K. Shivashankar Bhat, J.

1. While, S.T.R.Ps. Nos. 66 to 68 of 1991 pertain to the assessment years 1980-81, 1981-82 and 1982-83, S.T.R.P. No. 132 of 1991 pertains to the year 1978-79. Thus the entire period is from November 1, 1978 to November 4, 1983.

In all these cases, the assessee questions the orders made by the Deputy Commissioner of Commercial Taxes ("the D.C." for short), in the exercise of his power of revision under section 21 of the Karnataka Sales Tax Act, 1957 ("the Act" for short). In the first three revision petitions the orders were made on August 29, 1989. In respect of the year 1978-79 the order in revision was made on October 4, 1989.

2. After regular assessments were completed, the Deputy Commissioner issued notices under section 21(4) proposing to revise the assessment orders suo motu. The assessee challenged them by filling writ petitions, which were dismissed on April 1, 1986 [See Majaveer Drug House v. State of Karnataka , with certain observations. Thereafter, the assessee filed his objections, which were not accepted by the D.C.

3. In the show cause notice proposing to revise the assessment order for the year 1980-81, it was stated that : (i) in respect of 7 persons to whom goods were supplied, and which were claimed by the assessee as having returned by the purchasers, proper proof was not forthcoming to sustain the claim of exemption, on the ground of return of goods. The total turnover of these transactions was Rs. 3,938.38; (ii) list of inter-State purchases was not filed to ascertain correctly the taxable purchases; (iii) the list of declarations under form "C" gave the figure of Rs. 1,03,14,437.61, while the taxable purchases was shown as Rs. 1,01,94,586.02. No reason was given for the difference of Rs. 1,19,851.59; (iv) there was a difference in the working of additional tax, which came of Rs. 3,880.38. The assessee pointed out that : (i) details regarding the return of goods were available with the department, which were verified by the assessing authority; (ii) "C" form register and copies of "C" form statement had been field with the quantum of inter-State purchases and that it was not be requirement of only rule that purchase list should be filed; (iii) this difference between the figures in "C" forms and purchase turnover, was usual in all cases of inter-State transactions because, in many cases "C" forms are issued for gross amount while the purchase amount is the actual price paid; (iv) the levy of additional tax was illegal.

4. The D.C. accepted the explanation as to the ground No. (ii), pertaining to the list of inter-State purchases; similarly, the explanation regarding the additional tax under ground No. (iv) was also accepted. In other two aspects, show cause notice was affirmed. Consequently assessment order was set aside with a direction to the assessing authority to dispose of the matter "in accordance with law". The D.C. observed as to ground No. (iii), that :

"............. However, regarding the difference pointed out in the purchase amounts as per list of declarations in "C" form and the taxable purchases disclosed in the assessment order the contention of the authorised representative cannot be accepted as he has not adduced any proof or reconciliation for this difference."

5. The first ground as to the return of goods relate to a turnover of Rs. 3,938.38 and the tax thereon would be between Rs. 200 and Rs. 300. The supervisory jurisdiction of revision under section 21 should not take note of such a minor discrepancy in the assessment order, specially, when the assessee may not be in a position to clear the suspicion of the revising authority after several years of the events. The reason given in the order of the D.C., rejecting the explanation of the assessee is also not clear; as D.C. held :

"Regarding sales returns claimed to be disallowed, the contention of the authorised representative that the undersigned has taken the dates of sale as dates of returns is not correct, as is evident from the table furnished in respect of this item and hence the contention is not accepted."

The Appellate Tribunal has affirmed this reasoning, without referring to the assessees explanation. In the circumstances of this case, we hold that the assessment order was not illegal, improper nor proceedings improper, on this aspect of the case.

6. However, the case of the assessee regarding "C" form survives for consideration, because, admittedly, the figures in "C" form do not tally with the purchases shown. The burden was on the assessee to explain the difference. The assessee offered a particular explanation but did not establish it. The assessee should have placed convincing material before the revisional authority that, such a difference was usual in all such transactions. The record of the case, in no way revealed any explanation for this difference and the assessment order is also silent on this aspect. The assessment order reveals the purchases were of Rs. 1,01,94,586.02, though the records of the case, on examination clearly established that as per "C" forms, purchases were of Rs. 1,03,14,437.61, resulting in a difference of Rs. 1,19,851.59. Whether this could be a basis for the exercise of the revisional power under section 21 will be considered presently.

7. The position regarding the year 1981-82 is identical, so far as the "C" forms, and the purchase figures are concerned. The figures disclosed by the "C" forms came to Rs. 2,33,67,743.12; but the actual purchases declared by the assessee, and accepted by the assessing authority was Rs. 96,84,098.18. The D.C. has specifically confined the direction to the assessing authority to reconsider this aspect only.

8. Regarding the year 1982-83, about a similar difference of Rs. 85,40,000 was noticed, which was not explained. The assessees explanation that assessing authority has already initiated proceedings under section 12-A on this ground, was found to be incorrect; the other explanation, referred already was not sustained by any material (as in the earlier cases).

