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1960 Supreme(SC) 244
SUPREME COURT OF INDIA
18th October, 1960
S.K. DAS, M. HIDAYATULLAH, K.C. DAS GUPTA, J.C. SHAH AND N. RAJAGOPALA AYYANGAR, JJ.
Nathmal Tolaram, Appellant
Versus
Superintendent of Taxes, Dhubri and another, Respondents.
Civil Appeal No. 196 of 1958.
Advocates Appeared
Mr. Sukumar Mitter, Sr. Advocate, (Mr. Sukumar Ghose, Advocate, with him), for Appellant; Mr. Veda Vyasa, Sr. Advocate, (Mr. Naunit Lal, Advocate, with him), for Respondents. 332
NAUNIT LAL, SUKUMAR GHOSH, SUKUMAR MITRA, Veda Vyasa
The Superintendent of Taxes had no power to reassess the appellants in the light of the observations made in the judgment of the High Court, as the period of limitation prescribed for reassessment had expired.
Headnote:
SALES TAX - Reassessment - Bar of limitation - Notice issued by Superintendent of Taxes to produce evidence to enable him to start an enquiry which was barred by the expiry of the period of limitation prescribed by the Act - Held, the Superintendent had no power to issue such notice.
Fact of the Case:
The appellants, registered dealers under the Assam Sales Tax Act, 1947, were assessed to pay tax on sales of jute despatched by them to Calcutta during the account period April 1, 1948, to September 30, 1948. The High Court, on a reference under S. 34 of the Act, held that the consignments were not taxable. The Commissioner of Taxes directed the Superintendent of Taxes to dispose of the case in accordance with the judgment of the High Court. The Superintendent issued a notice to the appellants to produce evidence to enable him to determine whether the transactions were taxable under the Explanation to S. 2 sub-sec. 12 of the Act.
Finding of the Court:
The High Court, in answering the questions submitted to it, was exercising an advisory jurisdiction and could not and did not give any direction to the sales tax authorities to proceed to assess or not to assess the appellants to sales tax : it merely recorded its opinion that the transactions referred to in the questions were not sales within the meaning of S. 2 sub-sec. 12 of the Act and were accordingly not taxable.
Issues: Whether the Superintendent of Taxes had the authority to proceed to reassess the appellants in the light of the observations made in the judgment of the High Court.
Ratio Decidendi: The Superintendent of Taxes had no power to reopen the assessment and to call upon the appellants to produce documentary evidence with a view to commence an enquiry whether the sales involved in the case fell "within the purview of the Explanation to S. 2 sub-sec. 12". In any event, the account period as has already been observed was April 1, 1948 to September 30, 1948 and three years from the end of that period, expired before the date on which the notice was issued. Fresh proceedings for reassessment could not be initiated by the Superintendent of Taxes under S. 19 after the expiry of three years from the assessment period assuming that this could be regarded as a case of failure to apply for registration and to make a return required of the appellants.
Final Decision: Appeal allowed and the order passed by the High Court set aside. A writ quashing the proceedings commenced by the Superintendent of Taxes Dhubri by his notice dated January 30 1953, be issued.
Judgment
SHAH, J. : The appellants are dealers registered under the Assam Sales Tax Act XVII of 1947 - hereinafter referred to as the Act. For the account period April 1, 1948, to September 30, 1948, the appellants submitted a return of their turnover which included sales in Assam of all goods other than jute. The Superintendent of Taxes, Dhubri, summarily assessed the appellants under sub-sec. (4) of S. 17 of the Act to pay tax on sales of jute despatched by them to Calcutta during the account period. Appeals against the order of assessment to the Assistant Commissioner of Taxes and to the Commissioner of Taxes, Assam, proved unsuccessful. The appellants then applied to the Commissioner of Taxes to refer certain questions arising out of the assessment to the High Court in Assam under S. 34 of the Act. The Commissioner referred the following questions and another to the High Court of Judicature in Assam :
1. Whether, in view of the aforesaid facts and circumstances the turnover from 20,515 maunds of jute mentioned under item (i) is taxable under the Act ?
2. Whether, in view of the aforesaid facts and circumstances the turnover from 5,500 maunds of jute mentioned under item (ii) is taxable under the Act ?
3. Whether, in view of the aforesaid facts and circumstances, the turnover from 25,209 maunds of jute mentioned under item (iii) is taxable under the Act ?
2. In respect of each of the three questions 1 to 3, the High Court recorded the following answer :
"Not being a sale within the meaning of sub-sec. (12) of S. 2 of the Act, the consignments are not taxable."
3. The High Court, however, observed :
"As to whether these consignments can hereafter be assessed if they fall within the purview of the Explanation to sub-sec. (12) of S. 2, we express no opinion."
4. As required by S. 32(8) of the Act, the Commissioner of Taxes by his order dated August 1, 1952, directed the Superintendent of Taxes to dispose of the case in accordance with the judgment of the High Court. The Superintendent of Taxes thereafter issued on January 30, 1953, the following notice to the appellants :
"In view of the Hon ble High Court s order in Sales-tax reference No. 3 of 1951, the assessment order dated 30th September, 1950, for the return period 30th September, 1948, has been set aside and you are directed to produce necessary evidence, contract papers, account books, etc......in order to see whether the contract of sale involved in this case come within the purview of the Explanation to sub-sec. 12 of S. 2 of the Act."
5. By their letter dated March 23, 1953, the appellants called upon the Commissioner of Taxes to direct the Superintendent of Taxes not to proceed with the notice. The Commissioner having failed to direct as requested, the appellant petitioned the High Court in Assam under Art. 226 of the Constitution for a writ prohibiting the Superintendent of Taxes from re-opening and proceeding with the assessment of the appellants under the Assam Sales Tax Act and for a writ quashing the order dated August 1, 1952, passed by the Commissioner. The High Court summarily dismissed the petition. Against the order passed by the High Court, this appeal is filed with special leave under Art. 136 of the Constitution.
6. The High Court, in answering the questions submitted to it, was exercising an advisory jurisdiction and could not and did not give any direction to the sales tax authorities to proceed to assess or not to assess the appellants to sales tax : it merely recorded its opinion that the transactions referred to in the questions were not sales within the meaning of S. 2 sub-sec. 12 of the Act and were accordingly not taxable. Pursuant to the opinion of the High Court, the Commissioner directed the Superintendent of Taxes to dispose of the case "in accordance with" the judgment of the High Court; but the Superintendent of Taxes thought that he was entitled to re-open the assessment proceedings and to assess the appellants in the light of the Explanation to S.
