TaxTMI 
TaxTMI 
2020 (3) TMI 997
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....ed food etc., and for the purpose is a registered dealer under the Assam General Sales Tax Act, 1993 (for short, the AGST Act). 3. The assessment orders dated 10.11.2006 were passed by the Superintendent of Taxes, Guwahati Unit-A by which a total of Rs. 2,72,72,199/- was assessed to be tax due from the petitioner. The assessment orders related to a period April, 2006 under the Assam Value Added Tax Act, 2006 (for short, AVAT Act) for Rs. 2,28,424/-, out of which Rs. 52,034/- was paid; for the period April, 2006 under the Assam Luxuries (Hotel and Lodging Houses and Hospitals) Act 1989 (for short, Luxuries Act) for Rs. 3,86,020/-, out of which Rs. 1,03,233/- was paid; for the period from October 2004 to March 2005 under the Luxuries Act for Rs. 35,18,457/-, out of which Rs. 4,00,951/- was paid; for the period May 2005 to 2006 under the AVAT Act for Rs. 23,51,608/-, out of which Rs. 3,59,942/- was paid; for the period from October 2003 to March 2004 under the Luxuries Act for Rs. 34,65,241/-, out of which Rs. 1,76,484/- was paid; for the period from 2003 to 2004 under the Assam General Sales Tax Act, 1993 (for short, AGST Act) for Rs. 23,34,248/-, out of which Rs. 1,34,829/- was pa....
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....)(a) of the AVAT Act. It was further stated in the order of 10.11.2006 that an affidavit dated 22.08.2006 was furnished by the Manager F&A of the petitioner hotel that the income statements based on which the alleged sales were worked out by the department do not belong to them and they are mere estimates collected by their sales man from different hotels for preparing a projected account required for submission to the financial institutions for their loan application for the purpose of development of the hotel. But the Superintendent of Taxes rejected such contention by arriving at its satisfaction that 'it was simply beyond any iota of rational doubt and the exhibits under seizure are full of such characteristics and matching details pertaining to the business of the dealer'. 7. It is taken note of that some of the assessment orders dated 10.11.2006 were in respect of the assessment made under the Luxuries Act. In this respect we take note of the provisions of Sections 5(1) and 5(2) of the Luxuries Act which is extracted below:- "5. Taxing authorities and exercise of powers :- (1) Subject to the provisions of the Act and the rules made thereunder, the authorities competent t....
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....local jurisdiction under the sales tax law, be competent to assess, recover and enforce payment of tax due from any hotelier whose place of business is located within such jurisdiction as if the tax were a tax under the sales tax law and the hotelier a dealer, within the meaning of the sales tax law, carrying on business within such jurisdiction and subject to the provisions of this Act and the rules, notifications and orders made thereunder, the said authorities, for this purpose, may exercise all or any of the powers they have under the sales tax law, and the provisions of the sales tax law, including provisions relating to inspections, assessment, registration of the transferee of a business, imposition of tax liability of a person carrying on business on the transferee of, or successor to, such business transfer of liability of any firm or Hindu undivided family to pay tax in the event of dissolution of such firm or partition of such family, appeals, revisions, references, refunds, rebates, payment of interest compounding of offences and treatment of documents furnished by dealer as confidential, shall mutatis mutandis apply accordingly." From a reading of the provisions of S....
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....at such satisfaction, the appellate authority was of the view that the orders of assessment were not sustainable. 10. The Additional Commissioner, Taxes, Assam in exercise of the power under Section 36(1) of the AGST Act, or under Section 82(1) of the AVAT Act, as the case may be, passed the common order dated 28.10.2015 by which the order dated 29.01.2015 of the appellate authority being the Deputy Commissioner of Taxes (Appeals) was quashed and the assessment orders dated 10.11.2006 of the Assessing Officer were restored. The Additional Commissioner of Taxes in the order of 28.10.2015 was of the view that the appellate authority had gullibly accepted the contention of the petitioner that the occupancy figures of the hotel presented to the police authorities does not match with the sales turnover indicated by the seized documents and therefore are to be not accepted and raised a question as to if the petitioner can suppress the figures of the sales turnover in the returns submitted to the department, they could very well have submitted a matching report to the police authorities. The acceptance of the appellate authority as to how it would be possible to have a turnover of almos....