9.1. For the assessment year 1978-79 the order of assessment was made by the assessing authority on March 20, 1980. The D.C. issued a show cause notice dated March 3, 1984. The notice stated that, (i) for the month of October, 1979, the assessee had placed two statements in form No. 3 under section 12B for the purpose of advance tax; and in form No. 4, the assessee adopted the higher figure of the turnover; (ii) no proof was forthcoming to show that local purchases were already covered by tax payments and form No. 32 declarations were not filed and that party-wise purchase statements filed was insufficient to the extent of bill-wise details; (iii) some purchases were supported under "C" forms, while to the extent of Rs. 1,68,523.57, no such forms were found, to prove the inter-State trade transactions; details of purchases covered by "C" forms were not collected by the assessing authority; (iv) the assessment order did not disclose the classification of opening and closing balance of first dealer goods and second dealer goods separately.

9.2. Writ Petition No. 4780 of 1984 filed by the assessee challenging this notice was dismissed on April 1, 1986 [Reported as Mahaveer Drug House v. State of Karnataka ; thereafter the petitioner filed his objections and ultimately an order came to be passed by the Deputy Commissioner on October 4, 1989, setting aside the assessment order and remanding the matter to make a fresh assessment.

9.3. The assessee pointed out to the Deputy Commissioner that assessment is made on the basis of form No. 4, which contains the details exhaustively. Form No. 3 is filed every month, only for purpose of advance tax and that in form No. 4, the assessee has admittedly given a higher figure of turnover than the form No. 3; in fact, there was same mistake in one of the forms 3, but, the assessee had filed a revised form 3 on the discovery of the mistake and both the forms were found in the records as is clear from the very show cause notice (which refers to the discrepancies between two "C forms" filed for October, 1979). As to form No. 32, the assessee pointed out that it is only a piece of evidence and even without it, exemption could be claimed, provided the relevant facts are proved and in these cases the assessing authority was satisfied about the purchases having suffered tax already. Entire purchases were vouched and referred to by the assessing authority. It was also contended that "C" form register was produced which had been verified by the assessing authority.

9.4. After referring to the respective contentions, the Deputy Commissioner concluded as follows;

"The argument of the duty authorised representative with reference to the written objections, as well as the records, are concluded on the basis of form 4. I cannot agree with the contention of the advocate that form 32 is only a piece of evidence and exemption does not depend on existence or non-existence of form 32. Section 6A of the Karnataka Sales Tax Act, 1957, casts the burden of proving that the sales effected by a dealer is not taxable and form 32 is a very important evidence, through which the dealer can discharge his burden. Further, though the assessment is concluded on the basis of form 4, it is imperative for the assessing authority to reconcile the form 3 and the form 4 figures with specific reasons for the difference. This burden is also on the assessee as he should satisfactorily explain the difference in the form 3 and form 4 figures, which has not been done in the instant case. Under the circumstances, the following orders are passed :

"Order under section 21(2) of the Karnataka Sales Tax Act, 1957 dated October 4, 1989.

In view of the facts explained in the preamble, the assessment order dated March 20, 1980, passed by the Commercial Tax Officer, XIV Circle, Bangalore, in respect of M/s. Mahaveer Drug House, Gandhinagar, Bangalore-9, for the year 1978-79 (Deepavali year) is set aside and the case is remanded to the assessing authority for re-examination of the points discussed in the preamble of this order and to conclude a fresh assessment."

9.5. As to the discrepancies in the figures found in form No. 3 and in form No. 4, the reasons given by the Deputy Commissioner and then by the first appellate authority, seems to be no reason at all. Even the appellate authority has noted the two forms No. 3, filed in October, 1979. That means, the mistake found in the form No. 3 filed earlier was sought to be rectified by the form filed subsequently on the same day. Form No. 3 is relevant to estimate the advance tax. If ultimately, tax payable on the final assessment is found to be far in excess of the advance tax paid under section 12B, the Act provides to penalise the assessee under section 12-B(3). The correctness of the taxable turnover depends on the details found in form No. 4 and proof of the same. An assessing authority may suspect the figures stated in form No. 4, if the total turnover disclosed for advance tax as per the several forms in "3", exceeded the total turnover furnished for the final assessment based on form No. 4. It is ununderstandable as to how the assessee can be attributed with any suppression or mistake, when the ultimate turnover disclosed in form No. 4, far exceeds the figures found in form No. 3. Here, the facts are not so bad as the Deputy Commissioner imagined it to be, because, the mistake in form No. 3 was realised and on the same day another form No. 3 was filed. The Deputy Commissioner has not cared to compare this figure with that of the figure disclosed in form No. 4. We cannot uphold this approach of the revisional authority.

