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Ramco Cement Distribution Co. P. Ltd. Vs. Deputy Commercial Tax Officer - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberWrit Petition No. 4597 of 1970
Judge
Reported in[1974]33STC180(Mad)
AppellantRamco Cement Distribution Co. P. Ltd.
RespondentDeputy Commercial Tax Officer
Appellant AdvocateP.R. Ranganathan, Adv.
Respondent AdvocateK. Venkataswami, First Assistant Government Pleader
DispositionPetition allowed
Cases ReferredL. Hirday Narain v. Income
Excerpt:
- .....the equity in the request and remanded the case for fresh disposal. the petitioner then filed an application for rectification of the apparent error in the earlier order stating that an illegality had crept in the order, since an item which cannot be included in the assessable turnover has been so included. but the respondent passed the impugned order stating that such a claim was not made at the time of the original assessment and no records regarding the claim are available in the proceedings which constituted evidence on which the assessment order has been passed. he was also of the view that the mistake was not capable of being rectified without further deep investigation. he further refused to entertain the application. it is against this order, the present writ petition has been.....
Judgment:
ORDER

Ramaprasada Rao, J.

1. This writ petition has to be allowed. For the year 1966-67, the petitioner was assessed to tax in respect of his transactions on the basis of the returns submitted by him. But by mistake, the petitioner did not claim an exemption to which he is entitled to in law, namely, tax on freight charged independently in the invoices, and such levy is exempted expressly by Rule 6(c) of the Tamil Nadu General Sales Tax Rules. For the succeeding year also, the assessment was so concluded; but the petitioner took up the assessment order on appeal. At the appellate stage, the petitioner sought for a similar relief basing his claim on the judgment of the Supreme Court in Hyderabad Asbestos Cement Products Ltd. v. State of A.P. [1969] 24 S.T.C. 487 The Appellate Assistant Commissioner felt the equity in the request and remanded the case for fresh disposal. The petitioner then filed an application for rectification of the apparent error in the earlier order stating that an illegality had crept in the order, since an item which cannot be included in the assessable turnover has been so included. But the respondent passed the impugned order stating that such a claim was not made at the time of the original assessment and no records regarding the claim are available in the proceedings which constituted evidence on which the assessment order has been passed. He was also of the view that the mistake was not capable of being rectified without further deep investigation. He further refused to entertain the application. It is against this order, the present writ petition has been filed.

2. Even taxing authorities are bound by rules of equity at least in matters of procedure. In a case like this where it is the duty of the petitioner to establish that the freight charges were charged independently and that the sum total of such freight charges cannot be brought to tax under the Tamil Nadu General Sales Tax Act, the department ought not to have avoided its public duty to entertain the said application for rectification and look into the matter. Merely because the claim was not made at the original stage, a universal rule of thumb cannot be made and all applications for rectification of defects which are apparent on the face of the record cannot be refused to be corrected. There may be cases where such a principle might rightly be pressed into service. But, in a matter where the statute itself gave exemption and if that exemption has been inadvertently not claimed by the petitioner, it is certainly a case where the taxing authorities also should equitably view the situation and render justice. That such a turnover is not liable to tax cannot be disputed after the decision of the Supreme Court. If it is established by the petitioner that such a turnover has been included in the original assessment order, then this court would be perpetrating an illegality if the order of the respondent were to be upheld. Such illegalities ought to be avoided as hinted by the Supreme Court in L. Hirday Narain v. Income-tax Officer : [1970]78ITR26(SC) . In this view of the matter, the rule nisi is made absolute and the respondent is directed to entertain the application for rectification and deal with it in accordance with law. The petitioner is also at liberty to adduce such acceptable evidence in proof of the exemption. There will be no order as to costs.


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