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The Commissioner of Sales Tax Vs. Jeewa Khan - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case NumberMiscellaneous Civil Case No. 142 of 1976
Judge
Reported in[1978]42STC95(MP)
AppellantThe Commissioner of Sales Tax
RespondentJeewa Khan
Appellant AdvocateK.L. Goyal, Additional Government Adv.
Respondent AdvocateC.M. Mehta, Adv.
Cases ReferredMaharaj Kumar v. Income
Excerpt:
.....appellant is liable to be set aside. - the words themselves do alone in such cases best declare the intent of the lawgiver. ), as follows :there is no doubt that a part of the assessee's income had not been assessed and, in that sense, it has clearly escaped assessment......section 39(2) can be circumvented by the case being taken up under section 19(1) ?(2) whether an assessing authority is debarred from reopening an assessment under section 19(1) on the ground of alleged defects in c forms since the assessing authority must be presumed to have scrutinised the c forms and found them in order at the time of original assessment and the assessing authority cannot reopen a case by a change in its view subsequent to the original assessment ?2. the material facts giving rise to this reference briefly are as follows: for the assessment year 1959-60, the assessee was reassessed under section 19(1) of the act on the ground that the c forms submitted by the assessee at the time of original assessment were defective and, in consequence, the assessee was assessed at.....
Judgment:

G.G. Sohani, J.

1. By this reference under Section 44 of the M. P. General Sales Tax Act, 1958, hereinafter called the Act, the Tribunal has referred the following questions of law for our opinion :

(1) The period of limitation for revision proceedings by the Commissioner under Section 39(2) being three years while the period for reopening an assessment under Section 19(1) is five calendar years, whether it is legally wrong to take up a case under Section 19(1) if it could be taken up under Section 39(2) as otherwise even though the three years' period may have elapsed from the date of the order sought to be revised, the limitation under Section 39(2) can be circumvented by the case being taken up under Section 19(1) ?

(2) Whether an assessing authority is debarred from reopening an assessment under Section 19(1) on the ground of alleged defects in C forms since the assessing authority must be presumed to have scrutinised the C forms and found them in order at the time of original assessment and the assessing authority cannot reopen a case by a change in its view subsequent to the original assessment ?

2. The material facts giving rise to this reference briefly are as follows: For the assessment year 1959-60, the assessee was reassessed under Section 19(1) of the Act on the ground that the C forms submitted by the assessee at the time of original assessment were defective and, in consequence, the assessee was assessed at a lower rate by assessing the turnover covered by the defective C forms at one per cent instead of at seven per cent. The order of reassessment was assailed before the Appellate Assistant Commissioner of Sales Tax, Indore, but the appeal was dismissed. On further appeal before the Tribunal, the Tribunal held that the Sales Tax Officer was not competent to reopen the assessment under Section 19(1) of the Act after the expiry of the period of limitation prescribed by Section 39(2) of the Act for revising an assessment by the Commissioner. It was also held by the Tribunal that as the Sales Tax Officer had earlier accepted the C forms submitted by the assessee, he could not change his view and proceed to reassess the assessee on the ground that the C forms were defective. In this view of the matter, the order of reassessment was set aside. On an application made by the Commissioner of Sales Tax, Madhya Pradesh, the Tribunal has referred the aforesaid questions of law for our opinion.

3. Now, Section 19(1) of the Act reads as under:

19. Assessment of turnover escaping assessment.-(1) Where an assessment has been made under this Act or any Act repealed by Section 52 and if for any reason any sale or purchase of goods chargeable to tax under this Act or any Act repealed by Section 52 during any period has been underassessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom, the Commissioner may, at any time within five calendar years from the date of order of assessment after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he considers necessary, proceed, in such manner as may be prescribed, to reassess the tax payable by such dealer and the Commissioner may direct that the dealer shall pay, by way of penalty in addition to the amount of tax so assessed, a sum not exceeding that amount....

From a perusal of the aforesaid provision, it would be clear that the assessing authority has jurisdiction to issue a notice under Section 19(1) of the Act at any time within five calendar years from the date of the order of assessment, if, for any reason, any sale or purchase of goods chargeable to tax under the Act has been under-assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom. Section 39 of the Act deals with the powers of revision by the Commissioner. There are thus two distinct powers conferred on the authorities by the provisions of Sections 19 and 39 of the Act. Dealing with analogous provisions under the Madras General Sales Tax Act, 1959, a Division Bench of the Madras High Court observed in F.K. Hasheeb & Co. v. State of Madras [1966] 17 S.T.C. 38, as follows:

We are, therefore, of the opinion that the power of revision can be exercised by the Deputy Commissioner under Section 32 to correct errors committed by the assessing authority in his order of assessment, irrespective of the question as to whether the said errors could also be corrected by the assessing authority himself. The power under Section 32 is a distinct separate power and its exercise cannot be controlled by any power which may inhere in the assessing authority under Section 16.