9.6. The Deputy Commissioner has given other reasons also for his conclusion quoted by us; the said conclusion comprises within it his discussion and is not happily worded. It has been indicated that as an alternative to form No. 32, "bill-wise" details of subsequent purchases are not forthcoming. On this, the assessing authority had stated in the order of assessment, that the assessees have "accounted correctly, the entire purchases are vouched and they have maintained strict account both for opening and closing stock. C form register currently maintained". On this, the Deputy Commissioner has stated in his notice that "party-wise purchase statements filed is insufficient to the extent of bill-wise details, at least to substitute the evidence of the declaration in form 32 required under the provisions of the Act". In the order he does not say so, though the first appellate authority has adopted this reasoning. The Appellate Tribunal has also upheld this reasoning, as an alternative to the reasons that production of form No. 32 is mandatory; the Tribunal observed :

"The appellant has not furnished either form 32 declaration or the bill-wise details of his subsequent purchases nor the assessing authority has made any attempt to obtain the same and verify it. The action of the assessing authority is highly improper and the revisional authority rightly felt so since a proper verification of the documents by the assessing authority is a requirement of law before allowing the exemptions. Since the above points requires detailed reverification of the documents, the revisional authority felt that the proper course of action would be remanding the case back to the assessing authority for fresh disposal and accordingly he has done so."

9.7. The Deputy Commissioner has given scope for the attack against his order by the manner in which he expressed his conclusion; he could have been clearer in his statement. But the purport of the order could be understood by a careful analysis of the same. Ultimately, the assessment order was sought to be revised because, there has been no verification of the assessees claim that some of the goods purchased by the assessee had suffered tax already in the hands of a prior dealer. In other words, the claim based on the "second dealer status" was not verified and it is for the assessee to establish the claim by producing acceptable evidence in view of section 6A of the Act, read with the circumstances that the declarations in form No. 32 are not forthcoming.

10.1. Whether the enquiry held by the assessing authority is a satisfactory enquiry or he should have examined the case more thoroughly, is a matter for the revisional authority under section 21, to decide. Of course, the said authority cannot exercise his power under section 21 on the basis of mere suspicion or conjecture; the reasons for the exercise of the power should be objective. It is a wide power (and not a "wild" power). Circumstances of a case may warrant the examination of an assessees case in a manner not done by the assessing authority; in such a situation there is nothing illegal if the revisional authority interferes with the order and directs further enquiry.

10.2. Similar views have been expressed by various courts, while considering section 263 of the Income Tax Act, 1961; it is unnecessary to refer to them in view of the clear language of section 21 of the Act, with which we are concerned.

11. If the order is illegal or improper or the proceeding is irregular, the order could be revised under section 21. The relevant words are "legality or propriety of such order or as to regularity of such proceedings". Further, the vitiating element in the order or proceeding should be the "prejudice" to the interests of the Revenue. The term "propriety" is a term of wide import. It covers a very large area. In Raman & Raman Ltd. v. State of Madras : [1956]1SCR256 , the Supreme Court while considering the terms used in section 64-A of the Motor Vehicles Act, observed, at page 467 :

"The word propriety has nowhere been defined in the Act and is capable of a variety of meanings. In the Oxford English Dictionary (Volume VIII) it has been stated to mean fitness; appropriateness; aptitude; suitability; appropriateness to the circumstances or conditions; conformity with requirement, rule or principle; rightness, correctness, justness, accuracy."

On the existing record, it is open to the authority acting under section 21, to come to a different conclusion from that of the assessing authority and in an appropriate case, the revisional authority may direct the assessing authority to examine the case further.

12. The learned Government Advocate did not dispute the proposition that production of form No. 32 is not mandatory and admitted that an assessee may prove his claim by other evidence. On this aspect, law is quite settled - (vide : State of Orissa v. M. A. Tulloch and Co. Ltd. : [1964]7SCR816 and Vasavi Minerals & Mining Co. v. Commissioner of Commercial Taxes, Bangalore - S.T.R. Ps 106 of 1980 and connected cases - decided on 12th February, 1981). Even in a case where form No. 32 is produced, the assessing authority may require further proof depending upon the circumstances. In this regard, observations of this Court in Narayana Setty v. State of Karnataka , are relevant; at page 85, the court observed :

"No doubt, the burden is on the assessee to prove that he is not liable to tax. He cannot discharge that burden by merely producing form 32 which was passed on to him by his sellers. He must produce some other acceptable evidence to lend credence to the contention that he has purchased the goods from a dealer who is liable to pay tax under the Act. If once the evidence is put on record, then it is a question of appreciation and comparing the evidence of the assessee with the evidence produced by the sellers or collected in accordance with law by the assessing officer from the sellers. If an assessee has produced acceptable evidence in addition to form 32 to show that he has purchased the goods from a person who is liable to pay tax, it would be proper for the assessing officer to accept such evidence unless he comes to the conclusion by other positive proof that the selling dealers were not liable to pay tax on the concerned goods."

