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R. Kuppuswamy Mudaliar and Sons Vs. the Board of Revenue (Commercial Taxes) and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberWrit Petition No. 2181 of 1976
Judge
Reported in[1980]45STC152(Mad)
AppellantR. Kuppuswamy Mudaliar and Sons
RespondentThe Board of Revenue (Commercial Taxes) and anr.
Appellant AdvocateT.S. Viswanatha Rao, Adv.
Respondent AdvocateK. Govindarajan, Additional Government Pleader
DispositionPetition allowed
Cases ReferredAppellate Assistant Commissioner v. Kuppanna Gounder
Excerpt:
- .....8(5) of the central sales tax act. however, there was no such exemption from sales tax under the tamil nadu general sales tax act, 1959. in m. ishwarlal and co. v. state of madras [1973] 32 s.t.c. 377, which dealt with a batch of cases including w.p. no. 2676 of 1969 (r. kuppuswamy mudaliar and sons v. state of madras [1973] 32 s.t.c. 377., the state contended that, in view of the fact that jaggery had been subjected to tax under the tamil nadu general sales tax act, the notification dated 12th december, 1957, issued in pursuance of section 8(5) of the central sales tax act must be deemed to have been cancelled. but, that contention was negatived by this court and it was held that the notification had the effect of exempting jaggery from sales tax under the central sales tax act. the.....
Judgment:
ORDER

Varadarajan, J.

1. This writ petition is filed under Article 226 of the Constitution of India for the issue of a certiorarified mandamus or other order or direction calling for the records in BP. Rt. No. 3079/75 dated 20th October, 1975, on the file of the Board of Revenue, Madras, the first respondent herein, and quashing the same and directing the Board of Revenue to exercise the powers of revision and cancel the assessment made on the petitioner by the Deputy Commercial Tax Officer, Tiruppattur, North Arcot, in his proceedings C.S.T.1605/67-68 dated 25th October, 1968.

2. In this writ petition, we are concerned with the assessment year 1967-68. The petitioner is a dealer in jaggery, etc., and he was assessed to sales tax. He submitted a return declaring the taxable turnover of Rs. 6,79,810.84 for the assessment year 1967-68 under the Central Sales Tax Act, 1956. The assessing officer determined the taxable turnover at Rs. 6,79,697.31 and called for objection which was not filed by the petitioner. The petitioner was assessed to Central sales tax on that turnover by the assessing authority's order dated 25th October, 1968, and he paid the tax in full. The turnover included sale of jaggery in the course of inter-State trade. According to the petitioner, during the assessment year in question, jaggery was not exigible to tax by virtue of Notification G.O. Ms. No. 4586, Revenue, dated 12th December, 1957, issued in exercise of the power conferred by Section 8(5) of the Central Sales Tax Act. However, there was no such exemption from sales tax under the Tamil Nadu General Sales Tax Act, 1959. In M. Ishwarlal and Co. v. State of Madras [1973] 32 S.T.C. 377, which dealt with a batch of cases including W.P. No. 2676 of 1969 (R. Kuppuswamy Mudaliar and Sons v. State of Madras [1973] 32 S.T.C. 377., the State contended that, in view of the fact that jaggery had been subjected to tax under the Tamil Nadu General Sales Tax Act, the notification dated 12th December, 1957, issued in pursuance of Section 8(5) of the Central Sales Tax Act must be deemed to have been cancelled. But, that contention was negatived by this Court and it was held that the notification had the effect of exempting jaggery from sales tax under the Central Sales Tax Act. The notification dated 12th December, 1957, was, however, cancelled on 21st March, 1969, in G.O.P. No. 662, Revenue, during the pendency of the case in M. Ishwarlal and Co. v. State of Madras [1973] 32 S.T.C. 377, which was disposed of only on 26th July, 1912. Thereafter, the petitioner applied for rectification of the assessment on 26th September, 1973, under Section 55 of the Tamil Nadu General Sales Tax Act and for refund of the tax paid by him. The second respondent directed the petitioner to file a revision petition before the Deputy Commissioner (C.T.), Trichy, which the petitioner did. But the Deputy Commissioner (C.T.), Trichy, by his order dated 26th April, 1974, declined to interfere with the order of the assessing authority on the ground that the petitioner had allowed the assessment to get time-barred. The petitioner filed a revision petition before the Board of Revenue, which confirmed the order of the Deputy Commissioner (C.T.), Trichy, and dismissed the revision petition. The present writ petition has been filed to quash that order of the Board of Revenue as aforesaid.

