1. All these four petitions are filed by a firm which is carrying on business in Mangalore. The petitioner was an assessee under the provisions of the Central Sales Tax Act, 1956. W.P. No. 829 of 1974 relates to the accounting period between 1st October, 1957, and 31st March, 1958, W.P. No. 830 of 1974 relates to the period between 1st April, 1963, and 31st August, 1963, W.P. No. 831 of 1974 relates to the period between 1st September, 1963, and 9th September, 1964, and W.P. No. 1556 of 1974 relates to the period between 10th September, 1964, and 7th September, 1965. In respect of the periods to which W.P. Nos. 829 to 831 of 1974 relate, the assessment orders were passed under the provisions of the Central Sales Tax Act on 27th April, 1966, and in respect of the period to which W.P. No. 1556 of 1974 relates, the order of assessment was passed on 31st October, 1967. After the Central Sales Tax Act was amended in 1969, it was found by the assessing officer that in the orders of assessment, passed in respect of the periods with which we are concerned in these cases, there were mistakes apparent from the record which required to be rectified under the provisions of section 25A of the Karnataka Sales Tax Act. He, therefore, issued notices to the petitioner which was served on 31st January, 1970, to show cause as to why the orders of assessment in question should not be rectified in accordance with law. The orders of rectification were passed in relation to the periods covered by W.P. Nos. 829 of 1974, 830 of 1974 and 831 of 1974 on 30th January, 1974, and in relation to the period covered by W.P. No. 1556 of 1974, the order of rectification was passed on 23rd February, 1974. Aggrieved by the orders of rectification passed by the assessing officer, the petitioner has filed these four writ petitions.
2. Since a common question of law arises for consideration in these cases, they are disposed of by this common judgment.
3. The only contention urged in respect of these writ petitions by Sri K. Srinivasan, the learned counsel for the petitioner, is that the orders of rectification are liable to be quashed, because, they have been passed after the expiry of five years from the dates on which the original orders of assessment were passed in these cases. It is not disputed that, in these cases, the notices calling upon the petitioner to show cause as to why the orders of assessment should not be rectified were issued before the expiry of the prescribed period of five years from the dates of the assessment orders, but the impugned orders of rectification have been passed after the expiry of the said period. The question that arises for consideration in these cases, therefore, is whether the impugned orders of rectification are without jurisdiction.
4. Section 25A of the Karnataka Sales Tax Act, which authorises rectification of mistakes apparent from the record, reads as follows :
' 25A. Rectification of mistakes. - (1) With a view to rectifying any mistake apparent from the record, the assessing authority, appellate authority or revising authority may, at any time, within five years from the date of an order passed by it, amend such order :
Provided that an amendment which has the effect of enhancing an assessment or otherwise increasing the liability of the assessee shall not be made unless the assessing authority, appellate authority or revising authority, as the case may be, has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard.
(2) Where an order has been considered and decided in any proceedings by way of appeal or revision relating to an order referred to in sub-section (1), the authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that sub-section in relation to any matter other than the matter which has been so considered and decided.
(3) An order passed under sub-section (1) shall be deemed to be an order passed under the same provision of law under which the original order, the mistake in which was rectified, had been passed.'
5. The emphasis is placed by Sri Srinivasan, the learned counsel for the petitioner, on the words 'may at any time, within five years from the date of an order passed by it, amend such order'. In support of the contention that section 25A precludes the authority concerned to rectify a mistake after the expiry of five years from the date of the orders of assessment, notwithstanding the fact that action had been initiated by issue of a notice by the authority concerned to the assessee before the expiry of period of five years from the date of the original order, expressing his intention to do so, and calling upon the assessee to show cause as to why such rectification should not be made, it is contended that the expression 'amend' connotes the passing of the final order of rectification and does not mean mere initiation of proceedings to amend by issue of notice to the assessee.
6. The learned counsel for the petitioner relied upon a decision of a Division Bench of this Court in K. G. Subramanya v. T. V. Reddi, Commissioner of Agricultural Income-tax ( 73 I.T.R. 499; (1969) 1 Mys. L.J. 274), in which section 35(2) of the Karnataka Agricultural Income-tax Act came up for consideration. Under section 35 of the Act, the Commissioner has been given the power to revise an order of assessment passed by any of his subordinate authorities and to enhance the tax payable by the assessee if, in his opinion, the order of assessment passed by the subordinate authority is prejudicial to the revenue. Sub-section (2) of section 35, however, provides that no order shall be made under sub-section (1) of section 35 after the expiry of four years from the date of the order sought to be revised. In that case, the order of revision had been passed by the Commissioner of Income-tax beyond four years from the date on which it was passed. But the proceedings under section 35 had been initiated before the expiry of four years. In the circumstances of the case, this court accepted the plea urged on behalf of the assessee that having regard to the language of sub-section (2) of section 35, it was not open to the Commissioner to make an order in revision after the expiry of four years, notwithstanding the fact that the proceedings had been initiated before the expiry of four years.