13. Mr. B. P. Gandhi, learned counsel for the assessee, contended that : (A) in all these cases, the revising authority purported to revise the assessment orders on the ground that some turnovers escaped assessment; this is a subject reserved for the assessing authority under section 12A; in the guise of revising the order of assessment under section 21, it is not open to the revising authority to assess the escaped turnover; (B) the order of this Court in the writ petitions filed by the assessee makes it clear that the revisional authority has to "revise" the orders of assessment; he cannot now, remand the cases to the assessing authority to make fresh orders of assessment, (C) the orders of the revising authority do not satisfy the requirements of section 21, inasmuch as, the said authority has not given a definite finding that the assessment orders are illegal, or improper or that the proceedings were irregular; (D) discrepancies between annexure "C"-figures and the purchase figures is quite common in the inter-State transactions and the explanation of the assessee has been ignored by the revising authority.

14. Contentions "A" and "B" are to be considered together. Before proceeding further, as to contention (D) it has to be noted, only to be rejected, because, the factum of discrepancy is admitted by the assessee. In such a situation, burden is on the assessee to explain away the difference; the explanation offered by the assessee was not substantiated. Since the revising authority has remanded the matter, even now, before the assessing authority, the assessee may substantiate his explanation. The revising authority has not prohibited the assessing authority from examining the question afresh; in fact, tenor of the remand orders is, quite clear; it requires the assessing authority to enquire into this aspect and then to pass an appropriate order of assessment.

15. Contention "C" is based on mere technicality. If the order of the revising authority discloses that the said authority considered the legality or propriety of the order or the regularity of the proceedings as reflected from the records, it is not necessary to repeat those words in the revisional order. These words circumscribe the scope of the enquiry under section 21 and the order made under the said provision has to be examined whether requirements laid down by these words are satisfied.

16. The main contention is that the revisional authority seeks to assess the escaped turnover and this is the jurisdiction vested in the assessing authority under section 12-A. Till March 31, 1983, the words in section 12-A were different and it read as follows :

"April 1, 1970 to March 31, 1983 (Act 9 of 1970).

12-A. Assessment of escaped turnover. - (1) Where for any reason the whole or any part of the turnover of a dealer has escaped assessment to tax or licence fee or has been assessed at a lower rate than the rate at which it is assessable, the assessing authority, may, subject to the provisions of sub-section (2), at any time within a period of five years from the expiry of the year to which the tax or licence fee relates, proceed to assess to the best of its judgment, the tax or licence fee payable on the turnover referred to after issuing a notice to the dealer and after making such enquiry as it considers necessary."

Thereafter the scope of section 12-A was widened by the addition of a few more circumstances under which the assessing authority could exercise his powers under section 12-A; the section reads :

"April 1, 1983 to July 31, 1985 (Act 10 of 1983).

12-A. Assessment of escaped turnover. - (1) If the assessing authority has reason to believe that the whole or any part of the turnover of a dealer in respect of any period has escaped assessment to tax or has been under-assessed or has been assessed at a rate lower than the rate at which it is assessable under this Act or any deductions or exemptions have been wrongly allowed in respect thereof, the assessing authority may notwithstanding the fact that the whole or part of such escaped turnover was already before the said authority at the time of the original assessment or reassessment but subject to the provisions of sub-section (2), at any time within a period of five years from the expiry of the year to which the tax relates, proceed to assess or reassess to the best of its judgment the tax payable by the dealer in respect of such turnover after issuing a notice to the dealer and after making such enquiry as it may consider necessary."

Some more amendments of the years 1985 and 1988 need not be referred for the purpose of the present discussion. Whereas, initially, section 12-A was attracted when turnover (i) escaped assessment of tax or (ii) has been assessed at a lower rate than the rate at which it is assessable, after the amendment of the year 1983 (with effect from April 1, 1983), the provision was attracted when the turnover (i) escaped assessment to tax or (ii) has been under-assessed or has been assessed at a lower rate .... or (iii) any deductions or exemptions have been wrongly allowed in respect of the said turnover.

Section 21(1) in substance reads :

"The Assistant Commissioner may of his own motion call for and examine the record of any order passed or proceeding recorded under the provisions of this Act by Assistant Commercial Tax Officer subordinate to him for the purpose of satisfying himself as to the legality or propriety of such order or as to the regularity of such proceeding in so far as it is prejudicial to the interests of the Revenue and may pass such order with respect thereto as he thinks fit."

17. The first part of section 12-A provides for the assessment of "escaped turnover" in its conventional sense; the second part provided for re-doing the assessment when a proper rate of tax was not applied earlier. To attract this part, fresh material is unnecessary; in most cases, it is an error in applying a wrong provision of the Act. In fact, such an error would be apparent to the revisional authority on perusal of the records of the assessment and therefore, normally, could be a matter to exercise the jurisdiction under section 21 also. The third part introduced with effect from April 1, 1983, ropes in the cases of wrong deductions or exemptions allowed earlier. This again, is a subject which would also fall within the scope of section 21, because, in several cases, an examination of the "record" would reveal the error committed by the assessing authority in allowing the deductions or exemptions.

