The power of revision by the Board of Revenue under S. 12(3) of the Madras General Sales Tax Act is subject to the limitation period prescribed by S. 12(4)(b) of the Act.

Judgment

RAMASWAMI, J. : This appeal is brought by special leave against the Judgment of the Madras High Court dated the 13th September, 1961 in T. C. 162 of 1958.

2. The Madurai Mills Co., Ltd. (herein after called the respondent) is a dealer in yarn, purchasing raw material like cotton staple-fibre, etc., manufacturing them into yarn and selling the yarn. In the assessment year 1950-51, the respondent showed a return of Rs. 15,27,61,883-8-4 before the Deputy Commerical Tax Officer, Madurai who after scrutiny of the account books determined the net turnover at Rs. 15,44,09,109-3-11. The respondent preferred an appeal before the Commercial Tax Officer, Madurai South. It was contended on behalf of the respondent that a sum of Rs. 1,44,294-14-4 was wrongly included by the first assessing authority in the purchase value of cotton purchased by it for production of yarn as that amount only represented the commission paid by it to Comorin Investment Trading Company Limited for the purchase. It was also contended that another sum of Rupees 81,546-0-l which represented sale proceeds realised by selling empty drums etc. was not realisation in the course of its business. The Commercial Tax Officer upheld the first contention of the respondent and excluded the sum of Rs. 1,44,294-14-4 from the total turnover on the ground that the amount was commission paid by the respondent for the purchase of cotton, but rejected their second contention with regard to the sum of Rs. 81,546-0-1. The Deputy Commercial Tax Officer thereafter issued revised assessment. The respondent presented a revision petition before the Deputy Commissioner of Commercial Taxes and the only objection which the respondent raised was that it should not have been assessed to tax on amounts collected by it by way of tax amounting to Rs. 6,57,971-4-9. The respondent did not raise any other objection regarding the order of assessment of the Deputy Commercial Tax Officer or the Commercial Tax Officer. By his order, dated the 21st August, 1954, the Deputy Commissioner of Commercial Taxes dismissed the revision petition holding that the respondent was not entitled to raise the contention for the first time and that even otherwise the Madras General Sales Tax (Definition of Turnover and Validation of Assessments) Act, 1954, permitted the inclusion of tax in the taxable turnover. On the 4th August, 1958, the Board of Revenue issued a notice to the respondent stating that it proposed to revise the assessment of the Deputy Commercial Tax Officer, Madurai, by including in the turnover the sum Rs. 7,74,62,706-l-6 as that amount was wrongly excluded by the assessing authority. The respondent objected to the proposed revision on the ground that the proceeding was barred by limitation under S. 12 of the Madras General Sales Tax Act. The respondent also submitted that there was no wrong exclusion of the sum of Rs. 7,74,62,706-1-6 by the Deputy Commercial Tax Officer in making the assessment. By its order, dated the 25th August, 1958, the Board of Revenue overruled both these contentions of the respondent and fixed the net taxable turnover at Rupees 23,17,15,948-15-2. The respondent preferred an appeal to the Madras High Court against the order of the Board of Revenue dated the 25th August, 1958. The High Court allowed the appeal holding that the Board of Revenue could not invoke its revisional jurisdiction after the expiry of the period of limitation under S. 12(4)(b) of the Madras General Sales Tax Act. The order of the Board of Revenue, dated the 25th August, 1958 was accordingly set aside.

3. The question of law to be determined in this appeal is: whether the order of the Board of Revenue dated the 25th August 1958 was illegal because there was a contravention of the rule of limitation laid down by S. 12(3)(i) of the Madras General Sales Tax Act in as much as the order of the Board of Revenue was made after a period of 4 years from the date on which the order of the Deputy Commercial Tax O