7. Sri G. V. Shantharaju, the learned counsel for the respondent, has relied upon a decision of the Supreme Court in Sales Tax Officer, Special Circle, Ernakulam, and Another v. Sudarsanam Iyengar & Sons : 1SCR859 in support of his contention that the impugned orders were not without jurisdiction. It is necessary to set out in some detail the facts of that case in order to appreciate the contention urged on behalf of the respondent. The assessee in that case had been assessed to sales tax in April, 1964, and March, 1964, for the assessment years 1961-62 and 1962-63. Rule 33(1) of the Travancore-Cochin General Sales Tax Rules, 1950, authorised the assessing authority to reassess the assessee if he was of the opinion that the assessee had escaped assessment to tax in any year in respect of his turnover. Rule 33(1) read as follows :
' Rule 33. (1) If for any reason the whole or any part of the turnover of business of a dealer or licensee has escaped assessment to tax in any year or if the licence fee has escaped levy in any year, the assessing authority or licensing authority, as the case may be, subject to the provisions of sub-rule (2) may at any time within three years next succeeding that to which the tax or licence fee relates determine to the best of his judgment the turnover which has escaped assessment and assess the tax payable or levy the licence fee in such turnover after issuing a notice to the dealer or licensee and after making such enquiry as he considers necessary.'
8. The High Court of Kerala was of the opinion that after the expiry of period of three years next succeeding to which the tax or licence fee related, it was not open to the assessing authority to pass an order of reassessment under rule 33(1), even though action had been taken by the assessing authority to reassess the dealer by issuing necessary notices within the period prescribed by rule 33(1). The department filed an appeal against the order of the High Court of Kerala before the Supreme Court. In that appeal, the Supreme Court while considering the contention urged on behalf of the assessee that the expression 'determine' appearing in rule 33(1) meant to 'settle or discharge' and not 'to proceed to assess', observed as follows :
' Now in view of the previous decisions the principle is firmly established that assessment proceedings under the Sales Tax Act must be held to be pending from the time the proceedings are initiated until they are terminated by a final order of assessment. The distinguishing feature on which emphasis has been laid by the counsel for the respondent is that the language employed in rule 33 is such as to lead to only one conclusion that the final determination of the turnover which has escaped assessment and the assessment of the tax have to be done within three years. It is pointed out that in the other sales tax provisions which came up for consideration in the cases mentioned above the words employed were 'proceed to assess', e.g., sub-sections (4) and (5) of section 11 of the Punjab General Sales Tax Act. Our attention has been invited to the appropriate dictionary meaning of the word 'determine' which is 'to settle or decide' - to come to a judicial decision - (Shorter Oxford English Dictionary). It is suggested that the word 'determine' was employed in rule 33 with a definite intention to set the limit within the final order in the matter of assessment should be made, the limit being three years. We find it difficult to accept that in the context of sales tax legislation the use of the words 'proceed to assess' and 'determine' would lead to different consequences or results. In this connection the words which follow the word 'determine' in rule 33 must be accorded their due signification. The words 'assess the tax payable' cannot be ignored and it is clearly meant that the assessment has to be made within the period prescribed. Assessment is a comprehensive word and can denote the entirely of proceedings which are taken with regard to it. It cannot and does not mean a final order of assessment alone unless there is something in the context of a particular provision which compels such a meaning being attributed to it. In our judgment despite the phraseology employed in rule 33 the principle which has been laid in order cases relating to analogous provisions in sales tax statute must be followed as otherwise the purpose of a provision like rule 33 can be completely defeated by taking certain collateral proceedings and obtaining a stay order as was done in the present case or by unduly delaying assessment proceedings beyond a period of three year.'
9. From the portion of the judgment of the Supreme Court, extracted above, it is clear that the Supreme Court was of the view that the expression 'determine', although it ordinarily connoted a final disposal of the case, in the context in which it was used, it conveyed the same meaning which the words 'proceed to assess' conveyed. Hence, if a notice has been issued in exercise of the power under section 25A of the Karnataka Sales Tax Act asking the assessee to show cause as to why the order of assessment should not be rectified within the period of five years from the date on which the order in question is passed, it has to be held that the order of rectification passed after the expiry of the period of five years pursuant to the notice so issued would not be a defective one.
