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1987 Supreme(SC) 124
E.S. VENKATARAMIAH AND M.M. DUTT, JJ.
Civil Appeal No. 625 of 1986,
D/-3-2-1987.
M/s. Kundan Lal Srikishan, Mathura (U.P.), Appellant
Versus
Commissioner of Sales Tax, U.P. and another, Respondents.
Headnote:
Uttar Pradesh Sales Tax Act, 1948 - Section 21, 22, 21(3), 21(2) - Mysore Sales Tax Act, 1957- Section 12A - Constitution of India, 1950 - Article 226 - Business - Books of Accounts - Sales Tax Officer - Liable To Pay Tax - Order Of Assessment - Appellant firm is a dealer carrying on business - An order of assessment was passed in respect of turnover of appellant - Thereafter Sales Tax Officer issued a notice to appellant proposing to make a reassessment in respect of said assessment year on ground that mandi cess and arhat which should have been included in turnover had escaped assessment and directed appellant to appear before him along with its account books - After looking into books of accounts and hearing advocate who appeared on behalf of appellant, Sales Tax Officer passed order on same date holding that appellant was not liable to pay any more tax under Act - Question which arises for consideration in this appeal relates to period of limitation within which an application for rectification of an order of reassessment passed under S. 21 of Uttar Pradesh Sales Tax Act, 1948 - Whether for purposes of limitation date of order of assessment for the year in instant case should be date of the original assessment order or whether it should be date of order passed under S. 21 of Act - Whether period of four years is to be calculated when initial assessment orders were made, when orders under section 12A of Act were made – Held, Court do not find any merit in submission made on behalf of Department that order passed should be understood as an order discharging notice issued under S. 21 of Act and not an order of reassessment as such - This is obvious from language of S. 21 itself - Section 21 authorises assessing authority to make an order of assessment or reassessment - It says that if assessing authority has reason to believe that whole or any part of turnover of a dealer, for any, assessment year or part thereof, has escaped assessment to tax or has been under assessed or has been assessed to tax at a rate lower than that at which it is assessable under Act, or any deductions or exemptions have been wrongly allowed in respect thereof, assessing authority may, after issuing notice to dealer and making such inquiry as it may consider necessary, assess or re-assess dealer or tax according to law - Only order which assessing authority is required to make under S. 21 after a notice is issued to dealer under that section is an order of assessment or reassessment - It is not required to pass first an order whether it should proceed with reassessment proceedings or not - Such a preliminary order is not contemplated under S. 21 of Act - Hence order has to be treated as an order of assessment even though it is not in form in which an order of assessment has to be passed and not as an order merely on the question whether the reassessment proceedings under S. 21 of the Act should be proceeded with or not. In other words, it should be held that assessing authority had adopted earlier order as order of assessment passed at conclusion of proceedings under S. 21 of Act - Period of limitation for application for rectification should, therefore. be calculated from date of order under S. 21 of Act – Court cannot, therefore, subscribe to view of High Court expressed in its observation that since no fresh order of assessment had been passed after examining accounts of assessee original assessment order should be considered to remain intact as nothing is added or altered in pursuance of order under S. 21 of the Act - Appeal allowed.
Judgement
VENKATARAMIAH, J.:- The short question which arises for consideration in this appeal relates to the period of limitation within which an application for rectification of an order of reassessment passed under S. 21 of the Uttar Pradesh Sales Tax Act, 1948 (Uttar Pradesh Act No. XV of 1948) (hereinafter referred to as the Act) can be preferred under S. 22 of the Act.
2. The brief facts which are necessary for deciding this case are these. The appellant firm is a dealer carrying on business in Mathura in the State of Uttar Pradesh. An order of assessment was passed in respect of the turnover of the appellant for the year 1975-76 by the Sales Tax Officer, Sector 2, Mathura under the Act on 7-2-1979. Thereafter on January 8, 1980 the Sales Tax Officer issued a notice to the appellant under S. 21 of the Act proposing to make a reassessment in respect of the said assessment year, i.e., 1975-76 on the ground that the mandi cess and arhat (commission) which should have been included in the turnover had escaped assessment and directed the appellant to appear before him along with its account books on 18-1-1980. After looking into the books of accounts and hearing the advocate who appeared on behalf of the appellant, the Sales Tax Officer passed the order under S. 21 of the Act on the same date holding that the appellant was not liable to pay any more tax under the Act. The order passed by the Sales Tax Officer reads thus
"Office of the Sales Tax Officer
Sector 2, Mathura
S/Shri Kundan Lal Srikishan
Lala Ganj, Mathura
Year : 75-76 Section 21
ORDER UNDER SECTION 21
The original tax assessment order in respect of you was passed on 7-2-79. The audit, however, had objected that the businessmans arhat (commission) and mandi cess amount was left out from taxation. On this basis the businessman was called by issuing him notice under the said section. On the appointed day, his advocate appeared and submitted the accounts books. On examination it was found that the businessman had a already included the arhat and mandi cess amount in the taxable income and he had already been assessed. Therefore, no tax is to be levied now and the businessman is declared as free from paying any more tax under section 21.
Sd/-
B. Lal
Sales Tax Officer
Sector 2, Mathura
Dated : 18.1.80"
3. In the year 1982, the appellant realised that it was not liable to pay sales tax on purchases made on behalf of ex U.P. principals as such purchases had occasioned inter-state movement of the commodities in question and were as such exempt from the purview of the Act. The appellant, therefore, filed four applications under S. 22 of the Act for rectification of the mistakes in the assessment orders for assessment years 1975-76, 1976-77, 1977-78 and 1978-79 on the ground that the turnover in respect of purchases made on behalf of ex. U.P. principals had been wrongly assessed to sales tax in the aforementioned four years. The applications for rectification made in respect of assessment years 1976-77, 1977-78 and 1978-79 were all within three years of the assessment orders but the application made in respect of the assessment order in respect of the assessment year 1975-76 was beyond three years from the date of the original order of assessment which had been made on 7-2-1979 but within three years from the date of the order passed by the Sales Tax Officer under S. 21 of the Act. All the four applications made by the appellant were rejected by the Sales Tax Officer on merits on 3-1-1983. Thereupon the appellant preferred appeals against the orders rejecting the applications before the Appellate Authority. The said Appellate Authority by its order dated 21-1-1983 allowed the appeals relating to the assessment orders for the assessment years 1976-77, 1977-78, and 1978-79 on merits but dismissed the appellants appeal in respect of the assessment order for the assessment year 1975-
