JUDGMENT
Jagannath Shetty, J.
1. This revision petition is directed against the order dated 5th July, 1978, of the Karnataka Appellate Tribunal, Bangalore, dismissing the appeal of the petitioner in S.T.A. No. 659 of 1977.
2. The petitioner-firm is carrying on the business as jewellers at Bijapur. For the assessment year 1974-75, the petitioner declared his taxable sales and purchase turnovers. The assessing authority accepting the declared turnovers levied the tax at 1 per cent on Rs. 11,404.75. He also levied surcharge of Rs. 910.97 under section 6B (as it then stood) of the K.S.T. Act 1957.
3. The petitioner, being aggrieved by the levy of surcharge, preferred an appeal to the Deputy Commissioner of Commercial Taxes (Appeals), Belgaum, under section 20 of the K.S.T. Act. The Deputy Commissioner, while considering the appeal, found that the levy of tax at 1 per cent on purchase of gold and silver articles was not in order. He issued a notice to the petitioner proposing to enhance the rate of tax to 3 1/2 per cent from 1 per cent under section 5(1) of the Act. After hearing the petitioner, he affirmed the rate of tax proposed and consequently cancelled the levy of additional tax imposed under section 6B of the Act.
4. Being aggrieved by the order of the Deputy Commissioner, the petitioner took up the matter in appeal before the Appellate Tribunal. The main contention urged in the appeal related to the lack of jurisdiction for the Deputy Commissioner to enhance the assessment by adopting the higher rate of tax while disposing of the appeal against the levy under section 6B. The Tribunal did not accept the contention and dismiss the appeal.
5. Hence, this revision petition.
6. The sole question that arises for consideration is whether the Deputy Commissioner was competent to enhance the levy while disposing of the appeal preferred against the impost under section 6B. Section 20(5) of the Act provides :
“20. …………………..
(5) in disposing of an appeal, the appellate authority may, after giving the appellant a reasonable opportunity of being heard –
(a) in the case of an order of assessment or penalty –
(i) confirm, reduce, enhance or annual the assessment or penalty or both;
(ii) set aside the assessment and direct the assessing authority to make a fresh assessment after such further enquiry as may be directed; or
(iii) pass such other orders as it may think fit; and
(b) in the case of any other order confirm, cancel or vary such order.”
7. It will be seen from the above provisions that the section confers power on the appellate authority to enhance the assessment or penalty. It may be by enhancing the turnover or the rate of tax. But the authority must give an opportunity of being heard to the assessee before he does so. Secondly, the appeal should relate to that levy or the assessment. The appellate authority cannot enhance the assessment which is not the subject-matter of the appeal. This principle is beyond doubt and it goes to the very basis of the appellate power. If, therefore, the impugned levy under section 6B, which was subject-matter of appeal before the Deputy Commissioner, was quite different from the levy under section 5(1) read with section 6, then it must be stated that the Deputy Commissioner had no power to enhance the assessment made or the rate of tax adopted by the assessing authority.
8. In our opinion, the levy under section 6B, though it was additional or in the nature of surcharge, is quite distinct and different from the levy under section 5(1). This would be clear from the scheme of the Act. In Sunggar Bros. v. State of Karnataka (S.T.R.P. No. 100 of 1981 disposed of on 8th April, 1982 – Karnataka High Court), a Bench of this Court after analysing the provisions of the Act observed :
“….. Though the tax under section 6B is an impost of a similar nature, it is levy distinct from the impost under section 5(1) or under section 6. This is the clear outcome of the scheme of section 6B and the effect of section 6B(2) of the ‘Act’. Section 6B(2) by providing for the application of the provisions of the ‘Act’ to the tax under section 6B as they apply to the sales or purchase tax under the Act, recognises the distinction between the additional tax on the one hand and the other imposts under the ‘Act’ on the other.”
9. It must now be stated that since the appeal before the Deputy Commissioner was only in relation to levy under section 6B he could not have enhanced the rate of tax payable on the taxable turnover.
10. In the result, the revision petition is allowed. The order of the Deputy Commissioner as affirmed by the Tribunal, in so far it relates to the levy of enhanced rate of tax, is set aside. The order of the Deputy Commissioner in other respect is kept undisturbed. The petitioner is entitled to his costs. Advocate’s fees Rs. 100.