TaxTMI 
TaxTMI 
1977 (10) TMI 45
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....s. According to the STO the purchase of the Ship had escaped the levy of purchase tax under s. 13 at the time of assessment. He therefore initiated action under s. 35 of the Bombay ST Act, 1959. Accordingly the STO issued notice in Form 28 and served the same on the assessee on 5th March, 1974. The assessee was called on 18th March, 1974. This notice was found to be defective. The STO, therefore, issued a fresh notice which was served on the dealer on 23rd April, 1974, calling him on 13th May, 1974. The assessee replied to this notice and challenged the jurisdiction of the STO, who issued the said notice on various counts. The STO however did not accept any of the submissions and he levied purchase tax to the tune of Rs. 16,200. 2. Being aggrieved the assessee preferred appeal before the Asstt. CST. The order was challenged on various grounds. One of the main grounds being that in the facts and circumstances of the case the STO was not competent to pass the orders under s. 35 especially as the case was not covered by s. 35(1)(b). The Asstt. Commissioner did not accept these submissions. He confirmed the order and dismissed the appeal. It is against this order that the present se....
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....re the order of the STO is bad. Shri Sheth further submitted that the Dy. Commissioner has passed the order on merits after admission of the appeal and even though in the result the Asstt. Commissioner's order was set aside the operative order would still be the order of the Dy. Commissioner. We find the submission of Shri Sheth well founded. It cannot be disputed that on the day on which the STO initiated the proceedings and passed the impugned orders, the order of the Asstt. Commissioner under s. 57 was in full force. (ii) The second limb of the reply of Shri Nadkarni was that the ratio of the Tribunal's decision in the case of Ramtirth Yogashram will not apply because the case of Ramtirth Yogashram dealt with the turnover which had escaped the assessment whereas in the assessee's case the revision order passed by the Asstt. Commissioner was in respect of set off. Shri Nadkarni further submitted that s. 35 was amended with retrospective effect to incorporate the words "any draw-backs, set-off or refund had been wrongly granted" and that this amendment was made with retrospective effect, According to Shri Nadkarni the revised order dealt with set-off whereas what was now taxed ....
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.... not entitled to get. We, therefore, hold that in the facts and circumstances of the case the STO was not competent to pass the impugned order. He should have submitted a report to the Asstt. Commissioner, who had revised his order. 5. The next submission of Shri Sheth was that the full disclosure regarding the purchase of Budh Jayanti was made before the STO at the time of assessment. In this connection he submitted that the turnover of sales of this Budh Jayanti to the tune of Rs. 1,91,051 was taxed by the STO. That the Budh Jayanti was purchased for breaking from Jayanti Shipping Company was a matter well within the knowledge of the STO at the time he passed the order under s.33 on 9th May, 1969. The STO did not levy the purchase tax on the ship presumably because he was under the impression that breaking of ship does not amount to manufacture or that the ship was purchased by the assessee in the course of import. In this connection Shri Sheth invited our attention to the balance sheet as on 30th June, 1966, filed before the STO at the assessment stage. In the balance-sheet the purchase of Budh Jayanti appears on the right-hand side, the value has been shown at Rs. 12, 83,490....
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....ore us the assessee did not disclose the transactions evidenced by the drafts which the ITO discovered. After this discovery the ITO had in his possession all the primary facts, and it was for him to make necessary enquiries and draw proper inference as to whether the amounts invested in the purchase of the drafts could be treated as part of the total income of the assessee during the relevant year. This the ITO did not do. It was plainly a case of oversight, and it cannot be said that the income chargeable to tax for the relevant asst. yr. had escaped assessment by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts. The ITO had all the material facts before him when he made the original assessment. He cannot now take recourse to s. 147(a) to remedy the error resulting from his own oversight." In our opinion the ratio of the Supreme Court decision applies with equal force to the facts of the present case. The STO had all the material facts before him when he made the original assessment and he therefore cannot now take recourse to s. 35(1)(b) to remedy the error resulting from his own oversight. 6. In support of his su....