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immidisetti Ramakrishnaiah Vs. the State of Andhra Pradesh - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case Number Tax Revision Case No. 54 of 1961
Judge
Reported in[1962]13STC914(AP)
Appellantimmidisetti Ramakrishnaiah
RespondentThe State of Andhra Pradesh
Appellant Advocate D. Venkatappaiah Sastry and ; P. Kameswara Row, Advs.
Respondent Advocate The Third Government Pleader
DispositionRevision dismissed
Excerpt:
.....before the tribunal was that the assessment year being 1953-54, it was governed by the madras general sales tax act and the rules framed thereunder, and that according to rule 17(1) of the madras general sales tax rules (hereinafter called the previous law), the assessing authority was empowered to determine to the best of his judgment the turnover which has escaped assessment, and assess the tax payable on such turnover at any time within three years next succeeding that to which the tax related, that the three years expired by 31st march, 1957, and that the assessment order dated 31st july, 1959, is illegal. 15. yet another argument advanced on behalf of the petitioner was that, even assuming that the period of four years under the existing law is attracted, sub-section (5), which..........9 s.t.c. i. rule 17(1) of the madras general sales tax rules, 1939, which provided for a two year period of limitation within which the assessing authority could assess the escaped turnover, was amended on nth june, 1953, when the period of limitation was enlarged to three years next succeeding that to which the tax related. the date of assessment of the petitioner for the assessment year ending 31st march, 1953, was 10th february, 1954, and the escaped turnover was assessed on 20th march, 1956. the petitioner contended that he had acquired a vested right to the two year period of limitation and therefore the assessment of escaped turnover was barred by limitation. it was held that the law of limitation being procedural law its provisions applied to causes of action which arose.....
Judgment:

Venkatesam, J.

1. This tax revision case is directed against the order by majority of the Sales Tax Appellate Tribunal, Hyderabad, in T.A. No. 159 of 1960 on its file. The relevant facts may shortly be stated thus:

2. The year of assessment in this case is 1953-54. The original order of assessment was made on 12th March, 1955, and served on the assessee-petitioner on 1st April, 1955. On 8th March, 1957, the assessing authority issued a notice to show cause why he should not be re-assessed on the escaped turnover, and the same was served on the assessee on 9th March, 1957. Against the said order, the assessee filed a writ petition (W.P. No. 170 of 1957), and in C.M.P. No. 1999 of 1957 he obtained an order from this Court on 18th March, 1957, restraining the Commercial Tax Officer, Visakhapatnam (the assessing authority) to proceed further with the revision of assessment until further orders on the writ petition. The writ petition was eventually dismissed by the High Court on 18th February, 1959.

3. The Commercial Tax Officer, Visakhapatnam, thereupon issued a notice dated 10th June, 1959, to the assessee as follows :-

In this office note dated 8th March, 1957 it was proposed to revise the assessment for the year 1953-54 adding a turnover of Rs. 1,09,413-12-0 to the turnover previously assessed. The notice was served on you on 9th March, 1957. You filed a writ petition against the above in the High Court in W.P. No. 170 of 1957 which was dismissed. You are therefore requested to file your objections if any, to the proposed revision before me on 20th June, 1959, at 11-00 A.M. in my office at Visakhapatnam, failing which the revision will be made as proposed.. .

4. The objections were filed and considered by the assessing authority, and he by his order dated 31st July, 1959, revised the assessment for the year 1953-54, and assessed the dealer on an escaped turnover of Rs. 1,08,413-12-0 in addition to the turnover already determined, and to an additional tax of Rs. 1,693-15-6.

5. The matter was carried in appeal before the Deputy Commissioner of Commercial Taxes, Kakinada, in Appeal No. 393 of 1959-60 on his file, who dismissed the said appeal. Against that order, the assessee preferred an appeal to the Andhra Pradesh Sales Tax Appellate Tribunal in T.A. No. 159 of 1960.

6. The contention before the Tribunal was that the assessment year being 1953-54, it was governed by the Madras General Sales Tax Act and the Rules framed thereunder, and that according to Rule 17(1) of the Madras General Sales Tax Rules (hereinafter called the previous law), the assessing authority was empowered to determine to the best of his judgment the turnover which has escaped assessment, and assess the tax payable on such turnover at any time within three years next succeeding that to which the tax related, that the three years expired by 31st March, 1957, and that the assessment order dated 31st July, 1959, is illegal.

7. By a majority of two members to one, the Tribunal held that the said contention was unsustainable, and that Section 14 of the Andhra Pradesh General Sales Tax Act (hereinafter called the existing law) as amended in 1958, applied to the case, and that the revised assessment is within time.

