Skip to content


The State of Tamil Nadu Vs. A. Periam Pillai Nadar and Co. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberT.C. (Revision) Petition No. 1480 of 1977 (Revision No. 337 of 1977)
Judge
Reported in[1984]57STC219(Mad)
ActsTamil Nadu General Sales Tax Act, 1959 - Sections 32, 34(1), 36, 36(3) and 37
AppellantThe State of Tamil Nadu
RespondentA. Periam Pillai Nadar and Co.
Appellant AdvocateK.S. Bakthavatsalam, Additional Governement Pleader
Respondent AdvocateR. Venkataraman, Adv.
Cases ReferredDunlop India Ltd. v. Joint Commercial Tax Officer
Excerpt:
sales tax - power - sections 32, 34 (1), 36, 36 (3) and 37 of tamil nadu general sales tax act, 1959 - turnover exempted by assessing authority - no dispute before appellate authority - revenue filed enhancement petition for first time before tribunal - whether enhancement petition maintainable - section 36 (3) empowers tribunal to confirm, reduce, enhance or anull assessment or penalty or both - tribunal even can order for fresh assessment - in view of legal position enhancement petition filed by revenue maintainable. - .....the turnover exempted by the assessing authority and which was not disputed before the first appellate authority could form the subject-matter of an enhancement petition for the first time before the sales tax appellate tribunal. 2. the tribunal, following the decisions in central camera co. (p.) ltd. v. government of madras [1971] 27 stc 112, easun engineering company ltd. v. joint commercial tax officer [1970] 26 stc 486, state of madras v. spencer and company ltd. [1974] 34 stc 249 and nagaraja overseas traders v. state of mysore [1974] 33 stc 315, held that the enhancement petition could not be admitted, as the subject-matter of the enhancement petition was not before the first appellate authority; nor was it canvassed by the revenue before it. therefore the question involves.....
Judgment:

Ramanujam, J.

1. The only question in this tax case is, whether the turnover exempted by the assessing authority and which was not disputed before the first appellate authority could form the subject-matter of an enhancement petition for the first time before the Sales Tax Appellate Tribunal.

2. The Tribunal, following the decisions in Central Camera Co. (P.) Ltd. v. Government of Madras [1971] 27 STC 112, Easun Engineering Company Ltd. v. Joint Commercial Tax Officer [1970] 26 STC 486, State of Madras v. Spencer and Company Ltd. [1974] 34 STC 249 and Nagaraja Overseas Traders v. State of Mysore [1974] 33 STC 315, held that the enhancement petition could not be admitted, as the subject-matter of the enhancement petition was not before the first appellate authority; nor was it canvassed by the Revenue before it. Therefore the question involves the determination of the scope and ambit of the power of the Tribunal under section 36(3)(a)(i) of the Tamil Nadu General Sales Tax Act, 1959, hereinafter referred to as the Act.

Section 36(3) of the Act so far as it is relevant is extracted below :

'36. (3) In disposing of an appeal, the Appellate Tribunal may, after giving the appellant a reasonable opportunity of being heard, -

(a) in the case of an order of assessment -

(i) confirm, reduce, enhance or annul the assessment or penalty or both;

(ii) set aside the assessment and direct the assessing authority to make a afresh assessment after such further inquiry as may be directed; or

(iii) pass such other orders as it may think fit; or

(b) in the case of any other order, confirm, cancel or vary such order : Provided that at the hearing of any appeal against an order of the Appellate Assistant Commissioner or the Deputy Commissioner, the assessing authority shall have the right to be heard either in person or by a representative : Provided further that, if the appeal in involves a question of law on which the Appellate Tribunal has previously given its decision in another appeal and either a revision petition in the High Court against such decision or an appeal in the Supreme Court against the order of the High Court thereon is pending, the Appellate Tribunal may defer the hearing of the appeal before it, till such revision petition in the High Court or the appeal in the Supreme Court is disposed of.'

3. The above sub-section expressly enables the Tribunal in an appeal relating to an order of assessment to confirm, reduce, enhance or annual the assessment or penalty or both. Thus the Tribunal has been conferred by sub-section (3) of section 36 of the Act the power to directly deal with the assessment and confirm, reduce, enhance or annul the assessment. It also enables the Tribunal to set aside the assessment and direct the assessing authority to make a fresh assessment after such further enquiry as may be directed. The said sub-section does not in terms limit the power of the Appellate Tribunal to deal with the order of the appellate authority alone. Thus the above provision contemplates a case where the Tribunal can enhance the assessment, if the Revenue files an application for enhancement and if enhancement is called on on the facts and circumstances of the particular case.

