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K. Ambujammal Vs. Deputy Commercial Tax Officer, Kothavalchavadi Division and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case Number Writ Petition No. 2750 of 1968
Judge
Reported in[1971]29STC368(Mad)
AppellantK. Ambujammal
RespondentDeputy Commercial Tax Officer, Kothavalchavadi Division and anr.
Appellant Advocate M.S. Sethu, Adv.
Respondent Advocate K. Venkataswami, First Assistant Government Pleader
Disposition Petition dismissed
Cases Referred and Deputy Commissioner of Commercial Taxes v. Ramiah Chetty and Company
Excerpt:
.....assessing authority, acting under section 55 of the act, issued a notice proposing to rectify the original assessment order and this notice dated 15th february, 1965, was served on the authorised representative of the petitioner on 20th february, 1965. on 23rd february, 1965, the order of rectification was made by the assessing authority, in and by which the tax liability was enhanced to rs. the other argument of the revenue is that the order of rectification was known to the petitioner and she tried to canvass the legality, propriety and regularity of the said order by approaching the appropriate statutory authority and she having ultimately failed in her attempt to dislodge the effectiveness of the said order, cannot now contend that such an order which has reached a finality of its..........assessing authority, acting under section 55 of the act, issued a notice proposing to rectify the original assessment order and this notice dated 15th february, 1965, was served on the authorised representative of the petitioner on 20th february, 1965. on 23rd february, 1965, the order of rectification was made by the assessing authority, in and by which the tax liability was enhanced to rs. 1,231.53. from the records, it is seen that the order of rectification made under section 55 was served on the petitioner op 13th march, 1965. aggrieved by the order, which resulted in the enhancement of the tax liability, the petitioner, under the bona fide impression that an appeal lay against the order of rectification under section 55, filed an appeal before the appellate assistant commissioner.....
Judgment:
ORDER

Ramaprasada Rao, J.

1. This writ petition raises a somewhat interesting question of law. The power of attorney agent of the petitioner is the son-in-law of one Seetharama Chettiar, who was a dealer within the meaning of the provisions of the Madras General Sales Tax Act, 1959 (hereinafter referred to as the Act). After the death of Seetharama Chettiar, his widow, the petitioner herein, was representing his affairs and she was in turn being represented by her son-in-law as her power of attorney agent. The late Seetharama Chettiar closed down his business, and for the assessment year 1963-64, he was assessed to sales tax. Consequent upon the said assessment, the notice of demand was served on the widow calling upon her to pay a sum of Rs. 306.38 as the balance due under the said assessment order. It appears that the petitioner was aggrieved by the notice of demand as well as the original order of assessment, and an appeal questioning the propriety of the original order was filed on 31st December, 1964, which was received by the Appellate Assistant Commissioner on 4th January, 1965. When the appeal was pending with the appellate authority, the assessing authority, acting under Section 55 of the Act, issued a notice proposing to rectify the original assessment order and this notice dated 15th February, 1965, was served on the authorised representative of the petitioner on 20th February, 1965. On 23rd February, 1965, the order of rectification was made by the assessing authority, in and by which the tax liability was enhanced to Rs. 1,231.53. From the records, it is seen that the order of rectification made under Section 55 was served on the petitioner op 13th March, 1965. Aggrieved by the order, which resulted in the enhancement of the tax liability, the petitioner, under the bona fide impression that an appeal lay against the order of rectification under Section 55, filed an appeal before the Appellate Assistant Commissioner on 27th March, 1965. The Appellate Assistant Commissioner, after following the usual procedure, dismissed the appeal as not being maintainable, as under the Act no such appeal lay against an order of rectification under Section 55 of the Act. The petitioner once again pursued her remedies and was interested in canvassing the legality of the order of rectification made by the assessing authority and therefore she filed a revision petition to the Deputy Commissioner of Commercial Taxes, which revision was permitted in law, once again for the sole purpose of canvassing the regularity of the order of rectification made by the assessing authority. Her revision petition dated 11th August, 1966, was heard by the Deputy Commissioner after giving the petitioner an opportunity to state her objections ; but ultimately this revision petition was dismissed on the ground of inordinate delay. The petitioner has not challenged further the correctness of the order of the revisional authority. The result is that the order of rectification made by the assessing authority on 23rd February, 1965, has become final and effective in the eye of law.

2. Whilst the above proceedings were concurrently being taken by the assessee at one time mistakenly before the appellate authority and at another time, beyond time, before the revisional authority, the Appellate Assistant Commissioner, who was in seizin of the appeal as against the original order of assessment dated 30th November, 1964, did not divest himself of such seizin of the papers in appeal, but continued to deal with it, notwithstanding the fact that the assessing authority put him on notice of the rectification of the assessment order and the pendency of the appeal preferred by the petitioner as against the order of rectification under Section 55. It, however, happened in this case, I should say very unfortunately, that the Appellate Assistant Commissioner, notwithstanding the fact that he had notice of the parallel proceedings undertaken by the petitioner as against the order of rectification, yet dealt with the appeal against the first assessment order dated 30th November, 1964, and dismissed the said appeal on 13th October, 1965. It appears from the records that he came to the same conclusion as the assessing authority, but on different grounds. This would not make any difference in the instant case.

