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Sales Tax Officer Vs. C. C. Transport Co. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case Number W.A. No. 214 of 1974
Reported in(1978)6CTR(Ker)116
AppellantSales Tax Officer
RespondentC. C. Transport Co.
Excerpt:
- - as we have expressed ourselves against the respondent on the merits we think it unnecessary to base our decision on this ground, which also appears well-founded......was granted in respect of a sum of little over rs. 80,000/-representing accommodation sales. the deputy commissioner of sales-tax exercised his suo motu power of revision u/s. 35 of the kerala general sales-tax act which enables him to call for any order passed by any officer or authority below that of an inspecting asstt. commissioner and pass such orders thereof as he thinks fit. this revisional power is under sub-sec. (2) of s. 35 subject to three limitations one of which is that it shall not be exercised if more than four years have been expired after passing of the order sought to be revised. in pursuance of its decision to exercise the revisional power, the deputy commissioner issued ext. p2 notice dated 28-2-1971 to the assessee objections to the said notice were filed vide.....
Judgment:

Gopalan Nambiyar, C.J. - We think this appeal should succeed, as it is directly covered in by more than one decisions of the Supreme Court and by a Division Bench ruling of this Court. The writ petitioner whose writ petition was allowed by a learned Judge, was assessed to sales-tax by Ext. P.1 order dated 22-3-1967. Exemption was granted in respect of a sum of little over Rs. 80,000/-representing accommodation sales. The Deputy Commissioner of Sales-tax exercised his suo motu power of revision u/s. 35 of the Kerala General Sales-tax Act which enables him to call for any order passed by any Officer or Authority below that of an Inspecting Asstt. Commissioner and pass such orders thereof as he thinks fit. This revisional power is under sub-sec. (2) of S. 35 subject to three limitations one of which is that it shall not be exercised if more than four years have been expired after passing of the order sought to be revised. In pursuance of its decision to exercise the revisional power, the Deputy Commissioner issued Ext. P2 notice dated 28-2-1971 to the assessee objections to the said notice were filed vide Exts. P3 and P4 dated 15-3-1971. By Ext. P5 order dt. 20-3-1971 the Deputy Commissioner set aside the assessment order Ex. P1 and remanded the matter to the Sales-tax Officer to re-do the assessment afresh in accordance with law and in the light of the observations contained in the order. The Officer issued contained in the order. The Officer issued Ext. P6 notice for fresh assessment and after hearing the assessee on its objection (Ext. P7) passed the impugned under Ext. P8 dated 9-6-1971. The assessee-respondent filed the writ petition in this Court to challenge the said order which was allowed by the learned Judge; against which the State has preferred the appeal.

2. The learned Judge noticed the objection that was raised to the assessment, viz., that in substance of an escaped turnover u/s. 19 of the Act, and therefore without jurisdiction, as it was passed beyond the period fixed by the said section viz. four years from the expiry of the year to which the tax relates. It was also submitted that the facts that the order was passed pursuant to a direction of the Dy. Commr. would not make any difference on the legality of the order, as the Deputy Commissioner himself had no jurisdiction to interfere u/s. 35, since the case was one of the escapement of turnover, falling strictly u/s. 19 of the Act. The above contention which is seen stated in paragraph 2 of the judgment of the learned Judge was dealt with and examined in detail and at the end of the discussion, the learned Judge concluded in paragraph 6 that the objection taken to the jurisdiction of the Deputy Commissioner u/s. 35 of the Act, cannot be sustained. Having held so, the learned Judge proceeded to observe as follows :

'7. It has not been seriously contended before me, that, if the case falls within the ambit of Sec. 35 of the Act, the Deputy Commissioner has no power to remand the case for a further enquiry and disposal according to law in the light of the directions given by him. Then the question arises whether the Sales tax Officer, to whom the case was remanded can pass an order pursuant to the directions of the Deputy Commissioner, after the expiry of the period of four years fixed in Sec. 35 for exercising his revisional power. I have no doubt that the Sales-tax Officer cannot pass an order of reassessment after the aforesaid period. If the Deputy Commissioner cannot himself pass an order bringing the escaped turnover to assessment after the above period it would be absurd to hold that he can direct a subordinate authority to pass such an order, and that the subordinate authority could do so after the expiry of the said period.

8. In the result I hold that impugned order, Ext. P8 is without jurisdiction since it has been passed beyond the period of limitation fixed under S. 35 of the Act. The said order is, therefore, quashed. There will be no order as to costs.'

With respect, we are quite unable to agree with the reasoning and the conclusion of the learned Judge. It has been decided by the Supreme Court in Dhanalakshmi Mills, case Ninans case and in Thattil Kochu Vareeds case that the limitation of time which fetters and acts as a trammel on the exercise of the power of the revisional authority u/S. 35 of the Act cannot operate against the S.T. Officer to whom the matter is remitted back by the revisional authority after setting aside the assessment, and who thereafter, proceeds as it were, on a clean slate. The proposition as such is uncontestable, and was not, very fairly, contested by Counsel or the respondent. It was recently reaffirmed by this Court in T.R.C. Nos. 26, 27 and 28 of 1975.

3. Counsel for the respondent however contended that in the instant case the sales tax assessment had not been set aside in toto, but the remittal back was only for the limited purpose of re-doing the question of exemption and no more. We are unable to agree. On the terms of Ext. P5 order, we have no hesitation to hold that the assessment order had been set aside and the assessing authority had to begin afresh on a clean slate.

4. It was then contended by the Counsel for the assessee-respondent that the inhibition of four years time-limit within which the revisional authority had to act, was binding on that authority, and ex hypothesi the same limitation must apply to the authority to whom the matter stood remitted or remanded. It was argued that this latter authority was only a delegate or agent of the revisional authority, and that agent of the revisional authority, and that what binds the principal must necessarily bind the agent also. While the proposition is acceptable, the underlying premise, is not. We cannot regard the assessing authority as an agent of the revisional authority, although as its subordinate, it is bound to carry out its directions. In any event, we have the direct authority of the decisions of the Supreme Court noticed earlier, and of Division Bench of this Court in the Tax Revision Cases. We are therefore unable to accept the contention of the assessee respondent.

5. The learned Government Pleader also raised the contention that against Ext. P8 the assessee has its alternative remedy by 36 and 39 of the Act, and therefore the petition under Article 226 was not maintainable, having regard to sub-clause (3) of Art. 226 of the Constitution as amended by the 42nd Amendment, and of S. 58 of the 42nd Amendment Act. As we have expressed ourselves against the respondent on the merits we think it unnecessary to base our decision on this ground, which also appears well-founded.

6. We allow this appeal, set aside the order of the learned Judge and direct that O.P. No. 2871 of 1975 will stand dismissed. There will be no order as to costs.


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