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S.T. Somasundaram Pillai (Firm) Vs. the Government of Madras - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberTax Case No. 109 of 1962 (Revision No. 46 of 1962)
Judge
Reported in[1963]14STC170(Mad)
AppellantS.T. Somasundaram Pillai (Firm)
RespondentThe Government of Madras
Advocates:R. Gopalaswami Aiyangar and ;K.P. Thirunavukarasu, Advs.
DispositionSuit dismissed
Cases ReferredMadurai v. The State of Madras
Excerpt:
- - 7,69,000. they preferred appeals to the appellate assistant commissioner and the tribunal but failed. 2. one of the contentions urged before the tribunal was that the department failed to grant relief to the assessees under certain government orders which we will refer to later......for the assessment year 1957-58 on a net turnover of rs. 7,69,000. they preferred appeals to the appellate assistant commissioner and the tribunal but failed.2. one of the contentions urged before the tribunal was that the department failed to grant relief to the assessees under certain government orders which we will refer to later. they claimed immunity from levy of additional tax under section 3(2) in respect of certain sales proved to have been effected by them as first dealers. according to them they have not collected tax at the additional rate on such sales from their purchasers. but the finding of the appellate assistant commissioner was that they had collected the tax on the sales of fine and superfine cloth either as a separate charge of 'contingent liability' or by inclusion.....
Judgment:
ORDER

Jagadisan, J.

1. The petitioners are dealers in textiles. They were assessed under the Madras General Sales Tax Act for the assessment year 1957-58 on a net turnover of Rs. 7,69,000. They preferred appeals to the Appellate Assistant Commissioner and the Tribunal but failed.

2. One of the contentions urged before the Tribunal was that the department failed to grant relief to the assessees under certain Government orders which we will refer to later. They claimed immunity from levy of additional tax under Section 3(2) in respect of certain sales proved to have been effected by them as first dealers. According to them they have not collected tax at the additional rate on such sales from their purchasers. But the finding of the Appellate Assistant Commissioner was that they had collected the tax on the sales of fine and superfine cloth either as a separate charge of 'contingent liability' or by inclusion in the sale price. The G. O. relied upon by the assessees for exemption from additional levy is G.O. No. 275 dated 19th January, 1957. The material part of the G. O. relevant to the present case is as follows :

The Government have decided that in cases where the dealers prove to the satisfaction of the assessing authorities that they have not collected the additional tax from their customers, the collection of the additional tax should be waived in respect of the sales of their mill cloth etc. during the period from 1st January, 1957, to 17th December, 1957

3. The Tribunal held that it was not within its purview to enforce the obedience of departmental officers to executive instructions issued by the Government and therefore declined to go into the question whether the assessees had collected the additional tax. As stated already, the appeal was dismissed.

4. In this revision petition by the assessees, the only question raised is whether the Tribunal acted rightly in not granting relief to the assessees on the basis of the administrative G. O. The argument is twofold. It is contended that the Tribunal should have itself applied the G. 0. if the facts warranted its application, as there can be no valid assessment eschewing the G. O. The alternative contention is that it was the duty of the Tribunal as the appellate authority to correct the mistake committed by the Appellate Assistant Commissioner by improperly refusing to apply the G. O. on the basis of an erroneous finding of fact. In our opinion, these contentions cannot be sustained. We have dealt with this identical question in T. C. No. 31 of 1960 Since reported as A.S. Kassam and Co., Madurai v. The State of Madras [1962] 13 S.T.C. 907 and T. C. Nos. 52 and 55 of 1961.

5. In T. C. No. 31 of 1960 Since reported as A.S. Kassam and Co., Madurai v. The State of Madras [1962] 13 S.T.C. 907, we repelled the contention that is now urged before us in these words :

What appears to have happened is that the order of the Government left the liability to pay tax unaffected, for the Government only stated that in respect of transactions during a certain period, they would not enforce the collection against a dealer if the dealer had not in fact collected the tax from his customers. That being the narrow extent of the scope of the waiver of the collections by the Government, the liability to tax of the dealer was left unaffected. The Tribunal had jurisdiction only to examine any exemption from liability to tax of a dealer under the provisions of the Act and if it declined to consider and apply the Government order which had been issued under the above stated circumstances, the Tribunal was, to our minds, correct.

