The Supreme Court bench comprising of Justice Dipak Misra and Justice Shiva Kirthi Singh held that, the assessee shall reap the benefit of initial assessment and Change of Opinion of the Assessing Authority is not valid ground for reopening of an Assessment.
The Court was hearing an appeal filed by M/s Ravi Prakash Refineries (P) Ltd, who is engaged in the manufacturing of refined edible oil by solvent extraction process and refining along with trading in edible oil and oil-cake. For the assessment year ending 31-3-2003 the assessee had filed Revised Annual Return in Form 4,declaring the Gross Taxable Turnovers at Rs.19,76,37,615-00 and Rs.1,60,93,055-00 respectively.
The appellant sold Sunflower De-oiled Cake (SF DOC) and several other goods in the course of inter-State trade and commerce and in the course of the said transaction the appellant produced ‘C’ Forms obtained from the dealers in inter-State sales. The assessee had admitted the liability of tax at 2 per cent on the sale of SF DOC in the course of inter-State trade and commerce. The Deputy Commissioner of Commercial Taxes (Assessment) Chitradurga, the assessing authority, had passed an order of assessment under Section 9(2) of the Central Sales Tax Act, 1956 (for brevity, ‘the CST Act’) on 29th January, 2005, whereby it had expressed the view that a sum of Rs.4,75,68,764/- was subjected to tax at 2 per cent. The assessing officer had granted the benefit on production of ‘C’ Form in terms of the Notification No.FD119 CSL 2002 (2) dated 31st May, 2002.
After the order of assessment was passed, the succeeding assessing officer formed an opinion that there was an escapement of tax due tointer-State sales of SF DOC was actually liable to tax at 4 per cent and not at 2 per cent, which had been erroneously adopted by the earlier assessing authority.
The aforesaid order was called in question in an appeal before the Joint Commissioner of Commercial Taxes (Appeals). That the change of opinion could not have been a ground for reopening of assessment in exercise of power under Section 12-A of the KST Act and, accordingly, set aside the order of re-assessment.
Though the assessee succeeded, yet it preferred an appeal before the CESTAT, Bangalore, as the first Appellate Authority had not expressed any opinion with regard to rate of tax on oil-cake and de-oiled cake.However, the Tribunal directed for reassessment for the year 2002-03 in respect of rate of CST levied at 4% on the turnover of Rs.4,75,68,764relating to inter-State sales of sunflower de-oiled cake covered by C Forms is modified to 2% allowing the benefit of reduction in the rate of CST to 2% granted in the Notification No.FD 119CSL 2002 (2) dated 31-5-2002.
On appeal, the High Court confirmed the findings of the Tribunal except one that there is distinction between oil cake and de-oiled cake and they are two different commodities and not one and the same.Thereafter the matter was brought before the Supreme Court.
The Court, confirmed the order of the High Court by holding that oil-cake and de-oiled cake being different products as per the notification dated 31st May, 2002. Further, the Court refused to re-open the assessment by granting the benefit of initial assessment to the assessee.
Read the full text of the Judgment here.
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