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Raghunath Singh Romesh Chander Vs. the State of Punjab - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtPunjab and Haryana High Court
Decided On
Case Number General Sales Tax Reference No. 33 of 1971
Judge
Reported in[1975]35STC338(P& H)
AppellantRaghunath Singh Romesh Chander
RespondentThe State of Punjab
Appellant Advocate Bhagirath Dass,; B.K. Jhingan and; S.K. Hirajee, Adv
Respondent Advocate S.C. Goyal, Adv.; for the Adv.-General and; O.P. Goyal
Cases ReferredBhawani Cotton Mills Ltd. v. State of Punjab
Excerpt:
.....had made a default in formally communicating the order to him. allowing a party to do so would amount to placing a premium on the lack of diligence of a party, who is remiss in seeking a remedy that was available to it. therefore, knowledge whether actual or construction of the order passed by the state or regional transport authority should result in commencement of the period of limitation. thus,. in cases where the state or regional transport authority has not communicated the order of refusal passed to the persons concerned, the period of limitation for filing an appeal would commence from the date when the parties concerned acquire knowledge of passing of the said order......the parties, are as narrated below :the references relate to the years 1958-59 to 1964-65. the assessee-firm deals in charcoal, resin and timber, etc. for the assessment years referred to above, the assessee-firm was charged 6 per cent sales tax on charcoal and, according to the assessment, the assessee-firm paid the sales tax. later on, their lordships of the supreme court in commissioner of sales tax, madhya pradesh v. jaswant singh charan singh [1967] 19 s.t.c. 469 (s.c.), held that 'charcoal' fell in the definition of 'coal', and that coal was declared goods and on such an item more than 2 per cent sales tax could not be charged. after the decision in jaswant singh charan singh's case [1967] 19 s.t.c. 469 (s.c.), their lordships in bhawani cotton mills ltd. v. state of punjab.....
Judgment:

Prem Chand Jain, J.

1. This judgment and order of ours would dispose of General Sales Tax References Nos. 33 to 39 of 1971. In these references, the Presiding Officer, Sales Tax Tribunal, Punjab, on the application filed by M/s. Raghunath Singh Romesh Chander, under Section 20(1) of the Punjab General Sales Tax Act, 1948 (hereinafter referred to as the Act), has referred the following question for our opinion :

Whether, on the facts and circumstances of the case, provisions of Section 11AA of the Punjab General Sales Tax Act, 1948, are attracted and the petitioner was not entitled to refund of tax paid in excess at the rate of 6 per cent instead of 2 per cent on the sales of 'charcoal', declared goods ?

2. The facts, on which there is no dispute between the parties, are as narrated below :

The references relate to the years 1958-59 to 1964-65. The assessee-firm deals in charcoal, resin and timber, etc. For the assessment years referred to above, the assessee-firm was charged 6 per cent sales tax on charcoal and, according to the assessment, the assessee-firm paid the sales tax. Later on, their Lordships of the Supreme Court in Commissioner of Sales Tax, Madhya Pradesh v. Jaswant Singh Charan Singh [1967] 19 S.T.C. 469 (S.C.), held that 'charcoal' fell in the definition of 'coal', and that coal was declared goods and on such an item more than 2 per cent sales tax could not be charged. After the decision in Jaswant Singh Charan Singh's case [1967] 19 S.T.C. 469 (S.C.), their Lordships in Bhawani Cotton Mills Ltd. v. State of Punjab [1967] 20 S.T.C. 290 (S.C.) also decided that the provisions of the Punjab General Sales Tax Act, 1948 (as they stood on 1st April, 1960), levying purchase tax on declared goods specified in Schedule C contravene the provisions of Section 15(a) of the Central Sales Tax Act, 1956, as the stage at which purchase tax is levied is neither definite nor ascertain able. As a consequence of the decision of their Lordships of the Supreme Court in Bhawani Cotton Mills Ltd. case', the Punjab General Sales Tax Act was amended by issuing an Ordinance and thereafter by enacting the Punjab General Sales Tax (Amendment and Validation) Act, 1967, that is, Act No. 7 of 1967 (hereinafter referred to as the Validation Act). By the amending Act, under Section 5(3), the stage was provided, while after Section 11A of the principal Act, Section 11AA was added, which is in the following terms :

