State Of Andhra Pradesh v. Commissioner Of Income Tax[[4]], Had Held That, When An Appeal Isdismissed By The Supreme Court By A Non-Speaking Order, Thesupreme Court Upholds The Decision O

THE HON’BLE SRI JUSTICE RAMESH RANGANATHANANDTHE HON’BLE SRI JUSTICE M.SATYANARAYANA MURTHYTAX REVISION CASE No.275 of 2001 ORDER:(per Hon’ble Sri Justice Ramesh Ranganathan) This revision, under Section 22(1) of the Andhra PradeshGeneral Sales Tax Act 1957 (for brevity, ‘the Act’), is preferredagainst the order of the Sales Tax Appellate Tribunal, Hyderabad inT.A.No.88 of 1997 dated 28.06.2001. The respondent herein was finally assessed to tax by theCommercial Tax Officer, for the assessment year 1990-91, allowingset off of tax on tax paid on packing material used for sale of goodswithin the State as per G.O.Ms.No.374 dated 25.04.1987. TheCommercial Tax Officer reopened the assessment and passed anorder restricting set off of tax, and adopted a different method ofcomputing set off of tax. Aggrieved thereby, the respondent preferredan appeal to the Appellate Deputy Commissioner. In his order dated09.02.1994, the Appellate Deputy Commissioner held that the earlierassessment was revised by the assessing authority on the basis ofaudit objections of the Accountant General; the assessing authorityhad usurped the powers of the revisional authority; and the order ofthe assessing authority, revising the earlier assessment order, waswithout jurisdiction. The order of the Appellate Deputy Commissioner dated09.02.1994 was revised by the Additional Commissioner (CT) (Legal)by order dated 10.10.1996. The finding of the Appellate DeputyCommissioner that the assessing authority lacked jurisdiction torevise the assessment order, based merely on an audit objection, wasnot faulted by the Additional Commissioner. While noting theconclusion of the Appellate Deputy Commissioner that the assessingauthority could not make re-assessment, in the absence of any material de hors the record, the Additional Commissioner merely holdsthat all orders of subordinate officers would merge in the proposedrevision order of the Additional Commissioner (CT) and the JointCommissioner (Legal). Aggrieved by the order of the Additional Commissioner dated10.10.1996, the respondent preferred an appeal to the Sales TaxAppellate Tribunal. In the order under revision dated 28.06.2001 theSales Tax Appellate Tribunal, relying on the judgments of this Court in State of Andhra Pradesh v. Ratnasri Box Makers[[1]], andGiridharlal & Company v. State of Andhra Pradesh[[2]]; held thatreassessment could not be made, by reopening the assessment underSection 14 (4) of the Act, on the basis of the material already onrecord at the time of assessment; and it can be made only on thematerial de hors the record which comes to the notice of the assessingauthority subsequent to the assessment. The Tribunal held that it wasevident from the record that the Commercial Tax Officer has onlychanged his mind based on the audit note; the re-assessment wasbased only on the change of opinion, and on the same material alreadyon record at the time of the original assessment; and it was illegal andwithout jurisdiction. In the order under revision, the Tribunal referred to the judgmentof the Supreme Court in State of Andhra Pradesh v. Ratnasree BoxMakers[[3]]and held that the judgment of this Court in State of AndhraPradesh v. Ratnasree Box Makers[1] was not discussed therein; theSupreme Court, in V.M.Salagaocar & Brothers Private Limited v. Commissioner of Income Tax[[4]], had held that, when an appeal isdismissed by the Supreme Court by a non-speaking order, theSupreme Court upholds the decision of the High Court under Article In the order under revision, the Tribunal referred to the judgmentof the Supreme Court in State of Andhra Pradesh v. Ratnasree BoxMakers[[3]]and held that the judgment of this Court in State of AndhraPradesh v. Ratnasree Box Makers[1] was not discussed therein; theSupreme Court, in V.M.Salagaocar & Brothers Private Limited v. Commissioner of Income Tax[[4]], had held that, when an appeal isdismissed by the Supreme Court by a non-speaking order, theSupreme Court upholds the decision of the High Court under Article 133 (3) of the Constitution of India. The Tribunal also relied on thejudgment of the Supreme Court in Indian Oil Corporation Limited v.State of Bihar and others[[5]]to hold that dismissal of a SpecialLeave Petition in limine, by a non-speaking order, does not imply thatthe contentions raised in the Special Leave Petition, on merits, hadbeen rejected; in the present case the Supreme Court did not dismissthe Special Leave Petition but disposed of the same stating that theycannot interfere with the matter; the Supreme Court did not disturb thejudgment of the High Court under appeal; the Supreme Court did notset aside the judgment of the High Court, and did not lay down what was good law in the matter; and, as such, it could not be said that thejudgment of this Court, in State of Andhra Pradesh v. RatnasreeBox Makers[1], was set aside by the Supreme Court. The appeal wasallowed. Hence this revision. Sri J.Anil Kumar, learned Special Standing Counsel forCommercial Taxes, would submit that Section 14 (4) of the Actenables the assessing authority to pass an order assessing thecorrect amount of tax payable under the Act, and in case where anydeduction or exemption has been wrongly allowed; there is nolimitation on the power under Section 14 (4) of the Act; the judgment ofthis Court in State of Andhra Pradesh