8. The correctness of this order of the Tribunal is now challenged before us.

9. In order to fully appreciate the contentions of the petitioner, a few dates and the relevant statutory provisions may be noted.

10. The assessment year is 1953-54, i.e., ending with 31st March, 1954. According to Rule 17(1), the revised assessment should be made at any time before 31st March, 1957. The Andhra Pradesh General Sales Tax Act (VI of 1957) came into force on 15th June, 1957. Section 14(4) of that Act provided that 'where, for any reason, the whole or any part of the turnover of business of a dealer has escaped assessment to tax, or has been under-assessed or assessed at too low a rate, or... the assessing authority may, at any time within a period of four years from the expiry of the year to which the tax or the licence fee or registration fee relates, assess the tax payable on the turnover which has escaped assessment... after issuing a notice to the dealer and after making such enquiry as he considers necessary.

11. By the Andhra Pradesh General Sales Tax (Amendment) Act, III of 1958, Sub-clause (5) was added to Section 14 thus :

Where an assessment under this section has been deferred on account of any stay order granted by the High Court in any case, or by reason of the fact that an appeal or other proceeding is pending before the High Court or the Supreme Court involving a question of law having a direct bearing on the assessment in question, the period during which the stay order was in force or such appeal or proceeding was pending shall be excluded in computing the period of four years specified in this section for the purpose of making the assessment.

12. This Act came into force on 23rd March, 1958, and Section 1(2) of that Act has enumerated the amendments which shall be deemed to have come into force on 15th June, 1957, when the Andhra Pradesh General Sales Tax Act came into force, and the amendment to Section 14(5) is not one amongst them.

13. Sri Venkatappaiah Sastry, the learned counsel for the petitioner contended that Section 14 of the Andhra Pradesh General Sales Tax Act, as it originally stood, or as subsequently amended was not given retrospective effect even by the amending Act III of 1958. He relied on Section 41(1) proviso of the Andhra Pradesh General Sales Tax Act which is as follows:-

Provided that such repeal shall not affect the previous operation of the said Acts or section or any right, title, obligation or liability already acquired, accrued or incurred thereunder, and subject thereto, anything done or any action taken (including any appointment, notification, notice, order, rule, form, regulation, certificate, licence or permit) in the exercise of any power conferred by or under the said Acts of section shall be deemed to have been done or taken in the exercise of the powers conferred by or under this Act, as if this Act were in force on the date on which such thing was done or action was taken; and all arrears of tax and other amounts due at the commencement of this Act may be recovered as if they had accrued under this Act.

14. Though the Madras General Sales Tax Act had been repealed, the right which the assessee had under the previous law to have the reassessment made only within three years, remained intact, and is not affected by Section 14 of this Act. So proceeded the argument of the learned counsel. It was also contended that the addition of Sub-section (5) to Section 14 of the Act made it clear that, even in cases where assessment under Section 14 had been deferred on account of any stay order of the High Court, the period during which that order was in force should be excluded in computing the period of four years specified in Section 14. The stay order was passed by the High Court on 18th March, 1957, and was in force till the writ petition was dismissed on 18th February, 1959, i.e., for a period of one year and eleven months, and even if that period were to be added to 31st March, 1957, before which date alone the revised assessment could be made under the previous law, the revised assessment had to be made before 3rd March, 1959, while in fact it was made on 31st July, 1959, and hence, it is urged, it is beyond time.

15. Yet another argument advanced on behalf of the petitioner was that, even assuming that the period of four years under the existing law is attracted, Sub-section (5), which came into force on 23rd March, 1958, did not empower the exclusion of any period by reason of the order of stay, and the assessment had to be completed by 31st March, 1958.

16. In support of this argument it was submitted that Section 15(1) of the Limitation Act, which deals with the exclusion of the time between the day on which the order of stay is issued and the day on which it is withdrawn in computing the period of limitation for any suit or application for the execution of a decree would not apply to a special enactment, like the Madras General Sales Tax Act or the Andhra Pradesh General Sales Tax Act, which has provided its own periods of limitation. In other words, the contention of the learned Advocate is that the section applies only to cases for which the period of limitation has been provided by the First Schedule to the Limitation Act. For this contention, he sought the assistance of the decision in Subbarayan v. Natarajan (1922) I.L.R. 45 Mad. 785 where a Bench of the Madras High Court ruled that the period of twelve years mentioned in Section 48 of the Code of Civil Procedure for execution of the decrees is not a period of limitation in the strict sense, and consequently Section 15(1) of the Limitation Act was not applicable to it. He also pressed into service another Bench decision, Tandavamurti v. Durgaienbai A.I.R. 1928 Mad. 1154 to a similar effect, that Section 15 of the Limitation Act applies only to the periods prescribed in the schedule to that Act and does not apply to the period of limitation prescribed by Section 48, Civil Procedure Code, following the decision in Subbarayan v. Natarajan (1922) I.L.R. 45 Mad. 785.

