TaxTMI 
TaxTMI 
1994 (9) TMI 340
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....) 12 of 1994 concerns period of assessment from November 4, 1983 to October 23, 1984. By the orders under appeal, assessment orders passed by the Assistant Commissioner of Commercial Taxes, 26th Circle, Bangalore in the case of the appellant for the concerned periods have been revised by the revisional authority and the assessing authority is directed to issue demand notices accordingly. 2.. A few relevant facts leading to these appeals are required to be noted at the outset. The appellant is dealing in iron and steel and is registered under the Act, on the file of the Assistant Commissioner of Commercial Taxes, 26th Circle, Bangalore. For the assessment period November 16, 1982 to November 3, 1983 assessment was completed by the Assistant Commissioner by his order dated August 4, 1986. The said authority also completed the assessment on the same day for the assessment period April 1, 1982 to November 15, 1982 and similarly on the same day he also completed the assessment for the period November 4, 1983 to October 23, 1984. 3.. The Deputy Commissioner of Commercial Taxes (Administration), City Division-I took up the assessment records of the appellant and suo motu initiate....
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....y he had not caused the entry of the goods in Bangalore municipal limits. Thereafter, the third show cause notice was issued to the appellant on July 14, 1993 which was replied on July 21, 1993 by submitting that sufficient correspondence has been entered into and the appellant has already submitted by his earlier reply what he has to say. It is, thereafter that the impugned orders came to be passed by the revisional authority on July 22, 1993. As noted earlier, the dissatisfied assessee is in appeal against that revisional orders under section 16(1) of the Act. 5.. We have heard Sri Kamath, learned counsel for the appellant and Sri Ramesh, learned standing counsel for the department, respondent. As common question of fact and law arises in these appeals, all these appeals were heard together by consent of learned counsel for the parties and are hereby disposed of by this common judgment. 6.. Sri Kamath learned counsel for the appellant, raised the following contentions in support of the appeals. 1.. The Joint Commissioner of Commercial Taxes (Administration), Bangalore who has passed the impugned order on July 22, 1993 in these three cases has no jurisdiction to exerci....
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....in so far as dealers coming under their respective jurisdiction were concerned. That so far as the appellant is concerned he was a dealer within the jurisdiction corresponding to that of the Joint Commissioner of Commercial Taxes (Administration) of City Division-1 of Bangalore and hence as per serial No. 1 of the table found in the said notification w.e.f. April 22, 1993 only Additional Commissioner of Commercial Taxes, City Zone-1 could proceed with the said proceedings under section 15(1) of the Act. Consequently, the Joint Commissioner of Commercial Taxes (Administration) City Division-1 was not competent to pass the impugned order even on this score. 8.. On the other hand Sri Ramesh, learned Standing Counsel for the respondent revenue authority submitted that the impugned order passed by the Joint Commissioner is perfectly within his jurisdiction. In this connection Mr. Ramesh firstly submitted that under section 15(1) the Legislature has in terms authorised the Commissioner to specially empower any other officer to exercise powers under section 15(1), that such empowered officer would function on his own and independently of the officers expressly mentioned by th....
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....ses Act, 1899. Mr. Ramesh, therefore, contends that on the date when the impugned order was passed the notification dated July 31, 1981 would squarely apply to empower the Joint Commissioner of Commercial Taxes (Administration) to pass such order as the earlier term "the Deputy Commissioner of Commercial Taxes (Administration)" employed therein will have to be read as Joint Commissioner of Commercial Taxes (Administration), in the light of the amending Act 5 of 1993) which had already come into effect from February 4, 1993. 10.. In this connection Mr. Ramesh invited our attention to the judgments of the Supreme Court to which we will make reference hereinafter. Referring to the notification dated January 19, 1993/ April 27, 1993 issued by the State of Karnataka under section 12(1) Mr. Ramesh submitted that the said notification has no effect on the present proceedings as all that it tried to do was to bifurcate the jurisdiction of erstwhile Additional Commissioner of Bangalore into jurisdictions of five Additional Commissioners of five divisions and reallocate all pending proceedings initiated under section 15(1) by statutory authorities other than the Commissioner under sect....