4. The scope of section 36(3)(a) of the Act came up for consideration before a Division Bench of this Court in Deputy Commissioner of Commercial Taxes v. Panayappan Leather Industries [1981] 47 STC 88. In that case this Court has held that under section 36(3)(a)(i) of the Act in an appeal preferred by the assessee, the Appellate Tribunal has got the power to decide the appeal prejudicial to the assessee in the sense, not only by way of dismissing the appeal but also by way of enhancing the assessment or penalty. It is also held that section 36(3)(a)(ii) under which power is given to the Tribunal to set aside the assessment itself and direct the assessing authority to make a fresh assessment after such further enquiry as may be directed also indicates that the power of the Tribunal is not confined to the order of the Appellate Assistant Commissioner in appeal or the order of the Deputy Commissioner in revision, and that therefore in an appeal preferred by the assessee under section 36 the entire matter is set at large and the Tribunal can go into the correctness or otherwise of the order of the assessing authority himself and not the order of the Appellate Assistant Commissioner along against which the appeal has been filed. In this decision the learned Judges have considered the decisions referred to by the Tribunal in Easun Engineering Company Ltd. v. Joint Commercial Tax Officer [1970] 26 486, Central Camera Co. (P.) Ltd. v. Government of Madras [1971] 27 STC 112 and State of Madras v. Spencer and Company ltd. [1974] 34 STC 249 and held that the above decisions will have no bearing on the interpretation of section 36(3)(a)(i) of the Act. The aforesaid decision of this Court in Deputy Commissioner of Commercial Taxes v. Panayappan Leather Industries [1981] 47 STC 88 has been followed consistently by various Division Benches of this Court in T.C. No. 1284 of 1977 (State of Tamil Nadu v. Kutty Flush Doors & Furniture Co. (P.) Ltd. [1984] 57 STC 217 judgment dated 15th April, 1982, T.C. No. 1304 of 1977 (State of Tamil Nadu v. Pyarelal Malhotra [1984] 57 STC 215 and T.C. No. 1564 of 1977 (State of Tamil Nadu v. Rallis India Limited [1984] 57 STC 218 in all of which the power of the Tribunal to enhance the assessment was upheld, even though the subject-matter of the enhancement petition filed by the Revenue was not before the first appellate authority. These decisions squarely apply to the facts of this case.

5. The learned counsel for the assessee, however, submits that an earlier decision of this Court in Dunlop India Ltd. v. Joint Commercial Tax Officer [1978] 41 STC 41 and also a Full Bench decision of the Andhra Pradesh High Court in State of Andhra Pradesh v. Sri Venkata Rama Lingeshwara Rice Mill [1977] 39 STC 57 (FB) take a different view and therefore the decision in Deputy Commissioner of Commercial Taxes v. Panayappan Leather Industries [1981] 47 STC 88 and the other decisions rendered by this Court subsequently following the same may require reconsideration. However, it is seen that the decision of the Full Bench of the Andhra Pradesh High Court in State of Andhra Pradesh v. Sri Venkata Rama Lingeshwara Rice Mill [1977] 39 STC 57 (FB) was considered by this Court in Deputy Commissioner of Commercial taxes v. Panayappan Leather Industries [1981] 47 STC 88 and this Court held that the aforesaid decision of the Andhra Pradesh High Court ran directly contrary to the decision of this Court in T. V. Sundaram Iyengar & Sons (P.) Ltd. v. State of Madras [1970] 25 STC 160.

6. The decision of this Court in Dunlop India Ltd. v. Joint Commercial Tax Officer [1978] 41 STC 41, which is relied on by the learned counsel for the assessee is not relevant for the present discussion relating to the scope of section 36 of the Act. In that case the scope of sections 32 and 34(1) of the Act came up for consideration. The order which was appealed against to the High Court under section 34(1) of the Act in that case was an order of the Board of Revenue merely intimating to the party that it did not intend to exercise its suo motu powers of revision at the instance of the assessee. Such an intimation was held not to be an order under section 34(1) of the Act and therefore no appeal would lie to the High Court against such intimation under section 37 of the Act. We do not see how that decision is of any relevance for the determination of the power of the Tribunal under section 36(3)(a)(i) of the Act.

7. As a result of the above discussion, we have to hold that the Tribunal is in error in holding that the application filed by the Revenue for enhancement is not maintainable. We accordingly hold that the enhancement petition filed by the State is maintainable.

8. Since we have held that the enhancement petition by the State is maintainable, the matter is remitted to the Tribunal for disposal of the said enhancement petition on merits.

9. The tax case is ordered accordingly. The Revenue will have its costs from the assessees. Counsel's fee Rs. 250 (Rupees two hundred and fifty only).


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //