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Manganese Ore (India) Ltd. Vs. the Regional Assistant Commissioner of Sales Tax, Jabalpur Region and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case Number Miscellaneous Petition No. 118 of 1977
Judge
Reported in[1981]48STC183(MP)
AppellantManganese Ore (India) Ltd.
RespondentThe Regional Assistant Commissioner of Sales Tax, Jabalpur Region and ors.
Appellant Advocate S.V. Natu, Adv.
Respondent Advocate S.L. Saxena, Government Adv.
DispositionPetition dismissed
Cases ReferredAppellate Tribunal v. Cambatta
Excerpt:
.....as well as the department filed applications for reference in all the four cases before the tribunal. (8) the assessment shall be made under this section- (i) in respect of a registered dealer, within a period of five calendar years from the end of the period for which assessment is to be made ;and (ii) in respect of a dealer who has failed to apply for registration, within a period of five calendar years from the commencement of proceedings under sub-section (6) :provided that- (a) where a fresh assessment has to be made to give effect to any finding or direction contained in any order under section 38, 39 or 44, or to any order of the high court or the supreme court such assessment shall be made within a period of three calendar years from the date of order containing such..........august, 1978, that no reference could be made at that stage on the ground that the order of the tribunal dated 28th december, 1972, had become inoperative and ineffective as no fresh assessments were made within time. the objections filed by the petitioner were heard by the tribunal on 17th december, 1978, and on the request of the petitioner the tribunal decided to withhold the making of references for six months.4. all these petitions proceed upon' the basis that fresh assessment proceedings directed by the deputy commissioner of sales tax by his order dated 19th may, 1969, and the tribunal by its order dated 28th december, 1972, became barred by limitation under section 18(8) of the madhya pradesh general sales tax act. this provision was inserted by act no. 10 of 1970 and reads as.....
Judgment:
ORDER

G.P. Singh, C.J.

1. This order shall also dispose of Miscellaneous Petitions Nos. 119, 120 and 121, all of 1977.

2. The facts briefly stated are that the petitioner is registered as a dealer in Madhya Pradesh under the Madhya Pradesh General Sales Tax Act, 1958, as also under the Central Sales Tax Act, 1956. This dispute before us relates to the assessments under both the Acts for the years 1962-63 and 1963-64. For the year 1962 63 the petitioner deposited Rs. 3,795 under the State Act and Rs. 7,343.82 as tax under the Central Act along with its returns. For the year 1963-64, the petitioner deposited Rs. 61,261.99 under the State Act and Rs. 55,679.62 under the Central Act as tax along with its returns. The petitioner was assessed for these years by order of the Regional Assistant Commissioner of Sales Tax passed on 27th October, 1967. For the year 1962-63 the tax under the State Act was assessed at Rs. 1,51,615.55 and the assessment under the Central Act was nil. For the year 1963-64 the tax under the State Act was assessed at Rs. 2,06,257. The assessment under the Central Act for this year also was nil. The petitioner filed four appeals to the Deputy Commissioner of Sales Tax. For the year 1962-63 the petitioner further deposited Rs. 40,475.73 towards its liability for payment of tax assessed under the State Act. It also got adjusted the amount of Rs. 7,343.82 paid as tax under the Central Act towards its liability under the State Act as the assessment under the Central Act was nil. For the year 1963-64, the petitioner further paid Rs. 89,315.39 towards its liability for payment of tax assessed under the State Act. The petitioner also got Rs. 55,679.62 deposited as tax under the Central Act adjusted against its liability under the State Act as the assessment under the Central Act was nil. The appeals were decided by the Deputy Commissioner on 19th May, 1969. All the assessment orders were set aside and the assessment cases were remanded for fresh assessment. There was also a direction regarding inquiry about declarations in C forms. The petitioner then filed four appeals to the Sales Tax Appellate Tribunal (Board of Revenue) which were decided on 28th December, 1972. The appeals were partly allowed by ordering that the directions given by the Deputy Commissioner regarding declarations in C forms should be disregarded. In other respects the appeals were dismissed and the assessing authority was directed to finalise the assessments. The petitioner as well as the department filed applications for reference in all the four cases before the Tribunal. All these applications were heard on 5th August, 1974. The petitioner filed these petitions under Article 226 of the Constitution in the High Court on 22nd February, 1977. The prayer in these petitions is that the proceedings pending before the Tribunal in reference applications be quashed and the assessing authority be commanded by a writ of mandamus to forbear from taking any step towards fresh assessment. There is also a prayer for refund of the tax already paid with interest.

3. In July, 1978, the petitioner was intimated that the Tribunal proposed to refer certain questions of law to the High Court. The petitioner took written objections before the Tribunal on 11th August, 1978, that no reference could be made at that stage on the ground that the order of the Tribunal dated 28th December, 1972, had become inoperative and ineffective as no fresh assessments were made within time. The objections filed by the petitioner were heard by the Tribunal on 17th December, 1978, and on the request of the petitioner the Tribunal decided to withhold the making of references for six months.