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....f orders prejudicial to revenue: (1) The Commissioner or the Joint Commissioner or any other officer specially empowered by the Commissioner in this behalf may call for and examine the record of any proceedings under this Act, and if he considers that any order passed therein by any officer is erroneous in so far as it is prejudicial to the interest of revenue, he may, if necessary, stay the operation of such order for such period as he deems necessary and after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment." 13.. By the time the third show cause notice dated July 14, 1993 was issued and also by the time the impugned order was passed on July 22, 1993 section 15(1) stood as under: "15(1) Revision by the Commissioner or the Additional Commissioner of orders prejudicial to revenue.-(1) The Commissioner or the Additional Commissioner or any other officer specially empowered by the Commissioner in this behalf may call fo....
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....cise powers of revision against the orders of his subordinates. In exercise of this power, the then Commissioner of Commercial Taxes, Karnataka Sri N.P. Singh had issued Notification dated July 31, 1981 empowering and authorising the Deputy Commissioners of Commercial Taxes (Administration) to exercise the powers conferred by sub-section (1) of section 15 in regard to any orders passed by any subordinate officer, within their respective jurisdiction under the Karnataka Sales Tax Act, 1957. 16.. The first contention of Sri Kamath, learned counsel for the appellant against the said notification is that even if this notification has continued to operate all throughout, it would not be effective and valid inasmuch as section 15(1) of the Act under which it is issued, requires the Commissioner to specially empower the concerned officer mentioned in the notification. That the notification on the other hand, authorises the Deputy Commissioners of Commercial Taxes (Administration) in general and they are empowered to exercise revisional powers under sub-section (1) of section 15 in regard to any order passed by any officer subordinate to them within their respective jurisdiction unde....
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....t Class, specially empowered by the State Government to exercise the jurisdiction under the Act. The notification in question which was issued under section 2(c) of the Act by the State Government empowered all the judicial Magistrates of First Class in the State by virtue of their office to try the offences under the Act in the area of their respective jurisdiction. The question before the Supreme Court was whether such a general notification earmarking the class of officers for discharging their functions under the Act as Magistrates in the area of their respective jurisdictions could be treated to be effecting special empowerment or general empowerment. The accused contended that it was a general empowerment and not a special one. Rejecting that contention, the Supreme Court speaking through Sakaria, J., made the following pertinent observations: "The term 'specially' in the expression 'specially empowered' in section 2(c) of the Immoral Traffic in Women and Girls Act must be taken to have reference to special purpose of the empowerment. The word qualifies the word 'empowered' and has been used in an attributive sense to highlight the special nature of the power. It does not ....
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....each of them to perform those functions within their respective jurisdictions. That such a notification would mean that the Government thereby appoints each of the Special Land Acquisition Officers to perform the functions of the Collectors within their respective areas. Having referred to the aforesaid decision of Abdul Hussain's case AIR 1968 SC 432, in paragraph 26 it was observed that "On parity of reasoning, it can be said that the empowerment of all the Magistrates of the First Class, in the State under one notification by virtue of their office, to try offences under the Act in the area of their respective jurisdiction, must be held to be 'special' and not 'general' ". Mr. Kamath learned counsel for the appellant in connection with the aforesaid Supreme Court decision submitted that in that case office of the Magistrates was already contemplated by the Act, while in the present case, when notification of 1981 was issued, there was no post of Deputy Commissioner as contemplated by the Act and that the said term came to be inserted in the Act for the first time in 1985. In our view, this distinction is without any real difference. As per section 15(1) of the Act, Commiss....
