1976 Supreme(SC) 369

SUPREME COURT OF INDIA
H.R. KHANNA, N.L. UNTWALIA AND JASWANT SINGH, JJ.
The Indian Aluminium Cables Ltd. and another, Appellants
Versus
The Excise and Taxation Officer and another, Respondents.
Civil Appeals Nos. 415 and 962 of 1976,
D/- 23-9-1976.
Advocates appeared
Mr. S. T. Desai, Sr. Advocate (M/s. Talat Ansari & Shri Narain, Advocates, for J. B. Dadachanji & Co., Advocates), for Appellants in both the appeals; Mr. M. C. Bhandare, Sr. Advocate and Mr. R. N. Sachthey, Advocate, for Respondents in both the appeals.

Headnote:

Central Sales Tax Act, 1956 - Section 8 (2-A) - Punjab General Sales Tax Act, 1948 - Section 5 (2) (a) (iv) - Punjab Act - Section 5 (2) (a) (iv) – Constitution of India, 1950 - Article 14 - Claim of compensation – Condo nation of delay - Whether assessment proceedings with regard to assessment year could be proceeded - Whether assessment order could be passed beyond a period of five years after expiry of the period to which the assessment relates - In other words whether Sales Tax Officer had jurisdiction to make assessment for the assessment year which had become time barred - Whether Central Sales Tax was payable in respect of sale of electric cables manufactured and sold by petitioner Company to State Electricity Boards in view of exemption granted generally under Section 8 (2-A) of Central Sales Tax Act read with Section 5 (2) (a) (iv) of Punjab General Sales Tax Act, 1948 - Whether assessment order passed under Section 11 (3) of Act after undue delay of completion of the hearing of evidence produced or required to be produced by the dealer is valid or not - Indian Aluminum Cables Ltd appellant No. 1 in both appeals has got its factory at Faridabad in the State of Haryana - It sells and supplies aluminum cables to several State Electricity Undertakings or Boards situated in the various States - In respect of the assessment year Company raised a dispute that it was not liable to pay Central Sales Tax under the Central Sales Tax Act, 1956 as it claimed to be exempt from inter-State tax on the sales of its products to the various State Under-takings or Boards by reason of the provisions contained in Section 5 (2) (a) (iv) of th Punjab General Sales Tax Act, 1948 - hereinafter referred to as the Act - Tribunal decided the matter in favor of assessed Company but the High Court of Punjab and Haryana answered Sales Tax Reference made at the instance of the Revenue against assessed - Matter was brought to this Court in appeal and by a decision given on April view of the High Court was affirmed and it was held that the sales were not exempt from tax generally within the meaning of Section 8 (2-A) of Central Act read with Section 5 (2) (a) (iv) of Punjab Act - Decision of this Court is reported in Indian Aluminum Cables Ltd - Period of assessment concerning appellant is each quarter of the year - In respect of all quarters of years Returns were filed by the Company in time or before last day of the month following quarter concerned - Assessing Authority did not accept the Returns and issued notices on May under Section 11 (2) of Act in respect of quarters requiring the assessed Company to produce evidence in support of Returns – Held, In case before SC two notices were within three years and third notice was beyond three years and their Lordships held that the third notice being beyond three years Assessing Authority had no jurisdiction to make the assessment - If the phrase proceed to assess bears the meaning which the learned counsel for the State contends for namely that only a step towards assessment has to be taken and the assessment can be made at any time after the period of three years their Lordships would, on the basis of two notices within the period of limitation have come to a different conclusion and that is not what has been done - This was it appears to us clearly a mistaken reading of the judgment of this Court - Majority in court opinion was also wrong in importing the period of limitation provided in sub-sections (4), (5) and (6) of Section 11 of the Act into sub-section (3) and in holding therefore that an assessment under sub-section (3) must also be completed within three years from the last date on which the return should be filed under the Act - Court are again constrained to point out that majority of the Full Bench committed a mistake in thinking that this Court had held in case that the period of three years had to be counted from the last date on which return should be filed - Decision of the Full Bench of the Punjab High Court in the case is clearly erroneous and must be overruled in his dissenting opinion ha by and large taken a correct view in favor of the Revenue - Court may also make a reference to a recent decision of this Court delivered by one of in case - An argument quite similar to the one advanced before us was advanced on behalf of assessed appellant in that case before this Court - It was argued that the period of four years of limitation prescribed under sub-sec. (2-a) of Section 11 of the Bengal Finance Act, 1941 as extended to the Union Territory of Delhi, should be imported into revisional and the appellate power of the authorities conferred on them under Section 20 - This argument was repelled and it was pointed out that the legislature had not provided any period within which an order was to be made by an Appellate or Revisional authority no such period should be imported in the exercise of the power on the basis of Section 11 (2-a) relied upon the penultimate paragraph of this decision in support of his contention that in any view of the matter notice under Section 11 (2) had to be issued and the assessment completed within a reasonable time – Court do not accept this contention to be sound - Argument as presented cannot be accepted to be correct - Appeals dismissed