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The State of Madras Vs. Mettur Industries Ltd. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberT.C. Nos. 27, 28 and 29 of 1969 (Revisions Nos. 27, 28 and 29 of 1969)
Judge
Reported in[1973]32STC239(Mad)
AppellantThe State of Madras
RespondentMettur Industries Ltd.
Appellant AdvocateK. Venkataswami, First Assistant Government Pleader (Tax)
Respondent AdvocateS.V. Subramaniam, Adv. for ;Subbaraya Iyer, ;Sethuraman and ;Padmanabhan, Advs.
DispositionPetition dismissed
Cases ReferredIndia Cements Ltd. v. Deputy Commissioner of Commercial Taxes
Excerpt:
- - the appeals having failed, the assessee took the matter in appeal before the sales tax appellate tribunal. the assessee not being satisfied with the relief granted by the appellate assistant comis-sioner in relation to the original assessment, filed an appeal to the triunal......sales in the taxable turnovers as a result of the reassessment under section 16, the assessee filed appeals before the appellate assistant commissioner. in those appeals, the assessee challenged only the addition of the turnovers relating to canteen sales in the taxable turnovers. the appeals having failed, the assessee took the matter in appeal before the sales tax appellate tribunal. in those appeals also, the assessee challenged only the addition of the turnovers relating to canteen sales. in those appeals, the revenue not only wanted to sustain the addition of turnovers relating to canteen sales in the taxable turnovers, but also filed applications for enhancement of the original assessments by bringing to charge the purchase turnovers of cotton, exempted earlier by the.....
Judgment:

Ramanujam, J.

1. The State is the petitioner in all these cases and it canvasses the correctness of the common order of the Tribunal in respect of the assessment years 1959-60, 1960-61 and 1961-62 in relation to the same assessee, Mettur Industries Limited. In the original assessments under Section 12 of the Madras General Sales Tax Act for the years 1959-60, 1960-61 and 1961-62, turnovers relating to canteen sales effected by the assessee were not included on the ground that they are not taxable. Similarly, turnovers of Rs. 65,75,320.35 in 1959-60, of Rs. 59,82,489.09 in 1960-61 and of Rs. 87,30,321.58 in 1961-62 were also exempted on the ground that they represented inter-State purchases of cotton not taxable under the Madras General Sales Tax Act.

2. Subsequent to the original assessment, the assessing authority invoked its power under Section 16 of the Act and brought in the turn over relating to canteen sales on the ground that they had escaped assessment in all the three years in question. As against this addition of canteen sales in the taxable turnovers as a result of the reassessment under Section 16, the assessee filed appeals before the Appellate Assistant Commissioner. In those appeals, the assessee challenged only the addition of the turnovers relating to canteen sales in the taxable turnovers. The appeals having failed, the assessee took the matter in appeal before the Sales Tax Appellate Tribunal. In those appeals also, the assessee challenged only the addition of the turnovers relating to canteen sales. In those appeals, the revenue not only wanted to sustain the addition of turnovers relating to canteen sales in the taxable turnovers, but also filed applications for enhancement of the original assessments by bringing to charge the purchase turnovers of cotton, exempted earlier by the assessing authority on the ground that they were inter-State purchases.

3. The Tribunal allowed the assessee's appeals holding that the turnovers relating to canteen sales cannot be taxed in the relevant assessment years, following the decision of this court in Deputy Commissioner of Commercial Taxes v. Thirumagal Mills Ltd. [1967] 20 S.T.C. 287, which has since been affirmed by the Supreme Court in State of Tamil Nadu v. Thirumagal Mills Ltd. [1972] 29 S.T.C. 290 . This part of the decision of the Tribunal cannot, in our view, be challenged in view of the categorical opinion expressed by the Supreme Court in State of Tamil Nadu v. Thirumagal Mills Ltd. [1972] 29 S.T.C. 290 p>

4. The enhancement applications filed by the revenue have been dismissed by the Tribunal on the ground that the appeals filed by the assessee before it related only to turnovers of canteen sales, the subject-matter of assessment under Section 16 and that the revenue cannot seek to vacate the exemption granted by the assessing authority in its original orders of assessment, which were not under challenge before the Tribunal, by way of filing enhancement petitions in appeals filed against orders made under Section 16. This view of the Tribunal is questioned by the revenue before us.

5. We are not able to agree with the revenue that the enhancement petitions are maintainable in the facts and circumstances of these cases. Admittedly, the question of exemption of the alleged turnovers relating to inter-State purchase of cotton was not the subject-matter either before the assessing authority in proceedings under Section 16, or before the appellate authority, or before the Tribunal in the appeals filed by the assessee. As pointed out by the Tribunal, the original orders of assessment were not before the Tribunal and as such the revenue cannot seek to canvass the correctness or otherwise of the original orders of assessment in appeals filed by the assessee against orders passed under Section 16, bringing to charge certain escaped turnovers. The Tribunal has taken the view that the revenue cannot file a petition for enhancement of the original assessment in an appeal filed against an order under Section 16 for the reason that it is a separate and independent appeal from the one relating to the original order of assessment. The reasoning given by the Tribunal appears to us to be quite tenable. It is only when the original order of assessment comes before, the Tribunal in some form or other, the revenue can seek to canvass the findings given by the assessing authority in that order so far as they are against the revenue, but not in appeals filed by the assessee against orders under Section 16, where the subject-matter was only the escaped turnovers and not the entire assessments. The view taken by the Tribunal gets support from a decision of this court in India Cements Ltd. v. Deputy Commissioner of Commercial Taxes [1972] 30 S.T.C. 516. In that case, there was an original order of assessment under the Central Sales Tax Act and later the assessing authority rectified that order by invoking his powers under Section 55 of the Act (Madras General Sales Tax Act, 1959). The assessee filed an appeal against that rectification order before the Appellate Assistant Commissioner. In that appeal he sought relief even in relation to a turnover which was the subject-matter of the original assessment. The Appellate Assistant Commissioner, while upholding the order of rectification, granted in part, the relief prayed for by the assessee. The assessee not being satisfied with the relief granted by the Appellate Assistant Comis-sioner in relation to the original assessment, filed an appeal to the Triunal. The question before the Tribunal was whether the assessee could get the reliefs sought for by him in an appeal against rectification proceeding. The Tribunal held that the Appellate Assistant Commissioner was not justified in granting relief in respect of the turnover covered by the original assessment order while dealing with the validity or otherwise of the rectification order, which could only be the subject-matter before him. Ultimately, the Tribunal's order was questioned before this court. This court after considering the relative provisions of the Madras General Sales Tax Act and also the provisions of the Central Sales Tax Act, held that the reliefs claimed by the assessee in the appeal before the Appellate Assistant Commissioner so far as they related to a turnover which was the subject-matter of the original assessment and not of the rectification order, cannot be granted and that the Appellate Assistant Commissioner can grant relief only in so far as it relates to the rectification order. The decision of the Tribunal proceeds on the basis that the order of rectification is separate from and independent of the original order of assessment and, therefore, an appeal from an order of rectification cannot cover the subject-matter of the original assessment. In this case, the Tribunal has adopted the reasoning in the said decision, that an appeal against an order under Section 16 is quite independent of an appeal against an order of original assessment and that a petition for enhancement in respect of the turnover which was the subject-matter of the original assessment cannot be maintained in an appeal filed against an order under Section 16. We, therefore, see no reason to interfere with the view taken by the Tribunal in this regard.

6. The tax cases are, therefore, dismissed, with costs in T. C. No. 27 of 1969 alone. Counsel's fee Rs. 150.


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