Tirupathi Traders vs The Additional Commissioner of Commercial Taxes

Jayant M. Patel, J.—1. The appeal is admitted. Mr. T.K. Vedamurthy, learned Government Pleader takes notice on admission for the respondent.

With the consent of learned Advocate appearing for both sides, the appeal is finally heard.

The present appeal is directed against the Order dated 22.08.2014 passed by the Additional Commissioner of Commercial Taxes, Zone-3, Bangalore [hereinafter referred to as ''Commissioner'' for the sake of convenience], whereby the Appellate Order dated 10.01.2014 is set aside and revised assessment is restored.

The facts of the case appears to be that the appellant is a registered dealer under the Central Sales Tax Act, 1956 [hereinafter referred to as ''CST Act'', for the sake of convenience] and Karnataka Value Added Tax Act, 2003 [hereinafter referred to as ''KVAT Act'', for the sake of convenience]. As per the appellant, in the year 2006-07, there were goods returned worth Rs. 58,12,800/- for the respective tax period of July 2006. The Assessing Authority revised the order under Section 9[2] of the CST Act and rejected the claim of sales returns on the ground that the sales returns were effected beyond the time stipulated and the appellant did not produce the document in support of the sales returns.

The matter was carried in appeal before the Joint Commissioner of Commercial Taxes [Appeals]. As per the appellant, all the relevant documents were produced and the Appellate Authority in the said appeal modified the Order of Assessment and levied Central Sales Tax at 4% as against ''Nil''. The matter was taken up in suo motu revision by the Additional Commissioner in Appeal No. ZAC-03/DVG/SMR-01/14-15 and the order of the First Appellate Authority i.e., the Joint Commissioner of Commercial Taxes [Appeals] was set aside. Under the circumstances, the present appeal before this Court.

We have heard Mrs. Vani H., learned Counsel for the Appellant and Mr. T.K. Vedamurthy, learned Government Pleader appearing for the respondent.

We have considered the records and proceedings of the original file of the Commissioner which has been made available by learned Government Pleader appearing for the respondent, during the course of hearing.

It appears that two vital aspects has been lost sight of by the Commissioner while exercising revisional jurisdiction. One is the letter dated 15.08.2006 issued by M/s. Kothari Products Limited to appellant whereby it is confirmed that the case of Bill Nos. 622 and 623 both dated 10.07.2006 and Bill Nos. 624 and 625 both dated 14.07.2006 have been rejected on account of inferior quality of the goods on 15.08.2006. The said letter is part of the record on the file of the Commissioner. The aforesaid aspect further considered with the reasoning recorded by the Commissioner in the impugned order shows that the Commissioner has discarded the transport receipt produced by the appellant for dispatch of the goods by M/s. Kothari Products Limited to Tirupathi Traders [appellant herein] on the ground that there are no endorsements of check post and therefore the say of the appellant cannot be accepted. The most pertinent and important aspect is that if the person to whom the goods were sold has confirmed that the goods were dispatched by way of return of goods, since the material as per them was found to be of inferior quality, the said aspect could not have been ignored or in any case the application of mind on the part of the Commissioner was required before reaching the conclusion that the say of the appellant for return of the sales cannot be accepted. Under these circumstances, we find that it would be a fit case to remand the matter to the Commissioner for reconsideration and after hearing learned representative of both sides, appropriate order may be passed afresh in accordance with law.

In view of the above, the impugned Order Annexure-A dated 22.08.2014 passed by the Additional Commissioner of Commercial Taxes, Zone-3, Bangalore is set aside, with a further direction that the suo motu revision shall stand restored to the Commissioner.

It is further observed and directed that the Commissioner shall re-examine the matter in the light of the observations made by this Court in the present Judgment and after hearing both the sides, order in accordance with law shall be passed as early as possible, preferably within a period of six months from the date of receipt of certified copy of the Judgment of this Court.

The appeal is allowed to the aforesaid extent. Considering the facts and circumstances, no order as to costs.