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....gment refers to the contention of the petitioner that against the order of the Deputy Commissioner of Taxes (Appeals) dated 21.09.2015, the remedy before the department was to file an appeal before the Assam Board of Revenue under Section 33(2)(b) of the AGST Act. The said contention of the petitioner was rejected by the Assam Board of Revenue by taking the view that the appellate provision under Section 32(2)(b) of the AGST Act would be against the order of the Commissioner alone and not against the order of the Deputy Commissioner. 13. Being aggrieved by the judgment dated 30.01.2019 of the Assam Board of Revenue, the revision petitions are being preferred under Section 35(1) of the AGST Act and Section 81(1) of the AVAT Act, respectively. 14. Mr. KN Choudhury, learned senior counsel for the revision petitioner raises the contention that the learned Assam Board of Revenue had erred in arriving at its conclusion that under Section 33(2) (b) of the AGST Act an appeal is maintainable only against an order of the Commissioner of Taxes and not that of the Deputy Commissioner of Taxes (Appeals) and that as Section 33 (2) (b) of the AGST Act provides for an appeal by the Commissione....
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....tions 36 (1) of the AGST Act and 82 (1) of the AVAT Act is circumscribed and in order to enable the Commissioner to exercise the power of suo-moto revision, the two circumstances must exist, i.e. (i) the order is erroneous and (ii) the erroneous order has caused a prejudice to the interest of the revenue. 17. Further reliance has been placed by Mr. KN Choudhury on the pronouncement of the Supreme Court in Malabar Industrial Co. Ltd. -vs- Commissioner of Income Tax, Kerala State reported in (2000) 2 SCC 718 to substantiate his submission as to what would constitute an 'erroneous order' and also 'prejudicial to the interests of the revenue'. 18. Reliance has also been placed on the pronouncement of this Court in Santalal Mehendi Ratta - vs- Commissioner of Taxes & Ors. reported in 2002 (2) GLT 262 to substantiate his submission that an erroneous order cannot be equated with a wrong order as understood in common parlance and an order of assessment passed within the limits of jurisdiction of the assessing authority even if considered wrong by the revisional authority would not attract the exercise of suo-moto revisional power. 19. By relying on the aforesaid two pronouncements, M....
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.... submitted by the petitioner assessee did conform to the occupancy rate of the hotel as submitted to the police authorities and further the petitioner assessee having taken a stand that the information contained in the seized documents pertain to some other hotel, which was obtained for the purpose of formulating a projected turnover to be presented to the financial institutions for availing a loan and therefore could not have been taken into consideration to arrive at the sales turnover of the petitioner. The revisional order of the Additional Commissioner of Taxes of 28.10.2015 leading to the judgment of the learned Assam Board of Revenue dated 30.01.2019 on the other hand proceeded on the premises that in the absence of any further evidence being led by the petitioner assessee, more particularly as to which hotel the information contained in the seized documents related to and there being no materials produced regarding any loan being negotiated with the financial institutions, a mere statement that that information contained in the seized documents related to some other hotel and was obtained for the purpose of projecting a sales turnover for the purpose of availing a loan, wou....
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....d practice of court, but contrary to law, upon mistaken view of law, or upon erroneous application of legal principles". "10. From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an officer acting in accordance with law makes certain assessment and determines the turnover of a dealer, the same cannot be branded as erroneous by the Commissioner simply because according to him the order should have been written more elaborately. This section does not visualise a case of substitution of judgment of the Commissioner for that of the officer, who passed the order, unless the decision of the subordinate officer is held to be erroneous. Cases may be visualised where assessing officer while making an assessment examines the accounts, makes his enquiries, applies his mind to the facts and circumstances of the case and determines the turnover either by accepting the accounts or by making some estimates himself. The Commissioner on perusal of the records may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the turnover at a....
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....led that when exercise of statutory power is dependent upon the existence of certain objective facts, the authority before exercising such power must have materials on records to satisfy it in that regard. If the action of the authority is challenged before the court it would be open to the courts to examine whether the relevant objective factors are available from the records called for and examined by such authority. Our aforesaid conclusion gets full support from a decision of Sabyasachi Mukharji, J. in Russell Properties Pvt. Ltd. v. A. Chowdhury, Addl. Commissioner of Income-tax [1977] 109 ITR 229 (Cal). In our opinion any other view in the matter will amount to giving unbridled and arbitrary power to revising authority to initiate proceedings for revision in every case and start re-examination and fresh enquiries in matters which have already been concluded under the law. As already stated it is quasi-judicial power hedged with limitation and has to be exercised subject to the same and within its scope and ambit. So far as calling for the records and examining the same is concerned, undoubtedly it is an administrative act, but on examination "to consider" or in other words, t....
