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Judgment
G. Rohini, J.—The petitioner company which is engaged in the business of manufacture and sale of fruit pulps etc., is a dealer on the rolls of the respondent No. 2 under the provisions of A.P. Value Added Tax Act, 2005 as well as the Central Sales Tax Act, 1956. This Writ Petition is filed aggrieved by the order dated 16.5.2013 passed by the Deputy Commissioner (CT), Chittoor Division (respondent No. 1 herein) reassessing the VAT payable by the petitioner for the period from 1.4.2005 to 31.3.2009 purportedly in exercise of the powers conferred u/s 32 of the A.P. VAT Act, 2005.
As could be seen from the material available on record, the petitioner was assessed for the tax period 2007-08 determining the under declared output tax liability as Rs. 1,31,241/- vide order of the 2nd respondent - Commercial Tax Officer dated 17.6.2009 in Form-VAT 305.
Subsequently, the petitioner was served with the show-cause notice dated 16.3.2013 issued by the 1st respondent - Deputy Commissioner (CT) alleging that on verification of the assessment records it was found that the order dated 17.6.2009 is prejudicial to the interest of Revenue and accordingly calling upon the petitioner to show cause as to why the assessment orders for the period 1.4.2005 to 31.3.2009 passed by the Commercial Tax Officer, Madanapalle Circle should not be revised in exercise of the powers vested u/s 32 of the A.P. VAT Act. The petitioner submitted a detailed explanation dated 28.03.2013 opposing the proposed revision. However, the objections raised by the petitioner were not accepted and the impugned order dated 16.05.2013 came to be passed by the 1st respondent holding that the petitioner failed to declare the true and correct quantity of goods manufactured during the year 2005-06 to 2008-09 and thus determining the petitioner''s under declared output tax liability as Rs. 1,50,43,262/-.
As could be seen from the material available on record, the petitioner was assessed for the tax period 2007-08 determining the under declared output tax liability as Rs. 1,31,241/- vide order of the 2nd respondent - Commercial Tax Officer dated 17.6.2009 in Form-VAT 305.
Subsequently, the petitioner was served with the show-cause notice dated 16.3.2013 issued by the 1st respondent - Deputy Commissioner (CT) alleging that on verification of the assessment records it was found that the order dated 17.6.2009 is prejudicial to the interest of Revenue and accordingly calling upon the petitioner to show cause as to why the assessment orders for the period 1.4.2005 to 31.3.2009 passed by the Commercial Tax Officer, Madanapalle Circle should not be revised in exercise of the powers vested u/s 32 of the A.P. VAT Act. The petitioner submitted a detailed explanation dated 28.03.2013 opposing the proposed revision. However, the objections raised by the petitioner were not accepted and the impugned order dated 16.05.2013 came to be passed by the 1st respondent holding that the petitioner failed to declare the true and correct quantity of goods manufactured during the year 2005-06 to 2008-09 and thus determining the petitioner''s under declared output tax liability as Rs. 1,50,43,262/-.
The said order is assailed in this writ petition contending inter alia that the impugned order is without jurisdiction. It is also contended that the reassessment for the period in question is barred by limitation.
In the counter-affidavit filed by the 1st respondent, it is contended that the writ petition itself is not maintainable without exhausting the alternative statutory remedy of appeal. The allegation in the writ petition that the petitioner was not supplied the report of the Regional Vigilance and Enforcement Officer has been denied and it is stated that the same was served on the petitioner on 9.4.2013. It is contended that as there was suppression in the yield rate, the re-assessment was rightly made under the impugned order. Relying upon Section 21(6) of the A.P. VAT Act read with Rule 59 (4) (iii) of the Rules, it is contended that the prior permission of the Commissioner of Commercial Taxes is not necessary for making the re-assessment. It is further contended that the impugned order was passed for the period 2005-06 to 2008-09 as the assessing authority found under declaration in respect of the period 2007-08 and 2008-09.
We have heard the learned counsel for both the parties. Having carefully gone through the material available on record and having given our thoughtful consideration to the controversy involved, it appears to us that the first respondent while passing the impugned order had totally mixed up the power of reassessment u/s 21(6) and the revisional power conferred u/s 32 of the A.P. VAT Act.
Section 21(6) of A.P. VAT Act empowers the authority prescribed to reassess where an assessment was already made under subsections (1) to (5) of Section 21 and where such assessment understates the correct tax liability of the dealer. The competent authority to exercise the power under sub-section (6) of Section 21 is the prescribed authority. As per Rule 59(1) of A.P. VAT Rules, 2005 as substituted by G.O.Ms. No. 33 dated 21.01.2013 w.e.f. 21.01.2013 the authority prescribed to exercise the powers conferred u/s 21(6) is the authority who detects the under assessment but not below the rank of Assessing Authority who made the assessment.
Coming to Section 32 of the A.P. VAT Act, it is a provision which empowers the Commissioner to suo motu call for and examine the record or order passed by an officer subordinate to him. If such order is prejudicial to the interest of the revenue, the Commissioner may initiate proceedings to revise, modify or set aside such order and may pass a revised order within a period of four years from the date on which the order was served on the dealer. Under sub-section (1) of Section 32 the revisional power is conferred on the Commissioner. Under subsection (2) of Section 32 the said revisional powers may also be exercised by the Additional Commissioner, Joint Commissioner, Deputy Commissioner and Assistant Commissioner in the case of orders passed or proceedings recorded by the Authorities, Officers or persons subordinate to them.
From the above analysis, it is clear that Section 21(6) provides for reassessment, whereas Section 32 empowers the Commissioner as well as the other officers mentioned in sub-section (2) to revise, the order passed by an officer subordinate to him if such order is prejudicial to the interest of the revenue. Apparently, the scope of the two provisions is different and the power conferred is distinct from each other.
Coming to the impugned order, it is observed that it is described as an order of reassessment and even the contents of the order show that the first respondent sought to reassess the correct VAT payable to the Department. However the order referred to the revisional power conferred u/s 32 of the Act.
Though the petitioner in the explanation to the show-cause notice raised an objection that the first respondent has no jurisdiction to make an order of reassessment, the objection was rejected placing reliance upon Section 75 of A.P. VAT Act which provides that the powers conferred by the Act on any of the officers appointed u/s 3A may also be exercised by any of the officers superior to the officers so empowered.
It may be true that the first respondent is competent to exercise the revisional power u/s 32(2) of the Act, however, having regard to the fact that the order dated 17.06.2009 was in respect of the Assessment Year 2007-08, the revisional order has to be confined only to that assessment order. Strangely the first respondent under the impugned order sought to revise the assessment for the tax period from 2005-06 to 2008-09. That apart, the impugned order states that it is an order of reassessment. Even if it is taken as an order passed under sub-section (6) of Section 21, even then the same shall be confined only to the Assessment Year 2007-08 the period for which the assessment was made by order dated 17.06.2009.
Viewed from any angle, the impugned order suffered from a material irregularity in exercise of the jurisdiction conferred under law. Apparently it is neither an order of reassessment u/s 21 nor a revised order u/s 32 of the A.P. VAT Act.
For the aforesaid reasons, the impugned order cannot be sustained and therefore the same is liable to be set aside on that ground alone.
Accordingly, the Writ Petition is allowed and the impugned order is set aside. However, this shall not preclude the competent authority to pass an appropriate order afresh in accordance with law. No costs. Consequently the miscellaneous petitions, if any, pending in the writ petition shall stand closed.