18. The assessees learned counsel, however, relied on the principle that, when a power is specifically conferred on the assessing authority, necessarily the said power gets excluded from the scope of the power vested in any higher authority, as otherwise, the assessee would lose one right of appeal and in some cases, benefit of the limitation; further, the two provisions require a harmonious reading.

It is not possible for us to accept this contention in view of the plain language of section 21. In the absence of any limitation imposed for the exercise of the superior power created under section 21, its scope should not be curtailed by recourse to principles of doubtful application. Section 21 is not subjected to section 12-A; similarly, section 12-A is not worded as to override the provisions of section 21.

19. There is no basic rule requiring the Legislature to confine the subject-matter of a jurisdiction to one authority alone. It is for the Legislature to create two or more jurisdictions, which may to some extent overlap with each other; in such a situation, initiation of proceedings by both sets of authorities in respect of the same subject-matter could be prevented by the higher authority issuing appropriate administrative directions. Section 21 creates a superior and supervisory jurisdiction unlike the jurisdiction under section 12-A; initiation of proceedings under section 21 is limited to the examination of the "record of any order passed" or "proceeding recorded". Under section 12-A the jurisdiction is not confined to the "record" of the case. To this extent there is a difference between the two jurisdictions. Further, if the examination of the record reveals any illegality, impropriety or irregularity in the proceeding, a superior officer normally should have the power to intervene and take action to safeguard the interests of the Revenue. Unlike the assessee, the Revenue has no right of appeal against an order of assessment; this purpose is substantially met by this provision. However, unless, the illegality, impropriety or the irregularity referred to therein is not revealed by the examination of the record, but depends upon any material outside the said record, section 21 cannot be resorted to; the Revenue then has to invoke other provisions of the Act, like section 12-A.

20. Mr. Gandhi relied on a decision of this Court in Bidar Sahakar Sakkare Karkhane Ltd. v. State of Karnataka . In the said case (for the assessment years 1971-72 and 1972-73) the assessing authority while concluding the assessment had omitted to include the expenses incurred by the assessee to purchase the sugarcane, in the taxable turnover. This was sought to be revised under section 12-A. The Bench held that,

"It is not the case of the department at any stage that the assessing authority did apply his mind to the harvesting charges referred to in the trading result of the assessee. In fact to make the matter clear on this point, we asked Mr. Babu, learned Government Advocate, whether this is a case where the assessing authority had applied his mind to the turnover relating to the harvesting charges. He frankly submitted that this is a case where the assessing authority did not apply his mind on the disputed turnover. He, however, maintained that, since the disputed turnover was not outside the record of assessment, the assessing authority under section 12-A and the Deputy Commissioner under section 21(2) of the Act have got concurrent jurisdiction to revise such assessment. The learned counsel elaborated his submission as follows :

(i) the turnover that has not been disclosed in the original assessment record, but discovered by further investigation or information.

(ii) the turnover that has been disclosed in the assessment records, in respect of which the assessing authority has applied his mind, but not assessed, and

(iii) the turnover that has been disclosed in the assessment records, but the assessing authority did not tax it, perhaps inadvertently without noticing it.

In the first instance, according to the learned counsel, it would be the exclusive jurisdiction of the assessing authority to take proceedings to assess the escaped turnover under section 12-A; in the second instance, it would be the exclusive jurisdiction of the revising authority to revise the assessment under section 21(2) and in the third instance, it would be equally open to the assessing authority and also the revising authority to revise the assessment."

The observations of this Court in Rallis India Limited v. State of Mysore [1965] 16 STC 130 Mys were distinguished as obiter wherein this Court had held that to some extent jurisdiction under rule 32 overlapped with the jurisdiction under section 15. After referring to two decisions of the Supreme Court, the Bench held at page 67 :

"It is thus clear that the revisional power cannot be exercised in respect of a matter which falls within the power to reassess the escaped turnover. The revising authority, in other words, should not trench upon the powers which are expressly reserved to the assessing authority under section 12-A of the Act. The Deputy Commissioner, in exercise of his revisional jurisdiction, should not ignore that limitation."

At page 68, the Bench observed :

"It is clear from these provisions that the reason for the turnover escaping assessment is immaterial. The turnover might escape for any reason. It might be by oversight, mistake or by design. If the records reveals no application of mind by the assessing authority in respect of a part of the turnover, then, it must be deemed to have escaped assessment. It would be therefore a clear case falling within the exclusive jurisdiction of the assessing authority for reassessment, no matter whether that part of the turnover was in or outside the record of assessment. If, on the other hand, the assessing authority has applied his mind and erroneously excluded any part of the turnover, then certainly it would be a case for the revisional authority to revise the assessment."

