TaxTMI 
TaxTMI 
2014 (4) TMI 492
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.... the Assam Board of Revenue (for short hereinafter called the "Board ") in case no 15 STA and 16 STA of 2001 which in turn arise out of the order dated 14.7.2000 passed by the Commissioner of Sales Tax arising out of two assessment order dated 11.8.1999 passed by the Assessing Authority for the assessment year 96-97/97-98. In order to appreciate the issue involved in the case, few relevant facts need mention in brief. The petitioner is a leading biscuits and confectionary items manufacturer in the country. They sell their products by and under the brand name - "Parle" all over the country including in State of Assam. They are registered dealer under the Assam General Sales Tax Act 1993 (for short hereinafter called the Act). The petitioner filed their sales tax returns for the year 96-97 and 97-98 as required under the Act. The Assessing Authority then made an assessment order dated 11.8.1999 under Section 17 (4) of the Act and accordingly determined the gross turnover of 8 % taxable goods at Rs. 3,69,16,030.00 so far as assessment year 96-97 was concerned. Whereas the Assessing Authority determined gross turnover of 8 % taxable goods at Rs. 3,89,3130.00 and 12 % taxable g....
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....s is higher as compared to the such sale price for the N.E. 1 States. It may further be noted that the sale price of our products for the N.E. 2 States is even more than such sale price fixed for sales of the products within Assam. But such sale price for the N.E. 1 States is lower than the sale price of the same goods within Assam. Because of this variation in sale prices in the different States of the N.E. Region, the actual sales proceeds realized by us do not and cannot remain the same as compared to our stock transfer value. That is why a difference has been made out by you by deeming it to be alleged suppression of sales whereas a case of suppression of sales in fact does not exist in the facts and circumstances of the case. 3. As to the fixation of different sales prices of our products in case of Assam, N.E. 1 States and N.E. 2 States, we like to clarify that we have to fix our sale price at a higher value in respect of such States where no sales tax is payable by the dealer of those States. Similarly for those states where sales tax is payable on sale of our products, we have to fix the sale price at lower rate. This entire exercise has to be done in order to provide a ....
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...., as alleged by the Commissioner in his show cause notice within the meaning of Section 36 ibid, Secondly: the show cause notice did not mention any grounds as to how the assessment orders were erroneous and prejudicial to the interest of Revenue, thirdly and most importantly neither the Commissioner and nor the Board took into consideration the detail reply filed by the petitioner and lastly: a change of opinion on any particular issue could not be made basis to invoke the suo motu jurisdiction by the Commissioner for treating the assessment to be erroneous and prejudicial to the interest of Revenue. Learned counsel placed reliance on the decisions reported in [2002] 1 GLR 197, Santalal Mehendi Ratta (HUF) vs. Commissioner of Taxes and Others, [1990] 1 GLR 449, Shri Rajendra Singh & Others vs. The Superintendent of Taxes and Others and [2000] 243 ITR 83 (SC) Malabar Industrial Co. Ltd. vs. Commissioner of Income Tax in support of his contentions. In reply, learned counsel appearing for the Revenue supported the impugned orders and prayed for dismissal of the petition. Having heard the learned counsel for the parties and on perusal of the record of the case, we are incline....
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....s but is prejudicial to the Revenue - recourse cannot be had to Section 263(1) of the Act. 7. There can be no doubt that the provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer; it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. 8. The phrase "prejudicial to the interests of the Revenue" is not an expression of art and is not defined in the Act. Understood in its ordinary meaning it is of wide import and is not confined to loss of tax. The High Court of Calcutta in Dawjee Dadabhoy & Co. v. S.P. Jain & Ano. [1957] 3 ITR 872 (Cal), the High Court of Karnataka in CIT v. T. Narayana Pai [1975] 98 ITR 422 (KAR), the High Court of Bombay in CIT v. Gabriel India Ltd. [1993] 203 ITR 108 (Bom) and the High Court of Gujarat in CIT v. Minalben S. Parikh [1995] 215 ITR 81 (Guj) treated loss of tax as prejudicial to the interests of the Revenue. 9. Mr Abrah....
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....this court too, while interpreting Section 36 of the Act in the case of Shri Rajendra Singh & Others vs. The Superintendent of Taxes and Others (Supra) has held as under: "9. The power of Suo Motu revision under sub-section (1) is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of suo-motu revision under this sub-section, (i) the order is erroneous (ii) by virtue of the order being erroneous prejudice has been caused to the interest of the revenue. It is not sufficient that the order is erroneous. It must be erroneous and also prejudicial to the interest of the revenue. If an order is erroneous but not prejudicial to the revenue, the Commissioner cannot exercise power under this sub-section. Likewise, it is not sufficient to exercise power under Section 20(1) that the order in question is prejudicial to the interest of the revenue. It must be erroneous first and if it is so then it can be revised in so far as it is prejudicial to the interest of the revenue. It has, therefore, to be considered firstly as to when an order can be said....
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....not be enough to vest the Commissioner with the power of suo motu revision because the first requirement, namely, that the order is erroneous, is absent. Similarly if aa order is erroneous but not prejudicial to the interest of the revenue then also the power of suo motu revision cannot be exercised. Any and every erroneous order cannot be subject matter of revision because the second requirement also must be fulfilled. There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed." Applying the aforesaid principles to the facts of this case, we notice that the only grounds on which the Commissioner invoked his suo motu revisional jurisdiction for recalling of the assessment orders was that - firstly: petitioner had shown low profit margin and therefore it seemed unreasonable to him and secondly: the petitioner was alleged to had suppressed sales to the extent of Rs.11,39,132.24 in these two years. With respect, we do not find any basis for these grounds for invoking suo motu powers ....