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Commissioner of Sales Tax Vs. T.A. Lokhandwala - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case Number M.C.C. No. 93 of 1978
Judge
Reported in[1981]48STC529(MP)
AppellantCommissioner of Sales Tax
RespondentT.A. Lokhandwala
Appellant Advocate S. Kulshreshtha, Deputy Government Adv.
Respondent Advocate R.G. Waghmare, Adv.
Cases ReferredBengal v. Mahaliram Ramjidas
Excerpt:
.....accused in-laws of any misconduct dispelling any suspicion as to their involvement - letter of threat allegedly written by appellant to father of victim was concocted piece of evidence held, though presumption against appellant can be raised, it cannot be said that onus shifts exclusively and heavily on him to prove his innocence. conviction of appellant is liable to be set aside. - for the assessment year 1962-63, the assessing authority rejected the books of account produced by the assessee and made a best judgment assessment. 182. in these decisions, it has been held that when the act expressly used the expression 'if for any reason',it would not be permissible either for the tribunal or for this court to curtail the scope of that expression and the only limitation on the part of..........under section 19(1) and declarations in form xii which had been accepted originally by the assessing authority could be rejected on the ground that they were defective and the turnover reassessed to tax ?2. the material facts giving rise to this reference briefly are as follows: the assessee was at the material time dealing in steel, cement, hardwares, paints, etc. for the assessment year 1962-63, the assessing authority rejected the books of account produced by the assessee and made a best judgment assessment. the appeal preferred by the assessee before the deputy commissioner of sales tax was rejected. in the second appeal preferred before the board, it was held by the board that there was no basis for the addition of rs. 5,00,000 in the assessment order and the case was.....
Judgment:

G.G. Sohani, J.

1. By this reference under Section 44(1) of the M. P. General Sales Tax Act, 1958, hereinafter called the Act, the Board of Revenue has referred the following question of law to this Court for its opinion:

Whether, under the facts and circumstances of the case, the assessment of the dealer could be reopened under Section 19(1) and declarations in form XII which had been accepted originally by the assessing authority could be rejected on the ground that they were defective and the turnover reassessed to tax ?

2. The material facts giving rise to this reference briefly are as follows: The assessee was at the material time dealing in steel, cement, hardwares, paints, etc. For the assessment year 1962-63, the assessing authority rejected the books of account produced by the assessee and made a best judgment assessment. The appeal preferred by the assessee before the Deputy Commissioner of Sales Tax was rejected. In the second appeal preferred before the Board, it was held by the Board that there was no basis for the addition of Rs. 5,00,000 in the assessment order and the case was remanded to the assessing authority for reconsideration. The assessing authority thereafter passed an order of assessment afresh and also issued a notice under Section 19(1) of the Act calling upon the assessee to show cause why the deduction of Rs. 2,86,396 allowed under Section 2(r)(iv) of the Act should not be disallowed. The assessee objected to the proceedings on the ground that action under Section 19(1) of the Act was not called for in the circumstances of the case. The assessing authority, however, rejected that contention. An appeal preferred by the assessee against that order was rejected by the Deputy Commissioner. On second appeal, the Board of Revenue upheld the contention of the assessee that having once decided the question in the initial assessment, the assessing authority could not change its decision and reopen the case under Section 19(1) of the Act. The Board held that the assessing authority could not revise its opinion nor could it reassess a dealer under Section 19(1) of the Act because all the facts were before the assessing authority at the time of making initial assessment. In this view of the matter, the appeal was allowed. Hence, at the instance of the department, the Board has referred the aforesaid question of law to this Court for its opinion.

3. The answer to the question referred to this Court turns on the true construction of Section 19(1) of the Act. That section provides 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 taken by the Tribunal that the assessing authority was not justified in exercising powers under Section 19(1) of the Act on the facts and in the circumstances of the case, cannot be upheld. This question came up for consideration before a Division Bench of this Court in Commissioner of Sales Tax v. Jeewa Khan [1978] 42 S.T.C. 95 and Commissioner of Sales Tax v. Soubhagmal Ghasi Ram [1979] 44 S.T.C. 182. In these decisions, it has been held that when the Act expressly used the expression 'if for any reason', it would not be permissible either for the Tribunal or for this Court to curtail the scope of that expression and the only limitation on the part of the Sales Tax Officer while initiating proceedings under Section 19(1) of the Act is that he must act in good faith as held by the Privy Council in Commissioner of Income-tax, Bengal v. Mahaliram Ramjidas [1940] 8 I.T.R. 442 (P.C.), while considering a similar provision under the Indian Income-tax Act, 1922. We see no reason to differ from the view taken in these decisions. The Board has not in the instant case found that the action of the assessing authority in initiating proceedings under Section 19(1) of the Act was not bona fide. In our opinion, therefore, the assessment of the dealer could be reopened under Section 19(1) of the Act and the declarations in form XII which had been accepted originally by the assessing authority could be rejected on the ground that they were defective.

4. For all these reasons, our answer to the question referred to us is in the affirmative and against the assessee. In the circumstances of the case, parties shall bear their own costs of this reference.


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