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The Deputy Commissioner (Ct), Coimbatore Division, Coimbatore-2 Vs. Rathna and Company - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberT.C. (R) No. 329 of 1976 (Revision No. 63 of 1976)
Judge
Reported in[1982]51STC398(Mad)
ActsIndian Income-tax Act, 1922 - Sections 13
AppellantThe Deputy Commissioner (Ct), Coimbatore Division, Coimbatore-2
RespondentRathna and Company
Cases ReferredIn State of Tamil Nadu v. Chellaram Garments
Excerpt:
- - the appellate tribunal took the view that the c forms were received only subsequent to the assessment and that the assessee's failure to ask for time was not due to negligence. if such c forms were not furnished before the assessment, then if the assessing authority was satisfied that the person concerned was prevented by sufficient cause from furnishing such declaration or certificate before the assessment, then the authority may allow such declaration or certificate to be furnished within such further time as that authority may permit. it was not necessary or proper for the sales tax appellate tribunal to go into the question as to whether the assessee's failure to ask for time was due to negligence or not......business in sago in sellappampatti, namakkal, under the name and style of rathna and company. the assessing authority determined the turnover at rs. 14,67,956. there was an appeal to the appellate assistant commissioner and before him the assessee produced four c forms for a total sum of rs. 75,005 and prayed for concessional rate of tax on the aforesaid turnover. the appellate assistant commissioner did not accept those forms observing that they should have been produced before the assessing authority and that they could not be produced before the appellate authority. against this order, the assessee appealed to the tribunal. it was contended that on 14th february, 1975, when the matter was posted for hearing, the assessee's clerk prayed for some more time being granted for the.....
Judgment:

Sethuraman, J.

1. This revision has been filed against the order of the Sales Tax Appellate Tribunal, Additional Bench, Coimbatore, dated 24th February, 1976. The assessee is doing business in sago in Sellappampatti, Namakkal, under the name and style of Rathna and Company. The assessing authority determined the turnover at Rs. 14,67,956. There was an appeal to the Appellate Assistant Commissioner and before him the assessee produced four C forms for a total sum of Rs. 75,005 and prayed for concessional rate of tax on the aforesaid turnover. The Appellate Assistant Commissioner did not accept those forms observing that they should have been produced before the assessing authority and that they could not be produced before the appellate authority. Against this order, the assessee appealed to the Tribunal. It was contended that on 14th February, 1975, when the matter was posted for hearing, the assessee's clerk prayed for some more time being granted for the production of C forms, that no order was passed on the said early application and that the assessing authority passed the assessment order on 28th February, 1975. The contention was that the time granted by the assessing authority for production of the C forms was not sufficient as the assessee had to contact the non-residential buyers and collect the forms from them. The assessee filed a letter dated 7th October, 1975, issued by Karur Vysya Bank, Sevapet, Salem, for showing that the two C forms mentioned in that letter were delivered to the assessee only on 10th April, 1975. Those forms along with two others were produced before the appellate authority, who refused to receive them. The Tribunal considered these facts and came to the conclusion that if for justifiable reasons the assessee was not able to produce the C forms before the assessing authority the appellate authority had a right to accept those C forms and consider the necessary reliefs after scrutinising those forms. The Tribunal, therefore, directed the C forms being accepted and then scrutinised. It is this order of the Tribunal that has given rise to the present revision filed on behalf of the State.

2. In State of Tamil Nadu v. Chellaram Garments (P.) Ltd. [1979]44STC239, we had occasion to consider a similar question. In that case, the assessee was given a period of eight days' time for filing the missing C forms and as the assessee did not do so, the assessing authority taxed the assessee and when the matter was taken on appeal before the Appellate Assistant Commissioner he refused to receive those C forms which were subsequently produced. The Appellate Tribunal took the view that the C forms were received only subsequent to the assessment and that the assessee's failure to ask for time was not due to negligence. The matter was, therefore, remanded to the assessing authority for considering the assessee's claim for a concessional rate of tax on the basis of the C forms produced. The validity of the order of the Tribunal directing that the Appellate Assistant Commissioner would transmit the C forms taken from his record to enable the assessing authority to consider the claim afresh was under challenge in the said case. After referring to the relevant provisions in the rules, it was observed at page 240 that :

'The effect of this provision is to show that the C form is to be furnished only before the assessing authority. The assessing authority has to entertain the C forms which are filed before the assessment. If such C forms were not furnished before the assessment, then if the assessing authority was satisfied that the person concerned was prevented by sufficient cause from furnishing such declaration or certificate before the assessment, then the authority may allow such declaration or certificate to be furnished within such further time as that authority may permit. The petitioner had filed C forms before the Appellate Assistant Commissioner belatedly. The Appellate Assistant Commissioner declined to accept the C forms. Therefore, the Tribunal remanded the matter back to the assessing authority for the purpose of finding out whether those C forms could be entertained. As the conclusion of the Tribunal in restoring the matter to the assessing authority for the purpose of considering the entertainability of the C forms is correct, we do not think it necessary to interfere with the order of the Sales Tax Appellate Tribunal. It was not necessary or proper for the Sales Tax Appellate Tribunal to go into the question as to whether the assessee's failure to ask for time was due to negligence or not. This aspect can only be gone into by the assessing authority. As the remand order as such cannot be said to be erroneous, we do not think it necessary to entertain this revision petition.'

3. The order of the Tribunal in the present case is also in the same terms. However, there is one aspect which may require consideration, namely, the application of the principle laid down by the Supreme Court in Commissioner of Income-tax v. McMillan & Co. : [1958]33ITR182(SC) . In that case, the provision of section 13 of the Indian Income-tax Act, 1922, had to be considered. Under that provision the assessing authority had power to reject the accounts if the method of accounting adopted by the assessee was not conducive to the proper profits being deduced and the question was whether the Appellate Assistant Commissioner could go into the method of accounting and find out whether the method was such as had to be rejected. The Supreme Court observed that the proviso to section 13 of the Indian Income-tax Act did not import any limitation on the power of the Appellate Assistant Commissioner and that it was, therefore, open to the Appellate Assistant Commissioner to reject for the first time the method of accounting employed by the assessee on the ground that the income, profits and gains of the assessee could not be properly deduced therefrom, even though the Income-tax Officer has not applied the proviso to section 13 and had not expressly said so. This is on the principle that what the assessing authority could do the appellate authority could also do. However, this principle was not considered in the earlier decision and we do not think it necessary to go into the said aspect in the present case. It is enough to observe that it was open to Tribunal to direct the scrutiny of the forms in accordance with law. It is true that the question regarding the entertainability of C forms would have to be considered by the assessing authority taking into account all the facts and in accordance with law. Subject to the above observation, the revision is dismissed. There will be no order as to costs.


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