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M.S. Shirahatti Vs. Commercial Tax Officer, Haveri and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKarnataka High Court
Decided On
Case NumberW.P. No. 877 of 1964
Judge
Reported in(1967)1MysLJ218; [1967]19STC306(Kar)
ActsCentral Sales Tax Act, 1956 - Sections 8 and 8(1); Mysore Sales Tax Act, 1957 - Sections 20(5) and 21; Central Sales Tax Rules, 1957 - Rule 6; Mysore Sales Tax Rules - Rule 38
AppellantM.S. Shirahatti
RespondentCommercial Tax Officer, Haveri and ors.
Appellant AdvocateB.V. Katageri, Adv.
Respondent AdvocateG.V. Shantaraju, Adv. for High Court Special Government Pleader
Excerpt:
.....has been made against him - appellate authority has duty to correct mistake if any committed by original authority - no laches proved against assessee - appellate authority empowered to receive c form in case reason for late filing was on account of inevitable delay in commercial transactions - held, assessee entitled to claim benefit under section 8 (1) by producing c forms before appellate authority. held see para 13. - motor vehicles act, 1988 [c.a. no. 59/1988]sections 168 & 173; [ram mohan reddy, j] compensation appeal against - claimant was an in-patient in the hospital for 13 days non-examination of the doctor who treated the claimant at the general hospital - uncorroborated medical certificate which certifies that the claimant sustained fractures of the 6th, 7th and 8th..........petitioner appealed to the deputy commissioner of commercial taxes, belgaum, complaining that the original authority had not given him sufficient opportunity to produce the necessary declarations, and actually produced some declarations before the appellate authority. the appellate authority received those declarations and gave the petitioner the benefit of reduced rate to the limit of the transactions covered by the said declarations. thereafter the commissioner of commercial taxes in mysore, acting in exercise of his suo motu power of revision under section 21 of the mysore sales tax act, gave notice to the petitioner why the appellate order should not be set aside and after hearing him made an order setting aside the appellate order and restoring that of the original assessing.....
Judgment:
ORDER

Narayana Pai, J.

1. The petitioner is an assessee to sales tax in respect of the year 1959-60. His claim under section 8 of the Central Sales Tax Act of 1956 for a lower rate of tax in respect of certain inter-State transactions was rejected by the original assessing authority, the Commercial Tax Officer, Haveri, on the ground that the relevant declarations or certificates referred to as 'C' Forms in the orders of the authorities, were not produced by the petitioner right up to the time the order of assessment came to be passed. The petitioner appealed to the Deputy Commissioner of Commercial Taxes, Belgaum, complaining that the original authority had not given him sufficient opportunity to produce the necessary declarations, and actually produced some declarations before the appellate authority. The appellate authority received those declarations and gave the petitioner the benefit of reduced rate to the limit of the transactions covered by the said declarations. Thereafter the Commissioner of Commercial Taxes in Mysore, acting in exercise of his suo motu power of revision under section 21 of the Mysore Sales Tax Act, gave notice to the petitioner why the appellate order should not be set aside and after hearing him made an order setting aside the appellate order and restoring that of the original assessing authority. In this writ petition directed against the said order, the petitioner contends that the order in revision passed by the Commissioner of Commercial Taxes is without jurisdiction and should, therefore, be quashed.

2. The Commissioner of Commercial Taxes has interfered with the appellate order of the Deputy Commissioner on the view that the appellate order was vitiated by illegality, impropriety or irregularity. According to him, the language of section 8 of the Central Sales Tax Act is explicit and mandatory and there was no scope whatever for an assessee to claim the benefit of section 8(1) by producing the 'C' Forms before the appellate authority after the assessment order has been made against him. He also observed that the Act does not confer any power on the appellate authority to receive 'C' Forms produced before it for the first time by the assessee by condoning the failure on the part of the assessee to do so before the assessing authority.

3. In support of the order of the revising authority, a further argument has also been addressed before us on behalf of the department to the effect that the order of the appellate authority (Deputy Commissioner of Commercial Taxes) on the face of it appears to be a wrong one passed without the authority applying its mind to the claim or contention of the assessee that the original authority had not given him sufficient opportunity to produce 'C' Forms, not has it recorded therein that the appellate authority was satisfied that the assessee had not been guilty of any latches or is otherwise entitled to any concession or latitude by way of condonation of delay.

4. So far as the said additional argument addressed before us is concerned, it is sufficient to note that that is not the reason on which the revising authority had proceeded to interfere with the order of the appellate authority. The clear opinion entertained by the revising authority on the basis of which it proceeded to set aside the order of the appellate authority is that the order of the latter was illegal, improper or irregular. Although three words are used the actual opinion of the revising authority appears to be that the order of the appellate authority was illegal for the reasons stated in detail in the order in revision.

5. The provisions of section 8 of the Central Sales Tax Act which deal with the production of declarations are those contained in sub-section (4) which read :

'The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner -

(a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority; * * *'

6. The section leaves many matters to be prescribed by rules including the authority from whom the declaration should be taken, the particulars which the declaration should set out, the form in which the declaration should issue and the authority before which the same should be produced. It may be noticed for the present that the time for production is not one of the matters set out in the section. The relevant rule is rule 6 of the Central Sales Tax (Mysore) Rules, 1957. The rule requires that the forms of declaration should ordinarily be annexed to the returns made by the assessee. But there is a proviso appended to the rule reading :

'Provided that in cases of delayed receipt of declaration forms or certificate, the dealer may submit them at any time before the assessment is made.'

