G BALAIAH SETTY Vs. STATE OF ANDHRA PRADESH
HIGH COURT OF ANDHRA PRADESH
STATE OF ANDHRA PRADESH
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Jeevan Reddy, J. -
(1.) Rule 14-A(8) of the Central Sales Tax (Andhra Pradesh) Rules, 1957, empowers the assessing authority to reopen the assessment within a period of six years from the expiry of the year to which the tax relates, if such escapement has occurred on account of the failure of the dealer to disclose the turnover or any other particulars correctly, and within a period of four years if such escapement has occurred due to any other causes. It would be appropriate to set out sub-rule (8) : "(8) If, for any reason, the whole or any part of the turnover of business of a dealer has escaped assessment to tax or has been under assessed in any year, the assessing authority may after issuing a notice to the dealer and after making such inquiry as he considers necessary determine to the best of his judgment the correct turnover, and assess the tax payable on such turnover - (a) within a period of six years from the expiry of the year to which the tax relates, if any such event has occurred on account of the failure of the dealer to disclose the turnover or any other particulars correctly; (b) within a period of four years from the expiry of the year to which the tax relates, if any such event has occurred due to any other causes."
(2.) The question in this tax revision case is whether in the facts and circumstances of this case the assessee can be said to have been guilty of non-disclosure so as to attract the action under clause (a) of sub-rule (8). The circumstances leading to this tax revision case may briefly be stated : The assessee-petitioner is a dealer in "ghee" which is taxable at the last point of purchase within the State (item 5 of the Second Schedule to the A.P. General Sales Tax Act). The petitioner purchased ghee and sold it to certain nonresident dealers within the State, which means dealers from outside the State. The petitioner says that the goods were delivered at Vijayawada Railway Station and that it is an intra-State sale. In the return filed under the Andhra Pradesh General Sales Tax Act, hereinafter referred to as "the State Act", the petitioner disclosed the sale as an intra-State sale. On the basis of this statement he was held not liable to tax under the State Act. So far as the return under the Central Sales Tax Act, hereinafter called as "the Central Act", is concerned, it is admitted before us that the said transaction was not disclosed. The assessee explains that it was not so disclosed because it was not an inter-State sale, according to him. Be that as it may, the fact remains that on the aforesaid transaction, the assessee neither paid the State Tax nor the Central Tax. The matter was reopened under rule 14-A(8) by the Commercial Tax Officer who by his order dated 19/02/1976, brought to tax a turnover of Rs. 3,95,367. On appeal, the Assistant Commissioner of Commercial Taxes, Guntur, allowed the appeal partly. So far as bill No. 20, the turnover whereof was in a sum of Rs. 53,528 is concerned, with which transaction alone, we are concerned in this T.R.C. - the Assistant Commissioner dismissed the appeal (In respect of certain other bills, he allowed the appeal and in respect of some others the matter was remanded). In so far as the Assistant Commissioner dismissed the appeal, i.e. with respect to bill No. 20, the assessee filed a further appeal to the Sales Tax Appellate Tribunal which was dismissed. Hence this revision.
(3.) The main contention urged by the learned counsel for the petitioner is that there has been no failure on the part of the dealer to disclose the turnover or any other particulars correctly within the meaning of clause (a) of sub-rule (8) to rule 14-A and hence the action of the Commercial Tax Officer in reopening the assessment under the said sub-rule is unsustainable in law. The counsel contended that even though these transactions are not disclosed in the return filed under the Central Act, these transactions were disclosed in the return filed under the State Act and since the assessing authority is identical under both the enactments and also because the returns under both the enactments were considered simultaneously, it must be held that there was a proper disclosure of the relevant primary facts. It is further contended that if the C.T.O. had failed to tax it under the proper Act, the fault lay with him which cannot be sought to be corrected by report to sub-rule (8) of rule 14-A. For answering this contention it is necessary to keep in mind the oft-repeated proposition that the question whether there has been a non-disclosure of material facts and particulars in a given case in essentially a question of fact, to be decided in the facts and circumstances of each case. It is not possible to lay down any hard and fast rules governing all situations. According to the sub-rule, if there is a failure to disclose the turnover or any other particulars relating to assessment correctly, the officer has the power to reopen the same within a period of six years. On this aspect, it is necessary to refer to form C.S.T. VI prescribed by the aforesaid Rules. Clause 1 of the return requires the assessee to state the "gross amount received or receivable by the dealer during the period in respect of sale of goods" which means the total turnover of the dealer for the concerned period. From this he has to deduct (i) sales of goods outside the State through commission agents, (ii) sales of goods outside the State otherwise than through commission agents, (iii) sales of goods in the course of export outside India (as defined in Section 5 of the Act) and (iv) total value of the goods transferred to other States otherwise than as a result of sale. Clause 2 requires the dealer-assessee to state the turnover on inter-State sales and sales within the State and to deduct therefrom the turnover on sales within the State. Clause 3 requires the assessee to state the turnover on inter-State sales and deduct the turnover on inter-State sales exempt under section 6 being second or subsequent sales. Clause 4 then requires the assessee to state the turnover on inter-State sales liable to tax. Without a doubt - and this circumstance is admitted by both the counsels for the petitioner and the department - this form requires the assessee not only to mention the inter-State sales but also to mention the intra-State sales effected by him. The idea obviously is that the dealer must disclose all the sales effected by him, whether he calls them intra-State or inter-State, and it is for the authority to finally decide whether they are inter-State sales or inter-State sales. It is not open to a dealer to refuse or to fail to disclose a transaction on the ground that, according to him, it is an intra-State sale and accordingly irrelevant for the purpose of assessment under the Central Act. He must disclose the transaction and then claim exemption on the ground that it is an intra-State sale. The authority may accept his contention or may not. (The position is not different from that obtaining under the Income-tax Act. Even under the Income-tax Act an assessee is bound to disclose his total income including the income exempt from tax under the provisions of the Act and then deduct the exempted income). What is of relevance for our purpose is that the form, which is prescribed by the Rules, does expressly require the assessee-dealer to disclose not only inter-State sales but also intra-State sales.;
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