3. The objection raised on behalf of the respondents is that the assessment has become final and that the petition filed under Section 55 of the Tamil Nadu General Sales Tax Act was barred by time. However, it is submitted by the learned counsel for the petitioner that Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957, providing for rectification of assessment order was omitted only on 29th October, 1975, in S.R.O. No. A-21/76 and that rule was in force on the date on which the rectification petition was filed by the petitioner on 26th September, 1973, within five years from the date of the assessment order, which was made on 25th October, 1968, and that it was open to the authorities below to exercise the power conferred by Rule 5(9) and they could not refuse to rectify the assessment order. It could not be denied by the respondents that G. 0. Ms. No. 4586, Revenue, dated 12th December, 1957, was in force until it was cancelled by G. 0. P. No. 662, Revenue, dated 21st March, 1969, after the year of assessment, namely, 1967-68. Therefore, the petitioner was not liable to Central sales tax in respect of the turnover in question. That is the position of law that has been declared by this Court in M. Ishwarlal & Co. v. State of Madras [1973] 32 S.T.C. 377. A Bench of this Court has pointed out in Appellate Assistant Commissioner v. N. Kuppanna Gounder [1975] 35 S.T.C. 170. that when a law is declared it has effect not only from the date of the decision but also from the inception of the statutory provision. The petition filed by the petitioner before the Deputy Commercial Tax Officer and, subsequently, before the Deputy Commissioner (C.T.), Trichy, was clearly for rectification although Section 55 of the Tamil Nadu General Sales Tax Act, 1959, was referred to and no reference was made to Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957. A contention, similar to the one urged by the respondents in the present case, was also raised before the Supreme Court in S.A.L. Narayana Row, Commissioner of Income-tax v. Model Mills Nagpur Ltd : [1967]64ITR67(SC) . in respect of Section 35 of the Income-tax Act, 1922. It was urged before the High Court that no application for rectification under Section 35 of the Income-tax Act was presented by the respondent-company and, therefore, the company was not entitled to the relief claimed by it. The High Court rejected the contention principally on the ground that the income-tax authorities had themselves treated the application as one under Section 35 and had rejected the same on the merits. The Supreme Court observed that the application to the Income-tax Officer was one in which a request for rectification of the order was implicit and the Commissioner in dealing with the application for refund treated that application in that light. In the circumstances, I am of the opinion that the petition for rectification, though specifically mentioned only Section 55 of the Tamil Nadu General Sales Tax Act, was a petition for rectification and must have been dealt with by the authorities below as a petition under Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957, which was in force at the relevant time.

4. The learned counsel for the respondents pointed out that, as per page 23 of the typed set in this case, the petitioner had filed a writ petition, W.P. No.2676 of1969(R.Kuppuswamy Mudaliar and Sons v. State of Madras Reported as M. Ishwarlal and Co. and Others v. State of Madras and Ors.[1973] 32 S.T.C. 377, challenging the levy of tax on jaggery. It is stated therein that, when the writ petition was filed, the petitioner asked for stay of assessment proceedings for the assessment year 1967-68 and that, when the writ petition came up before this Court, the High Court directed the counsel to confine the petition to anyone of the above-mentioned years and it was therefore confined to 1968-69, as the assessment was not over for that year. As already stated, Ishwarlal & Co. v. State of Madras Reported as M. Ishwarlal and Co. and Ors. v. State of Madras and Ors. [1973] 32 S.T.C. 377 was in respect of a batch of writ petitions including W.P. No. 2676 of 1969. The respondents' counsel submitted that the petitioner had not pressed the writ petition for the assessment year in question, namely, 1967-68, but confined it only to the assessment year 1968-69. In this connection, he relied on the decisions in Easun Engineering Co. Ltd. v. Sales Tax Appellate Tribunal [1972] 29 S.T.C. 378. and Benson (India) P. Ltd. v. State of Tamil Nadu [1972] 30 S.T.C. 228. The decision in Easun Engineering Co. Ltd. v. Sales Tax Appellate Tribunal will not be applicable for, at the time of hearing of the application, the question whether a part of the turnover should be deemed to be sales which occasioned the import, according to the decision in the Khosla's case [1966] 17 S.T.C. 473, was not argued and it was also not raised in the grounds of appeal and the Tribunal had therefore no occasion to consider the facts and decide whether the transactions were sales in the course of import. Benson's case [1972] 30 S.T.C. 228 also will not apply to the facts of the present case. In that case, it was held that it is only in circumstances where the aggrieved person raises an issue and provokes a quasi-judicial or a judicial Tribunal to decide the same, that the decision rendered by that Tribunal is liable to be scrutinised by the same authority at a later stage, if it is called upon to rectify it on the ground that, in the earlier decision, a mistake has crept in. But, if there is no provocation and if the record is silent about any such ground having been raised at all, then such an assessee cannot properly invoke Section 55 of the Tamil Nadu General Sales Tax Act, 1959, or Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957.

5. In the present case, on the date of the rectification petition, there was no necessity to go into any question of fact, having regard to the decision in M. Ishwarlal and Co. v. State of Madras [1973] 32 S.T.C. 377, which has made it clear that the notification in G.O. Ms. No. 4586, Revenue, dated 12th December, 1957, made by the State Government in exercise of the power conferred by Section 8(5) of the Central Sales Tax Act, 1956, was operative at the relevant time, namely, the assessment year 1967-68. It is not possible to agree with the learned counsel for the respondents that the contention that the transaction was not liable to tax should have been urged before the assessing authority himself and that it could not be urged later on the date of presentation of the rectification petition on 26th September, 1973, taking advantage of the decision in M. Ishwarlal and Co. v. State of Madras [1973] 32 S.T.C. 377. The law was declared in that decision (M. Ishwarlal and Co. v. State of Madras [1973] 32 S.T.C. 377 and, as held by a Bench of this Court in Appellate Assistant Commissioner v. Kuppanna Gounder [1975] 35 S.T.C. 170, it must be held to have been there from the inception. The assessing authority committed an error in ignoring that provision while assessing the petitioner. Therefore, it is open to the petitioner to have that error rectified by filing a petition under Section 55 of the Tamil Nadu General Sales Tax Act, 1959, read with Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957, which no doubt was not specifically referred to in the rectification petition. The rectification petition having been filed within the period of five years from the date of the order of assessment, it could not be held to be barred by time and the fact that the petitioner had confined W.P. No. 2676 of 1969 for the assessment year 1968-69 alone and not for the assessment year in question, namely, 1967-68, would not prevent the petitioner from getting the error rectified within the time allowed by the rule. The writ petition is, therefore, allowed and the orders of the respondents are quashed and the assessment made on the petitioner by the second respondent is cancelled. The petitioner will have his costs. Advocate's fee Rs. 250.


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