7. Prima facie, therefore, what the essence of the matter is that, before an assessee can secure the benefit of the concessional rate, he should furnish the assessing authority with sufficient information set out in the form prescribed by the rules to enable him to determine the turnover in respect of which concession could be granted. The purpose of the statute is also sought to be served by the details or particulars required to be set out in the form.

8. Although the rule requires that ordinarily the forms should be annexed to the returns, the argument that a return unaccompanied by those forms should be regarded as wholly incomplete was rejected by this Court in Madurai Mudaliar & Sons v. Commissioner of Commercial Taxes . The effect of the decision is that the production of the forms or more accurately the information contained in the forms is the substance of the matter and not the annexing of those forms to the returns and that the relevance of those forms is that they contain information necessary for the completion of an assessment and that, therefore, the point of time materials for the production of the forms is the time when the assessing authority makes up his mind to complete the assessment and determine the liability of the assessee to tax.

9. It is also without doubt that the appellate authority has the power as well as the duty of correcting errors, if any, committed by the original authority and passing such orders as, in the light of the correct view of facts and law taken by it, should have been passed by the original authority. That that is the substance of the matter is also clear from sub-section (5) of section 20 of the Mysore Sales Tax Act, 1957, dealing with appeals which says that the appellate authority may after giving the appellant an opportunity of being heard, pass such orders on the appeal as such authority may think fit.

10. Now, in this case, there is no suggestion that the forms produced by the petitioner before the appellate authority were either not genuine or not in prescribed forms or devoid of the prescribed particulars. We have also pointed out that the complaint of the petitioner before the appellate authority was that the original authority had not given him sufficient opportunity to produce the same. The same was obviously accepted by the appellate authority, and that opinion of the appellate authority has not even been dissented from by the revising authority in its order.

11. In such a position, it is not disputed, nor can it be, that it would have been open to the appellate authority to set aside the order of assessment and remit the matter back to the original authority with a direction to give an opportunity to the assessee to produce the forms and then proceed to dispose of the assessment. If so, we see no reason why the appellate authority, instead of taking up the time of the department, should not have proceeded to dispose of the matter itself on the basis of the forms produced before it. That is exactly what the appellate authority has done. Prima facie, therefore, we are unable to agree that there is any recognisable illegality in the order of the appellate authority attracting the powers of revision under section 21 of the Act.

12. But an argument has been pressed before us on the basis of the ruling of the Madras High Court in Deputy Commissioner (Commercial Taxes) v. Parekutti Hajee Sons ([1962] 13 S.T.C. 680), in which an opinion is expressed that when once by reason of the very provisions of the Act a particular transaction is taken out of the scope of the operation of section 8(1), a subsequent compliance with the conditions will not serve to restore the transactions to taxability under section 8(1), and that therefore it was not open to the departmental officers or the Tribunal to excuse the delay in the submission of the 'C' Form declarations. But this categorical statement of law totally denying the appellate authority the power or discretion of extending the time or condoning the delay, was not accepted by this Court in the decision already cited by us. Although it was unnecessary for this Court to pronounce in that case on this question of law, because upon facts this Court found that the assessee had not produced the 'C' Forms, this Court took care to say,

'In deciding these cases, we have not gone into the question as to whether an assessing authority should or should not give reasonable time to an assessee to produce the 'C' Forms before making the final assessment, as in these cases the assessee was clearly guilty of laches.' (Page 902 of 15 Sales Tax Cases 900).

13. But it is now necessary for us to express an opinion on that point and we find it difficult to accept the rather strict view taken by the Madras High Court. We have already pointed out what the substance of the matter is and what may be regarded as the material point of time at which the forms are necessary for purpose of completing the assessment. We have also pointed out that the appellate authority has not only the power but the duty to correct the mistake, if any, committed by the original authority. If that much is granted, it will be an unnecessary abridgement of the powers of the appellate authority and deprivation of its authority to correct mistakes to take the strict view which the Madras High Court has taken. But the power to refuse to receive 'C' Forms at a late stage if laches are proved is, undoubtedly, there and that power is sufficient for the protection of the revenue. When there are no laches proved against the assessee and when delays in commercial transactions may be regarded as inevitable, we do not think that it will be proper to say that under no circumstances shall be appellate authority receive the 'C' forms.

14. In this case we read the appellate order as involving an opinion that the original authority had not given sufficient opportunity to the assessee to produce 'C' Forms, and, therefore, take the view that what the appellate authority has done is merely to exercise its powers under the law to do what the original authority in its opinion could not should have done.

15. Before concluding we must observe that an argument was raised on behalf of the respondents to the effect that the order of the revising authority in this case was an order against which an appeal could have been preferred to this Court. It is no doubt so. The petitioner explains that he thought that he could get the Commissioner to correct his mistake by moving the revising authority under rule 38 of the Mysore Sales Tax Rules to rectify or review his order. Whether or not it was quite prudent on his part to have done so, we do not think that we should decline to interfere in this case because the clear opinion we entertain in respect of the revisional order is that the revisional authority has interfered in a case in which it should not have interfered. Its order is, therefore, wholly without jurisdiction.

16. The writ petition is allowed, the order of the Commissioner of Commercial Taxes impugned in this petition is set aside, and the appellate order of the Deputy Commissioner of Commercial Taxes, Belgaum Division, is restored.

17. Petition allowed.


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