A.Narsimha Rao, Member (D) -
(1.) THESE two appeals have been filed by M/s. Sri Srinivasa Trading Company, Jammalamadugu, against the orders of the Appellate Deputy Commissioner (CT), Kurnool, in appeals filed against the orders of the Commercial Tax Officer No. II, Proddatur. The details are as follows: -
The appellant was on the rolls of the Deputy Commercial Tax Officer, Pulivendula for the year 1986 -87. While filing the A2 returns for the months of April to July, 1986 it appears that the appellant failed to file Form 'E' returns in support of the exemption claimed in A2 returns. The business premises of the appellant were inspected on 14.7.1986 and certain irregularities were noticed. Thereupon the records were transmitted to the Commercial Tax Officer, No. II, Proddatur for enquiry and to make use of the material for assessment. The Commercial Tax Officer No. II, Proddatur made provisional assessment. The appellant filed appeal against the provisional assessment. The appeal was remanded on 23.11.1987 for fresh disposal after conducting detailed enquiry duly affording a reasonable opportunity to the appellant to represent its case. The assessing authority passed final assessment orders on 27.3.1991. He also levied penalty and passed proceedings on the same day. The appellant filed writ petition against these proceedings. Their Lordships of the High Court of Andhra Pradesh in their order dated 14.5.1991 in W.P. No. 6177/91 and 6205/91 set aside the proceedings of the assessing authority on the ground that the orders were passed without issuing requisite notice. Their Lordships observed that the order in the writ petition would not preclude the respondents from taking such proceedings as were open to them in law. Thereupon the assessing authority issued show cause notice for assessment on 2.6.1994 and passed assessment proceedings on 14.6.1994. He issued show cause notice for penalty on the same day (i.e., on 14.6.1994) and passed penalty proceedings on 18.6.1994. The appellant filed appeals against these proceedings on the ground that they were barred by limitation. The appellant also contended that the assessing authority had not followed the directions given by the appellate authority in the appeal orders. The appellate authority did not accept the contention that the proceedings were barred by limitation but stated that they are well within the time limit as provided under Section 24 -A of the APGST Act. In regard to the contention that the assessing authority had not followed the directions given by the appellate authority in the earlier appeal order the appellate authority remanded the matter for conducting detailed enquiry as stated in the earlier appeal order and to pass such orders as the assessing authority deemed fit. Against these appeal orders the present appeals have been filed.
(2.) THE point for consideration is whether the appellate authority was not justified in remanding the matter without accepting the contention that the proceedings were barred by limitation. While disposing of the writ petitions filed against the proceedings their Lordships of the High Court have set aside the proceedings on the ground that they were passed without issuing the requisite notice. They however observed that the order would not preclude the respondents from taking such proceedings as were open to them in law. The assessing authority construed these observations as the order of remand by the High Court. Both the assessing authority and the appellate authority were of the view that the matter was remanded to the assessing authority and therefore the assessing authority would have time to pass orders afresh upto three years from date of the receipt of the order in the writ petitions. The appellant as well as the authorised representative at the time of hearing contended that the order cannot be construed as remand. The State Representative insisted that the observations of the High Court would amount to remand and Section 24 -A would set in.
In the case of the State of Andhra Pradesh vs. Vutukuru Venkaiah, J. Pullaiah and Company, : (1995) 99 STC 44, Notice dated May 10, 1978, was issued to the respondent by the Deputy Commissioner under Section 20(2) of the Andhra Pradesh General Sales Tax Act, 1957, proposing in revision, to withdraw certain exemptions granted to the respondent in the Central Sales Tax assessment for the year 1975 -76 by order dated July, 16, 1977. The respondent filed a writ petition against the notice, but no stay was granted and the petition was ultimately dismissed on December, 23, 1983. On July 10, 1984, the Deputy Commissioner withdrew the exemptions, by a revision order passed in pursuance of a fresh notice. The Tribunal held that the revision was barred by limitation. On a revision petition, their Lordships of the High Court have stated that the order passed by the Deputy Commissioner was not passed to give effect to the order passed under any of the provisions in the APGST Act and therefore Section 24A has no application. As none of the provisions saving limitation is applicable, the order passed by the Deputy Commissioner was clearly barred by limitation.