v. Ratnasree Box Makers[1]has been held not to be good law by the Supreme Court in State ofAndhra Pradesh v. Ratnasree Box Makers[3]; while dealing with asimilar provision under Section 147 (b) of the Income Tax Act, theSupreme court, in Commissioner of Income Tax v. P.V.S. Beedies Private Limited[[6]],has held that the information given by the internalaudit party is not an information on a question of law; the audit partyis entitled to point out a factual error or omission; reopening of thecase, on the basis of a factual error pointed out by the audit party, ispermissible under law; and reopening of the case under Section 147 (b) of the Act, on the basis of factual information given by the internalaudit party, is valid in law. Learned Special Standing counsel wouldalso rely on a Full Bench judgment of the Madras High Court, in State of Madras v. Louis Dreyfus and Company Limited[[7]]to contendthat the turnover, which has escaped assessment, can be reassessedto tax. On the other hand, Sri S. Dwarakanath, learned counsel for therespondent, would rely on the judgments of this Court in Giridharlal &Company[2]; State of Andhra Pradesh v. Kedia Vanaspathi PrivateLimited[[8]];Sri Ramanjaneya Groundnut Factory v. CommercialTax Officer, Kadiri[[9]]; Western India Gunnies Private Limited v.State of Andhra Pradesh and another[[10]];and KanakadurgaManure Works v. State of Andhra Pradesh[[11]];and on a judgmentof the Delhi High Court in Binani Industries Limited v. AssistantCommissioner of Commercial Taxes, VI Circle, Bangalore andothers[[12]], to contend that reopening of an assessment, on merechange of opinion, is impermissible. of Madras v. Louis Dreyfus and Company Limited[[7]]to contendthat the turnover, which has escaped assessment, can be reassessedto tax. On the other hand, Sri S. Dwarakanath, learned counsel for therespondent, would rely on the judgments of this Court in Giridharlal &Company[2]; State of Andhra Pradesh v. Kedia Vanaspathi PrivateLimited[[8]];Sri Ramanjaneya Groundnut Factory v. CommercialTax Officer, Kadiri[[9]]; Western India Gunnies Private Limited v.State of Andhra Pradesh and another[[10]];and KanakadurgaManure Works v. State of Andhra Pradesh[[11]];and on a judgmentof the Delhi High Court in Binani Industries Limited v. AssistantCommissioner of Commercial Taxes, VI Circle, Bangalore andothers[[12]], to contend that reopening of an assessment, on merechange of opinion, is impermissible. It is wholly unnecessary for us to examine the question whetherSection 14 (4) of the Act enables the assessing authority to revise theassessment on an audit objection based on existing material, orwhether the judgments of this Court, holding to the contrary,necessitate reconsideration, as the Additional Commissioner (CT) hasnot revised the order of the Appellate Deputy Commissioner on thisground. As noted hereinabove against the order of the CommercialTax Officer, revising the assessment under Section 14 (4) of the Act,the respondent preferred an appeal to the Appellate DeputyCommissioner who, in his order dated 09.02.1994, held that theexercise of jurisdiction under Section 14 (4) of the Act was based on achange of opinion as suggested by the Accountant General; and exercise of such jurisdiction amounts to usurpation of power of therevisional authority under Section 20 of the Act. In his revisional order, the Additional Commissioner does notdispute this finding. He merely holds that the application of thedoctrine of merger would result in the order of the Appellate DeputyCommissioner merging with the order of the revisional authority. Whileit was always open to the revisional authority to revise the originalassessment order, if he considered it to be prejudicial to the interestsof revenue, what has been revised in the present case is not theoriginal assessment order but the order of the Appellate DeputyCommissioner. Without holding that the Appellate DeputyCommissioner has erred in coming to the conclusion that theassessing authority lacked jurisdiction to revise the assessment orderunder Section 14 (4) of the Act, the Additional Commissioner was notjustified in revising the order of the Appellate Deputy Commissionerapplying the doctrine of merger. While it is true that the Tribunal has examined the scope ofSection 14 (4) of the Act, and has come to the conclusion that achange of opinion would not justify exercise of power under Section 14(4) of the Act, it is wholly unnecessary for us to go into this largerquestion as the finding of the Appellate Deputy Commissioner in thisregard has not been set aside by the Additional Commissioner (CT). While the Sales Tax Appellate Tribunal need not have examined thislarger question, the fact remains that the Additional Commissioner haserred in holding that, by applying the doctrine of merger, he couldrevise the order of the Appellate Deputy Commissioner even if theorder under revision did not suffer from any legal infirmity. We see noreason, therefore, to interfere with the order of the Sales Tax AppellateTribunal. The T.R.C. fails and is, accordingly, dismissed. Themiscellaneous petitions pending, if any, shall also stand dismissed. 09[th] October, 2014.Tsy [1](1989) 75 STC 82[2](1995) 97 STC 442[3](1999) vol.29 APSTJ 221[4](2000) 243 ITR 383 (SC)[5](1987) 167 ITR 897 (SC)[6](1999) 237 ITR 0013[7]1955 (6) STC 318[8]1995 STC 208[9]103 STC 297[10]133 STC 14[11]133 STC 147[12]2007(6) VST 783 (SC) ______________________________ RAMESH RANGANATHAN, J __________________________________ M.SATYANARAYANA MURTHY, J