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....ded that even an incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. 26. From the point of view whether there was any incorrect assumption of facts or incorrect application of law by the appellate authority in respect of the seized documents, we take note of that the appellate authority had rejected the seized documents by accepting the statement of the Manager (F & A) of the petitioner assessee that the information contained therein relates to some other hotel and were obtained for the purpose of making a sales projection of the hotel before a financial institution. No further evidence had been brought in by the petitioner assessee that the information contained in the seized documents were of some other hotel and if yes, as to of which hotel, nor any evidence had been brought in that it was used for the purpose for making a sales projection before any financial institution for obtaining a loan. The appellate authority had taken an assumption that the return submitted by the petitioner assessee conform to the occupancy rate of the hotel submitted to the police authority. We also take note of that the appella....
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....required to exist for the purpose of invoking the suo-moto revisional power under Sections 36 (1) of the AGST Act and 82 (1) of the AVAT Act are present in the instant case and therefore we do not find any infirmity in the exercise of any suo-moto power by the Addl. Commissioner of Taxes in the order 28.10.2015. 30. As regards the other contention of Mr. KN Choudhury, learned senior counsel for the petitioner that a suo-moto power of revision under Section 36(1) of the AGST Act would not be maintainable in view of the provision of an appeal in the Appellate Tribunal by the Commissioner against an order of the appellate authority, said question can be answered from the provisions of Section 33(2)(b) and Section 36 (1) of the AGST Act. 31. In Commissioner of Sales Tax, Orissa & anr. -vs- Halari Store reported in (1997) 7 SCC 715, the Supreme Court in paragraph-10 has held as follows: "10. A perusal of the aforesaid provisions shows that Section 23 of the Act deals with appeals and revision. Sub-section (1) thereof provides that any dealer or person may prefer an appeal against the order of assessment or an order directing payment of interest or an order imposing penalty. Sub-s....
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....the instant case also, under Sections 36(1) of the AGST Act and 82(1) AVAT Act, the same expressions 'any order passed therein by any person' and 'any order passed by any authority subordinate to him' respectively are also provided for. Accordingly, Sections 36(1) of the AGST Act and 82(1) of the AVAT Act being parimateria with Section 23(4)(a) of the Act under consideration before the Supreme Court, the interpretation given by the Supreme Court would also be applicable in respect of Sections 36(1) of the AGST Act and 82(1) of the AVAT Act and the appellate order can be subjected to a suo-moto revision. The Act under consideration before the Supreme Court, Section 23(3)(a) also provided for the State Government to file appeal before the tribunal against the order of the appellate authority. Inspite of the provision of Section 23(3)(a) for an appeal before the tribunal, no interpretation had been given by the Supreme Court that in view of a provision for an appeal by the State Government against the appellate order, a suo-moto revisional power under Section 23(4)(a) would not be available. 35. Further to arrive at an adjudication as to whether the provision for an appeal by the ....
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.... 'order relates to the assessment of turnover or tax payable, is a more broad based expression, which would include any issue or any infirmity in the order relating to the assessment of turnover or the tax payable, which again would also include an order that may be erroneous or prejudicial to the interest of the revenue, and therefore, would be appealable by the Commissioner before the Appellate Tribunal, but again Section 36(1) gives the discretion to the Commissioner to suo-moto revise such order, but subject to it being circumscribed that the order so revised, is erroneous and prejudicial to the interest of the revenue. In other words, if an order is erroneous and prejudicial to the interest of the revenue in respect of any order passed by any person appointed under Section 3(1) of the Act, the Commissioner is provided with the discretion that a suo-moto revision may also be under taken to remedy the error or the prejudice caused to the revenue. The Statue having provided two alternative options to the Commissioner, it would be left to the discretion of the Commissioner to exercise either of the two options and not be limited to exercise only the option of an appeal under Secti....