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Mohammed HussaIn Vs. the State of Andhra Pradesh - Court Judgment

LegalCrystal Citation
SubjectSales Tax;Limitation
CourtAndhra Pradesh High Court
Decided On
Case Number T.R.C. No. 8 of 1971
Judge
Reported in[1973]30STC445(AP)
AppellantMohammed Hussain
RespondentThe State of Andhra Pradesh
Appellant Advocate Mir Baquer Ali, Adv.
Respondent Advocate The Fifth Government Pleader and ; Mahadev, Adv.
DispositionPetition dismissed
Excerpt:
.....be held to be orders passed under section 12 as well as under section 23 and, consequently, the period of limitation prescribed in the second proviso in section 12(6) will in terms become applicable, and that the limitation prescribed under section 12(6) would apply to all orders of assessment, irrespective of whether they are original orders, appellate orders or revisional orders. under section 14(3) where an assessee fails to submit his return before the date prescribed for, what is called, best judgment assessment, the period fixed is six years from the expiry of the year to which the assessment relates. under section 38a of the act, no assessment made or order passed by any officer or authority under the act, shall be set aside merely on account of any defect or irregularity in..........appeal to the assistant commissioner was rejected, the appellant-assessee went on appeal to the sales tax appellate tribunal and the appellate tribunal directed the assistant commissioner to admit the appeal and dispose it of according to law. the assistant commissioner finally on 30th november, 1967, passed an order, accepting the return filed by the assessee and rejecting the estimated turnover made by the assessing authority. as against this also, the assessee went in appeal to the tribunal, contending that the assessment was time-barred and raising other objections. as this appeal was dismissed, he has come before us with this petition.3. the first contention put forward before us is that under section 14(1) of the andhra pradesh general sales tax act (hereinafter referred to as.....
Judgment:

A.D.V. Reddy, J.

1. This petition is directed against the order passed by the Sales Tax Appellate Tribunal, confirming the assessment of the petitioner for the year 1956-57 under the Andhra Pradesh Sales Tax Act.

2. The petitioner is a dealer trading in the name of M/s. Hameedi Confectioners, Moazzam Jahi Market, Hyderabad. For the year 1956-57, he submitted a return of his turnover of Rs. 1,07,988-1-0, but the assessing authority rejected his accounts and completed the assessment on an estimated turnover of Rs. 2,54,719, by his order dated 14th September, 1957. On appeal, the Deputy Commissioner of Commercial Taxes, by his order dated 5th May, 1958, remanded the case to the Commercial Tax Officer for making a fresh assessment after giving a reasonable opportunity to the appellant to adduce evidence in his behalf. On remand, as the assessee did not produce his account books, on notices issued to him, the Deputy Commercial Tax Officer determined the turnover on the basis of the previous year 1955-56 at Rs. 4,13,350.68 by his order dated 29th March, 1961, which was communicated to the assessee on 4th August, 1961. As the appeal to the Assistant Commissioner was rejected, the appellant-assessee went on appeal to the Sales Tax Appellate Tribunal and the Appellate Tribunal directed the Assistant Commissioner to admit the appeal and dispose it of according to law. The Assistant Commissioner finally on 30th November, 1967, passed an order, accepting the return filed by the assessee and rejecting the estimated turnover made by the assessing authority. As against this also, the assessee went in appeal to the Tribunal, contending that the assessment was time-barred and raising other objections. As this appeal was dismissed, he has come before us with this petition.

3. The first contention put forward before us is that under Section 14(1) of the Andhra Pradesh General Sales Tax Act (hereinafter referred to as the Act), the entire assessment should have been completed within four years and as the assessment in this case took nearly 12 years, it is out of time. As pointed out above, in the felicitous term often used, the assessment has had a chequered career. There has been delay at various stages. It has to be considered whether the contention of the assessee that as the entire period taken until the final disposal by the Assistant Commissioner on 30th November, 1969, accepting the returns filed by the assessee is nearly 12 years, it is beyond the time of four years prescribed under Section 14(1) of the Act and, therefore, it is out of time, is correct.