With utmost respect to the learned Judges, we are of the view that these observations ignore the essence of the revisional jurisdiction created by section 21. If an assessing authority ignores a relevant fact on record and does not apply his mind to it, no doubt, to that extent, turnover escapes the assessment. This escapement makes the order illegal or improper (the term "improper" being of wide import, as already noticed by us); in such a situation, when the illegality, impropriety or irregularity is revealed from the existing "record" of the case, there is no reason to deny the jurisdiction under section 21 to such a situation. However, if the order is the result of the non-application of the mind of the assessing authority because, the relevant material was not before the court and there is nothing on record to indicate that the assessing authority should have held further enquiry on the question before passing the assessment order it would be a case for section 12-A and not for applying section 21. Again, if the records disclose that the assessing authority should have probed further on a claim made by the assessee or on a matter relevant to the making of the assessment order, making an order of assessment without such a probe will be a case of an incomplete enquiry and the assessment order would not be a proper order and the proceeding before the assessing authority would not be regular.

21. In Gee Vee Enterprises v. Additional Commissioner of Income Tax : [1975]99ITR375(Delhi) , the Delhi High Court was considering the scope of section 263 of the Income Tax Act, 1961, which could be applied to construe the provisions of section 21 of the Act also. The High Court held at page 386 :

".............. The Commissioner can regard the order as erroneous on the ground that in the circumstances of the case the Income Tax Officer should have made further inquiries before accepting the statements made by the assessee in his return.

The reason is obvious. The position and function of the Income Tax Officer is very different from that of a civil court. The statements made in a pleading proved by the minimum amount of evidence may be accepted by a civil court in the absence of any rebuttal. The civil court is neutral. It simply gives decision on the basis of the pleading and evidence which comes before it. The Income Tax Officer is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry. The meaning to be given to the word erroneous in section 263 emerges out of this context. It is because it is incumbent on the Income Tax Officer to further investigate the facts stated in the return when circumstances would make such an inquiry prudent that the word "erroneous in section 263 includes the failure to make such an inquiry. The order becomes erroneous because such an inquiry has not been made and not because there is anything wrong with the order if all the facts stated therein are assumed to be correct."

The very purpose of section 21 is to ensure that the assessing authority applies his mind to relevant facts and the order made by the assessing authority is not prejudicial to the interests of the Revenue by an incomplete enquiry, etc.

22. At any rate, ratio of the decision in Bidar Sahakar Sakkare Karkhane Ltd. if applied liberally would take away the substantial area covered by section 21, by confining the said area to section 12-A, because, the area now covered by section 12-A is quite wide after its amendment with effect from April 1, 1983; therefore, now it can be safely said only because an area comes under section 12-A, the said area cannot be excluded from the purview of section 21.

23. In Swastik Oil Mills Ltd. v. H. B. Munshi, Deputy Commissioner of Sales Tax : [1968]2SCR492 the Supreme Court was considering the scope of revision under the provisions of the Bombay Sales Tax Act. At page 395 the Supreme Court observed that :

"........... Whenever a power is conferred on an authority to revise an order, the authority is entitled to examine the correctness, legality and propriety of the order and to pass such suitable orders as the authority may think fit in the circumstances of the particular case before it. When exercising such powers, there is no reason why the authority should not be entitled to hold an enquiry or direct an enquiry to be held and, for that purpose, admit additional material. The proceedings for revision, if started suo motu must not, of course, be based on a mere conjecture and there should be some ground for invoking the revisional powers. Once those powers are invoked, the actual interference must be based on sufficient grounds, and, if it is considered necessary that some additional enquiry should be made to arrive at a proper and just decision, there can be no bar to the revising authority holding a further enquiry or directing such an enquiry to be held by some other appropriate authority. This principle has been clearly recognised by this Court in the State of Kerala v. K. M. Cheria Abdulla and Company [1965] 16 STC 875 Ker. In that case, sub-section (2) of section 12 of the Madras General Sales Tax Act, 1939, which came up for interpretation, empowered the Deputy Commissioner, suo motu, or under certain circumstances on an application, to call for and examine the record of any order passed or proceeding recorded under the provisions of that Act by any officer subordinate to him, for the purpose of satisfying himself as to the legality or propriety of such order, or as to the regularity of such proceeding, and to pass such order with respect thereto as he thought fit. This Court held :

There is no doubt that the revising authority may only call for the record of the order or the proceeding, and the record alone may be scrutinised for ascertaining the legality or propriety of an order or regularity of the proceeding. But there is nothing in the Act that for passing an order in exercise of his revisional jurisdiction, if the revising authority is satisfied that the subordinate officer has committed an illegality or impropriety in the order or irregularity in the proceeding, he cannot make or direct any further enquiry.

It was further held :

It is, therefore, not right baldly to propound that, in passing an order in the exercise of his revisional jurisdiction, the Deputy Commissioner must, in all cases, be restricted to the record maintained by the officer subordinate to him, and can never make enquiry outside that record.

While thus explaining the scope of the revisional power, the court also indicated the limitations within which such power can be exercised, holding :

It would not invest the revising authority with power to launch upon enquiries at large so as either to trench upon the powers which are expressly reserved by the Act or by the Rules to other authorities or to ignore the limitations inherent in the exercise of those powers. For instance, the power to reassess escaped turnover is primarily vested by rule 17 in the assessing officer and is to be exercised subject to certain limitations, and the revising authority will not be competent to make an enquiry for reassessing a taxpayer. Similarly, the power to make a best judgment assessment is vested by section 9(2)(b) in the assessing authority and has to be exercised in the manner provided. It would not be open to the revising authority to assume that power.