10. Sri K. Srinivasan tried to distinguish the decision of the Supreme Court from the present case on two grounds : (1) that the Supreme Court was concerned in the above case with a rule which provided for reassessment of the turnover of a dealer but not with a provision relating to the power of an authority to rectify a mistake in an order of assessment; and (2) that the language used in section 25A of the Act would bring it within the scope of the observation of the Supreme Court in the above decision, namely, -
' It is undoubtedly open to the legislature or the rule-making authority to make its intention quite clear that on the expiry of a specified period no final order of assessment can be made. Then the taxing authorities would certainly be debarred from completing the assessment beyond the period prescribed as was the case in sub-section (3) of section 34 of the Income-tax Act, 1922; but such is not the case here and we would hold that the assessment proceedings relating to the year 1962-63 were within time.'
11. I do not think that the decision of the Supreme Court can be distinguished from the present case on either of the two grounds urged by Sri Srinivasan. It is no doubt true that section 25A of the Act deals with the power of rectification, but not with the power of reassessment. But I do not think that there is any different between the two powers in so far as the question involved in this case is concerned. In the case of assessment, every step relating to the assessment is considered to be part of the procedure relating to the assessment. Similarly, I am of the view that even in the case of a rectification of a mistake in the order of assessment, a notice issued by the assessing authority to the assessee asking the assessee to show cause as to why the order of assessment should not be rectified should also be considered as an integral part of the rectification proceedings because without the issue of such notice and giving reasonable opportunity to the assessee, it would not be open to the assessing authority to make rectification of the order of assessment to the prejudice of the assessee. In substance, an order of rectification is also an order of assessment because an order of assessment after it is rectified would result either in enhancing the liability of the assessee or reducing it.
12. One other reason which persuades me to take the view that the present case is indistinguishable from the case before the Supreme Court is that the acceptance of the submissions made on behalf of the assessee would defeat the very purpose for which section 25A of the Act is intended. As observed by the Supreme Court, it is quite possible for the assessee to defeat the purpose of section 25A of the Act by either asking for adjournment before the assessing authority to submit his explanation to the show cause notice issued to him or by approaching a higher court in a collateral proceeding and by obtaining an order of stay resulting in undue delay of the rectification proceedings. It is seen that this was one of the considerations which prevailed upon the Supreme Court in the decision cited above to take the view that the expression 'determine' meant 'proceed to assess' in the context of that case.
13. In so far as the second point of distinction which was urged by Sri Srinivasan is concerned, it has to be observed that the language of section 25A of the Act is not similar to the language of section 34(3) of the Income-tax Act, 1922. Section 34(3) of the Income-tax Act, 1922, provided that no order of assessment or reassessment, other than an order of assessment under section 23 to which clause (c) of sub-section (1) of section 28 applies or an order of assessment or reassessment in cases falling within clause (a) of sub-section (1) or sub-section (1A) of this section shall be made after the expiry of four years from the end of the year in which the income, profits or gains were first assessable. Section 25A of the Act is not in the same language in which section 34(3) of the Income-tax Act, 1922, is couched.
14. The above observation is sufficient to distinguish the decision of the Division Bench of this Court in K. G. Subramanya v. T. V. Reddi, Commissioner of Agricultural Income-tax ( 73 I.T.R. 499; (1969) 1 Mys. L.J. 274) also because sub-section (2) of section 35 of the Karnataka Agricultural Income-tax Act also provided that no order should be made under sub-section (1) of section 35 after the expiry of four years from the date of the order sought to be revised. I am of the view that the language used in section 25A of the Act is analogous to the language used in rule 33 of the Travancore-Cochin General Sales Tax Rules and hence the decision of the Supreme Court cannot be distinguished from the facts of the present case. It is no doubt true that the provisions of any law relating to taxation should as far as possible be interpreted in favour of the assessee. But the said rule cannot be taken as of universal application. The instant case and the case in Sales Tax Officer, Special Circle, Ernakulam, and Another v. Sudarsanam Iyengar & Sons : 1SCR859 can very well be treated as exceptions to the said rule.
15. I do not, therefore, consider that the Commercial Tax Officer has exceeded his jurisdiction in passing the impugned orders of rectification because, show cause notices had been issued to the petitioner before the expiry of the prescribed period of five years. These petitions, therefore, fail and they are dismissed. No costs.
16. Petitions dismissed.