IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN FRIDAY, THE 6TH FEBRUARY 2009 / 17TH MAGHA 1930 ST.Rev..No. 114 of 2007(M) -------------------------- AGAINST THE ORDER DATED 30/12/2005 IN TA.146/2005 of S.T.A.T.ADDL.BENCH,PALAKKAD .................... REVISION PETITIONER/APPELLANT/ASSESSEE: ---------------------------------------------------- M/S CLASSIC SPICES PVT. LTD., E.P.AGRO INDUSTRIAL ESTATE, CHERPULASSERY ROAD, OTTAPPALAM, PALAKKAD DISTRICT, REPRESENTED BY E.P.RAJKUMAR, MANAGING DIRECTOR. BY ADV. SRI.ARIKKAT VIJAYAN MENON RESPONDENT/RESPONDENT/REVENUE: ------------------------------------------ STATE OF KERALA BY GOVERNMENT PLEADER, SRI V.K. SHAMSUDEEN THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 06/02/2009,ALONG WITH ST.REV. No. 115/2007, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C.R. C .N. RAMACHANDRAN NAIR & K. SURENDRA MOHAN, JJ. ------------------------------------------------- S.T.Rev. Nos. 114 & 115 OF 2007 -------------------------------------------------- Dated this the 6th day of February, 2009 JUDGMENT Ramachandran Nair,J. The revision petitions are filed by the assessee challenging the order of the Sales Tax Appellate Tribunal, whereunder the Tribunal confirmed the validity of suo motu revisional orders issued by the Deputy Commissioner of Commercial Taxes under Section 35 of the KGST Act directing revision of original assessments completed by the assessing officer for the assessment years 1997-98 and 1998-99. The petitioner was engaged in powdering and selling of red chilly, coriander, Turmeric etc., which does not involve any manufacturing activity. However, in the original assessment for the assessment years 1997-98 and 1998-99 petitioner claimed exemption which was granted by the assessing officer. Both the assessments were completed on 27.06.01. However, the assessing officer later noticed that exemption was wrongly granted and therefore he revised the assessments under Section 19(1) of the Act withdrawing the sales tax exemption wrongly granted and bringing tax escaped turnover. STRV Nos. 114 & 115/07 -:2:- Petitioner filed writ petition challenging the validity of these revised assessments on the ground that the revised orders passed under Section 19(1) were beyond the period of limitation provided under the statute. 2. Subsequent to the revision of original assessments by the assessing officer under Section 19(1), the Deputy Commissioner of Commercial Taxes initiated suo motu revisional proceedings under Section 35 of the KGST Act because he noticed that the revised assessments completed under Section 19(1), were not tenable as those were issued beyond the period of limitation. Eventhough the assessee raised objection stating that original assessments do not survive after revised orders are issued by the assessing officer under Section 19(1), the Deputy Commissioner overruled the objections and issued orders under Section 35 setting aside the original assessments with direction to the assessing officer to revise the assessments against which the assessee filed appeals before the Tribunal and Tribunal dismissed the appeals. 3. The question raised by the assessee is whether the Deputy Commissioner had jurisdiction under Section 35(1) of the KGST Act to revise the original assessments after the assessing officer issued STRV Nos. 114 & 115/07 -:3:- revised orders under Section 19(1) of the KGST Act. The counsel relied on a Division Bench judgment of this Court in the case of Cardamom Marketing Corporation's case, in ST(Rev) No.422/2004 dated 24.9.08 and contended that the Deputy Commissioner has no jurisdiction to revise the original assessment which does not survive after revised orders are issued by the assessing officer. We have gone through the judgment of this Court and we notice that in that case the Deputy Commissioner had not gone to the correctness or otherwise of the revised orders issued by the assessing officer under Section 19(1) of the KGST Act which was pending in appeal, at the time the Deputy Commissioner initiated and completed proceedings under Section 35(1) of the KGST Act. In this case also the counsel for the petitioner pointed out that facts are similar in as much as, instead of filing appeal against the revised assessments under Section 19(1) of the KGST Act, the petitioner had challenged the correctness of the revised assessment through writ petition which is still pending in this Court. In the above reported case decided by this Court it is seen that, the revised assessment was in fact cancelled by the time the Deputy Commissioner initiated proceedings under Section 35. When a revised assessment completed under Section STRV Nos. 114 & 115/07 -:4:- 19(1) is cancelled in appeal, then the only surviving assessment is the original assessment and we do not know on what basis this Court held that the Deputy Commissioner has no authority to revise the only surviving assessment order in exercise of his statutory powers under Section 35 of the KGST Act. However, in this case we find that in the Deputy Commissioner's order it is specifically declared that the revised order under Section 19 is invalid. In fact in the order he clearly holds as follows: "The revised assessment under Section 19 has been completed by the Additional Sales Tax Officer, Ottapalam on 31.08.04 after due date. Therefore, the revised assessment completed under Section 19 is not valid under law. Hence, 'not sustainable'. " The effect of the above finding of the Deputy Commissioner is that while considering the revision of assessment for the relevant year, the Deputy Commissioner declared the revised order issued by the officer under Section 19(1) as invalid and thereafter he proceeds to consider the correctness of the only surviving assessment order which is the original assessment. We are of the view that, he is fully competent to revise the original assessment which was the only surviving order after the declaration of the invalidity of the revised STRV Nos. 114 & 115/07 -:5:- order by the Deputy Commissioner. It is the settled position that the powers conferred on the assessing officer under Section 19(1) and powers of Deputy Commissioner under Section 35 are for the very same purpose of preventing escapement of assessment of any turnover or otherwise to prevent evasion of tax. It would be wrong to hold that the higher authority forfeited his right to revise an assessment order in exercise of supervisory jurisdiction vested in him merely because the original authority made an ineffective attempt to correct the mistake. There is no dispute that the Deputy Commissioner has authority under Section 35 to revise even a revised assessment issued under Section 19(1) and so much so, while considering evasion of tax or escapement of assessment of turnover, it will be open to the Deputy Commissioner to consider the validity of the revised order which was issued by the assessing officer for the very same year and if he finds that such order is unsustainable on account of limitation or for other reason, he is free to declare such order as illegal and invalid and then proceed to consider the correctness of the original assessment which is the only surviving order. However, by this time if the limitation is over for revising the original assessment then of course he forfeits his STRV Nos. 114 & 115/07 -:6:- authority to revise the original assessment order. However, in this case there is no dispute that the Deputy Commissioner's order revising the original assessment after declaring the revised assessment as invalid was passed within time. Therefore, we hold that the Deputy Commissioner is well within his powers to revise the assessment and Tribunal rightly upheld the validity of the orders. It is also to be mentioned that the Writ Petition filed by the petitioner has become infructuous because after the declaration of the revised assessment issued under Section 19(1) as invalid by the Deputy Commissioner, the order impugned in the Writ Petition no longer survives. We therefore dismiss the revision petitions with this observation. (C.N.RAMACHANDRAN NAIR) Judge. (K. SURENDRA MOHAN) Judge. ttb STRV Nos. 114 & 115/07 -:7:-