Belgaum Lubricants vs The Commissioner of Commercial Taxes, Bangalore

Puttaswamy, J.-This appeal is by the assessee and is directed against the order dated 12.8.85 of the Commissioner of Commercial Taxes, Karnataka, Bangalore (Commissioner) in case No. 131/84-85 made under section 22-A of the Karnataka Sales Tax Act 1957 (Act).

The assessee who is engaged in the business of purchasing and selling grease and lubricants, is a registered dealer under the Act on the File of the Commercial Tax Officer, Belgaum.

On 5-7-84 the assessee was transporting libricants in a motor vehicle bearing registration No. MEX 5204 for effecting line Sales and delivery. When that vehicle was passing on Hubli-Dharwar Road, the Commercial Officer (Intelligence) Hubli (C.T.O.) intercepted the same, detained and then demanded the driver and the other person accompanying the vehicle to produce the documents that should accompany the goods carried in the vehicle required by the Act and the Rules. On their failure to produce the requisite documents, the C.T.O. made an order against the assessee imposing a penalty of Rs. 6,000-00 under section 28A(4) of the Act (Annexure-C). Some time later in the day, the assessee paid the said penalty and obtained the release of the said vehicle.

Aggrieved by the said order made by the C.T.O. the assessee filed an appeal in appeal No. AP/KST/167/84-85B-1891 before the Deputy Commissioner of Commercial Taxes (Appeals) Hubli. (D.C.) under section 28A (7) of the Act, with relevant documents to establish his case that the goods carried in the vehicle had suffered single point tax under the Act. On an examination of the records and the documents produced in support of the appeal, the D.C. inter-alia holding that the goods carried in the vehicle had suffered single point Tax under the Act, by his order dated 19-12-1984 (Annexure-B) allowed the same.

On 25-5-85, the Commissioner issued a show cause notice to the assessee proposing to revise the order of the D.C. and restore the order of the C.T.O. for the reasons stated in the notice which was naturally opposed by the assessee. On an examination of the records, the Commissioner by his order dated 12-8-85 (Annexure-A) has revised the order of the D.C. and has restored the order of the C.T.O. Hence, this appeal.

Sri. B.P. Gandhi, learned counsel for the assessee, contends that the view expressed by the Commissioner that D.C. as an appellate authority was not competent to receive the documents produced by his client along with his appeal memo and grant relief on that basis had committed manifest illegality, that justified interference by this court.

Sri. S. Rajendra Babu learned Government Advocate for the Revenue sought to support the order of the Commissioner.

After setting out the facts of the case and the contentions urged by the assessee in support of his case the Commissioner expressed thus:

"The appellate authority can only function and decide matter in terms of the express provision of the law. The appellate authority cannot go beyond the jurisdiction allowed to the lower authorities. The law under section 28-A(2) has been discussed in previous paras. The appellate authority in allowing the appeal by entertaining the documents subsequently at the appeal stage has erred".

on this view the Commissioner has reversed the order of the D.C. and has restored the order of the C.T.O.

Section 28-A(7)(a) of the Act, which provides for an appeal by an aggrieved person, does not place any restrication on the powers of the D.C. who is the appellant authority. Section 28A(7)(a) of the Act stipulates that the appeal filed under clause (a) shall be dealt with as if it is an appeal under section 20 of the Act. Section 20 of Act, which provides for appeal against assessments, does not also place any restriction on the D.C. who is the appellate authority under the Act.

When the provisions for appeal or other provisions do not place any restriction on the powers of the appellate authority, it is well settled that the powers of such appellate authority are co-extensive with the powers of the original authority under the Act. Whatever power could be exercised by the original authority under the Act could also be exercised by the appellate authority under the Act. If the original authority could admit documents for evidence in proof of payment of tax then a fortiori the appellate authority could also admit them and if it is satisfied with the genuineness of the same could undoubtedly grant relief to the appellant. Unfortunately, the Commissioner without bearing those principles and erroneously held to the contrary. We are of the view that what had been held by the commissioner is illegal. From this it follows that he Commissioner had approached the case on totally irrelevant considerations. In this view, it is proper to set aside the order made by the Commissioner and direct him to redetermine the matter afresh.

But Sri. Gandhi contends that on the facts found with due regard to the show cause notice issued this is a fit case to finally settle the matter without unnecessarily remitting the case to the Commissioner.

As earlier held the Commissioner had approached this case on totally irrelevant considerations and had not decided the case on relevant considerations. When that is so, it is not proper for us to decided the case finally as urged by Sri. Gandhi, we need hardly say that it is undoubtedly open to the assessee to appear before the Commissioner and urge all such contentions as are open to him to sustain the order of the D.C.

In the result, we allow this appeal, set aside the order dated 12-8-85 of the Commissioner in ease No. 131/ 84-85 and direct him to restore the proceedings to its original file and redetermine the same in accordings with law and the observations made in this order with all such expedition as is possible in the circumstances of the case and in any event within for months from the date of receipt of the order of this court.

STA allowed in part and case is remanded to the Commissioner. But in the circumstances of the case, we direct the parties to bear their own costs.