24. The learned counsel for the assessee was relying upon the observation of the Supreme Court in Cheria Abdullas case : [1965]1SCR601 which is found in the above passage and obviously the said observation was the basis for the decision of this Court in Bidar Sahakar Sakkare Karkhanes case [1985] 58 STC 65 SC. However, after noticing the earlier decision in Cheria Abdullas case : [1965]1SCR601 , it was pointed out that while examining the correctness, legality and propriety of an order and to make a suitable order thereof the revisional authority may either hold an enquiry himself or direct an enquiry to be held. Subsequent discussion at page 397, after completing the reference to Cheria Abdullas case : [1965]1SCR601 the Supreme Court said in Swastik Oil Mills case : [1968]2SCR492 that even the Madras General Sales Tax Act has not specifically provided for any further enquiry, still the same was permitted in Cheria Abdullas case : [1965]1SCR601 . This is a clear indication that in the case of an unsatisfactory enquiry by an assessing authority before making the order of assessment, the same could be directed to be redone by recourse to section 21 of the Act. The restriction about the exercise of the revisional power as against the power to make a best judgment assessment or to make a reassessment found in Cheria Abdullas case : [1965]1SCR601 shall have to be read in the context of the relevant provisions before the Supreme Court. When wide powers are given under section 21 of the Act the said provisions cannot be mutilated only because some aspects of the said power also would fall under section 12-A of the Act. In fact there is an earlier decision of this Court in Nagaraja Overseas Traders v. State of Mysore [1974] 33 STC 315 Mys, which was referred to in Bidar Sahakar Sakkare Karkhanes case in support of the proposition enunciated in the said case . In Nagaraja Overseas Traders case [1974] 33 STC 315 (Mys) the assessment order granted certain deductions. Thereafter he issued a notice under section 12-A of the Act on the ground that it has escaped the assessment. It was contended that section 12-A was not attracted and that the subject came within the provisions of section 21. The Bench observed at page 316 thus :

"......... Section 12-A empowers the assessing authority to bring to tax an escaped turnover. When the turnover was already before the assessing authority when he made the first order of assessment, the said turnover cannot be said to be an escaped turnover. In such cases, the order granting deduction or exemption has to be corrected in revision under section 21 of the Act. This Court has held in Chikanarasimhiah v. Assistant Commissioner of Commercial Taxes, Bangalore City Division, Bangalore that if the exemption of the turnover was improper, then the matter is not one for proceeding under section 12-A but under section 21 of the Act as stated earlier and that section 21 empowers the revisional authority to revise the orders passed by the subordinate authorities, if on examination of the record, the revisional authority is satisfied that the order of the subordinate authority is not legal or proper. Following the said decision, this revision petition is allowed."

According to us this decision directly supports the Revenue in the instant case. The question is whether the deduction claimed by relying on certain purchases are correct or not and whether it is a matter for examination under section 12-A or section 21. Nagaraja Overseas Traders case [1974] 33 STC 315 (Mys) says that it is not a matter for examination at all under section 12-A.

A few decisions support the proposition that under the Sales Tax Act two jurisdictions may overlap with each other and on that ground one jurisdiction cannot be limited to exclude the other overlapping portion. In Madras Rubber Factory Ltd. v. State of Kerala a Full Bench of the Kerala High Court dealt with an identical question and pointed out the distinction between the two jurisdictions. At page 220, after referring to an earlier decision of the same High Court, the Bench quoted from the said decision and made the following observation; the earlier decision had stated :

"While the revisional power is restricted to the examination of the record for determining whether the order of assessment was according to law, the power to assess escaped turnover can be exercised in matters de hors the record of assessment proceedings. These two sections therefore relate to different jurisdictions and different matters. A valid order under the one is not an infringement of the power under th other; see State of Kerala v. M. Appukutty : AIR1963SC796 , Deputy Commissioner of Agricultural Income Tax and Sales Tax, Quilon v. Dhanalakshmi Vilas Cashew Co. : (1970)3SCC273 and State of Kerala v. K. E. Nainan : (1970)3SCC353 ."

Thereafter the Full Bench observed in Madras Rubber Factorys case thus :

"The above statement of the law is correct in so far as it laid down that a valid exercise of the revisional power is not an infringement of the power of assessing escaped turnover; it requires qualification in so far as it stated that the revisional power is restricted to the examination of the records : vide the decisions in the Cheria Abdullas case : [1965]1SCR601 and the Swastik Oil Mills case : [1968]2SCR492 and the Bombay Ammonia case : [1976]3SCR856 ."