In the case of Jindal Steel Strips Limited, Secunderabad vs. The State of Andhra Pradesh in T.A. No. 643/93, the appellant questioned the proceedings in a Writ before the A.P. High Court, the show cause notice dated 6.6.1979 and also obtained stay of further proceedings vide order in W.P. M.P. 8093 of 79 in W.P. No. 6028/79, Dated 4.9.1979. The High Court granted interim stay directing the Department not to proceed further pursuant to the show cause notice dated 6.6.1979 for the year 1977 -78. The main writ was disposed of by the High Court on 7.2.1983 quashing the show cause notice in view of the amended notification issued by the Government vide G.O.Ms. No. 2458, which rendered G.O.Ms. No. 88, as amended by G.O.Ms. No. 729, no longer enforceable. Their Lordships further observed that the State was not precluded from taking proceedings pursuant to the amendment made by the Notification in G.O.Ms. No. 2458, Dated 3.6.1980 in accordance with law, after duly giving opportunity to the appellant, if and when such action is taken on the petitioner viz., the appellant. The assessing authority issued the second show cause notice dated 8.9.1984 for reopening the assessment under Section 14(4) of the APGST Act purporting to issue the notice in pursuance of such direction by the A.P. High Court. The re -assessment was completed on 13.12.85, apparently after availing extension of limitation by virtue of the period of stay granted earlier on notice dated 6.6.1979 by the High Court. This Tribunal in its order dated 26.11.1996 has held that the notice dated 8.9.1984 for re -assessment was barred by limitation not being saved by any order of stay from nor being directed by the High Court. The Tribunal held this view based on the judgment of the Apex Court in the case of Rajendranath vs. Commissioner of Income Tax : 120 ITR 14, in which the Apex Court has observed that the expression "direction" in Section 153(3)(ii) of the Income Tax Act must be an express direction necessary for the disposal of the case before the authority or court. It must also be a direction which the authority or court is empowered to give by deciding the case before it.
In the present cases there was no direction by the High Court so as to bring it under Section 24A. The cases would however fall under sub -section (7) of Section 14 of the APGST Act in which case only the period between the date of the proceedings of the assessing authority and the date on which they were set aside would be excluded in computing, the period of four years for purpose of making fresh assessment. In the present cases, even after excluding such period the proceedings were barred by limitation.
In the case of Nabi Oil Mills, Chittoor, vs. The Commercial Tax Officer : (1977) 40 STC 118, the assessee claimed exemption on the sale of groundnuts to others on the ground that he was not last purchaser. The Commercial Tax Officer, however, assessed to tax the entire turnover. The Asst. Commissioner on appeal directed the Commercial Tax Officer to obtain the affidavits of all the purchasing millers to ascertain whether the purchasing millers had paid the tax and to grant relief to the assessee if the purchasing millers had paid the tax. On remand the Commercial Tax Officer without looking to the affidavits filed by the purchasing millers held that the assessee was liable to pay tax. The appeal of the assessee to the appellate authority was dismissed. Their Lordships have held that the remand order of the Asst. Commissioner was binding on the Commercial Tax Officer, and the order of the Commercial Tax Officer passing in contravention of the remand order was illegal. Viewed in the light of the decision of the High Court in the present cases in the second round of appeal the appellate authority is supposed to verify whether the Commercial Tax Officer has followed the directions given by the appellate authority. In the second round of appeal the appellate authority would not have remanded the matter again in order to follow the directions given in the earlier appeal order. On this ground also the appeals would succeed.
In the result, the appeals are allowed and the orders of the lower authorities are set aside.
Dictated to the Stenographer, transcribed by him, pronounced in the Open Court on this the 12th day of May, 1998.;