- (1.) This revision petition challenges the order dated 10.11.2003, passed by the Rajasthan Tax Board, Ajmer, setting aside the order dated 14.12.2001, passed by the Deputy Commissioner (Appeals), Commercial Taxes, Kota upholding the order of assessment dated 22.06.1998, whereunder the assessing authority under Section 12 of the RST 1954 (hereinafter 'the Act of 1954') had levied tax, interest (under Section 11B(f) of the Act) as also penalty (under Section 7AA of the Act) on the respondent-assessee for the assessment years 1991-91 and 1992-93.
(2.) The facts of the case are that the respondent-assessee as a contractor submitted returns for the assessment years 1991-92 and 1992-93 disclosing inter alia its taxable turnover including the profit accrued to it during the two assessment years. The assessing authority proceeding under Section 10 of the Act of 1954 passed assessment orders dated 07.12.1993 (for the year 1991-92) and 29.06.1994 (for the year 1992-93). The assessment orders did not include the amount of profit disclosed by the contractor for both the years in the taxable turnover as the assessing authority was of the view at the relevant time that the profit earned by the contractor was exempted from tax under law. However, following the judgment of the Hon'ble Supreme Court in 88 STC 204, the learned assessing authority issued notices to the respondent-assessee on 05.12.1997 in both the cases under Section 12 of the Act of 1954 for reopening the earlier assessments for both the relevant years and reassessed the contractor to tax on the amount of profit also. Consequential interest was also charged on the amount of the tax assessed for the period for which it having been remained unpaid. Penalty under Section 7AA pf the Act of 1954 was also levied. An appeal against the order of the assessing authority also failed before the Dy. Commissioner.
(3.) The learned Tax Board taking into consideration the facts of the case noted that the case before the assessing authority as also appellate authority determined by their orders dated 22.06.1998 and 14.12.2001 respectively was not one of escaping of assessment, but one of error of judgment by the assessing authority in the first instance. In this view of the matter, relying on the judgment of the Hon'ble Supreme Court in the case of State of Kerala Vs. K. E. Nainan, 1970 26 STC 251, the Tax Board held that the profits of the contractor having been disclosed in the returns filed and the assessing authority having made an error of judgment in the first instance, reopening of the assessment orders passed 07.12.1993 and 29.06.1994 for tax escaping assessment could not have been resorted to by invoking Section 12 of the Act of 1954. It was held that an error of judgment in the assessment made in spite of material disclosed before the assessing authority was rectifiable only by way of a revision before the Commissioner under Section 15(1) of the Act of 1954 and not as tax escaping assessment under Section 12 of the Act of 1954.;