6. In T.C. Nos. 50, 52 and 55 of 1961, Mr. R. Gopalaswami Aiyangar, who appeared for the assessees in that case also, submitted that the decision in T. C. No. 31 of 1960 Since reported as A.S. Kassam and Co., Madurai v. The State of Madras [1962] 13 S.T.C. 907 required reconsideration. We again went into the matter and we saw no reason to change the view already taken by us. In that case we observed as follows :

Collections of tax lawfully levied is a phase of departmental activity of the assessing officers beyond the purview of the Appellate Tribunal which is only a statutory body that adjudicates between the State and the subject on the controversies arising out of the application of the Act.

7. But Mr. Gopalaswami Aiyangar contends that those decisions were under the 1939 Act which conferred upon the Tribunal a somewhat limited power which was not comprehensive enough to deal with breach of administrative instructions by the assessing officers. He submits that under the present Act the Tribunal's powers are quite ample to correct the officers of the department who violate executive instructions. Having examined the relevant provisions of the present Act, we have no doubt that the Tribunal has no power or jurisdiction to step out of its orbit of administering the statute and rules having statutory force.

8. We shall now refer briefly to the relevant sections in the new Act dealing with the powers of the department to tax and the power of the Appellate Tribunal to hear and determine appeals. The Tribunal's power is provided for under Section 36 of the Act. It reads :

(1) Any person objecting to an order passed by the Appellate Assistant Commissioner under Sub-section (3) of Section 31, or an order passed by the Deputy Commissioner under Sub-section (1) of Section 32 may...appeal against such order to the Appellate Tribunal.

Section 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 fresh 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...

9. Mr. Gopalaswami Aiyangar contends that the powers of the Tribunal to give suitable directions to the Appellate Assistant Commissioner in the matter of enforcement of even an administrative G. O. would be covered by Sub-clause (b) of Section 36(3). This contention cannot be sustained. It is true that Section 36(3) consists of two parts, one dealing with an order of assessment and the other dealing with 'any other order'. It is just possible that the two limbs of Section 36(3) were enacted as the Appellate Tribunal had powers not merely to entertain appeals from orders passed by the Appellate Assistant Commissioner but also from orders passed by the Deputy Commissioner under Sub-section (1) of Section 32. Referring to Section 32, we find that the Deputy Commissioner has been given powers to call for and examine an order or proceeding recorded by the appropriate authority under Section 12, Section 14, Section 15 or Sub-sections (1) and (2) of Section 16. Section 12 is the section under which the first assessment is made. Section 14 provides for fresh assessment in certain cases. Section 15 deals with the case of legal representatives and Section 16 with assessment of escaped turnovers. But there is nothing to warrant the view that the Appellate Tribunal had powers to issue directions to the Appellate Assistant Commissioner or to the Deputy Commissioner with regard to matters which are purely administrative in character. Having regard to the scheme of the Act, the proper interpretation of the scope of the appellate powers of the Tribunal would be to hold that it had jurisdiction to deal with the orders of the Appellate Assistant Commissioner and Deputy Commissioner under the Act. In regard to matters which the departmental officers may have to carry out in their administrative spheres and which are extra-statutory, the jurisdiction of the Tribunal cannot be stretched and extended. We see no difference in the language of the provisions of the appellate powers of the Tribunal in the new Act from those of such powers under the previous Act which would enable us to say that the Tribunal has general power of control and supervision over the assessing officials of the department, in respect of both statutory and non-statutory matters. But whether the appellate power of the Tribunal now is of a more extensive character than what it was previously is not really the question before us. The only question is whether the Tribunal can take note of a non-statutory rule and insist upon the administration of that rule or compel the Appellate Assistant Commissioner or the Deputy Commissioner to act in conformity with it. We have no doubt that the Tribunal had no such power or authority.

10. The revision petition fails and is dismissed.


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