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State of Orissa Vs. Sri Sanatan Pathal - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtOrissa High Court
Decided On
Case NumberSpecial Jurisdiction Case Nos. 1 to 5 of 1970
Judge
Reported in[1973]31STC632(Orissa)
AppellantState of Orissa
RespondentSri Sanatan Pathal
Appellant AdvocateStanding Counsel (Sales Tax)
Respondent AdvocateK.C.J. Ray, Adv.
Cases ReferredAnandji Haridas and Co. (P.) Ltd. v. S.P. Kushare
Excerpt:
.....co. ltd. v birendra mohan de, 1995 (2) gau lt 218 (db) and union of india v smt gita banik, 1996 (2) glt 246, are not good law]. - law is well-settled by series of decisions that it is capable of widest construction. we are, therefore, satisfied that even if no notice had been issued to the dealer under section .12(5) or no assessment had been made, yet it is open to the taxing authority to proceed under section 12(8). 7. the state has taken the stand that in fact notice under section 12(5) had been issued and the assessment had been made, though it is said to have been annulled.g.k. misra, c.j.1. sri sanatan pathal (respondent) was assessed under section 12(8) of the orissa sales tax act, 1947 (act 14 of 1947) (hereinafter to be referred to as 'the act'), for five quarters ending 31st march, 1959, to 31st march, 1960. he was alleged to have been carrying on business in timber and firewood. the member, additional sales tax tribunal, orissa, by his order dated 12th november, 1968, did not interfere with the assessment under section 12(8) though he allowed the appeal by reducing the quantum of turnover. the assessee filed an application for review. the ground that was urged in support of the review was that unless an assessment had been previously made under section 12(5) of the act, subsequent assessment under section 12(8) was without jurisdiction.2. the learned.....
Judgment:

G.K. Misra, C.J.

1. Sri Sanatan Pathal (respondent) was assessed under Section 12(8) of the Orissa Sales Tax Act, 1947 (Act 14 of 1947) (hereinafter to be referred to as 'the Act'), for five quarters ending 31st March, 1959, to 31st March, 1960. He was alleged to have been carrying on business in timber and firewood. The Member, Additional Sales Tax Tribunal, Orissa, by his order dated 12th November, 1968, did not interfere with the assessment under Section 12(8) though he allowed the appeal by reducing the quantum of turnover. The assessee filed an application for review. The ground that was urged in support of the review was that unless an assessment had been previously made under Section 12(5) of the Act, subsequent assessment under Section 12(8) was without jurisdiction.

2. The learned Tribunal accepted this contention and allowed the review application on 8th February, 1969. Against this order the State of Orissa asked for reference under Section 24(1) of the Act. The reference was made on 16th December, 1969 and the following two questions were referred to the High Court for answer:

(1) Whether on the facts and in the circumstances of the case, the Additional Sales Tax Tribunal was right in passing an order dated 8th February, 1969, under Rule 83 of the Orissa Sales Tax Rules, 1947 ?

(2) Whether the Tribunal was right in holding that assessment under Section 12(8) is not maintainable where there has been earlier no notice and no assessment under Section 12(5) of the Orissa Sales Tax Act ?

3. The factual basis of the first question may be noticed in short as appears from the appellate order of the Tribunal. Counsel for the assessee had contended that the assessment for the first five quarters, that is to say, the impugned quarters, under Section 12(8) was not correct as the assessee was never assessed under Section 12(5) of the Act.

On behalf of the State, it has been contended that the dealer (respondent) had been previously assessed for the first quarter under Section 12(5).

The Tribunal observed that the records did not show that the dealer was assessed under Section 12(5) earlier. Though the Tribunal said that there were no records to come to the conclusion that the respondent was assessed under Section 12(5), it did not carry the matter to its logical conclusion and did not give any relief to the dealer on this score.