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.... (Administration) cannot be said to be specially empowered officer by the Commissioner as per the notification dated July 31, 1981. So far as this alternative contention of Sri Kamath is concerned, Sri Ramesh, learned counsel appearing for the Revenue heavily relied upon two decisions of the Supreme Court AIR 1951 SC 318 (State of Bombay v. F.N. Balsara) and [1957] 8 STC 358 (SC); AIR 1957 SC 790 (Kailash Nath v. State of Uttar Pradesh) for submitting that the notification which is a statutory notification issued under section 15(1) has to be read with the parent Act namely, the Entry Tax Act. That in the parent Act itself, the amendment was brought about by Karnataka Act 5 of 1993 with effect from February 4, 1993 and by section 2, sub-section (3) thereof, it was laid down by the Legislature that in Karnataka Tax on Entry of Goods Act, 1979 for the expressions "Assistant Commissioner", "Deputy Commissioner" and "Joint Commissioner" wherever they occur, the expressions "Deputy Commissioner", "Joint Commissioner" and "Additional Commissioner" shall respectively be substituted. Therefore, according to Sri Ramesh, learned counsel for the Revenue, the word "Deputy Commissioner" shou....
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....unless there is anything repugnant in the subject or context, have the same respective meanings as in the enactment conferring the power." Under section 15(1) of the Act, the power is conferred on the Commissioner to issue notification. That power is exercised by him in 1981. While exercising that power, he has specially conferred revisional powers under section 15(1) on Deputy Commissioner of Commercial Taxes (Administration). The expression Deputy Commissioner of Commercial Taxes, must, therefore get the same meaning as in the enactment namely, the Entry Tax Act conferring that power. Under the Entry Tax Act, which conferred this power, by virtue of its amendment by Act 5 of 1993 as per section 2, subsection (3) of the Karnataka Act it has clearly been laid down that wherever the expression Deputy Commissioner is found in the Act, the said words should be read as Joint Commissioner. If in the parent Act the expression Deputy Commissioner is to be read as Joint Commissioner then by virtue of section 20 of the General Clauses Act even in the notification the expression Deputy Commissioner will have to be read as the expression Joint Commissioner. We do not find anything repugnan....
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....he scope and ambit of the notification dated January 19, 1993/April 22, 1993. It will be profitable to reproduce the said notification in extenso at this stage. "Sl. No. 43 NOTIFICATION No. FD 336 CST 92(II), Bangalore, dated 19th January, 1993 SO 399, Karnataka Gazette, dated 22nd April, 1993. In exercise of the powers conferred by sub-section (1) of section 12 of the Karnataka Tax on Entry of Goods Act, 1979 (Karnataka Act 27 of 1979) and in supersession of all previous notifications/order issued in this regard the Government of Karnataka hereby empowers the officers specified in column 2 of the table below with head quarters specified in column 3 to exercise the powers under section 15 of the said Act in respect of the dealers falling in the areas specified in column 4 thereof: Sl. No. Designation of officers Head Quarters Areas 1. Additional Commissioner of Commercial Taxes, City Zone-I. Bangalore Jurisdiction corresponding to the Joint Commissioners of Commercial Taxes (Administration) of City Divisions I and III of Bangalore 2. Additional Commissioner of Commercial Taxes, City Zone- Bangalore Jurisdiction corresponding to th....
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....To take any other view would result in enabling the State Government in exercise of its power under section 12(1) to repeal or to denude of its efficacy the third category of officers contemplated by section 15(1). Keeping in view this statutory scheme therefore, the scope and ambit of the notification dated January 19, 1993/April 22, 1993 has to be appreciated. 24.. It was not in dispute between the parties that prior to the issuance of that notification originally there was one Joint Commissioner of Commercial Taxes functioning at Bangalore for the entire State and that Joint Commissioner became Additional Commissioner of Commercial Taxes, Bangalore by virtue of section 2(3) of the Karnataka Amendment Act 5 of 1993. That happened with effect from February 4, 1993. Thus by the time notification dated January 19, 1993 got gazetted on April 22, 1993 there was already in existence the post of one Additional Commissioner of Commercial Taxes, Bangalore who was to exercise jurisdiction under section 15 for the entire State. All that the notification of April 22, 1993 sought to do was to bifurcate the jurisdiction of the sole Additional Commissioner of Commercial Taxes, Bangalore into....
