J. Shyam Sundar Rao, Chairman -
(1.) THIS is an appeal filed against the orders of Appellate Deputy Commissioner (CT), Kurnool in common proceedings in Appeal No. 103/2002 -03, dated 24 -10 -2002. The appellant is M/s Kala Trading Company, Hindupur. It is on the rolls of Commercial Tax Officer, Hindupur. The appellant deals in Tamarindseed and Tamarind Kernel. The Commercial Tax Officer passed final assessment order for the year 1996 -97 under the provisions of CST Act. Again the Commercial Tax Officer passed re -assessment orders for the same assessment year on 2 -2 -2002. Originally, the Commercial Tax Officer granted concessional rate of taxation on the inter -State Export Sales of Tamarind seed Kernels against 'H' forms. But after receiving the audit objection from the Accountant General, Andhra Pradesh, Hyderabad, the Commercial Tax Officer proposed to pass reassessment order withdrawing the concessional rate of taxation since the exporters exported tamarind seed kernel powder. It is observed by the Audit Officers as well as the Commercial Tax Officer that the 'H' form shows that the appellant sold tamarind -seed but not tamarind -kernel and as the exporters sold tamarind kernel powder, the goods tamarind -seed is different from tamarind kernel powder and intended to withdraw the concessional rate of taxation and accordingly issued show cause notice. The appellant filed its objections stating that what was sold by them is tamarind kernel only but not tamarind seed and also produced a certificate issued by the dealer stating that they purchased tamarind kernel only but not tamarind seed. However, the Commercial Tax Officer held that it is an after thought since show cause notice has been issued proposing re -assessment. Accordingly, he withdrew the concessional rate of taxation and levied tax. An appeal had been preferred before the Appellate Deputy Commissioner (CT), Kurnool stating that they sold tamarind kernel only but not tamarind -seed. It is also canvassed that the re -assessment is barred by time as the order of assessment was served on them on 12 -2 -1998 whereas the re -assessment order was served on 2 -8 -2002. It is stated that there is a delay of six months in serving the order. Hence, the re -assessment order purported to have been passed on 2 -2 -2002 was not actually passed on the said date but it was passed beyond the prescribed period of limitation for re -assessment. However, the Appellate Deputy Commissioner dismissed the appeal. Aggrieved by the same, the present appeal has been preferred.
(2.) IN the appeal grounds, it has been contended by the appellant that the re -assessment is barred by time. Reliance has been placed on the decision rendered by Hon'ble Supreme Court in M. Ramakistaih & Co. & Others & Others reported in . So much so, it has been contended in the appeal grounds that the appellant sold tamarind -seed kernel only but by mistake in the 'H' form it was written as tamarind -seed and on the reverse side of 'H' forms, it was specifically stated that the goods that were sold against 'H' form is nothing but tamarind -seed kernel. Certificate issued by the dealer was also produced along with copies of the bills showing that the appellant sold tamarind kernel only. However, the State Representative contended that production of certificate issued by dealer is subsequent thought and that the order passed by the Commercial Tax Officer while making re -assessment is within the time, since the original assessment order was served on 16 -2 -1998 whereas the reassessment order is dated 2 -2 -2002. In view of the contentions raised, now the following points will arise for determination:
1) Whether the re -assessment order passed by the Commercial Tax Officer is barred by time?
2) Whether the re -assessment is bad under law by making the Audit Objections report as new material de hors the record?
3) Whether the appellant sold Tamarind -seed Kernel or Tamarind -seed against 'H' forms?
Point No. (1) & (2): - It has been contended by the learned counsel for the appellant that the original assessment order was passed by the Commercial Tax Officer on 6 -2 -1998 and the same was served on the assessee on 12 -2 -1998, whereas the re -assessment order dated 2 -2 -2002 had been served in the month of August, 2002 with a delay of six months. Reliance had been placed by the learned counsel for the appellant on the judgment of Supreme Court in between State of Andhra Pradesh Vs. M. Ramakistaiah & Company reported in, (1994) 93 STC 406. The relevant portion of the judgment is as follows:
"An assessment order passed in September, 1969 was sought to be revised by the Deputy Commissioner under Section 20(2) of APGST Act, 1957. He passed an order prejudicial to the assessee. The order was said to have been made on January, 1973, but it was served after the expiry of four years from the date of the assessment order, on the assessee on 21 -11 -1973, 10 1/2 months later. There was no explanation by the Deputy Commissioner why the service of the order was so delayed:
Held that, in the absence of any explanation whatsoever, the court must presume that the order was not made on the date it purported to have been made, and that it could have been made after the expiry of the period of four years prescribed for passing such an order in revision. The order was bad".
A reading of the above judgment shows that the Hon'ble Supreme Court observed and opined that the appeal had to be dismissed on the ground urged by the assessee himself. The assessee urged before the Supreme Court that as the assessment order was served after expiry of limitation period with delay and as the delay is not properly explained it is deemed and shall be presumed that the order was passed after the expiry of four years, but was ante -dated. The said contention was upheld by the Supreme Court. Here, the re -assessment order is 2 -2 -2002, whereas it is admittedly served on the assessee on 2 -8 -2002 with a delay of nearly six months from 12 -2 -1998, the date of service of the original assessment order. Hence, it is to be upheld that the reassessment order is passed subsequent to the expiry of re -assessment time.
(3.) APART from it, when re -assessment order has to be passed, it must be made if new material came to the notice of the assessing authority. If it is found that some turnover had been escaped then only re -assessment can be made. Section 14(4) of APGST Act deals with the powers of the assessing authority for making re -assessment, it runs as follows:
4) In any of the following events, namely, where the whole or any part of the turnover of a business of a dealer has escaped assessment to tax, or has been under -assessed or assessed at a rate lower than the correct rate, or where the license fee or registration fee has escaped levy or has been levied at a rate lower than the correct rate, the assessing authority may, after issuing a notice to the dealer, and after making such enquiry as he may consider necessary, by order, setting out the grounds therefor -
(a) determine to the best of his judgment the turnover that has escaped assessment and assess the turnover so determined;
(b) assess the correct amount of tax payable on the turnover that has been under -assessed;
(c) assess at the correct rate the turnover that has been assessed at a lower rate;
(cc) assess the correct amount of tax payable, in a case where any deduction or exemption has been wrongly allowed;
(d) levy the license fee after determining to the best of his judgment the turnover on which such fee is payable.
(e) levy the registration fee that has escaped levy.
(f) levy the correct amount of license fee or registration fee in a case where such fee has been levied at a rate lower than the correct rate.;