4. The review application was filed under Rule 83 of the Orissa Sales Tax Rules, 1947, which runs thus :

83. The Commissioner of Sales Tax, Additional Commissioner of Sales Tax, the Deputy Commissioner of Sales Tax, the Assistant Commissioner of Sales Tax, the Sales Tax Officer, the Assistant Sales Tax Officer or the Tribunal may at any time correct any arithmetical or clerical mistakes or any error apparent on the face of the record arising or occurring from accidental slip or omission in an order passed by him, or it.

Referring to this rule, the learned Tribunal allowed the application and annulled the assessment for the first five quarters, that is, quarters ending 31st March, 1959, to 31st March, 1960.

The language of Rule 83 is plain and is not capable of any wide construction and it is not open to any of the taxing authorities to enter into the merits of the matter and correct their errors of law or fact committed in the earlier judgment. The correction is only confined to any arithmetical or clerical mistakes or any other error apparent on the face of the record and where no lengthy argument is necessary to find out accidental slip or omission in an order.

This rule itself came up for consideration before the Supreme Court in Master Construction Co. (P.) Ltd. v. State of Orissa [1966] 17 S.T.C. 360 (S.C.) and at page 364 their Lordships observed:

But, however wide the said expressions are construed, they cannot countenance a re-argument on merits on questions of fact or law, or permit a party to raise new arguments which he has not advanced at the first instance.

The learned Tribunal, therefore, acted illegally in exercise of his jurisdiction in entertaining the review application and by examining whether the records justified the dealer's stand that there was no earlier assessment under Section 12(5) of the Act.

5. On the aforesaid analysis, we would answer this question in the negative by saying that the Tribunal was not right in passing the order dated 8th February, 1969, under Rule 83 of the Orissa Sales Tax Rules, 1947.

6. On the second question also the Tribunal's view is equally erroneous in law. Doubtless, this aspect of law did not strike him, nor was it placed before him. He accordingly came to a bald conclusion without carefully examining the legal position that if there had been no earlier assessment under Section 12(5), there cannot be a later assessment under Section 12(8). Section 12(8), so far as relevant, runs thus:

If for any reason the turnover of a dealer for any period to which the Act applies has escaped assessment or has been under-assessed... the Commissioner may at any time within thirty-six months from the expiry of the year to which that period relates, call for a return under Sub-section (1) of Section 11 and may proceed to assess the amount of tax due from the dealer in the manner laid down in Sub-section (5) of this section....

The question for consideration is whether the words 'escaped assessment' would carry any restricted meaning.

Law is well-settled by series of decisions that it is capable of widest construction. The word 'escaped' is not qualified by any expression indicating the manner of escape. If the turnover escapes assessment in any manner whatsoever, it is open to the authorities to assess the same under 'escaped assessment'.

The matter is no longer res Integra and is concluded by Anandji Haridas and Co. (P.) Ltd. v. S.P. Kushare [1968] 21 S.T.C 326 (S.C.), where the Supreme Court after reviewing the corresponding provision of the Income-tax Act and other taxing statutes came to the following conclusion :

We, therefore, hold that the expression 'escaped assessment' in Section 11A of the Act includes that turnover which has not been assessed at all, because for one reason or other no assessment proceedings were initiated and therefore no assessment was made in respect thereof.

We are, therefore, satisfied that even if no notice had been issued to the dealer under Section .12(5) or no assessment had been made, yet it is open to the taxing authority to proceed under Section 12(8).

7. The State has taken the stand that in fact notice under Section 12(5) had been issued and the assessment had been made, though it is said to have been annulled. We express no view on this factual aspect as it is not necessary for answering the questions referred to us. Even on the assumption that there was no such notice, still the turnover could be assessed under Section 12(8).

8. We, therefore, answer the second question also in the negative by saying that the assessment under Section 12(8) is maintainable even if no notice had been issued or no assessment had been made under Section 12(5).

In the result, the references are accepted with costs.

Hearing fee rupees two hundred.

S. Acharya, J.

I agree.


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