17. These decisions can no longer be considered good law in view of the Full Bench decision of the Madras High Court reported in Kandaswami Pilial v. Kannappa Chetty (1951) 2 M.L.J. 668 where it was ruled that Section 48 of the Civil Procedure Code is controlled by Section 15(1) of the Limitation Act on the ground that the expression 'prescribed' in Section 15(1) of the Limitation Act does not mean 'prescribed by the first Schedule' to that Act, but would also include a case where a period of limitation is prescribed by any general statute, like the Civil Procedure Code, and also on the ground that even if the word 'limitation' is to be understood in strict sense, the period of twelve years mentioned in Section 48 of the Civil Procedure Code is a period of limitation. In view of this decision, the authorities cited by the counsel even for the limited submission made by him are of no assistance.

18. The effect of enlarging the period of limitation in Rule 17(1) of the Madras General Sales Tax Rules of 1939 was considered by a Bench of the Madras High Court in Syed Mohammed Ravoother v. Deputy Commercial Tax Officer, Tirukoilur [1958] 9 S.T.C. I. Rule 17(1) of the Madras General Sales Tax Rules, 1939, which provided for a two year period of limitation within which the assessing authority could assess the escaped turnover, was amended on nth June, 1953, when the period of limitation was enlarged to three years next succeeding that to which the tax related. The date of assessment of the petitioner for the assessment year ending 31st March, 1953, was 10th February, 1954, and the escaped turnover was assessed on 20th March, 1956. The petitioner contended that he had acquired a vested right to the two year period of limitation and therefore the assessment of escaped turnover was barred by limitation. It was held that the law of limitation being procedural law its provisions applied to causes of action which arose before their enactment and as in that case before the right of the assessing authority was barred the period of limitation prescribed by law was enlarged, it was the amended law that determined the liability of the petitioner. Consequently the assessment of escaped turnover was held not barred by limitation. In laying down that principle, the learned Judges followed the earlier decisions of the Madras High Court in Muhamad Hussain Nachiar v. Commissioner of Income-tax, Madras (1956) 2 M.L.J. 139 and Ramanathan Chettiar v. Kandappa Gounden (1950) 2 M.L.J. 624.

19. A Bench of this Court followed that decision (Syed Mohammed Ravoother v. Deputy Commercial Tax Officer, Tirukoilur [1958] 9 S.T.C. 1 in Padarthi Venkateswara Rao v. Deputy Commissioner of Commercial Taxes, Kakinada [1959] 10 S.T.C. 162. On behalf of the Court, my learned brother, Satyanarayana Raju, J., dealing with the effect of the amendment in 1953 to Rule 17 of the Madras General Sales Tax Rules of 1939, whereby a period of three years was substituted for two years held that the provision of the amended rule applied to a cause of action which arose before the amendment, and where the period of limitation prescribed by law was enlarged before the right of the assessing authority was barred, it was the amended law that determined the liability of the assessee. In that case, the assessment years were 1951-52 and 1952-53 and the revised assessments under Rule 17 existing prior to 1953 could be made only before 31st March, 1954, and 31st March, 1955. But Rule 17 was amended by G.O. No. 1635, Revenue, dated nth June, 1953, raising the period of limitation to three years, and it was held that the G. 0. came into force even before the expiry of the two year period, and that it governed the case. The Bench distinguished the decision of this Court in Government of Andhra v. K. Rajaiah & Co. [1957] 8 S.T.C. 164 on the ground that the assessment had become final in that case, that is, the period of two years expired even before the date of amendment, and that, therefore, the amendment made to Rule 17(1) did not apply.

20. In a recent case, a Bench of this Court in Munaga Peraiah v. State of Andhra Pradesh [1962] 13 S.T.C. 26 had to consider the effect of Section 14(4). There, the assessee was assessed to sales tax for the assessment year 1954-55 on 1st December, 1955. But on 31st October, 1958, the assessing authority issued a notice for re-assessment on the escaped turnover and levied an additional tax. It was contended on behalf of the assessee that as the assessment was made under the Madras General Sales Tax Act, 1939, the re-assessment could be made only within three years from the assessment year under Rule 17(1) of the Madras General Sales Tax Rules, and that Section 14(4) of the Andhra Pradesh General Sales Tax Act, which fixed the period of four years, was inapplicable. Following the decision in Padarthi Venkateswara Rao v. Deputy Commissioner of Commercial Taxes, Kakinada [1959] 10 S.T.C. 162, it was ruled that where the period of limitation prescribed by law was enlarged before the right of the assessing authority to re-assess was barred, it was the amended law that determined the liability of the assessee, and that the assessing authority was well within its right in making the additional assessment within four years next succeeding the assessment year. It was also ruled that an assessment could not be said to have become final, the moment it was made, but it became final only after the period prescribed for the filing of appeal or revision or for making an additional assessment had expired.

