Telangana High Court
The Stat.,Govt Of Ap.,Hyd vs M/S.Vijaya Electricals Ltd.,Hyd on 10 October, 2022
Author: T.Vinod Kumar
Bench: T. Vinod Kumar
THE HON'BLE SRI JUSTICE T. VINOD KUMAR
AND
THE HON'BLE SRI JUSTICE PULLA KARTHIK
Tax Revision Case No. 173 of 2002.
ORDER:(per the Hon'ble Sri Justice T.Vinod Kumar) This Tax Revision Case is preferred by the State being aggrieved by the order of the Sales Tax Appellate Tribunal (for short 'Tribunal'), dated 23.04.2001 in T.A. No. 90 of 1997. The assessment year involved is 1991-92 (under the APGST Act, 1957(for short 'the Act')).
2. The respondent in this revision case is the assessee on the rolls of Commercial Tax Officer, Ferozguda Circle.
3. The assessment of the respondent-assessee for the year 1991-92 was completed by the jurisdictional authority on 30.03.1993.
4. The Deputy Commissioner of the Division having found that the final assessment order passed by the Assessing Authority to be prejudicial to the interest of revenue, in exercise of revisionary powers conferred on him under section 20(2) of the Act, sought to revise the assessment order by issuing a revision show cause notice dated 16.09.1995, whereby, the revisional authority had proposed to include certain amounts received by the respondent-assessee in respect of supplies 2 affected by it during the year 1986-87 to the turnover of the assessment year 1991-92.
5. The revisional authority on examining the records of the respondent-assessee as available in the assessment record for the year 1991-92, found that the assessing authority, while completing the assessment for the year 1991-92, did not take into consideration the turnover relating to (1) recovery of differential tax from APSEB, (2) supervision, erection and commissioning charges, and (3) testing charges received by the respondent-assessee during the assessment year 1991-92, and thus, the order passed by the Assessing Authority in excluding the said turnover during the assessment proceedings of 1991- 92 has resulted in escapement of turnover from the levy of tax.
6. In response to the revision show cause notice issued by the Deputy Commissioner, the respondent-assessee had filed its objections on 23.11.1995.
7. On the respondent-assessee filing its reply to the show cause notice, the Deputy Commissioner passed revision order, dt.25.11.1996, rejecting the objections of the respondent- assessee and subjected the turnover relating to the above mentioned three heads to tax by revising the assessment order, Dt.30.03.1993.
3
8. Aggrieved by the order of Revision passed by the Deputy Commissioner, the respondent-assessee had filed appeal before the Tribunal, which was numbered as T.A.No. 90 of 1997.
9. The Tribunal, after considering the submissions made on behalf of the respondent-assessee as well as the State representative of the petitioner, had held that the disputed turnover relates to sales affected by the appellant during the years 1986-87 and 1987-88 to the electricity board. The Tribunal also took note of the fact that the Deputy Commissioner exercised jurisdiction under section 20 of the Act, basing on the annual report of the appellant for the year 1991- 92, and levied tax on the turnover on the ground that the respondent-assessee had received the difference amount in the year 1991-92, for which separate invoices are raised by the respondent-assessee.
10. The Tribunal by taking note of the fact that the turnover under the above three heads relate to sales affected during the years 1986-87 and 1987-88, held that the Deputy Commissioner erred revising the assessment order for the year 1991-92 on the basis of the receipt of the above amounts by the respondent-assessee during the said year. The Tribunal had held that the receipt of amount during a particular year is not 4 the criteria for making the assessment for the purpose of levying sales tax and that if the authority had reason to believe that the said amount received during a particular year has not suffered tax during the relevant year to which it relates, the proper course is to revise the assessment of the relevant year, to which the turnover pertains, but not by including it in the subsequent year. The Tribunal also held that there is no provision in the Sales Tax Act, or the Rules by which the revisional authority can include the turnover relating to an earlier assessment year in the subsequent year when the transactions do not pertain to the subsequent year.