4. Sri Mir Baquer Ali, for the above contention, has relied on the decision in The State of Orissa v. Debaki Debi [1964] 15 S.T.C. 153 (S.C.), followed by the Punjab High Court in Sir Sobha Singh & Co. v. Commissioner of Sales Tax [1966] 18 S.T.C. 416. In the Supreme Court case cited above, their Lordships were dealing with the second proviso to Section 12, Clause (6), of the Orissa Sales Tax Act, which reads as follows:

Provided further that no order assessing the amount of tax due from a dealer in respect of any period shall be passed later than thirty-six months from the expiry of such period.

5. In interpreting this section along with Section 23(2) of that Act, they held that even when an appellate or revisional authority is effecting a fresh assessment by enhancing it, it is exercising the power which is conferred by Section 12, and so to speak, doing the duty which an assessing authority would or ought to have performed ; that any order of assessment made by the appellate authority or revising authority must therefore be held to be orders passed under Section 12 as well as under Section 23 and, consequently, the period of limitation prescribed in the second proviso in Section 12(6) will in terms become applicable, and that the limitation prescribed under Section 12(6) would apply to all orders of assessment, irrespective of whether they are original orders, appellate orders or revisional orders. This was followed in the Punjab case, cited above, in interpreting the provisions regarding the limitation in Section 11(2)(a) of the Bengal Finance (Sales Tax) Act, 1941, as extended to Delhi. Periods of limitation fixed however differ in different enactments and they have to be interpreted and construed in the context of each statute.

6. In the present case, when the question of limitation was raised before the Appellate Tribunal, the Appellate Tribunal held that the original assessment was made under the Hyderabad General Sales Tax Act, that under that Act there was no limitation prescribed for the making of the original assessment, and, hence, the question would not arise. It is now contended that by virtue of Section 41 of the Andhra Pradesh General Sales Tax Act, which replaced the Hyderabad Act, which was repealed under the above-said provision, it was provided that any proceedings before the assessing or appellate or revisional authorities pending at the commencement of the new Act, shall, after such commencement, be disposed of as if this Act had been in force on the date on which such application, appeal or revision or other proceedings are made or preferred and that, therefore, the provisions of the new Act will apply with regard to these proceedings. This proposition is conceded by Mr. Venkatappaiah Sastry, appearing for the department. It is therefore to be seen what is the limitation prescribed under the provisions of Section 14(1) for the assessment.

7. The relevant provision of Section 14(1) reads as follows:.An assessment under this section shall be made only within a period of four years from the expiry of the year to which the assessment relates.

8. The question that has to be determined is whether the assessment should be deemed to have become final within a period of four years even though there have been revisions and appeals preferred by the assessee or the department during the period, and whether the four years is an outer limit for the assessment by the assessing officer. There is a general rule of construction applicable to all statutes alike, which is known as construction ex visceribus actus within the four corners of the Act. It is, therefore, necessary to find out what this section provides for having regard to and in relation to the other provisions of the Act. The general frame of the enactment and the provisions contained therein with regard to limitation have to be looked into to ascertain the meaning of the provision. It will be seen from the frame of the enactment that there are several provisions relating to limitation embodied in the Act. Under Section 14(1), four years is the time prescribed for the assessment; under Section 14(3) where an assessee fails to submit his return before the date prescribed for, what is called, best judgment assessment, the period fixed is six years from the expiry of the year to which the assessment relates. Section 14(5) provides for the exclusion of the time involved on stay orders from the High Court or Supreme Court in computing four years or six years as the case may be. Under Section 14(7) where the assessment had been set aside by any court or competent authority under the Act for any reason, the period involved shall be excluded in computing the period of four years or six years as the case may be. Therefore, the above provisions show that the Legislature has not intended that the four years prescribed under Section 14(1) should be the outer limit for making the assessment and that the assessment should be made within that period notwithstanding the revisions or appeals filed under the Act. Section 20 of the Act provides for revision by the Board of Revenue or Other prescribed authority, and under Sub-clause (3) such powers can be exercised only within a period of four years from the date on which the order against which the revision is being filed was served on the dealer. This period has to be calculated after the service of the order of assessment for which itself, the period of four years has been fixed. Therefore, it is obvious that the period fixed in Section 14(1) does not include the time taken in revisions or appeals and is only meant for the initial assessment.

