The Hon'ble High Court of Andhra Pradesh recently held in Agarwal Industries Limited, Hyderabad Vs The Commissioner of Commercial Taxes, Hyderabad (2013 56 (APSTJ P175) that in the guise of revising the revision order passed u/s 20 (2) of the APGST Act, the Commissioner cannot revise the original assessment order beyond the limitation period set-out in Section 20 (3) of the Act, though the revision of the revisional order is within the limitation period.
This is another land mark judgment pronounced by the Hon'ble Andhra Pradesh High Court on tax cases. Facts and background of the case:
The Appellant is a Company and dealers in vegetable oils and it affects sale within and outside the state and consignment sales thro agents. The Enforcement team of AP Commercial Taxes, conducted cross verification and found that transactions claimed as consignment sales, by the dealer, of Rs.1.05 crores for the period 01.04.2000 to 30.06.2000 was fictitious. A provisional assessment order was passed disallowing the entire total turnover of Rs.6.80 crores relating to first quarter of 2000-01. On Appeal, the ADC allowed and directed to re-do the assessment. Fresh Assessment was taken by the A.O and disallowed the exemption of Rs.39.89 crores on alleged interstate consignment sales turnover as some consignees were not existing, as claimed. Further the agents did not file their returns and not paid the taxes to the revenue.
The appellant filed F forms valuing Rs.39.89 crores in support of their claim and the A.O having accepted the said forms finally assessed to a net turnover of Rs.1.77 crores u/s 14 of APGST Act read with Section 9(2) of the CST Act, vide order dt 15.03.03. Thereafter, the Addl Commissioner, Legal issued a notice on 28.10.06 to revise the order to disallow the entire turnover of Rs.39.89 crores and also proposed 10% tax rate for a turnover of Rs.2.35 lacs by exercising the powers u/s 20 (2) of the Act read with section 9(2) of the CST Act as the dealer had not complied with the mandatory requirements contained in Rule 14(3) of the CST (AP) Rules. The appellant in his reply contended that filing of F Forms is sufficient to claim exemption for consignment sales therefore the said rule is not mandatory.
The contentions of the Appellant was accepted by the Addl Commissioner, Legal and dropped the proposal by referring judgments, State of AP Vs, A.P Dairy Development Corporation Ltd., and State of Madras Vs Shree Murugan Flour Mills (142 STC 399), by order dt 28.02.2007. He also confirmed the revised rate for the turnover of Rs.2.35 lacs. The order became final. Thereupon, the respondent issued a SCN dt 11.05.2009 again quoting reference to the investigations of the enforcement team and consignment agents' existence, variations in the F Form value and genuineness of F forms and the notice was issued for a consignment turnover of Rs.24.38 crores levying 10% CST.
The appellants filed objections on 23.06.09 for the proposed second revision inter alia contended that a) Revisional power was already exercised once by the Addl Commissioner and dropped the proposals and therefore the question of revising the assessment again the Commissioner does not arise; and b) There is no power to take up Revisional jurisdiction more than once under Section 20 the APGST Act which is also applicable to CST assessments. Reliances were placed by the appellants, decided and held by A.P High Court in the case of Manepalli Venkata Narayana and Others Vs. State of Andhra Pradesh (10 STC 524) and State of A.P Vs Sri Panduranga Rice Contractors Company. The Appellant also furnished the additional information sought for by the Commissioner in his notice. Upholding his jurisdiction the respondent passed the impugned order dt 13.07.2010 and stated that he did not exercise his revision power earlier and therefore second revision could be done.
Again on a Special appeal against this order, the AP High Court held that - "the very proposal of the respondent dated 11.05.2009 and the consequential order dated 13.07.2010 are wholly without jurisdiction and barred by limitation prescribed under sub section (3) of Section 20 of the GST Act as the respondent clearly intended to re-assess the appellant for the A.Y 2000-01, thereby interfering with the order of assessment dated 15.03.2003 of the Dy Commissioner (CT), Abids while purporting to revise the order dated 28.02.2007 of Addl Commissioner (CT), Legal and the Appeal is allowed".
The Court has observed and discussed the two cases Hyderabad Insulated Wires (P) Ltd., Vs Commissioner of Commercial Taxes, Hyderabad (80 STC99) and Commissioner of Income Tax VS Alagendran Finance Ltd., [2007 (293) ITR 1 SC]. In the first case it was held that the proposal to levy additional tax under Section 5A is beyond the power and jurisdiction of the Commissioner when such levy of Additional tax was not at all proposed by the Dy Commissioner in the revision notice issued to the assessee and the limitation period expired long back.
The Sub section (3) of Section 20 of the APGST Act provides that a revision of an order of assessment can be done under sub sections (1) and (2) of the said section only within a period of four years from the date on which the order was served on to the dealer. In the present case, the order of assessment by Dy.Commissioner was passed on 15.03.2003 and the Commissioner had issued the SCN for revision under sub-section (1) of Section 20 on 11.05.2009 i.e after six years from the date of the order of assessment and hence hit by period of limitation.
In the present case, the Commissioner of Commercial Taxes is not justified in exercising his revisional powers when it is already used once by the Addl Commissioner, CT and hence the question of law is well answered.
The author can be reached at firstname.lastname@example.org