11AA. Review of certain assessments, etc., of tax on declared goods.- (1) Notwithstanding anything contained in this Act, the Assessing Authority shall (whether or not an application is made to him in this behalf) review all assessments and reassessments made before the commencement of the Punjab General Sales Tax (Amendment and Validation) Act, 1967, in respect of declared goods and make such order varying or revising the order previously made as may be necessary for bringing the order previously made into conformity with the provisions of this Act as amended by the Punjab General Sales Tax (Amendment and Validation) Act, 1967 :

Provided that no proceeding for review shall be initiated without giving the dealer concerned a notice in writing of not less than thirty days.

(2) Any dealer on whom a notice is served under Sub-section (1) may within thirty days from the date of receipt of such notice intimate in writing the Assessing Authority of his intention to abide by the assessment or reassessment sought to be reviewed and if he does so, the Assessing Authority shall not review such assessment or reassessment under this section.

(3) No order shall be made under this section against any dealer without giving such dealer a reasonable opportunity of being heard.

(4) Notwithstanding anything contained in any judgment, decree or order of any court or other authority to the contrary, but subject to the provisions of the foregoing sub-sections any assessment, reassessment, levy or collection of any tax in respect of declared goods made or purporting to have been made, and any action or thing taken or done or purporting to have been taken or done in relation to such assessment, reassessment, levy or collection, under the provisions of this Act before the commencement of the Punjab General Sales Tax (Amendment and Validation) Act, 1967, shall be as valid and effective as if such assessment, reassessment, levy or collection or action or thing had been made, taken or done under this Act as amended by the Punjab General Sales Tax (Amendment and Validation) Act, 1967.

3. After the enactment of the Validation Act, the Assessing Authority issued a notice to the assessee-firm on 27th November, 1967, under Section 11AA of the Act intimating to him its intention to review the earlier assessment orders and calling upon him at the same time to indicate whether or not he wanted to be reassessed and alternatively to intimate in writing of his intention to abide by the assessment/reassessment. In response to the notice, the assessee-firm sent the following reply :

(1) That the assessee-firm has collected the tax at the last stage and it does not want to get the cases reviewed on this point only.

(2) In the light of the ruling of the Supreme Court, in the case of Messrs. Bhawani Cotton Mills [1967] 20 S.T.C. 290 (S.C.), it has been held that the levy of sales tax or purchase tax on the sales or purchases of declared goods, is illegal.

(3) In the light of the said ruling, the assessee-firm is entitled to get the refund of sales tax on the sales of the declared goods, as under :

Assessment year Amount of sales Amount of tax1. 1958-59 19,125.44 758.332. 1959-60 17,189.14 688.623. 1960-61 35,488.03 1,463.144. 1961-62 52,171.98 2,583.095. 1962-63 42,428.37 2,300.436. 1963-64 71,433.64 4,515.227. 1964-65 78,445.69 3,222.65--------------Total Rs. 15,531.48--------------The total amount of refund may please be issued to the assessee-firm through a refund voucher.

4. The Assessing Authority vide its order dated 9th April, 1968, rejected the application of the assessee-firm for refund of excess tax in respect of the sales of the declared goods (charcoal). The appeal preferred by the assessee-firm to the Deputy Excise and Taxation Commissioner, against the order of the Assessing Authority, was dismissed in default. A second appeal was preferred before the Tribunal by the assessee-firm, but the same was dismissed on 8th January, 1970. Thereafter the assessee-firm filed an application for reference on which, as earlier observed, the aforesaid question of law has been referred for our decision.