9. It is, however, contended that even the initial assessment in this case was beyond a period of four years. On the return filed by the assessee for the year 1956-57, an assessment order was passed on 14th September, 1957, itself. But, on appeal to the Deputy Commissioner of Commercial Taxes, this assessment was set aside by his order dated 5th May, 1958, and the case was remanded for fresh assessment and the fresh assessment was completed on 29th March, 1961. Even if this has to be considered as the assessment, it is admittedly within four years, applying the provisions of Section 14(1). But it is contended that as this order of assessment was not communicated to the assessee till 4th August, 1961, it should be deemed to be beyond four years and as such barred by time. With regard to this contention, the learned counsel for the assessee has relied on three decisions reported in Govindji v. Commissioner of Sales Tax, Madhya Pradesh [1955] 6 S.T.C. 183, Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Abdul Wasigh and Brothers [1962] 13 S.T.C. 295 and A.M. Safiulla & Co. v. State of Madras [1966] 17 S.T.C. 79. All these cases relate to the computation of the period of limitation with regard to the filing of revisions or appeals on a particular order and what they have indicated is that limitation should be computed not from the date of the order itself, unless it has been passed in the presence of the party or after notice to the party, but from the date of the communication of this order to the assessee. They do not hold that the order does not take effect from the date it was passed, but only from the date it is communicated that it is valid and binding on the party. If that were so, it will give rise to innumerable complications, as there may be ex parte orders or where the assessees may be dodging service and may not be served at all, and there may also be cases where, when there are different parties and they may be served on different dates and it cannot mean that the order takes effect on the different dates they are served on the parties or not at all if they are not served.

10. In State of Madras v. Batcha & Co. [1967] 20 S.T.C. 273 (S.C.), the Supreme Court had agreed with the view of the Madras High Court in S. B. Periasami Nadar v. State of Madras [1962] 13 S.T.C. 328, where it was pointed out that however wide the significance of the expression 'assessment' may be, it is impossible to hold that an assessment is incomplete or invalid in the absence of the order of assessment being served upon the assessee, that once the competent authority makes an assessment, under the Act, after scrutinising the return submitted by the assessee, and after giving the assessee a reasonable opportunity of proving the correctness and completeness of any return submitted by the assessee, it is complete and valid- Therefore, there is no force in the contention that the order of assessment becomes valid and effective only from the date of communication and that as in this case the date of communication is beyond four years from the expiry of the year to which the assessment relates, it is out of time even under Section 14(1). Admittedly, even the fresh assessment as per the remand order was passed on 29th March, 1961, and this is within the period of four years stipulated under Section 14(1). .Therefore, the fresh assessment order is within time.

11. It is next contended that the assessment has not been made on the dealer, but on the firm and as such this is a fundamental error, which goes to the root of the assessment and as such the assessment is invalid. For this proposition, the decision in Shankar Dhawan v. Sales Tax Officer, Circle II, Nagpur [1964] 15 S.T.C. 292, is relied on. That was a case of an assessment being made in the trade name after the death of the proprietor who was the dealer. Section 5 of the Act, which is the charging section, no doubt, makes the dealer liable and the term 'dealer' has been defined in Section 2(e) of the Act, as any person who carries on the business of buying, selling, etc. It is no doubt the dealer that is liable. But in this case, it is not correct to say that the assessment has been made in the trade name, i.e., Hameedi Confectioners. This is a proprietary concern and Md. Hussain who is the proprietor is the dealer under the Act. He has received the notices and has also submitted the returns for the year 1956-57. He had taken all the proceedings thereafter by way of revision and appeal. Nowhere in these proceedings did he contend that the assessment as made in the trade name is invalid. It is also before the Sales Tax Appellate Tribunal, as pointed out by them, at the fag end of the arguments, that this contention was raised. This is not, however, an incurable irregularity. Under Section 38A of the Act, no assessment made or order passed by any officer or authority under the Act, shall be set aside merely on account of any defect or irregularity in the procedure relating thereto, unless it appears that such defect or irregularity has in fact occasioned material hardship or failure of justice. As already stated, the petitioner-assessee has been submitting himself to the assessment as the sole proprietor of Hameedi Confectioners and has been taking necessary steps and the irregularity in issuing the assessment order in the name of his firm had not caused any material hardship or failure of justice to the petitioner. On the above grounds, the petition is dismissed with costs. Advocate's fee Rs. 100.


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