11. To arrive at the above conclusion, the Tribunal has relied on the decision of the Hon'ble Supreme Court in the case of Deputy Commissioner Of Sales Tax (Law), Board of Revenue(Taxes), Ernakulam v. Motor Industries Co.1 wherein the Supreme Court had categorically held that final assessment is always made in respect of one financial year commencing from 1st April of every calendar year and ending with 31st March of the succeeding calendar year, as per the scheme of the Act.
12. By taking note of the settled principle of law, the Tribunal held that the order of the Deputy Commissioner in revising the 1 (1983) 53 STC 48 5 assessment order of the year 1991-92 and including the disputed turnover relating to the year 1986-87 and 1987-88 and levying tax thereon treating the same as escaped turnover is not valid and sustainable and accordingly set aside the revision order by allowing the appeal.
13. Aggrieved by the said order, this Revision is preferred by the State by raising the following question of law to be decided by this Court:
1) Whether turnover relating to difference of tax amount pertaining to the year 1986-87 and 1987-88 can be included in the turnovers relating to the assessment years ?
2) Whether the impugned order is not valid and sustainable?
3) Whether the STAT, AP, Hyderabad, is justified in setting aside the order of the Deputy Commissioner(CT), Hyderabad (Rural) Division?
14. Heard Sri K. Raji Reddy, learned Special Standing Counsel appearing for the petitioner-State, Sri Puttam Karthik Ramana, learned counsel appearing for the respondent- assessee, and perused the record.
15. The fact of the receipts, which the respondent-assessee received during the year 1991-92, as reflected in the annual report, pertains to the supplies affected by the respondent- assessee during the years 1986-87 and 1987-88, is not in 6 dispute. It is also not in dispute that the recipient of the goods, namely APSEB, did not make the payment at the relevant point of time and that the said payment came to be made during the year 1991-92, only after the dispute raised by the recipient APSEB was settled, which resulted in release of the payment to the respondent-assessee for which separate invoices are raised during the year.
16. Under the Act, the sales tax would become payable on affecting a sale involving transfer of property in goods and not on receipt of consideration. Section 2(n) of the APGST Act, 1957, defines 'Sale' and takes in its ambit where transfer of property in goods takes place from one person to another in the course of business, for cash, or for deferred payment or for other consideration. Thus, when a sale is made for consideration in cash or for other valuable consideration, whether paid or deferred, the liability to pay sales tax arises. Thus the triggering point for the levy of sales tax is 'sale', by which there is a transfer of title in the goods from the seller to the buyer and not the payment by the buyer or receipt of consideration therefore by the seller.
17. Admittedly, in the facts of the present case, since the sales are affected during the years 1986-87 and 1987-88, mere 7 receipt of the consideration under the three different heads by the respondent-assessee on account of raising of dispute by the APSEB at the relevant point of time, would not absolve the respondent-assessee from its liability to discharge its obligations under the Act. If, the Deputy Commissioner had found that the various amounts as received by the respondent-assessee during the 1991-92 are relatable to the supplies affected during the years 1986-87 and 1987-88 exigible to tax and has not been subjected to tax, the proper course as noted by the Tribunal was to revise the assessment order of the said years and not by including the same in the turnovers for the year 1991-92, for the reason that no sales have taken place during the said year, for which the said consideration can be said to be received.
18. Thus, in the view of this Court the order of the Tribunal in holding that the turnover relatable to the receipts under the three heads as mentioned above, cannot be included in the turnover of the year 1991-92, for it to be subjected to tax, cannot be held to be erroneous, much less giving rise to a question of law to be decided by this Court.
19. In view of the above, this Tax Revision Case is without any merit and is accordingly dismissed. No order as to costs. 8
20. Consequently, miscellaneous petitions pending, if any, shall stand closed.
___________________ T. VINOD KUMAR, J ___________________ PULLA KARTHIK, J 10th October, 2022.
Gra 9 THE HON'BLE SRI JUSTICE T. VINOD KUMAR AND THE HON'BLE SRI JUSTICE PULLA KARTHIK TRC. No.173 of 2002 (per the Hon'ble Sri Justice T.Vinod Kumar) 10th October, 2022.
gra