The Deputy Commissioner has the authority to exercise revisional jurisdiction under Section 20 (2) of the Act to review the legality or propriety of an order passed by a subordinate authority, including an exemption granted by the Commercial Tax Officer, and to revise the assessment accordingly, especially when there is a subsequent decision of the Supreme Court that provides new information or clarifies the correct interpretation of the law.

Headnote:
SALES TAX - REVISION - JURISDICTION - DEPUTY COMMISSIONER - EXERCISE OF REVISIONAL JURISDICTION - LEGALITY - EXEMPTION GRANTED BY COMMERCIAL TAX OFFICER - SUBSEQUENT DECISION OF SUPREME COURT - REVISION OF ASSESSMENT - POWERS OF DEPUTY COMMISSIONER - SCOPE - SECTION 14 (4) AND SECTION 20 (2) OF THE ANDHRA PRADESH GENERAL SALES TAX ACT, 1957.
Fact of the Case:

The assessee, an oil miller and dealer in groundnuts, reported a gross and net turnover for the assessment year 1969-70. The Commercial Tax Officer determined the net taxable turnover after exempting the disputed turnover, representing the purchase value of groundnut kernel sold to oil millers within the State, based on a judgment of the Andhra Pradesh High Court. The Deputy Commissioner, in exercise of his revisional powers under Section 20 (2) of the Andhra Pradesh General Sales Tax Act, 1957 (the Act), brought the disputed turnover to tax based on a subsequent decision of the Supreme Court, which did not endorse the High Court's view and affirmed an earlier decision of the High Court holding that the disputed turnover was liable to tax.
Finding of the Court:

1. The Deputy Commissioner was justified in exercising his revisional jurisdiction under Section 20 (2) of the Act on the facts and in the circumstances of the case. 2. The disputed turnover, representing the purchase value of groundnut kernel or groundnuts sold to oil millers within the State by the assessee, was liable to tax.
Issues: 1. Whether the Deputy Commissioner was justified in exercising his revisional jurisdiction under Section 20 (2) of the Act on the facts and in the circumstances of the case? 2. Whether the disputed turnover, representing the purchase value of groundnut kernel or groundnuts sold to oil millers within the State by the assessee, was liable to tax?
Ratio Decidendi: 1. Section 14 (4) of the Act empowers the assessing authority, including the Deputy Commissioner, to reassess the turnover if it has escaped assessment, been underassessed, or assessed at a lower rate than the correct rate. However, in this case, the Deputy Commissioner was not reassessing the turnover but exercising his revisional jurisdiction under Section 20 (2) to determine the legality or propriety of the exemption granted by the Commercial Tax Officer. 2. The Supreme Court's subsequent decision, which held that the disputed turnover was liable to tax, constituted new information that could be considered by the Deputy Commissioner in exercising his revisional jurisdiction. The Deputy Commissioner was not bound by the exemption granted by the Commercial Tax Officer based on the earlier High Court judgment, which had been overruled by the Supreme Court.
Final Decision: The High Court set aside the Tribunal's finding that the Deputy Commissioner erred in exercising his jurisdiction under Section 20 (2) of the Act and remitted the case back to the Tribunal to determine how much of the turnover in each case was purchased by the assessee for milling and the rest for sale. If the Tribunal found that any part of the turnover was purchased for resale, the assessee would be entitled to relief to that extent.

( 1 ) (JUDGMENT of the Bench delivered by the Hon ble the Chief Justice.) 1. These three revisions arise out of three separate orders of the Sales Tax Appellate Tribunal but raise two common questions. We, therefore, propose to dispose of these three revisions by a common judgment. The two questions that arise for our consideration are, (1) Whether the Deputy Commissioner was justified in exercising his revisional jurisdiction under Section 20 (2) of the A. P. G. S. T. Act on the facts and in the circumstances of the case? (2) Whether the disputed turnover which represents the purchase value of groundnut kernel or groundnuts sold to oil millers within the State by the assessee, who is both a dealer and miller, is liable to tax?" for purposes of determining the questions involved, we shall state the facts of the case of the assessee, a firm known as "sri Lalitha Oil mills, Gudur . This firm is an oil miller and dealer in groundnu. . The assessee reported the gross and net turnovers of Rs. 9,07174-80 ps and Rs. 3,84,648. 24 ps. respectively for the assessment year 1969-70 in the A-1 return filed by it. The Commercial Tax Officer determined the net taxable turnover at Rs. 2,78,008-29 ps. The disputed turnover of Rs. 1,10,875-57ps which represented the purchase value of the groundnut kernel sold to oil millers in the State, was exempted from tax having regard to the judgment of this Court in madar Khan and Company vs. Assistant Commissioner (1) 27 S. T. C. 18. The Deputy Commissioner, in exercise of his revisional powers under section 20 (2) of the Andhra Pradesh General Sales Tax Act, herein after referred to as the Act after following the procedure prescribed, brought this turnover to tax on the basis of a subsequent decision of the Supreme Court in Sri Venkateswara etc. Oil Mill vs. State of andhra Pradesh (2) 28 S. T. C. 599. The Supreme Court did not endorse the view of this Court in Madar Khan and Co. vs. Assistant commissioner (1), 27, S. T. C. , 18, but affirmed the earlier decision of this Courtin State of Andhra Pradesh vs. Lakshmi Oil Mill (3) 20 s. T. C. 489. The Deputy Commissioner disallowed the exemption granted by the Commercial Tax Officer in respect of the disputed turnover of Rs. 1,10,875. 57 ps. and directed that turnover to be brought to tax at 3 percent. It is against that order of the Deputy Commissioner that the assessee preferred an appeal before the Sales Tax appellate Tribunal. As similar exemptions were granted by the commercial Tax Officer in respect of the other two assessees also on the sale of groundnuts or groundnut kernel to millers in the State, and as the exemptions were disallowed by the Deputy Commissioner in exercise of his revisional jurisdiction, they also preferred appeals to the Tribunal. The Tribunal was of the viewthat, at the time when the Commercial Tax Officer granted exemption he granted that exemption having regard to the view expressed by this Court in Madar khan and Company vs. Assistant Commissioner (1) 27, S. T. C. , 18, and that, therefore, there was no illegality attached to the exemption granted by the Commercial Tax Officer and hence the Deputy Commissioner was in error in exercising his revisional powers under Section 20 (2) of the Act. On the question whether the assessees were entitled to exemption in respect of the sales of groundnut kernel effected by them to the millers in the State, the Tribunal held, following the decision in Madar Khan and Company vs. Assistant Commissioner (1) Supra, that the sales were rightly exempted.

( 2 ) WE may first consider the question whether the Deputy commissioner acted within the bounds of the authority conferred upon him in exercising his revisional jurisdiction. It is the case of Mr. Dasaratharama Reddy appearing for the assessees that the proper and correct provision applicable in cases of this nature is Sec. 14 (4) of the Act and not section 20 (2) and that it was open to the Deputy commissioner to exercise the powers of the ass

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1978 Supreme(AP) 32

Andhra Pradesh High CourtJudges : S.OBUL REDDY, T.NARSINGA RAOState Of A.P.represented by State Representative before Sales Tax Appellate Tribunal, A.P., Hyderabad - AppellantVersusLalitha Oil Mills, Gudur - RespondentDecided On : 02-06-78

Andhra Pradesh High Court
Judges : S.OBUL REDDY, T.NARSINGA RAO
State Of A.P.represented by State Representative before Sales Tax Appellate Tribunal, A.P., Hyderabad - Appellant
Versus
Lalitha Oil Mills, Gudur - Respondent
Decided On : 02-06-78