4. All these petitions proceed upon' the basis that fresh assessment proceedings directed by the Deputy Commissioner of Sales Tax by his order dated 19th May, 1969, and the Tribunal by its order dated 28th December, 1972, became barred by limitation under Section 18(8) of the Madhya Pradesh General Sales Tax Act. This provision was inserted by Act No. 10 of 1970 and reads as follows:

(8) The assessment shall be made under this section-

(i) in respect of a registered dealer, within a period of five calendar years from the end of the period for which assessment is to be made ; and

(ii) in respect of a dealer who has failed to apply for registration, within a period of five calendar years from the commencement of proceedings under Sub-section (6) :

Provided that-

(a) where a fresh assessment has to be made to give effect to any finding or direction contained in any order under Section 38, 39 or 44, or to any order of the High Court or the Supreme Court such assessment shall be made within a period of three calendar years from the date of order containing such finding or direction or the order of the High Court or the Supreme Court, as the case may be;

(b) where assessment proceedings are pending on the date of commencement of the Madhya Pradesh General Sales Tax (Amendment and Validation) Act, 1969, such assessment shall be made within a period of three calendar years from the date of such commencement or within the period within which such assessment is required to be made in accordance with any other provision of this section, whichever is later ; and

(c) nothing contained in this sub-section shall apply to proceedings initiated under Section 19 or any proceeding other than assessment of tax that may be instituted under any other provisions of this Act.

5. The argument of the learned counsel for the petitioner is that as no fresh assessment orders were passed by the assessing authority within three calendar years from 28th December, 1972, when the Tribunal decided the appeals, the assessment proceedings became barred by limitation under proviso (a) to Section 18(8) and they cannot be continued simply because of pendency of applications for reference made under Section 44.

6. Proviso (a) to Section 18(8) says that 'where a fresh assessment has to be made to give effect to any finding or direction contained in any order under Section 38, 39 or 44, or to any order of the High Court or the Supreme Court such assessment shall be made within a period of three calendar years from the date of order containing such finding or direction or the order of the High Court or the Supreme Court, as the case may be'. Sub-section (1) of Section 38 deals with first appeals. Sub-section (2) of Section 38 deals with second appeals to the Tribunal against orders passed under Sub-section (1). The appellate authority in disposing of an appeal may confirm, reduce, enhance or annul the assessment or the penalty or both or set aside the assessment or the penalty or both, and direct the officer whose assessment order has been appealed against to make a fresh assessment after such further inquiry as may be directed ; or pass such orders as it may think fit. Instead of preferring an appeal a revision may be filed to the Commissioner under Sub-section (1) of Section 39. Under this provision the Commissioner may pass such order on the revision as he thinks fit not being an order prejudicial to the dealer. Sub-section (2) of Section 39 authorises the Commissioner to interfere in revision if he considers that any order is prejudicial to the interests of the revenue. Under this provision the Commissioner may enhance or modify the assessment or cancel the same and direct a fresh assessment. An order under Sub-section (2) of Section 39 is appealable to the Tribunal under Sub-section (3). Then comes Section 44, which reads as under :

44. Statement o/ case to High Court.-(1) Within sixty days from the date of communication by the Tribunal of any order to a dealer or to the Commissioner under Sub-section (2) of Section 38 or Sub-section (3) of Section 39, the dealer or the Commissioner may, by application in writing accompanied where the application is made by a dealer by a fee of one hundred rupees, require the Tribunal to refer to the High Court any question of law arising out of such order, and where the Tribunal decides to make a reference to the High Court, it shall draw up a statement of the case and refer it accordingly.

(2) If for reasons to be recorded in writing, the Tribunal refuses to make a reference, the applicant may within sixty days from the date of communication of such refusal-

(a) withdraw his application and if he does so, the fee paid shall be refunded; or

(b) apply to the High Court to require the Tribunal to make a reference.

(3) If upon the receipt of .an application under Clause (b) of Sub-section (2) the High Court is not satisfied, that the refusal was justified, it may require the Tribunal to state the case and refer it, and on receipt of such requisition, the Tribunal shall act accordingly.

(4) If the High Court is not satisfied that the case stated is sufficient to enable it to determine the question raised, it may call upon the Tribunal to make such additions or alterations therein as the Court may direct in that behalf.

(5) The High Court upon the hearing of a reference under this section shall decide the question of law raised thereby and shall deliver judgment thereon containing the grounds of decision and shall send to the Tribunal a copy of the judgment under the seal of the court and the signature of the Registrar, and the Tribunal shall dispose of the case accordingly.

(5-A) Where an appeal against the judgment of the High Court under Sub-section (5) is entertained by the Supreme Court, the Tribunal shall dispose of the case in accordance with the judgment delivered by the Supreme Court and for this purpose a copy of the judgment of the Supreme Court shall be sent to the Tribunal by the High Court under its seal and the signature of the Registrar.

