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United Timber and Cashew Products (P.) Ltd. Vs. Sales Tax Officer - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKerala High Court
Decided On
Case NumberO.P. No. 1954 of 1969
Judge
Reported in[1971]28STC526(Ker)
AppellantUnited Timber and Cashew Products (P.) Ltd.
RespondentSales Tax Officer
Appellant Advocate M.M. Pareed Pillai and; A. Shahul Hameed, Advs.
Respondent AdvocateGovernment Pleader
DispositionPetition allowed
Cases ReferredGhanshyam Dass Balmukund v. State of Uttar Pradesh
Excerpt:
- - 42,001.47. it is because the petitioner failed to pay the said amount that the second respondent dismissed the appeal by his order exhibit p-5. 4. the only question for decision is what is the admitted tax payable by the petitioner under the second proviso to section 34(1) of the 1963 act, for his appeal being entertained. the question which arose for decision in that case was precisely the one which arises here......tax act, 1963, by virtue of sub-section (2) of section 61 of this act. the petitioner filed an appeal from exhibit p-3 before the second respondent, the additional appellate commissioner of agricultural income-tax and sales tax, cannanore, under section 34 of the 1963 act. the second proviso to sub-section (1) of section 34 provides that no appeal shall be entertained unless it is accompanied by satisfactory proof of the payment of the tax or other amounts admitted by the appellant to be due. there is no dispute that it is not necessary that the proof of payment of the tax or other admitted amount should accompany the appeal, but it is sufficient that it is furnished before the hearing of the appeal. the net turnover furnished by the petitioner in its return before the sales tax.....
Judgment:

M.U. Isaac, J.

1. The petitioner was assessed by the first respondent, the Sales Tax Officer, Cannanore, under the General Sales Tax Act, 1125, for the year 1962-63, by his order exhibit P-3 dated 20th March, 1967. The assessment proceedings were taken and completed under the Kerala General Sales Tax Act, 1963, by virtue of Sub-section (2) of Section 61 of this Act. The petitioner filed an appeal from exhibit P-3 before the second respondent, the Additional Appellate Commissioner of Agricultural Income-tax and Sales Tax, Cannanore, under Section 34 of the 1963 Act. The second proviso to Sub-section (1) of Section 34 provides that no appeal shall be entertained unless it is accompanied by satisfactory proof of the payment of the tax or other amounts admitted by the appellant to be due. There is no dispute that it is not necessary that the proof of payment of the tax or other admitted amount should accompany the appeal, but it is sufficient that it is furnished before the hearing of the appeal. The net turnover furnished by the petitioner in its return before the Sales Tax Officer was Rs. 6,15,739.32. But the return was rejected, and the turnover was assessed at Rs. 23,20,212.50. The petitioner paid the tax due on the turnover furnished by it before the hearing of the appeal. The second respondent, however, considered that what the petitioner paid did not satisfy the requirement of the proviso and he called upon the petitioner to pay what according to him was payable by way of balance towards the admitted tax. The petitioner did not pay the same, with the result that the second respondent by an order exhibit P-5 dated 4th March, 1969, dismissed the appeal. This writ petition has been filed to quash exhibits P-3 and P-5, and to direct the first respondent not to take any coercive action against the petitioner for payment of the tax and surcharge due under exhibit P-3.

2. The fact that the petitioner's appeal, as contended for by it, had been wrongly dismissed by the appellate authority is not a ground for quashing the order of assessments, nor to restrain the assessing authority from realising the tax payable thereunder. The petitioner is not, therefore, entitled to have any such relief. The petitioner's counsel rightly pressed before me only the contention that the dismissal of the appeal was contrary to law and that the second respondent must be directed to readmit the appeal and dispose of the same according to law.

3. It appears from exhibit P-5 that during the course of the assessment proceedings the petitioner filed a statement before the first respondent. In that statement, the taxable turnover is shown as Rs. 14,96,406.87, and total tax payable by the petitioner comes to Rs. 55,952.34, while the tax payable on the net turnover shown in the petitioner's return is only Rs. 13,950.77. According to the second respondent the tax admitted by the petitioner is Rs. 55,952.34; and it has to pay the balance Rs. 42,001.47. It is because the petitioner failed to pay the said amount that the second respondent dismissed the appeal by his order exhibit P-5.

4. The only question for decision is what is the admitted tax payable by the petitioner under the second proviso to Section 34(1) of the 1963 Act, for his appeal being entertained. Three views are plausible. They are: (i) the admitted tax is the tax payable on the turnover furnished by the assessee in the return; (ii) it is the tax payable on the turnover conceded by the assessee during the course of the assessment proceedings; and (iii) it is the tax payable on the turnover assessed by the Sales Tax Officer to the extent it is not objected to in the appeal. The petitioner's counsel referred me to a Division Bench decision of the Allahabad High Court in Ghanshyam Dass Balmukund v. State of Uttar Pradesh [1969] 23 S.T.C. 282, which takes the third view. The question which arose for decision in that case was precisely the one which arises here. The proviso to Section 9(1) of the U.P. Sales Tax Act, 1948, corresponds to the second proviso to Section 34(1) of the 1963 Act of Kerala. Section 7 (1-A) contains the following provision :

Before submitting the return under Sub-section (1) or along with such return the dealer shall deposit in such manner as may be prescribed, the amount of tax due on the turnover shown in such return.

A corresponding provision is not there under the Kerala Act. But I do not think that it makes any difference in the application of the interpretation of the proviso to Section 9(1) of the U.P. Act to the second proviso to Section 34(1) of the Kerala Act. In that case, the court after a very elaborate consideration of all the plausible views, has come to the conclusion that the admitted tax payable by the assessee for his appeal being entertained is the tax payable on that part of the assessed turnover which is not objected to in appeal. Pathak, J., delivering the judgment of the court stated :

In our opinion, when computing the admitted tax liability for the purpose of the proviso to Section 9(1) of the Act, regard should be had to the position taken by the appealing assessee in the memorandum of appeal. The appellate authority should not be guided in the matter by what has been stated in the return filed by the assessee. The appellate authority should examine the memorandum of appeal and determine, by reference to the grounds set out in the memorandum and the relief sought in it, what is the turnover and the rate of tax admitted and not disputed by the assessee at the stage of filing the appeal.

The learned Judge has stated very weighty reasons for the above conclusion; and I respectfully agree with the same. It is not, therefore, necessary to repeat them here.

5. It follows that the rejection of the appeal by the second respondent on the ground that the petitioner did not pay the admitted tax as required by the proviso to Section 34(1) of the Kerala General Sales Tax Act, 1963, was wrong. The question whether the petitioner has paid the admitted tax must depend on the sole fact as to what is the disputed turnover in the appeal, and whether the petitioner has paid the tax payable on the turnover, in respect of which the liability for being taxed is not disputed in appeal. The order, exhibit P-5, is, therefore, quashed; and the second respondent is directed to readmit the appeal to file, and dispose of the same according to law and in the light of the observations herein contained. In the circumstances of the case I make no order as to costs.


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