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Judges : KOSHI,M.S.MENON,VARADARAJA IYENGAR
M.Appukutty - Appellant
Versus
State - Respondent
Case No : T. R. C. No. 11 of 1957
Decided On : 09/25/1958
Advocates Appeared :
R. Krishnaswami; For Petitioner Government Pleader; For State
Sales Tax - Assessment Jurisdiction - Madras General Sales Tax Act, 1939 - S.12(2) - R.14(2) - R.17 - The court held that the Deputy Commissioner's order was without jurisdiction as there were no proceedings under S.12, and the order of the Appellate Tribunal affirming the same was incorrect and had to be reversed.
Fact of the Case:
The petitioner was assessed to sales tax for 1952-53. The Deputy Commissioner revised the assessment order, which was challenged before the Sales Tax Appellate Tribunal. The correctness of the tribunal's order was challenged in the petition under S.12-B of the Madras General Sales Tax Act, 1939.
Finding of the Court:
The court found that the Deputy Commissioner's order was without jurisdiction as there were no proceedings under S.12, and the order of the Appellate Tribunal affirming the same was incorrect and had to be reversed.
Issues: The main issue was the jurisdiction of the Deputy Commissioner to revise the assessment order under S.12(2) and R.14(2) of the Madras General Sales Tax Act, 1939.
Ratio Decidendi: The court held that the Deputy Commissioner's revisional jurisdiction under S.12(2) could only be exercised if sought or exercised, and as there were no proceedings under S.12, the Deputy Commissioner's order was without jurisdiction.
Final Decision: The court reversed the order of the Appellate Tribunal and held that the Deputy Commissioner's order was without jurisdiction.
1. The Deputy Commercial Tax Officer, Kozhikode II, assessed the petitioner to sales tax on a net turnover of Rs. 12,56,178-14-0 for 1952-53 by his order dated 27-3-1954 (Ext. A). The assessee appealed to :he Commercial Tax Officer, Malabar (South). The appeal was dismissed by in order dated 24-5-1954. (Ex. B.)
2. By an order dated 31-3-1956 the Deputy Commissioner of Commercial Taxes, Coimbatore Division, ordered as follows:
"In exercise of the powers vested in me under the M.G.S.T Act and rules, I revise the order of the C.T. O. Malabar (South) dated 24-5-1954 and redetermine the met turnover at Rs. 14,99,561-4-0 as detailed below and order the levy of tax thereon for 1952-53.
Table:#1
3. The assessee challenged the correctness of this order before the Kerala Sales Tax Appellate Tribunal, Trivandrum, but without success. The order of the Sales Tax Appellate Tribunal is dated 23-3-1957 (Ext. D). It is the correctness of the said order that is challenged before us by this petition under S.12-B of the Madras General Sales Tax Act, 1939.
4. S.12 (2) of the Madras General Sales Tax Act, 1939, provides that the Deputy Commissioner may, suo mote, or on application in the cases specified :
"call for and examine the record of any order passed or proceeding recorded under the provisions of this Act by any officer subordinate to him, for the purpose of satisfying himself as to the legality or propriety of such order, or as to the regularity of such proceeding, and may pass such order with respect thereto as he thinks fit".
5. R.14 (2) of the Madras General Sales Tax Rules, 1939, provided for a revisional jurisdiction in similar terms and in dealing with that provision Krishnaswami Nayudu, J., said :
"The Commercial Tax Officer has only revisional jurisdiction as it is commonly understood of examining the record of any order and deciding as to its legality or propriety. It is not open to him to go beyond the order or the record and act upon further information or evidence placed before him so as to disturb the order originally passed and hold that it was not proper". (1952) III S. T. C. 19, Headnote, Para.2).
There was an appeal from the said decision and in dealing with certain questions of law referred to a Full Bench, Rajamannar, C. J., said in State of Madras v. Louis Dreyfus & Co. Ltd.. (1955) VI S.T.C. 318 (330): A.I.R. 1956 Mad. 659:
"Now what exactly is the meaning to be attached to the expression'the record of any order passed'. The records which the revising authority calls for are the records of the assessment. They would include the assessment order as well as the other files of the assessing authority which would furnish the basis upon which the assessment order is passed. If in the assessment order the turnover which a dealer has returned or which has been gathered from his books is treated as not taxable or subject to any exemption and the revising authority is of the opinion that the order in this behalf is erroneous, the Commercial Tax Officer would have satisfied himself that such an order was not legal or proper".
6. It is common ground that fresh evidence forms the foundation of Ext. C and it was not contended-quite correctly - that if (1955) VI S.T.C. 318 lays down the proper ambit of the revisional jurisdiction - as we respectfully think it does S.12 (2) of the Act will justify the action taken by the Deputy Commissioner of Commercial Taxes.
7. What we are concerned with in this case is not an "escaped assessment" but "an escaped turnover" and the further contention of the Department in support of Ext. C was based on R.17 of the Madras General Sales Tax R.1939. Sub-rule (1) of that Rule provides:
"If for any reason the whole or any part of the turnover of business of a dealer or licensee has escaped assessment to the tax in any year or if the licence fee has escaped levy in any year, the assessing authority or licensing authority, as the case may be, subject to the provisions in sub-rule (1-A) may, at any time withi
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