TMI Blog1974 (1) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... b 2,19,382.79 5 per cent 4,387.66 2. Sale of molasses 50,863.50 3 per cent 1,525.92 2,70,246.29 5,913.58 In these assessment orders the Sales Tax Officer had rejected the petitioner's contention that the sale of molasses was 'totally exempt from sales tax and that he was not liable to pay any sales tax on the turnover of molasses. Feeling aggrieved the petitioner filed these writ petitions in this court. At the hearing of the writ petition the sole point urged was that gur-lauta and molasses were one and the same commodity and as such molasses were completely exempt from sales tax under section 3-A of the U.P. Sales Tax Act. A Division Bench of this Court had in Commissioner of Sales Tax v. M/s. Sethu Prasad Lalta Prasad (Special Appeal No. 627 of 1963 decided on 24th January, 1969) held that gur-lauta is only a hardened form of molasses and is not a new kind of commodity. In view of this decision a Bench of this Court allowed the writ petition on 11th March, 1970, by holding that since khandsari molasses and gur-lauta were the same commodity, and since gur-lauta has been subjected to purchase tax under section 3-D, the turnover of molasses would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come final inter-parties it was binding on the department, and the Sales Tax Officer had no jurisdiction to initiate proceedings again in respect of the same turnover of molasses. The Sales Tax Officer repelled this submission and assessed the originally computed turnover of molasses to sales tax of Rs. 2,149.53 at the rate of 3 per cent for the year 1967-68 and of Rs. 1,525.92 for the year 1968-69. By the present petitions the assessment orders under section 21 have been challenged. At the threshold, learned counsel for the petitioner challenged the view of the Sales Tax Officer that the amending Act of 1972 was retrospective. But this submission was based upon a misreading of the amending Act. Clause (e) of section 6 expressly makes the amendment retrospective. The amended explanation was in law in force in the assessment year in question, namely, 1967-68. The legal consequence of retrospective amendment of a law was recently explained by a Division Bench in Ram Niranjan Singh v. Ram Awadh Singh1973 A.W.R. 547. The Division Bench relied on another decision of this court in Deep Chand Jain v. Board of Revenue1966 A.L.J. 113., where it was held: "The courts while deciding cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of other cases. In the present case, the High Court on a construction of the relevant provisions held that molasses and gur-lauta were the same commodity and, as such, molasses were exempt from sales tax. By the amending Act of 1972 the Legislature clarified that these two are different commodities with the result that molasses would not be exempt from sales tax on the ground that gur-lauta was liable to purchase tax. This retrospective legislative change in the law has the effect of nullifying the previous decision of the High Court to the contrary. With the result that in law the petitioner's turnover of the sale of molasses which was liable to sales tax remained untaxed or, in other words, escaped assessment to tax. In this situation, section 21 of the U.P. Sales Tax Act was attracted and the Sales Tax Officer had jurisdiction to bring the turnover of molasses to tax under that provision. For the petitioner it was urged that on the previous occasion the High Court only quashed the assessment order. It did not quash the assessment proceedings. Consequently, assessment proceedings initiated under section 7 revived and could be closed by passing a fresh assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evied under an invalid notification." The Division Bench then referred to the Supreme Court's decision in Chatturam Horilram v. Commissioner of Income-tax[1955] 27 I.T.R. 709 (S.C.)., and observed: "In that case, however, the assessment for the year 1939-40 made on the assessee was quashed by the Income-tax Appellate Tribunal on the ground that the Indian Finance Act, 1939, was not in force during the assessment year in Chhota Nagpur where the assessee was carrying on the business. Subsequently, Bihar Regulation IV of 1942 was promulgated by which the Indian Finance Act, 1939, was brought into force in Chhota Nagpur retrospectively from 30th March, 1939. The Income-tax Officer took the view that the income of the assessee had escaped assessment for the year 1939-40 and issued a notice under section 34 of the Indian Incometax Act, 1922. The Supreme Court held that the income of the assessee was chargeable to tax for the year 1939-40, that it had escaped assessment within the meaning of section 34 and that the notice under section 34 was valid." After giving this statement of facts of Chatturam Horilram's case(1), the Division Bench distinguished it by observing: "Upon the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court held that the result of the quashing of the assessment order by the Commissioner was that the original assessment proceedings (sic) be passed. The case is clearly distinguishable because there the Commissioner had not merely quashed the assessment order but remanded the case back for fresh assessment. The Supreme Court's decision in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax[1963] 14 S.T.C. 976 (S.C.). is not very material. In that case, it was held that a turnover cannot be said to escape assessment if proceedings in respect of the first assessment are pending and no final order of assessment is made therein. On facts, such a situation does not obtain in the present case. Learned counsel for the petitioner in the end urged that by the original order the petitioner bad been taxed on the turnover of rab, khand and molasses for the year 1967-68 and of rab and molasses for the year 1968-69. The High Court had quashed the assessment order as such and not only in respect of molasses. Assuming for the sake of argument that this is the correct effect of the High Court's decision, the petitioner cannot gain any advantage because the order under section 21 merely b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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