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P. Subbiah Pillai and Co. Vs. the State of Madras - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case Number Tax Case No. 214 of 1964 (Revision No. 144)
Judge
Reported in[1967]20STC266(Mad)
AppellantP. Subbiah Pillai and Co.
RespondentThe State of Madras
Appellant Advocate S. Padmanabhan, Adv.
Respondent Advocate K. Venkataswami, Adv. for Additional Government Pleader
DispositionPetition allowed
Cases ReferredShirahatti v. Commercial Tax Officer
Excerpt:
- - 2,68,426.08. the concessional rate was not allowed because, according to the assessing authority, they were not filed within the time prescribed by rule 5(1) of the central sales tax (madras) rules, 1957. but the assessee though failed before the appellate assistant commissioner, got relief at the hands of the tribunal as regards the turnover of rs. 2,68,426.08. as regards the balance of the turnover in respect of which the assessee failed to get concessional rate, no argument has been addressed to us, because as learned counsel for the petitioner puts it, he could not raise any question of the vires in a revision petition and that in point of fact, he has not raised it at any stage......rate was not allowed because, according to the assessing authority, they were not filed within the time prescribed by rule 5(1) of the central sales tax (madras) rules, 1957. but the assessee though failed before the appellate assistant commissioner, got relief at the hands of the tribunal as regards the turnover of rs. 2,68,426.08. as regards the balance of the turnover in respect of which the assessee failed to get concessional rate, no argument has been addressed to us, because as learned counsel for the petitioner puts it, he could not raise any question of the vires in a revision petition and that in point of fact, he has not raised it at any stage. we are, therefore, concerned in the petition only with the point relating to exemption claimed under section 6(2).2. a decision on that.....
Judgment:

Veeraswami, J.

1. The short point in this tax revision case is whether the petitioner who is the assessee was entitled to exemption from tax under Section 6(2) of the Central Sales Tax Act in respect of a turnover of Rs. 3,61,129.17. He has been denied the exemption right through. Before the assessing authority E-I Forms covering the turnover were not filed and a request by the assessee for time to file them was refused. When the E-I Forms were filed in appeal before the Appellate Assistant Commissioner he received them but declined to rely on them on the ground that they were filed out of time. This ground was maintained by the Tribunal in the further appeal filed before it by the assessee. He claimed that the entire turnover related to second sales of goods by transfer of documents during inter-State movement of goods. He also as an alternative sought the benefit of the concessional, rate under Section 8(1), but produced C Forms in relation to 29 transactions of the value of Rs. 2,68,426.08. The concessional rate was not allowed because, according to the assessing authority, they were not filed within the time prescribed by Rule 5(1) of the Central Sales Tax (Madras) Rules, 1957. But the assessee though failed before the Appellate Assistant Commissioner, got relief at the hands of the Tribunal as regards the turnover of Rs. 2,68,426.08. As regards the balance of the turnover in respect of which the assessee failed to get concessional rate, no argument has been addressed to us, because as learned counsel for the petitioner puts it, he could not raise any question of the vires in a revision petition and that in point of fact, he has not raised it at any stage. We are, therefore, concerned in the petition only with the point relating to exemption claimed under Section 6(2).

2. A decision on that point will entirely turn on the proviso to Section 6(2). Under Sub-section (1) of the section every inter-State transaction will be liable to tax, but this is subject to the other provisions of the Act. Sub-section (2) says that notwithstanding Sub-section (1) any subsequent inter-State sale of the description referred to in Section 8(3) to a registered dealer during movement of goods as contemplated by Section 3(b) shall not be subject to tax. But this exemption is conditional upon compliance with the proviso to Sub-section (2). The proviso says :

Provided that no such subsequent sale shall be exempt from tax under this sub-section unless the dealer effecting the sale furnishes to the prescribed authority in the prescribed manner a certificate duly filled and signed by the registered dealer from whom the goods were purchased, containing the prescribed particulars.

3. Evidently in exercise of the powers under the proviso and Section 13(4), the State Government has framed Central Sales Tax (Madras) Rules, 1957. Rule 5(1) requires E-I Forms pertaining to subsequent inter-State sales to be filed along with the monthly return by the 25th of each month. The requirement as to filing of E-I Forms is reiterated in Rule 9-B(2), though here no time-limit for filing is stated. On the question whether in exercise of the rule-making power under Section 8(4) a time-limit for filing C Forms could be prescribed, there was difference of opinion among the High Courts, this Court being of the view that if the time-limit prescribed was not complied with, the benefit of Section 8(1) would not be available. The language of Section 8(4) in the matter of conferment of rule-making power is practically identical with that in the proviso to Section 6(2). The Kerala High Court in Abraham v. Sales Tax Officer [1964] 15 S.T.C. 110 held that the word 'manner' in Section 8(4) will not include a power to make rules prescribing a time-limit for filing C Forms. This view was recently confirmed by the Supreme Court in Sales Tax Officer v. Abraham Civil Appeal No. 404 of 1966, which was on the Kerala judgment. The same interpretation must doubtless apply to the proviso to Section 6(2). It follows, therefore, that the time-limit prescribed by Rule 5(1) for filing E-1 Forms has to be ignored. But while disposing of the civil appeal, the Supreme Court also observed that the C Forms with which the Court was concerned in the civil appeal should be filed within a reasonable time. It is not disputed that the E-I Forms in this case were not filed before the assessing authority. It, however, appears that in response to a show cause notice from the assessing authority which was dated 3rd October, 1961, but signed on the 17th and served on the 24th October, the assessee by his objection dated 31st October, 1961, requested for time to file E-I Forms. But no time was granted and the assessment order was made the very next day. In the circumstances it is argued for the petitioner that the Appellate Assistant Commissioner before whom E-I Forms covering the entire turnover were filed should have while receiving the E-I Forms looked into them, and, if they were in order, given the exemption under Section 6(2), on the view that the assessing authority ought to have given a reasonable time to the assessee to file the forms, but it unjustifiably declined to give the indulgence he was entitled to. In our opinion, the contention has force. It is true, as has been held by the Supreme Court in another context, that the E-I Forms should be filed within a reasonable time.

4. But where an assessee in response to a show cause notice from the department appears and makes a reasonable request for time to file these forms, but all the same, time is unjustifiably refused, we are of the view that it is competent for and is within the jurisdiction of the Appellate Assistant Commissioner in exercise of his appellate powers to take that fact into account and himself extend the time for production of such forms, of where they were filed before him, to receive them, examine the same and if they were found in order, to give the relief to which the assessee is eligible under the law. The same view we find has been taken by the Mysore High Court in Shirahatti v. Commercial Tax Officer [1967] 19 S.T.C. 306.

5. We find, therefore, that the departmental authorities as also the Tribunal were in error in rejecting the E-I Forms on the ground that they were filed only before the Appellate Assistant Commissioner. For the revenue it is pointed out that on the view taken by it and the Tribunal it was not examined whether the E-I Forms were in order. We wish, at least for the sake of saving time, it had been done by the Appellate Assistant Commissioner or at least by the Tribunal. Anyway we have to accede to the contention for the revenue that the E-I Forms have to be examined to see whether they were in order.

6. The petition is allowed and the appeal is remitted to the Tribunal for fresh disposal in the light of this judgment. In the particular circumstances we make no order as to costs.


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