21. Applying the above principles to the case on hand, what do we find The original order of assessment was made on 12th March, 1-955> for the assessment year 1953-54. The period of three years provided by the Madras General Sales Tax Rules, Rule 17, would expire by 31st March, 1957. While so, even on 18th March, 1957, the hands of the assessing authority were stayed by an order from this Court in C. M. P. No. 1999 of 1957. The order of assessment made on 12th March, 1955, had, therefore, not become final by 18th March, 1957, and that state of affairs continued till 18th February, 1959, when the Andhra Pradesh General Sales Tax Act came into force on 15th June, 1957, providing for a period of four years. It would be seen that the assessment proceedings were stayed for a period of one year and eleven months by reason of the stay order. Adding this period of one year and eleven months to the period of four years from 31st March, 1958, the period for revision is extended till 3rd March, 1960. In this case, the revised assessment was made on 31st July, 1959. We are, therefore, of the opinion that Section 14(4) of the Andhra Pradesh General Sales Tax Act applied to the case, and before the expiry of the period of four years from 31st March, 1954, the revised assessment was made, and it is therefore in time.

22. We wish to add that the assessee who obtained an order of stay and prevented the assessing authority from making the revised assessment within the period of three years as it stood at that time, cannot be permitted to take advantage of the very same order and now contend that the revised assessment is barred. It is a well-established principle expressed by the Latin maxim, achts curiae neminum gravabit, i.e., an act of the Court shall prejudice no one. In dealing with a case where a petitioner in an election petition could not make a cash deposit in time on account of the default of the Court in issuing the challan within time, though the application for the challan was made within time, Kumaraswami Sastri, J., in Gopalakrishna Pillai v. Kunjithapatam Pillai (1924) I.L.R. 47 Mad. 543 held that the rule of law that nobody should be prejudiced by the acts of the Court or of its officers expressed by the maxim mum pro tune is one of universal application, and that it does not depend upon any of the provisions of the Limitation Act, and that it applied to a case under Order XXI, Rule 39, Civil Procedure Code, to set aside sales on depositing money into Court. The same principle was laid down by a Bench of this Court in Ambati Raghavalu v. Movva Venkamma (1962) 1 An. W.R. 139 where the learned Chief Justice on behalf of the Court, following this decision and reviewing the case law, observed that where a litigant is unable to comply with the requirements of the statute not because of his own fault, but on account of the action or inaction of a Court, the maxim actus curiae neminem gravabit comes into play. In the instant case the assessing authority was prevented from making the assessment in time, and his hands were stayed for a period of one year and eleven months from making the assessment. If there were no order of stay from this Court, the assessment could have been made within time even according to the previous law; In such cases, the period during which the order of stay was in force should be excluded in computing the period of limitation. The observations of the learned Chief Justice of the Madras High Court in Kandaswami Pillai v. Kannappa Chetty (1951) 3 M.L.J. 668 are very apposite :

But then the decree holder should have had an opportunity of working out his rights under the decree for this full period of 12 years. If by an act of Court over which the decree holder has not control he is prevented from recovering the fruits of his decree during the full period of twelve years, it appears to me to be highly unreasonable that by the mere lapse of twelve years from the date of the decree, his rights should become extinct rights which he was prevented from enforcing for a part at least of the period of twelve years.

23. We respectfully follow these observations, and hold that the period during which the order of stay was in force should be excluded in calculating the period of four years provided for by Section 14(4).

24. In this view, the further contention that Section 14(5) did not declare the previous law, and that it was not given retrospective effect need not be considered. Though we do not wish to express our final opinion on this matter, we hold that the amendment introduced by Section 14(5) cannot necessarily be construed as meaning that that was not the law previously. Further, as was laid down in the case cited above, since the provisions relating to limitation are part of the procedural law, they should be given retrospective effect, in which view Section 14(5) would also govern the case.

25. For these reasons, we agree with the majority order of the Sales Tax Appellate Tribunal and hold that the order of revised assessment is not barred by limitation. No other question has been argued before us.

26. The tax revision case fails and is dismissed with costs. Advocate's fee Rs. 100.


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