently, the Deputy Commercial Tax Officer, Salem Town, North, issued a notice on February 19, 1986 proposing to assess the turnover of buses on the ground that in entry 3 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, buses, chassis and body on a chassis have been enumerated as separate items, as the buses sold by the petitioner on which exemption allowed as second sales is different from the chassis and body built on chassis separately, the sales of buses have to be assessed to tax at 15 per cent single point on a turnover of Rs. 20,87,724.88. After considering the objections, the proposals were confirmed by overruling the objections. 2.. In respect of the assessment year 1984-85, the Deputy Commercial Tax Officer, Salem Town, North, in the original assessment brought the turnover of old buses sold to tax at 15 per cent on a turnover of Rs. 13,36,625 by holding that sales of buses are different from chassis and bus bodies on which tax has been paid by the petitioners and no exemption could be granted merely on the ground that chassis and bus bodies ha....
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....ing belonging to an inferior or lower rank than that of the original assessing authority seeks to exercise powers under sections 16 and 16-A of the Act. The further grievance is that in some such cases when the regular assessing authority of a higher rank allowed exemption of a particular turnover or assessed the turnover at a concessional rate, the very same issue was taken up by an inferior authority merely because he happens to be an officer in the Wing concerned, empowered under the impugned notifications to scrutinise and disallow the very claim allowed earlier by a higher officer of the department. We are not at this stage and in these cases concerned with the extent, scope and purport of the powers under section 16 or 16-A of the Act. It is by now well-settled that subject to the period of limitation specified the powers under sections 16 and 16-A of the Act have been held to extend to the extent of reopening an assessment earlier made, if there is any reason which satisfied the test of objectivity. On a careful consideration of the submission in the light of the governing position of law, we are of the view that there is nothing in the provisions of the Act or the Rules or ....
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....uilt by the Corporation and therefore the bodies had not suffered tax earlier and therefore the bus bodies were taxable at 15 per cent. Similarly in the decision reported in [1993] 91 STC 572 (Kar) in the case of State of Karnataka v. M. Madhvaraj, the body built on the chassis did not suffer tax. Even in the decision of the Special Tribunal in T.C.A. No. 1223 of 1997 dated February 7, 2000, in the case of Kanakasabhapathy and Sons, the bodies built on the chassis did not suffer tax. However, in the present cases both the chassis and bodies built thereon have already suffered tax in Tamil Nadu. In such circumstances, there is no justification to levy tax under entry 3 of the First Schedule to the Act by treating the sale as buses. In fact, no new commercial commodity has emerged apart from buses from bodies built on chassis and in such circumstances, the order of the Appellate Tribunal in confirming the levy of tax on the sale of old buses is not in order. 5.. Mr. R. Mahadevan, the learned Government Advocate, contended that the sales of buses have rightly been assessed to tax. The ratio of the decision of the Special Tribunal in T.C.A. No. 1223 of 1997 dated February 7, 2000 (Kan....
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.... pursue action under sections 16 and 16-A on the same subject-matter after notice has been issued by the officers of Inspection/Enforcement Wing; and (c) that any proceedings already issued in contravention of such declaration of us, shall not be pursued by the authorities." Thus, the principles that flow from the above declarations of the High Court could be stated as follows: "(1) On the basis of detections made, the Enforcement Wing officers can make assessment under section 16 or 16-A of the Act, provided the original assessment for the relevant year has been completed by the assessing officer. However, if the dealer has not filed any return and no assessment has been made, then with reference to detection of records by the Enforcement Wing officers, the assessment to be made on the dealer under section 16 or 16-A of the Act by treating it as escaped assessment could be made by the assessing authority only and not by any officers of the Enforcement Wing. (2) However, where the detection of materials by the Enforcement Wing relates to a turnover considered by the assessee in original assessment and exemption was granted by not levying any tax or assessment made by levying low....
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....84. Section 16(1) of the Act which speaks of escaped turnover reads as follows: "16. Assessment of escaped turnover.-(1)(a) Where, for any reason, the whole or any part of the turnover of business of a dealer has escaped assessment to tax, the assessing authority may, subject to the provisions of sub-section (2), at any time within a period of five years from the expiry of the year to which the tax relates, determine to the best of its judgment the turnover which has escaped assessment and assess the tax payable on such turnover after making such enquiry as it may consider necessary and after giving the dealer a reasonable opportunity to show cause against such assessment. (b) Where, for any reason, the whole or any part of the turnover of business of a dealer has been assessed at a rate lower than the rate at which it is assessable, the assessing authority may, at any time within a period of five years from the expiry of the year to which the tax relates, reassess the tax due after making such enquiry as it may consider necessary and after giving the dealer a reasonable opportunity to show cause against such reassessment." 7.. Thus, according to section 16 of the Act, the assess....
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.... as to why second sales claim of buses has to be revoked. The Kerala High Court in [1993] 90 STC 25 in the case of Deputy Commissioner of Sales Tax v. T.P. Elias has held that a mere change of opinion on the same material will be sufficient to reopen the assessment. In this connection, the Kerala High Court has followed the decision of the Supreme Court in Maharajadhiraj Sir Kameshwar Singh v. State of Bihar [1959] 37 ITR 388, wherein a statute in pari materia was considered by Supreme Court. In this connection, it is also relevant to refer to the decision of the Andhra Pradesh High Court reported in State of Andhra Pradesh v. Ratna Sree Box Makers [1989] 75 STC 82 wherein it was held that the opinion of the audit party cannot be treated as material de hors the assessment record so as to reopen an assessment. It was further held that the reopening of assessment cannot be made on change of opinion and must be based on material de hors, the assessment record. While disposing of the Special Leave Petition No. 10324 of 1991 in regard to this case reported in [1996] 101 STC Frsc 3, the Supreme Court observed as follows: "In view of the fact that the proprietor of the respondent has sin....
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.... by the Madras High Court. However, the Madras High Court clearly held that the bus sold as a single unit is liable to tax at 15 per cent single point. 11.. There is also the judgment of the Karnataka High Court reported in [1993] 91 STC 572 (State of Karnataka v. M. Madhvaraj) and it was observed in the said case: "We are of the view that in the face of the language employed by the Act, there is no scope to apply the above principle. The assessees purchased TPC frames and built bodies on them; used the vehicles for their own purposes. The vehicles sold by the assessees were, all old vehicles. In the very nature of these vehicles, their different parts may not have distinct, usable, independent identities. The theoretical possibility that the vehicle could have been dismantled into (i) 'TPC frame' and (ii) 'the body' before selling them ignores the commercial realities. A purchaser very rarely purchases a vehicle treating it as a federation of two articles; the purchaser purchases the vehicle, as a single, integrated, identifiable article." 12.. In the decision reported in [1995] 98 STC 330, in the case of Tata Engineering and Locomotive Company Ltd. v. State of Maharashtra the....