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Ramayana Printing Works Vs. the State of Tamil Nadu - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberTax Case No. 916 of 1977 (Revision No. 214 of 1977)
Judge
Reported in[1985]58STC133(Mad)
ActsTamil Nadu General Sales Tax Act, 1959 - Sections 7
AppellantRamayana Printing Works
RespondentThe State of Tamil Nadu
Appellant AdvocateM.R. Krishnan, Adv.
Respondent AdvocateK.S. Bakthavatsalam, Additional Government Pleader
Cases Referred and State of Tamil Nadu v. Shanthi Stainless Steel Co.
Excerpt:
- - 1. the only question that arises in this tax case is, whether the assessee is entitled to claim the benefit of compounding allowed under section 7 of the tamil nadu general sales tax act, 1959. the assessing authority, the appellate authority as well as the tribunal have all held that since the assessee sought permission to be assessed under section 7 only at the time of final assessment, that is, long after the period mentioned in rule 15(1) of the tamil nadu general sales tax rules, 1959, he cannot claim to be assessed under section 7 of the act......the assessee is entitled to claim the benefit of compounding allowed under section 7 of the tamil nadu general sales tax act, 1959. the assessing authority, the appellate authority as well as the tribunal have all held that since the assessee sought permission to be assessed under section 7 only at the time of final assessment, that is, long after the period mentioned in rule 15(1) of the tamil nadu general sales tax rules, 1959, he cannot claim to be assessed under section 7 of the act. the tribunal has referred to the fact that the power to exercise an option before the final assessment referred under sub-rule (4-b) of rule 15 has been withdrawn from 1st december, 1971 and stated that therefore, rule 15(1) has to be complied with. the assessee should have filed the petition.....
Judgment:

Ramanujam, J.

1. The only question that arises in this tax case is, whether the assessee is entitled to claim the benefit of compounding allowed under section 7 of the Tamil Nadu General Sales Tax Act, 1959. The assessing authority, the appellate authority as well as the Tribunal have all held that since the assessee sought permission to be assessed under section 7 only at the time of final assessment, that is, long after the period mentioned in rule 15(1) of the Tamil Nadu General Sales Tax Rules, 1959, he cannot claim to be assessed under section 7 of the Act. The Tribunal has referred to the fact that the power to exercise an option before the final assessment referred under sub-rule (4-B) of rule 15 has been withdrawn from 1st December, 1971 and stated that therefore, rule 15(1) has to be complied with. The assessee should have filed the petition exercising the option to be assessed under section 7 before the 1st day of May, 1971 under rule 15(1) and since the assessee has not exercise the option before that date in this case, he is not entitled to claim the benefit of assessment under section 7 of the Act.

2. An identical question cam up for consideration before a Division Bench of this Court consisting of Sethuraman and Balasubrahmanyan, JJ., twice, once in State of Tamil Nadu v. Ball Bearing Centre [1978] 41 STC 264 and again in State of Tamil Nadu v. Shanthi Stainless Steel Co. [1978] 41 STC 270. After hearing both sides elaborately, on both the occasions, the Bench took the view that even after the deletion of sub-rule (4-B) of rule 15 of the Tamil Nadu General Sales Tax Rules, 1959, on 27th September, 1971 the assessee is entitled to exercise the option at any time before the final assessment. Section 7 by itself does not impose any time-limit for exercising the option. Therefore, it should be held that the assessee could exercise the option within a reasonable time. If the said two decisions rendered in State of Tamil Nadu v. Ball Bearing Centre [1978] 41 STC 264 and State of Tamil Nadu v. Shanthi Stainless Steel Co. [1978] 41 STC 270 are applied to the facts of this case, the order of the Tribunal cannot be legally sustained.

3. However, the learned Government Pleader, appearing for the Revenue, brings to our notice a decision of another Division Bench of this Court reported in State of Tamil Nadu v. Agarwal Mudukundj [1978] 42 STC 147 wherein it has been held that after the deletion of sub-rule (4-B) of rule 15 in the year 1971 an application to exercise the option to be assessed under section 7 of the Act should be filed on or before 1st of May, 1971 as provided in rule 15(1). But we find that the said decision was an ex parte one, where the respondent did not appear and contest the matter. The judgment also proceeds on the basis that the assessee had not appeared to dispute the Revenue's contention. That is one of the grounds for accepting the Revenue's contention. Another circumstance is that in the subsequent decision, the earlier two decisions reported in State of Tamil Nadu v. Ball Bearing Centre [1978] 41 STC 264 and State of Tamil Nadu v. Shanti Stainless Steel Co. [1978] 41 STC 270 have not been referred to. Therefore, we are inclined to follow the judgments rendered earlier in State of Tamil Nadu v. Ball Bearing Centre [1978] 41 STC 264 and State of Tamil Nadu v. Shanthi Stainless Steel Co. [1978] 41 STC 270 which have been pronounced after considerable contest.

4. Following the abovesaid two decisions, we allow the tax case and set aside the order of the Tribunal in this case and direct the assessing authority to assess the petitioner under section 7 of the Tamil Nadu General Sales Tax Act. There will be no order as to costs.


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