M/s. Vikrant Tyres Limited, Mysore vs Assistant Commissioner of Commercial Taxes (Intelligence), Mysore and Others

Petitioner is aggrieved by the assessment orders dated 21-9-1998 framed under Section 9 of the CST Act read with Section 12-A of the Karnataka Sales Tax Act for the assessment years 1985-86 to 1992-93. According to the learned Counsel for the petitioner, assessment orders have been framed by the Deputy Commissioner, Commercial Taxes (Appeals), Mysore Zone, Mysore and he is not the Assessing Authority of the petitioner. There was earlier order passed by the Commissioner of Commercial Tax directing the Deputy Commissioner of Commercial Taxes (Appeals) to complete the assessment before 30-6-1998 and since the reassessment has not been framed within the specified time, the officer has no jurisdiction.

Learned Counsel for the Commercial Taxes Department has brought to my notice that subsequently another order dated 28-8-1998 have been passed under Section 3-B of the Act by which the powers have been conferred on the Deputy Commissioner of Commercial Taxes (Appeals) to complete the assessment till 30-9-1998.

A contention was raised by the learned Counsel for the petitioner that earlier order by which the assessments were to be framed before 30-6-1998 expired and thereafter the proposals were moved on 27-7-1998 and the said order was not communicated. In view of the judgment given in Shaw Wallace and Company Limited, Bangalore v Deputy Commissioner of Commercial Taxes (Assessments-2), City Division III, Bangalore, 1998(44) Kar. L.J. 162, Deputy Commissioner (Appeals) cannot be stated to have acquired the jurisdiction.

Reliance is also placed on the decision given in Fag Precision Bearing v Sales Tax Officer, 1997(42) Kar. L.J. 236 (SC), wherein it was held that before extending the time an opportunity should have been given to the assessee. Similar view was taken in the case of BHEL v Assistant Commissioner of Commercial Taxes, (1998)5 SCC 175.

I have considered over the matter.

The law on the point of limitation for completion of assessment and reassessment is contained in Act itself and if that period of limitation is to be extended then the assessee is required to be given an opportunity and the steps are to be taken before the expiry of period of limitation. But the present matter is not for extending of time but for conferring the power for assessment under Section 3-B of the Act. It is true that there was an earlier order of the Commissioner directing the Deputy Commissioner to complete the assessment by 30-6-1998. The said officer became functus officio on 30-6-1998 because a time limit was given for completion of the assessment in the order itself. Fresh orders were passed conferring the jurisdiction on 28-8-1998. Had the assessment been framed between 30-6-1998 and 28-8-1998 this Court would have set aside the orders passed on the ground that the officer had no jurisdiction and the subsequent power which has been conferred was on 28-8-1998. The present reassessment orders have been framed after 28-8-1998 within the time provided under the order and as such the confirmation of power under Section 3-B cannot be considered to take away the jurisdiction of the Commissioner.

The matter of extending the limitation for framing the assessment stands on a different footing. Under Section 3-B, the power which has been exercised for framing the assessment by the Commissioner on the other authority, if he is of the same place, then no notice is required to be given to the assessee in view of the law laid down by the Apex Court. Therefore, no prejudice would be stated to have been caused to the petitioner. The contention therefore that Deputy Commissioner of Commercial Taxes (Appeals) has no jurisdiction on the ground of conferring the power after expiry of earlier order has no substance. The various questions which have been raised in these petitions that may otherwise be available to the petitioner could be raised before the Appellate Authority. If the appeal is filed within four weeks from today, it would be considered to having been filed within time.

A contention was raised by the learned Counsel for the petitioner that it may be necessary for him to implead the other States and therefore in view of the law laid down by the Apex Court in the case of Ashok Leyland v Union of India, (1997)105 STC 152, direction be given to file the appeals directly before the Tribunal.

Filing of appeal is a statutory requirement and normally that remedy cannot be allowed to be bypassed. If the appeal is filed before the Appellate Authority as in this case before the Joint Commissioner Commercial Taxes (Appeals), Mysore Division, Mysore, and other States are impleaded as parties he is competent to issue notice to them. It is possible that the petitioner may be able to satisfy the First Appellate Authority that the transaction is only a branch transfer and in that case the assessment order framed will have to be quashed. The Apex Court has held that the question as to whether a transaction is an inter-State sale or branch transfer or local sale is essentially a question of fact and therefore it will be proper that the First Appellate Authority examine the facts. It appears that lot of material has to be taken into consideration while disposing of the appeal. In these circumstances, I feel that it would not be proper to direct the petitioner to skip over the remedy of first appeal and approach the Tribunal directly.

Regarding the apprehension of the petitioner for stay of demand of tax and penalty before the Appellate Authority, he will have a full hearing before the stay application is decided and will be free to point out that the tax has already been paid in other States and what relief petitioner could be given in the facts and circumstances of the case.