Rohan Associates vs Additional Commissioner of Commercial Taxes and Others

N. Kumar, J.—This appeal is by the assessee challenging the order passed by the revisional authority u/s 22(A)(1) of the Karnataka Sales Tax Act, 1957 (for short, hereinafter referred to as, "the Act"). The assessee is a partnership firm and was registered as a dealer under the provisions of the Act during the year 2004-05. The assessee is in the business of construction and sale of residential houses. The assessee bona fide believed that since they were putting up construction on the land owned by them and they were selling the house with the undivided shares, the provisions of the Act are not attracted. However, in view of the judgment of the apex court in the case of K. Raheja Development Corporation Vs. State of Karnataka, wherein it was held, the constructions put up on own land by execution of works contract fall within the purview of the Act, appellant was obliged to file the return and pay the tax. On such return being filed, the Assistant Commissioner of Commercial Taxes (Transitions) 11, Bangalore, passed the assessment order dated February 7, 2007 under the Act for the year 2004-05. While passing the said order, the assessing officer granted several benefits by way of reductions and also refund. The Commissioner of Commercial Taxes (Administration and Recovery), Bangalore, issued notice on May 21, 2009 proposing to revise the assessment order passed as aforesaid. The assessee filed statement of objections. On consideration of the same, the Joint Commissioner of Commercial Taxes by his order dated July 29, 2008 dropped the revisional proceedings. It is thereafter, the Additional Commissioner of Commercial Taxes, Zone I, Bangalore, issued notice dated July 21, 2009, proposing to set aside the revisional order passed by the Joint Commissioner of Commercial Taxes in respect of the assessment order for the years 2004-05. The assessee filed statement of objections. After hearing him, the Additional Commissioner of Commercial Taxes, passed an order dated September 25, 2009, set aside the revisional order passed u/s 21(4) of the Act as well as the assessment order passed for the years 2004-05 and remanded the matter in respect of certain items. However, he recorded his finding on certain other aspects. Aggrieved by the said order, the assessee is before this court.

The learned counsel for the assessee, assailing the impugned order firstly contended, when the assessment order was revised u/s 21, the assessment order merged with that revisional order, therefore, the Additional Commissioner of Commercial Taxes had no jurisdiction to again revise the assessment order as it was not in existence at all. Therefore, he submits, the impugned order is liable to be set aside.

Secondly, it was contended, if the Additional Commissioner of Commercial Taxes is exercising his power u/s 22, setting aside the order of revisional authority as well as the assessment order, he should have set aside the entire order and should have remitted the matter back to the assessing authority for denovo enquiry and for fresh assessment, he could not have made a restricted remand and decided the other issues. Therefore, he submits, for the aforesaid reasons, the impugned order requires to be set aside.

Per contra, learned Government Advocate supported the impugned order.

From the material on record, it is clear, the assessment order was passed on February 7, 2007. In the proceedings initiated u/s 21 of the Act, the Joint Commissioner of Commercial Taxes dropped the revisional proceedings on July 29, 2008. The assessment order dated February 7, 2007 merged with the order dated July 29, 2008 passed by the revisional authority. If the Additional Commissioner of Commercial Taxes has initiated proceedings and revised the order dated February 7, 2007, the assessee is right in his submission. But the record discloses, the proceedings initiated by the Additional Commissioner of Commercial Taxes u/s 22 was not to revise the order dated February 7, 2007 but to revise the order dated July 29, 2008. It is not disputed that such a power is vested with the Additional Commissioner of Commercial Taxes. Therefore, when the revisional proceedings were initiated u/s 22, revised order passed u/s 21, the revision is maintainable and therefore, we do not see any substance in the said contention.

In so far as the remand in concerned, that is the matter to be decided by the revisional authority. He has jurisdiction to set aside the orders of assessment and direct reassessment. He has jurisdiction to decide on those issues where the material on record is sufficient to hold it one way or the other, to remand the matter in respect of the matters where material is not sufficient or he can once and for all decide the assessment finally. In the instant case, in respect of the matter where material available on record and on undisputed facts, he has passed the orders which is final. On matters where he did not have sufficient material and enquiry was required, he has remanded the matter to the assessing officer for enquiry. Therefore, said conduct cannot be found fault with as it is well within his jurisdiction. In the aforesaid circumstances, we do not see any justification to interfere with the well considered order by the revisional authority. No merits. Dismissed.