The Kerala High Court also accepted the principle stated by the Madras High Court in F. K. Hasheeb & Co. v. State of Madras which is also referred to in another decision of the Madras High Court in East India Corporation Ltd. v. State of Madras : [1973] 31 STC 330 Mad. [LQ/MadHC/1972/248] At page 333, the Madras High Court considered the question thus :

"Section 16 deals with the turnover which has escaped assessment to tax. This section covers within its ambit even cases where in respect of a turnover the assessing authority has considered the liability to tax and wrongly excluded it from tax, whether on the ground of erroneous view of the nature of the transaction or on a wrong understanding of the provisions of the Act or for any other reason. This is the view taken by this Court in Hasheeb & Co. v. State of Madras in view of certain decisions of the Supreme Court in Maharaj Kumar v. Income-tax Commissioner : [1959]35ITR1(SC) and Maharajadhiraj Sir Kameshwar Singh v. State of Bihar : [1959]37ITR388(SC) . Taking this position as a jumping pad, the learned counsel for the petitioners wants to jump to the conclusion that when the Deputy Commissioner exercised his power under section 32 in respect of a turnover which could be termed as a turnover which has escaped assessment to tax, he was exercising the powers of an original authority and, therefore, all the limitations placed under section 16 would attach to his exercise of jurisdiction. The relative scope of sections 16 and 32 was considered by a Division Bench of this Court in Hasheeb & Co. v. State of Madras , and it was held therein :

If section 32 is construed in this background we are clearly of the opinion that the power of revision of the Deputy Commissioner is a separate and independent power which can be exercised whenever he is of the opinion that the original assessing authority has committed any error of law or fact. We are unable to see any force in the contention that the mere fact that the assessing authority also has got a power to reconsider his decision by correcting his mistakes, assuming that he has got such a power, should be construed as curtailing or negativing the powers of revision expressly conferred upon the Deputy Commissioner.

The learned Judges also noted that if the contention that where section 16 applies, section 32 cannot be invoked is to be accepted, it would be impossible to conceive of any case to which section 32 would be attracted. The learned Judges, therefore, concluded that the power of revision under section 32 could be exercised by the Deputy Commissioner to correct errors committed by the assessing authority in his order of assessment, irrespective of the question as to whether the said errors could also be corrected by the assessing authority and that its exercise could not be controlled by any power which may inhere in the assessing authority under section 16."

25. Another Bench of this Court in Kesoram Rayon v. Commissioner of Commercial Taxes [1989] 75 STC 13 Ker considered this aspect with reference to section 12-A, after the amendments made to the said provision. In the said case a lower rate of tax was levied by the assessing authority. Realising this the assessing authority initiated proceedings under section 12-A. This was challenged on the ground that the subject came within the provisions of section 21. The contention failed and at page 18 the Bench held thus :

"In out opinion, language of section 12-A of the Act is clear and unambiguous. It confers power on the assessing authority to make a reassessment even in cases where the entire turnover was before the assessing authority, but it had committed a mistake in the matter of rate of tax in that a lower rate of tax than the one at which the tax ought to have been levied had been levied."

Thereafter the amendment made to section 12A was noticed at page 21 as widening the scope of section 12-A. We have already noted the impact of this amendment and in case the petitioners present contention is accepted a substantial part of the jurisdiction created under section 21 will be totally taken away and such a reading cannot be done of the provision in the absence of a specific restriction imposed by the statute. In State of Andhra Pradesh v. Ratna Sree Box Makers the Andhra Pradesh High Court pointed out that the concept of turnover escaping assessment and the power to assess it has to be exercised only on material de hors assessment record and not on material already considered at the time of assessment. This clearly indicates that if a different view is to be taken on the existing material on record that is matter for the revisional authority to do so. As to the scope of the revision, the observations of the Gujarat High Court made in Additional Commissioner of Income Tax v. Mukur Corporation : [1978]111ITR312(Guj) that section 263 of the Income Tax Act also is relevant. The High Court pointed out that while exercising the power of revision under section 263 it is not necessary for the revisional authority always to come to a definite conclusion. He may direct a fresh enquiry, after being satisfied of other conditions referred in section 263.

26. It is unnecessary to refer to all other citations. The conclusion is inevitable that scope of section 21 cannot be curtailed by reference to section 12-A. The revisional authority has competence to initiate proceedings under section 21 provided the conditions referred to therein are satisfied on a perusal of the existing record. However the revisional authority may direct further enquiry when he comes to the conclusion that the case involves further investigation and that the assessing authority failed to probe into the relevant questions properly.

27. In these cases the revisional authority has found from the perusal of the records that there are certain discrepancies which we have already noted. The explanation offered by the assessee was not accepted by any of the authorities, and the explanation is such that it is not possible for us to decide the same as to its acceptability. In the circumstances, we are of the view that various orders of the revisional authority are to be upheld subject to the modifications which we have already referred earlier. It is also clarified that the assessing authority shall proceed to enquire into the specific point referred in the order of remand as modified by us, and thereafter make a proper assessment order. The order of remand in none of these cases could be termed as an open remand order.

S.T.R.Ps. are accordingly dismissed.

28. Petitions dismissed.