State of Andhra Pradesh vs Prem Colour Industries

M. Satyanarayana Murthy, J.—The State filed this revision aggrieved by the order in T.A. No. 151 of 2000 passed by the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad (for short, ''the tribunal''), wherein colours were to be assessed at concessional rate. The factual matrix of the case is as follows:

"M/s. Prem Colour Industries is the dealer on the rolls of Deputy Commercial Tax Officer, Gandhi Nagar, and their assessment for the year 1993-94 was completed by DCTO. Subsequently, the same assessing authority revised the assessment and brought the disputed turnover of dry colours to tax as not falling under the category of paints and withdrew the concessional rate of tax as per G.O.Ms. No. 381 Revenue dated 09-04-1986."

An appeal was preferred before Appellate Deputy Commissioner (CT), Secunderabad Division, but the appeal was allowed on technical grounds as the Deputy Commissioner is not competent to revise his own order. The Joint Commissioner (CT), Legal, on examination of Appellate Deputy Commissioner''s order, observed that the appellate authority passed the order prejudicial to the interest of revenue, thereby revised the order restoring the order of DCTO holding that colours, are included in item No. 8 of V schedule, can not be equated with item paints and liable for tax as general goods at 9%.

Aggrieved by the order, the assessee fled an appeal before the tribunal on various grounds challenging the order mainly contending that in view of G.O. referred supra, colours are exigible only at 4% concessional rate like paint in item No. 45 of I schedule of the Act. The appeal was allowed by the tribunal holding that colours are not covered by the G.O. and denied to set aside the order on that ground but allowed the appeal on technical ground i.e. DCTO is not competent to review his own order. Now, it is challenged on different grounds by revision before this Court contending that colours cannot be equated with paints to assess colours at concessional rate. At the same time, the revision by DCTO is in accordance with law and prayed to set aside the impugned order passed by the tribunal.

During the course of hearing, learned Special Government Pleader for Commercial Tax contended that colour is not synonym to paint and the G.O. exempts only paints produced by cottage industries for assessing at concessional rate. It is further contended that when additional material is produced by DCTO, the order can be revised by DCTO and finally prayed to set aside the impugned order.

Learned counsel appearing for the respondent argued totally in support of the impugned order.

Considering rival contentions and perusing the material available on record, the sole point that arises for consideration is:

"Whether DCTO is competent to revise his own assessment order, if so, whether the order passed by the tribunal be sustained?"

Point:

Admittedly, the tribunal did not agree with the contention of the assessee that colours are exigible only at concessional rate in view of G.O.Ms. No. 381 but G.O.Ms. No. 381 has no application as it was applicable only to paints manufactured by cottage and small scale industries situated within the state and liable to be taxed at concessional rate of 4% not for colours. In one of the judgments of this Court rendered between Andhra Chemicals, Kakinada v. The State of Andhra Pradesh (1995) 20 APSTJ 104, the same question came up before this Court and it was held that paints are exigible at concessional rate of tax at 4% even though paints are mentioned in entry 45 of I schedule are liable to be taxed at 9%. Entry 45 of I schedule refers to various goods including paints and varnishes but the G.O. grants concessional rate of tax only for paints and not for varnishes and other items and the contention of the appellant cannot be accepted because if the Government actually intended to give benefit to other commodities also, they would have specifically included the same in the G.O. Therefore, colour is not included in G.O.Ms. No. 381. However, circular issued by CTO is only instructive in nature and the same is not binding unless it is by way of G.O.

Therefore, by applying the principle laid down in the above judgment, the tribunal rightly declined to uphold the contention of the assessee, however, on technical ground that DCTO has no authority to revise his own order, allowed the appeal. The said finding is now challenged on the ground that when additional material is produced before DCTO, he can revise tax. According to Section 14 of A.P.G.S.T. Act, DCTO is competent to assess goods to tax and against his order, an appeal is maintainable u/s 19 to the Appellate Deputy Commissioner subject to compliance of such conditions. Section 20 permits Commissioner of Commercial Tax to revise tax suo motu calling for and examine records and revise the order passed by any person subordinate to the Commissioner of Commercial Tax under the provisions of the Act. Thus, power of revision is vested only on Commissioner of Commercial Tax as contemplated u/s 20 of A.P.G.S.T. Act. The sole contention of learned Special Government Pleader for Commercial Tax is that when new material is brought to the notice of authority, he can revise the order but here, no new material is brought to the notice of DCTO to take up suo motu revision which is not vested on him. In fact, Commissioner, Commercial Tax, alone is competent to take suo motu revision in view of Section 20 of A.P.G.S.T. Act. Therefore, the revision taken up by DCTO is nothing but transgressing the power conferred on him and Al exercise of power under the provisions of A.P.G.S.T. Act. Therefore, the order passed by the tribunal setting aside the revised assessment is totally in consonance with the provisions of the Act and we find no illegality in it warranting interference. Hence, the impugned order passed by the tribunal in T.A. No. 151 of 2000 dated 09-07-2001 is hereby confirmed holding the point against the revision petitioner and in favour of the respondent assessee. In the result, the revision is dismissed confirming the impugned order passed by the tribunal in T.A. No. 151 of 2000 dated 09-07-2001. Pending miscellaneous petitions, if any, shall stand dismissed in consequence. No order as to costs.