5. It was contended by Mr. Bhagirath Dass, the learned counsel for the assessee-firm, that in view of the provisions of Section 11AA, it was incumbent on the Assessing Authority to review all the assessments and reassessments made before the commencement of the Validation Act, and bring the said assessment and reassessment in conformity with the provisions of the Act as amended by the Validation Act. It was also sought to be argued that the assessee-firm did not show its intention to abide by the assessment or reassessment and the provisions of Sub-section (2) of Section 11AA were not at all attracted. On the other hand, it was argued by Mr. S. C. Goyal, Senior Advocate, the learned counsel for the department, that after the issuance of the notice on 27th November, 1967, and on receipt of the reply to that notice, the Assessing Authority passed an order on 10th January, 1968, refusing to review the assessment on the ground that the assessee showed his intention to abide by the assessment or reassessment sought to be reviewed, that that order was not challenged by the assessee-firm, that it was subsequently on 27th March, 1968, that an application was made for the refund of the excess amount, that that application was rejected on 9th April, 1968, by the Assessing Authority against which the assessee-firm preferred an appeal before the Deputy Excise and Taxation Commissioner and second appeal before the Tribunal and that in the subsequent proceedings initiated on the application made by the assessee-firm on 27th March, 1968, the order passed by the Assessing Authority on 10th January, 1968, under the provisions of Section 11AA of the Validation Act could not legally be challenged. It was also sought to be argued that Section 11AA has no applicability to the facts of the present case and no refund could be claimed under the provisions of that section.

6. After hearing the learned counsel for the parties, we are of the view that there is considerable force in the contention of the learned counsel for the assessee-firm. From the bare perusal of the provisions of Section 11AA, it is clear that the legislature has cast a duty on the Assessing Authority to review all assessments and reassessments and bring the orders previously made in conformity with the provisions of the Validation Act. The department rightly initiated the proceedings by issuing notice to the assessee-firm. The reply which has been reproduced in extenso, does not go to show that the assessee-firm showed its intention to abide by the assessment or reassessment sought to be reviewed ; rather from the reply it is clear that the assessee-firm laid claim to the refund of the sales tax. The only fact admitted by the assessee-firm was that it had collected the tax at the last stage and on that aspect of the matter no review was called for. In view of the decision of their Lordships of the Supreme Court in Bhawani Cotton Mills case [1967] 20 S.T.C. 260 (S.C.), even the stage had to be found out; but rightly the assessee-firm informed the Assessing Authority that it was liable to pay the tax as the same had been collected at the last stage. The reply, when read as a whole, does not show that the assessee-firm showed its intention to abide by the assessment or reassessment sought to be reviewed and in this respect the Presiding Officer, Sales Tax Tribunal, has rightly held that the view that the assessee-firm had not consented to the review of assessment under Section 11AA and the order against him had, therefore, become final, is erroneous ab initio. The Presiding Officer has also observed that to take the view or even to advance the pleas that the assessee-firm had indicated any intention of abiding by the previous assessment would be to say the least, a complete travesty of facts. As earlier observed, the department was bound to bring the assessments in conformity with the provisions of the amending Act. The contention of Mr. S. C. Goyal, the learned counsel, that the order passed under the provisions of Section 11AA refusing to review the assessment became final as no appeal was filed, is, on the face of it, fallacious and untenable, nor are we inclined to agree with him that the provisions of Section 11AA have no applicability on the proceedings initiated on the application filed by the assessee-firm on 27th March, 1968, which have ultimately culminated in these references. Moreover, this contention was not advanced before the Presiding Officer and does not form part of the statement of case nor does it arise on the question referred to us for decision. It would not be out of place to observe that instead of showing grace in refunding the excess amount charged, in accordance with the provisions of Section 11AA, the department is trying to evade that payment by resorting to pleas not tenable under the law. On the admitted facts and in view of the mandatory provisions of Section 11AA, the department was duty-bound to reopen the matter relating to the assessment of the assessee-firm pertaining to the years 1958-59 to 1964-65 and give them the necessary relief in accordance with law.

7. For the reasons recorded above, we answer the question in favour of the assessee-firm thus :

On the facts and circumstances of this case, provisions of Section 11AA of the Punjab General Sales Tax Act are attracted and the assessee-firm is entitled to the refund of the tax paid in excess of 2 per cent on the sales of 'charcoal'.

8. The assessee-firm shall have its costs from the department in each reference separately which are assessed at Rs. 100.


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