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PATNA HIGH COURT
S.K.Das and Kanhaiya Singh JJ.
Gajo Ram Basant Ram
Versus
State Of Bihar
Miscellaneous Judicial Case No. 211 of 1951 ; 291 of 1951 ;
Decided On : OCTOBER 21, 1955
BIHAR SALES TAX ACT - SECTION 10(6) PROVISO - SCOPE AND EFFECT - REVIEW OF ASSESSMENT - LIMITATION - APPLICABILITY: The proviso to Sub-section (6) of Sec.10, Bihar Sales Tax Act, 1944, which prescribes a limitation period of 24 months for passing an original order of assessment, does not apply to a fresh order of assessment directed by the appellate or revisional authority under Sec.20 of the Act.
Fact of the Case:
In two separate cases, the issue arose regarding the scope and effect of the proviso to Sub-section (6) of Sec.10, Bihar Sales Tax Act, 1944, which prescribes a limitation period of 24 months for passing an original order of assessment. In the first case, the assessee challenged the Commissioner's order sanctioning a review of assessment for five quarters, arguing that it contravened the limitation period. In the second case, the assessee questioned whether an assessment for a period prior to 1-7-1947 was barred under the same proviso.
Finding of the Court:
The Court held that the proviso to Sub-section (6) of Sec.10 is restricted in its operation to an original order of assessment made under Sec.10 of the Act and does not apply to a fresh order of assessment directed by the appellate or revisional authority under Sec.20. The Court reasoned that such an interpretation avoids absurdity and repugnancy between the different provisions of the Act and ensures that the appellate and revisional authorities can exercise their powers effectively.
Issues: 1. Whether the proviso to Sub-section (6) of Sec.10, Bihar Sales Tax Act, 1944, applies to and controls the power of review given by Sub-section (4) of Sec.20 of the Act? 2. Whether the assessment for the period prior to 1-7-1947 was barred under the proviso to Sub-section (6) of Sec.10, Bihar Sales Tax Act, 1944?
Ratio Decidendi: 1. The Court distinguished the provisions of the Bihar Sales Tax Act from those of the Bihar Agricultural Income-tax Act and the Indian Income-tax Act, which contained specific limitations on the powers of review and revision. In contrast, the Bihar Sales Tax Act did not contain such limitations, and the proviso to Sub-section (6) of Sec.10 was intended to apply only to original orders of assessment. 2. The Court emphasized the importance of avoiding absurdity and repugnancy in interpreting the provisions of the Act. It noted that if the proviso were applied to the powers of review and revision, it would render nugatory the appellate and revisional authorities' powers to pass certain orders, such as setting aside an assessment and directing a fresh assessment.
Final Decision: The Court answered both questions against the assessee, holding that the proviso to Sub-section (6) of Sec.10 does not apply to the power of review given under Sub-section (4) of Sec.20 and that the assessment for the period prior to 1-7-1947 was not barred under the proviso.
Das, J.
1. These two references under the Bihar Sales Tax Act have been heard one after the other. The facts of the two cases are different, though the question which we have to answer in the two cases relates to the true scope and effect of the proviso to Sub-section (6) of Sec.10, Bihar Sales Tax Act, 1941. It will, I think, be convenient if the two cases are dealt with separately, because they have been separately argued and the facts in the two cases are different, though the question to be answered in one case is similar to the question in the other.
2. I take up first Miscellaneous Judicial Case No. 211 of 1951. The question to be answered in this case is the following :
"Whether in the circumstances of the case, the order of the Commissioner, dated 23-9-1948, sanctioning review of assessment on the petitioner for the five quarters commencing from 1-10-1944, and ending on 31-12-1945, is bad In law. inasmuch as it contravenes the provisions of the proviso to Section 10(6), Bihar Sales Tax Act, 1944 ?"
The facts are the following. Messrs. Gajo Ram Basant Ram are bullion merchants of Gaya. On 21-5-1945, they were assessed to a certain amount of tax by the Sales Tax Officer, Gaya, for the last quarter of 1944, that is, the quarter ending on 31-12-1944. By an order dated the 20th or 28th of December, 1945, the Deputy Commissioner, on appeal, pet aside the order of assessment and remanded the case for further enquiry.
On 12-12-1946, the Sales Tax Officer reduced the assessment to a particular amount, the amount being irrelevant for our purpose. On the same day, namely, 12-12-1946, three other assessments were made against the said firm for the quarters ending 31-3-1945, 30-6-1945 and 30-9-1945.
Another assessment, was made on 22-12-1947, in respect of the quarter ending on 31-12-1945, All told the firm was assessed to a tax for five quarters, namely, the last quarter of 1944 and four quarters of 1945. Some time in July, 1948, the Deputy Commissioner of Commercial Taxes, Bihar, sought the sanction of the Commissioner for reviewing the aforesaid orders of assessment. This was done in accordance with Rule 61 of the rules made under the Bihar Sales Tax Act, 1944 . Rule 61 is in these terms:
"61. (1) When the Commissioner or any other officer reviews any order under Sub-section (4) of Sec.20, he shall record his reasons in writing for doing so.
(2) Save with the previous sanction of the Commissioner an order not passed by the Commissioner shall not be reviewed more than three months after the passing of the order which is sought to be reviewed."
As more than three months had passed since the orders of assessment, the Deputy Commissioner of Commercial Taxes asked For the sanction of the Commissioner under Rule 61(2) quoted above. The Commissioner gave his sanction on 23-9-1948. The assessee firm then filed an application for review against the order of the Commissioner sanctioning a review.
This application was rejected. The assessee firm then moved the Board of Revenue for quashing the order of the Commissioner dated 23-9-1948, Sanctioning a review. This application was also rejected by the Board of Revenue. The assessee firm then moved the Board for a reference to the High Court. This application was also rejected. In the meantime on 24-6-1949, the assessment orders were reviewed and the assessee firm was taxed to a higher amount of tax.The assessee firm then moved this Court by an application dated 16-7-1951 and on this application this Court directed the Board of Revenue to state a case with regard to the question which I have already set out at the beginning of this judgment. In short, the question is the true scope and effect of the proviso to Sub-section (6) of Sec.10, Bihar Sales Tax Act, 1944 .
I should make it quite clear at the very outset that the question we have to answer has to be answered with reference to the provisions of the Bihar Sales Tax Act, 1944 and not the Bihar Sales Tax Act, 1947. The Act of 1947 c
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