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....tion 15(1) in exercise of his own powers vested in him under section 15(1) by Legislature itself. The designation of the said officer got changed into that of Joint Commissioner by section 2(3) of the Karnataka Act 5 of 1993 with effect from February 4, 1993. After February 4, 1993, therefore, the erstwhile Joint Commissioner who became Additional Commissioner of Commercial Taxes might have also initiated proceedings under section 15(1). Any such proceedings initiated prior to April 22, 1993 either by Joint Commissioner when such officer was functioning or by Additional Commissioner on account of redesignation of such officer by Karnataka Act 5 of 1993 were to stand transferred to the respective Zonal Additional Commissioners of Commercial Taxes and for achieving that result, the proceedings initiated by Commissioner himself under section 15(1) were not to be touched. If that is so, the proceedings initiated and pending before the delegate of the Commissioner would also naturally not get touched and could not be covered by the sweep of the penultimate paragraph of the said notification. The delegate of Commissioner exercises delegated powers of Commissioner himself under section 15....
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.... the said notification dated April 22, 1993 and could be taken to their logical end by the Joint Commissioner of Commercial Taxes, who was a specially empowered officer as per the notification of 1981 which held the field till he passed the impugned order dated July 22, 1993. 24-A. In this connection, one submission of Mr. Kamath, learned counsel for the appellant is required to be noted. He submitted that section 12(1) confers the prerogative to the State to distribute the work of any officer of Commercial Taxes Department. That as per section 12(3) if there are more than one officer, so earmarked the Commissioner can distribute or allocate the work amongst them. This according to Sri Kamath, clearly indicated that once notification is issued by the State Government under section 12(1), it would override the earlier delegation of the powers by the Commissioner under third part of section 15(1), to any other officer. It is not possible to agree with this contention for the obvious reason that as discussed earlier, section 12(1) notification has a limited scope and it cannot cut across the statutory power conferred on the Commissioner by the Legislature itself under section....
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.... 1,71,759.00 1,717.59 Tax paid Rs. Balance Rs. 27. So for as T.A. (ET) 11 of 1994 is concerned it refers to assessment year April 1, 1982 to November 15, 1982. In the return filed for the aforesaid period the assessee returned the gross value of the turnover at Rs. 54,88,693.08. He claimed exemption on the turnover amounting to Rs. 53,27,860.31, the taxable turnover according to the return was Rs. 1,60,832.77. The assessing authority accepted the said return but added to the taxable turnover freight charges of Rs. 1,608.33 and computed the taxable turnover and exempted turnover as under: Taxable purchases as per return Rs. 1,60,832.77 Add: Freight Rs. 1,608.33 Rs.1,62,441. 10 Exemption turnover allowed 28. In T.A. (ET) 12 of 1994 the period of assessment is from Rs. 53,27,860.31 Gross turnover Rs. 54,90,301.41 Nature of goods Value determined Rate of tax Tax levied Iron and steel 1,62,441,10 2% Rs. 3,249.00 Tax paid Rs. Balance Rs. November 4, 1983 to Octo....
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....ds when they came to the hands of the assessee. In order to justify this stand and to get the orders of the assessing authority confirmed by the revisional authority, the aforesaid type of evidence was required to be produced by the assessee before the revisional authority. That is precisely for the purpose that in reply to first show cause notices on July 22, 1989, the assessee's chartered accountant by reply dated July 31, 1989 requested two months time to produce form No. 30 to show that the local dealers from whom he had purchased these goods during the relevant years were tax suffered goods and the selling dealers had paid the tax. This stand obviously implied the assertion that the assessee had himself not caused the entry of goods in the local area but the local dealers from whom he had purchased these goods had caused the entry of these goods within the local limits and therefore such local dealers, sellers of these goods, were liable to pay entry tax and they had actually paid the same and therefore this turnover has got exempted from the further payment of tax in the hands of assessee/purchaser. It is curious to note that not only two months time elapsed but at last 2&fra....