(6) The costs of a reference under this section, including the disposal of the fee referred to in Sub-section (i), shall be in the discretion of the court.

(7) The tax ordered by the Tribunal to be paid by an order in respect of which an application has been made under Sub-section (1) shall, notwithstanding the making of such application or any reference in consequence thereof, be payable upon the making of the order.

(8) Where as the result of a reference under this section the tax due from any dealer is reduced below the amount paid by him under Sub-section (7), the difference shall be refunded to him in accordance with the provisions of Section 24.

7. Section 44 of the Act is in the same lines as Section 66 of the Income-tax Act, 1922. The scheme of Section 44 is that on an application made by the dealer or the Commissioner, the Tribunal may refer any question of law arising out of its order passed in appeal under Sub-section (2) of Section 38 or Sub-section (3) of Section 39 to the High Court. If the Tribunal refuses to make a reference, the aggrieved party may apply to the High Court for directing the Tribunal to make a reference. When a reference is made, whether by the Tribunal acting on its own or on direction of the High Court, the High Court decides the reference and answers the question. The judgment of the High Court on a reference is advisory. After the judgment of the High Court is received by the Tribunal, it disposes of the case in accordance with the opinion expressed by the High Court. Sub-section (5) of Section 44 is relevant on this point. This provision directs that on receipt of a copy of the judgment of the High Court 'the Tribunal shall dispose of the case accordingly'. The words 'the case' as they occur here in the context refer to the appeal under Sub-section (2) of Section 38 or Sub-section (3) of Section 39 in which the reference was made. Reference may here also be made to Section 38(6) which says that an appellate order of the Tribunal is final subject to the provisions made in Section 44. Thus the scheme is that when a reference is made to the High Court, the order of the Tribunal in appeal in which the reference is made cannot be looked upon as final. The appeal has to be disposed of finally after receipt of the opinion of the High Court on the question referred. In other words, when a reference is made the appeal cannot be taken to be finally disposed of and it is only when the High Court sends its opinion and the Tribunal reconsiders the matter and decides it in accordance with the opinion of the High Court that the appeal can be said to be finally disposed of. This view is supported by the decision of the Bombay High Court in Income-tax Appellate Tribunal v. Cambatta & Co. Ltd. [1956] 29 I.T.R. 118, in which while interpreting Sections 33 and 66 of the Income-tax Act, 1922, Chagla, C. J., observed as follows :

Therefore, reading Section 33(6) and Section 66(5) together, the scheme is fairly clear that when a reference is made to the High Court either under Section 66(1) or Section 66(2) the decision of the Appellate Tribunal cannot be looked upon as final; in other words, the appeal is not finally disposed of.

It is only when the High Court decides the case, exercises its advisory jurisdiction, and gives directions to the Tribunal on questions of law, and the Tribunal reconsiders the matter and decides it, that the appeal is finally disposed of.

8. The words 'within a period of three calendar years from the date of order containing such finding or direction' as they occur in proviso (a) to Section 18(8), in our opinion, must refer to the date of the final order containing such finding or direction or to the date when the order attains finality. In case of an appeal decided by the Tribunal, as already seen, the appeal, when a reference is made under Section 44 can be said to be finally disposed of only when the Tribunal again considers the matter and decides the appeal in accordance with the opinion of the High Court. Till then the appeal cannot be said to have been finally disposed of. In the instant case, the Tribunal has intimated the petitioner that it proposed to state the case to the High Court on applications made to it. The Tribunal has not made any reference so far, only because the petitioner made a request for withholding the making of references. In such a situation, when a reference is going to be made to the High Court in appeals filed by the petitioner before the Tribunal, whether at the instance of the petitioner or at the instance of the Commissioner, it cannot be said that the orders passed in appeals are final. They would become final after the reference is decided by the High Court and the Tribunal again decides the appeals in accordance with the opinion expressed by the High Court on the questions referred. Even before the making of any references on an application filed under Section 44, the finality of the order made in appeal under Section 38 by the Tribunal is affected. The order is put in jeopardy by the application. It is only after the application is finally disposed of, either by its dismissal where no reference is made or where reference is made after the appeal is again decided in the light of the opinion expressed by the High Court, that the order in appeal attains finality. The words 'within a period of three calendar years from the date of order' as used in Section 18(8) must, in our opinion, refer to the date when the order assumes finality. So even in a case where no reference is made and the application for reference is dismissed by the Tribunal or the High Court, the period of limitation would run from the date of dismissal of the application. For these reasons it cannot be said that the reference applications pending before the Tribunal have become infructuous or that the proceedings for reassessment have become barred by limitation.

9. The petitions fail and are dismissed, but without any order as to costs. The security amount in each case be refunded to the petitioner.


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