We respectfully agree with the aforesaid observations. It, therefore, follows that any power, which may inhere in the assessing authority under the provisions of the Act to reassess the assessee, is not subject to the provisions of Section 39 of the Act. When the legislature has provided distinct periods of limitation for exercising powers under Section 19 and Section 39 of the Act, it would not be permissible, in our opinion, to hold that the powers under Section 19(1) of the Act could not be exercised after the expiry of the period of limitation prescribed for exercising powers under Section 39 of the Act. The construction placed upon Section 19(1) of the Act by the Tribunal would amount to not giving effect to the plain language of Section 19(1) of the Act on the ground that it would result in circumventing the provisions of Section 39 of the Act. We may usefully refer to the. following passage in 'Principles of Statutory Interpretation' by G.P. Singh, at page 28 :

When the words of a statute are clear, plain or unambiguous, i. e., they are reasonably susceptible to only one meaning, the courts are bound to give effect to that meaning irrespective of consequences. The rule as stated by Tindal, C.J., in Sussex Peerage case (1844) 11 Cl. & Fin. 85 is in the following form. If the words of the statute are in themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense. The words themselves do alone in such cases best declare the intent of the lawgiver. The rule is also stated in another form, when a language is plain and unambiguous and admits of only one meaning, no question of construction of a statute arises for the Act speaks for itself. The results of the construction are then not a matter for the court, even though they may be strange or surprising, unreasonable or unjust or oppressive. Again and again says Viscount Simon, L. C, this Board has insisted that in construing enacted words we are not concerned with the policy involved or with the results injurious or otherwise, which may follow from giving effect to the language used. And says Gajendragadkar, J., if the words used are capable of one construction only then it would not be open to the courts to adopt any other hypothetical construction on the ground that such construction is more consistent with the alleged object and policy of the Act.

4. Learned counsel for the assessee referred to the decisions reported in Chikanarasimhiah v. Assistant Commissioner of Commercial Taxes [1971] 28 S.T.C. 98, State of Andhra Pradesh v. Polireddi Satyanarayana [1972] 29 S.T.C. 512 and Nagaraja Overseas Traders v. State of Mysore [1974] 33 S.T.C. 315. These decisions, however, do not deal with the question that is for consideration before us. As the powers exercisable by an assessing authority under Section 19(1) of the Act are independent of the powers which could be exercised by the Commissioner under Section 39 of the Act, it would not be legally wrong, in our opinion, for an assessing authority to exercise powers under Section 19(1) of the Act, even though the period of limitation prescribed for exercising powers under Section 39 of the Act has expired.

5. As regards the second question referred to us, we see no justification for holding that the powers of Section 19(1) of the Act are attracted to those cases only which have not come to the notice of the assessing authority at all. In construing the scope of the expression 'escaped' in Section 34(l)(b) of the Indian Income-tax Act, 1922, the Supreme Court observed in a decision reported in Maharaj Kumar v. Income-tax Commissioner [1959] 35 I.T.R. 1 (S.C.), as follows :

There is no doubt that a part of the assessee's income had not been assessed and, in that sense, it has clearly escaped assessment. Can it be said that, because the matter was considered and decided on the merits in the light of the binding authority of the decision of the Patna High Court, no income has escaped assessment when the said Patna High Court decision has been subsequently reversed by the Privy Council We see no justification for holding that cases of income escaping assessment must always be cases where income has not been assessed owing to inadvertence or oversight or owing to the fact that no return has been submitted. In our opinion, even in a case where a return has been submitted, if the Income-tax Officer erroneously fails to tax a part of the assessable income, it is a case where the said part of the income has escaped assessment. The appellant's attempt to put a very narrow and artificial limitation on the meaning of the word 'escape' in Section 34(1)(b) cannot, therefore, succeed.

The provisions of Section 19(1) of the Act provide that if for any reason the sale or purchase of goods chargeable to tax under the Act has been under-assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom, the assessing officer can at any time within five calendar years from the date of the order of assessment reopen the assessment. In view of the clear language employed in Section 19(1) of the Act, the view of the Tribunal that the assessing authority was debarred from reopening the assessment under Section 19(1) of the Act on the ground that the assessing authority must be presumed to, have scrutinized the C forms submitted by the assessee at the time of assessment, cannot be upheld.

6. For all these reasons, our answers to the questions referred to us for opinion are in the negative ; parties shall bear their own costs of this reference.


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