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....alls outside Corporation limits. Under the circumstances it is requested, to consider the explanation furnished to allow the exemption of entry tax as per your inter pretation." 31.. In paragraph 4 of the reply the assessee clearly admits that if the material is despatched from godowns situated outside Corporation limits the liability of paying entry tax is to be borne by the person who has taken delivery of the goods and then in para 5 of the reply it is stated that, in assessee's case the godown was situated at Whitefield Road, Bangalore and the goods have been delivered from his registered godown at Whitefield which falls outside Corporation limits. This somersault in the stand shows that by March 11, 1992 the assessee came forward with entirely a new case that he had purchased goods from outside the local limits and also had stored them in his godown falling outside corporation limits and directly sold them to others and those other persons, if they had effected entry of the goods in Corporation limits, would be liable to pay entry tax. It is to be kept in view that such a case was never pleaded before the assessing authority or even in the reply. First show cause ....
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....urden of proof is on the assessee, to prove that any transaction of his by which he had taken delivery of goods was not liable to entry tax. Section 28A as it operated at the time of first and second notices read as under: "28A. Burden of proof.-(1) For purposes of assessment of tax under this Act, the burden of proving that goods brought into or caused to be brought into a local area or taken delivery of by a dealer, is not liable to tax under this Act shall be on such dealer. (2) Where a dealer furnishes, issues or produces bill of sale, voucher, the declaration, certificate or any other document which he knows or has reason to believe to be false with a view to support or make any claim that he or any other dealer is not liable to be taxed under this Act, the assessing authority shall on detecting such furnishing or issue or production, direct the dealer furnishing, issuing or producing such a bill of sale, voucher, the declaration, the certificate or other documents to pay as penalty-" At the time of impugned judgment section 28A(1) also reflected the same legislative intent, section 28A(1) in the amended form read as under: "Section 28A(1). For purposes of assessme....
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....to local area, if he was somebody other than the assessee. This was observed presumably keeping in view section 28A of the Act as aforesaid. Accordingly revisional authority revised the assessment orders and computed the taxable turnover and tax payable thereof for relevant years as under. In T.A. (ET) 10 of 1994 for the period of assessment from November 16, 1982 to November 3, 1983 the revisional authority computed the taxable turnover and the tax as under: Turnover Rate of tax Tax 1. Purchases within the State but outside the Corporation limits from 16.11.1982 to 31.3.1983. 53,41,350 2% 1,06,827.00 Page No: 474 2. Purchase within the State but outside the Corporation limits from 1.4.1983 to 3.1.1983. 30,83,259 1% 30,832.00 3. Local purchases not supported by evidences for having suffered tax at earlier stages In T.A. (ET) 11 of 1994 for the period from April 1, 1982 to 7,22,694 1% 7,226.00 Total: 91,47,303 1,44,885.00 November 15, 1982, revisional authority computer the taxable turnover and the tax as under: Turnover Rate of tax Tax 1. Inter-State [purchases of iron and steel 1,60,834.00 2% 3,216.68 2. Purchase within the State but outside the Corporation limits 46,40,....
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....the appellant was purchased from local dealers and when show cause notice was issued under section 15(1) for showing cause why the same should not be revised, it would be quite legitimate for a party or his representative to urge that given sometime he would produce form No. 30 from the concerned dealers who had sold the goods to the appellant. It is also to be noted that it is not even alleged that uptill now at any time any complaint about professional misconduct of the said chartered accountant is lodged by the assessee before the concerned authorities. For all these reasons this contention cannot be accepted. Mr. Kamath, then filed an application I.A. III in these appeals to permit him to read additional evidence by submitting certain sale bills under which he had sold iron goods to out-State purchasers. This application cannot be granted for obvious reasons. Firstly, nowhere before the assessing authority, the assessee had contended that the disputed turnover represented goods which were purchased by him outside the municipal limits and were stored by him in his own godown outside the municipal limits and then from there he had directly sold them to outstation purchasers me....