M/s. Rajashree Cement, Malkhed, Gulbarga District vs State of Karnataka

V.K. Singhal, J.-The order of the Karnataka Appellate dated 31st October, 1997, have been assailed in this sales tax revision petition. The Tribunal came to the conclusion that because of exercise of revisional power by the Additional Commissioner of Commercial Taxes on 22nd November, 1996, for the assessment year 1991-92, the appeal has become infructuous.

Learned Counsel for the petitioner submits that the matter before the Revising Authority was in respect of the claim of stock transfer for which C-Form was produced. The Revising Authority found that the mandatory provisions of Section 6-A(1) and (2) of the Central Sales Tax Act, have not been taken into consideration and, therefore, the matter was remitted for fresh disposal for that limited purpose.

In the appeal, preferred before the Karnataka Appellate Tribunal, it is submitted that the prayer was to extend the time for furnishing C-Form as the Appellate Authority had permitted furnishing of C-Form till the date of disposal of the appeal. It is submitted that it was beyond the capacity of the appellant to have procured the C-Forms and, therefore, the matter was challenged in appeal before the Tribunal. Since the controversy before the Tribunal was different than the point which was decided by the Revising Authority, it is submitted that this appeal had not become infructuous. The review petition submitted by the appellant have also wrongly been rejected.

Arguments of both the learned Counsels heard.

It appears that, after the order of the Revising Authority, fresh orders have already been framed, with which we are not concerned at this stage. The directions given by the Revising Authority were in respect of the stock transfers. At the time when the original order was passed, a claim of Rs. 1,22,81,78,072/- was made by the assessee claiming it to be the stock transfer. The Assessing Authorities allowed the exemption in respect of stock transfer to the extent of Rs. 99,99,62,773/-. This exemption appears to have been allowed on the basis of F-Form produced by the appellant. There was a search of the business place of the appellant and certain incriminating documents pertaining to Assessment Years 1987-88 to 1991-92 were seized. According to the Intelligence Authorities the suppression was to the extent of Rs. 87,74,576/-. When the original Assessment Order was framed, the report of the Intelligence Authorities was not considered and final decision was not taken. The Revising Authority observed that it would appear that the Assessing Authority did not get the material from Intelligence Authorities for the reasons not known, however nothing prevented the Assessing Authority in following the mandatory provisions of Section 6-A(1) and (2). It was in this context that the matter was remanded to the Assessing Authority. From the order of the Revising Authority, it is evident that the Assessing Authority was required to examine the nature of transaction in respect of Rs. 99,99,62,773/- and Rs. 87,74,576/-. The inter-State sales which was effected by the Assessee were not the subject-matter of the dispute before the Revising Authority.

In second appeal, the dispute was in respect of Rs. 32,71,731/- which was in respect of inter-State sales of cement and was subjected to tax at 15% since C-Forms were not submitted. The First Appellate Authority permitted C-Forms to be submitted which were received up to the date of appeal order and, therefore, in the second appeal it was contended that the C-Forms received subsequently in respect of inter-State sale by the appellant be permitted to be filed before the Assessing Authority. The Tribunal dismissed the appeal as not maintainable in view of the order of the Revising Authority.

We feel that a factual mistake has been committed by the Tribunal in understanding the order of the Revising Authority. The Revising Authority has not set aside the entire assessment order, and it was only in respect of the claim of the assessee for transfer of cement to its branches, for which certain directions were given. The inter-State sales which were subjected to taxes was not the dispute before the Authority and, therefore, the Tribunal should have examined the contention of the appellant. In any event, looking to the facts and circumstances of this case and the judgment of the Apex Court in case of State of Andhra Pradesh v M/s. Hyderabad Asbestos Cement Production Limited, AIR 1994 SC 2364, we permit the appellant to submit C-Form within 30 days from today to the Assessing Authority. The Assessing Authority shall examine the claim of the appellant in respect of C-Form so produced. This sales tax revision petition is allowed.