3. After the Deputy Commissioner of Commercial Taxes, as revisional authority, dismissed the revision petition filed by the petitioner as out of time, and after the order of rectification made by the assessing authority under Section 55 became final, the revenue took action for recovery of the amounts due from the petitioner pursuant to the order of rectification as above, apparently ignoring the order of the Appellate Assistant Commissioner dated 13th October, 1965, whereunder the first appeal as against the original assessment was dismissed by him. Such a notice of demand dated 10th July, 1968, which is the challenged order in this case, was issued to the petitioner and on receipt of the same, the petitioner has come up to this court for the issue of a writ of prohibition restraining the revenue from collecting the tax as provided in the impugned notice of demand.

4. Mr. Sethu, learned counsel for the petitioner, urges that the original order of assessment having become merged with the appellate order dated 13th October, 1965, the notice of demand purporting to be in furtherance of the order of rectification made by the original authority during the pendency of the appeal, is unsustainable and in this view the revenue should be interdicted by a writ of prohibition. The revenue, on the other hand, would state that this is not a case where the rectification proceedings were undertaken by the original authority after the first assessment order became merged with the appellate authority's order, but during the pendency of the said appeal before the appellate authority, and, therefore, the theory of merger, which is prominent in the contention of the petitioner, is not invokable in the instant case as it is not applicable. The other argument of the revenue is that the order of rectification was known to the petitioner and she tried to canvass the legality, propriety and regularity of the said order by approaching the appropriate statutory authority and she having ultimately failed in her attempt to dislodge the effectiveness of the said order, cannot now contend that such an order which has reached a finality of its own cannot be pressed into service by executing the same and by demanding the amount due thereunder.

5. It is undoubtedly true that if an assessment order is telescoped with the appellate order or any other order of a higher hierarchy, then it would be illegal and certainly irregular for the assessing authority to take action under Section 55 and deal with the file as if he has still the jurisdiction to rectify his own order for any purpose whatsoever. Once the original order becomes merged with the appellate order, then there is a substitution of the original order in all aspects of law and indeed factually as well, and any attempt to rectify the original order, which should be deemed to be non est, is a futile one. That this is the position has been stated and restated by three decisions of our court, reported in Haji Abdul Shukoor and Company v. State of Madras [1965] 16 S.T.C. 808 Gopalaswami Iyer and Ors. v. Sales Tax Appellate Tribunal, Madras [1965] 16 S.T.C. 854 and Deputy Commissioner of Commercial Taxes v. Ramiah Chetty and Company [1968] 22 S.T.C. 217. In all these cases, the principle is well laid down that if the original order of assessment gets merged in the order passed in appeal, then the assessing authority, whoever it may be, has no jurisdiction to interfere with the operation of the order as affirmed on appeal. Though technically, in this case, the appeal as against the original order was finally dismissed, yet that circumstance by itself cannot prevent an original authority to undertake a rectification of its order, if he attempted to do it before the appeal was disposed of. In the instant case, long prior to the disposal of the appeal, the assessing authority, after notice to the affected parties, rectified its order and passed such an order on 23rd February, 1965.

6. This order was the subject-matter of an appeal in the first instance and a revision at a later time at the instance of the petitioner ; but the petitioner was unsuccessful in his attempts to canvass the regularity or the legality of the order of rectification made by the assessing authority under Section 55. The result is that the order of rectification has become final and that is the order which is sought to be enforced by the revenue now.

7. But, the contention of Mr. Sethu is that notwithstanding the fact that the petitioner was concurrently taking proceedings questioning the order of rectification, so long as the appeal as against the first assessment order was not disposed of finally by the appellate authority, no rectification of the original order can ever be undertaken.

8. Section 55, dealing with the power to rectify any error apparent on the face of the record, creates three independent and distinct authorities who are vested with the power to so rectify any apparent error on record. They are the assessing authority, the appellate authority and the revising authority, including the Appellate Tribunal. This section does not prevent rectification or the exercise of the power to rectify, by each of such authorities, so long as its order is still enforceable and has not yet been set aside by any appellate or revisional authority. In the instant case, on the date when the order under Section 55 was made, there was no order of the appellate authority. The question, therefore, of any merger of the assessment order with the order of the appellate authority does not arise. Factually also, the appellate authority, who had seizin of the appeal papers, was informed by the assessing authority of such a rectification of the original order as above, and this information was apparently overlooked by the Appellate Assistant Commissioner. Normally, the Appellate Assistant Commissioner ought to have dealt with the regular appeal as against the first assessment order as well as the second appeal which was filed, but improperly, by the petitioner as against the order of rectification, and ought to have passed a common order. But, the mere fact that a statutory tribunal fails to do its duty in accordance with law or errs in the matter of the disposal 6f appeals before it in a manner known to law, it cannot be said that the revenue would be prevented from collecting the lawful dues payable by a dealer under the Act, if it has the authority otherwise to so collect and enforce a legal and valid order of an appropriate statutory authority. The order of rectification has become final. This was made long prior to the date when the appeal as against the first assessment was disposed of. The correctness of the order of rectification was canvassed by the petitioner, but unsuccessfully. In this state of affairs, I do not think that the ratio in the cases cited above, which would clearly apply in a circumstance when the original order has merged with the appellate order, can be invoked in the instant case so as to avoid the payment of the lawful liability of the original dealer and which is now payable by his 'successor, viz., the petitioner in this writ petition. As a matter of fact, the petitioner is estopped from contending that the amount is not recoverable, for she canvassed the correctness of the order of rectification, but failed to establish that it was wrong. In this view also, she having elected one mode of relief, cannot be allowed to reprobate and take up the position that the revenue is not authorised legally to collect the amount due and claimed under the challenged order. In these circumstances, I am unable to issue, in my discretion, a writ of prohibition. The rule nisi is discharged. The writ petition is dismissed. There will be no order as to costs.


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