(1.) THE short question that arises in this tax revision case, filed by the State, is whether the revisional order made by the Deputy Commissioner of Commercial Taxes is time-barred ?
The material facts may briefly be stated : The assessee-firm is a dealer in rice. During the course of inter-State trade, the dealer sold rice from the State of Andhra Pradesh. The turnover of those sales, during the assessment year 1963-64, amounted to Rs. 6,29,707. 85. The Special Commercial Tax Officer (Evasions), under section 9 of the Central Sales Tax Act (hereinafter referred to as the "c. S. T. Act"), made the assessment against the dealer for the assessment year 1963-64, on 15th March, 1965, on a turnover of Rs. 6,36,092. 85 including the value of gunny bags of Rs. 6,385 and calculated the tax thereon at 2 per cent.
(2.) AGGRIEVED by the assessment so made, the assessee-dealer filed an appeal before the Assistant Commissioner of Commercial Taxes. Two contentions were raised by the dealer before the Assistant Commissioner. The first contention raised by the dealer was that the rice, that was sold by it, was obtained from paddy which met tax at the rate of 3 paise per rupee under the Andhra Pradesh General Sales Tax Act (hereinafter referred to as the "a. P. G. S. T. Act") and hence the turnover of sales of rice under item 66 (b) of the First Schedule to the A. P. G. S. T. Act, read with section 8 (2a) of the C. S. T. Act, was taxable at the rate of 1 paisa per rupee, and the Commercial Tax Officer erred in taxing it at the rate of 2 paise per rupee. The second contention was that the sum of Rs. 6,385 represented the value of the gunny bags in which the rice was sold, and no separate price was charged for the gunnies and, hence, Rs. 6,385 should not have been included in the taxable turnover.
By his order dated 17th September, 1965, the Assistant Commissioner of Commercial Taxes agreed with the legal contention raised by the dealer that if it had effected purchases of paddy and paid tax under the A. P. G. S. T. Act at 3 paise per rupee, converted the paddy into rice and sold the rice in the course of inter-State trade or commerce, such sales of rice should be taxed at the rate of one paisa per rupee. Since, however, the dealer had not raised that contention before the assessing officer and had, for the first time, raised it before him, the Assistant Commissioner of Commercial Taxes set aside the levy of tax on the turnover of Rs. 6,29,707. 85 and remitted it back to the assessing officer with a direction to verify the dealer's contention and, if the facts, as contended by the dealer, were found correct, to tax the above turnover at the rate of one paisa per rupee. Regarding the second contention, the Assistant Commissioner held that the inclusion of the value of the gunnies of Rs. 6,385 in the taxable turnover and also the levy of tax on such turnover at 2 per cent was justified, in view of the decision of the Kerala High Court in Srinivasa Pai v. Sales Tax Appellate Tribunal ( 12 S. T. C. 80 ). The Assistant Commissioner thus partly allowed the appeal with the above direction.
(3.) WHEN it went back to him, the assessing officer, after serving notice on the dealer, verified the accounts of the dealer afresh and found, as a fact, that the purchases of paddy suffered tax at 3 paise per rupee under the A. P. G. S. T. Act and that paddy was converted into rice and sold. Such turnover, during the period 1st November, 1963, to 31st March, 1964, worked out to Rs. 6,29,707. 85. Since the entire turnover was covered by C forms and the Assistant Commissioner had directed him to tax the entire turnover at 1 per cent the assessing officer, by his order dated 12th December, 1967, assessed the turnover of Rs. 6,29,707. 85 at one paisa per rupee and the turnover of Rs. 6,385 at 2 paise per rupee. Under the powers vested in him under section 20 (2) of the A. P. G. S. T. ACT, the Deputy Commissioner of Commercial Taxes called for the assessment record suo motu and examined it for the purpose of satisfying himself as to the legality and the propriety of the order passed by the Assistant Commissioner of Commercial Taxes dated 17th September, 1965. The correct rate of tax, according to the Deputy Commissioner of Commercial Taxes, on inter-State sales of such rice, and with reference to section 5 and section 5-A of the A. P. G. S. T. Act and section 8 (2a) of the C. S. T. Act, was 1 1/2 per cent The Deputy Commissioner, therefore, held that the Assistant Commissioner had erred in directing the Special Commercial Tax Officer to levy tax on the turnover of Rs. 6,29,707. 85 at one paisa per rupee. After service of notice on the dealer, the Deputy Commissioner of Commercial Taxes, by his order dated 12th September, 1969, modified the Assistant Commissioner's order, holding thus :
". . . . . . . . As the matter stands, the Assistant Commissioner (C. T.), Kakinada, failed to adopt the correct rate of tax and erred in directing the Special Commercial Tax Officer (Evasions), Kakinada, to levy tax at 1 per cent only on the above turnover. . . . . . Thus the impropriety and illegality that set into his order has to be set right. . . . . . . . I, therefore, pass order confirming the assessment of a turnover of Rs. 6,29,707. 85 to tax at the extra 1/4 per cent under the C. S. T. Act for the year 1964-65 duly modifying the appellate order. The Commercial Tax Officer, Ramachandrapuram, shall give effect to this order. . . . . . . . " ;