TMI Blog2010 (9) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... r was not merged in the assessment order which was passed after remand. In the circumstances the initiation of the proceedings under section 19(1) for re-opening of the alleged escaped assessment of the items regarding which no appeal was filed by the petitioner could have been ordered being barred by limitation. Appeal allowed. - Writ Petition No. 9506 of 2003 - - - Dated:- 1-9-2010 - SHANTANU KEMKAR S.C. AND SHAARM AND PRAKASH SHRIVASTAVA , JJ. ORDER:- The order of the court was made by SHANTANU KEMKAR J. This petition under article 226/227 of the Constitution of India has been filed against the order of reassessment dated December 26, 1998 (annexure P9) passed by the Assistant Commissioner, Commercial Tax, Ujjain, the appellate order dated September 9, 2002 (annexure P11) passed by the Appellate Deputy Commissioner, Commercial Tax, Ujjain and the order dated July 2, 2003 (annexure P13) passed in revision by the Additional Commissioner of Commercial Tax, Indore. Briefly stated the petitioner a registered dealer under the M.P. General Sales Tax Act, 1958 (for short, the Sales Tax Act ) and under the M.P. Vanijyik Kar Adhiniyam, 1994 (for short, the Vanijyi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 19(1) of the Sales Tax Act to the petitioner in form No. 16 proposing to levy sales tax at 12 per cent on cement amounting to Rs. 20,00,000. In addition it was also proposed to levy purchase tax under section 7(1) of the Sales Tax Act on the purchase of coal amounting to Rs. 3,31,63,065 and on high speed diesel (diesel oil) amounting to Rs. 3,05,23,132 which was purchased by the petitioner from the registered dealer of Madhya Pradesh without payment of tax taking the benefit of notification dated May 8, 1984. On receipt of the said notice the petitioner contended before the assessing authority that no purchase tax under section 7(1) of the Sales Tax Act was leviable and that the proceedings of reassessment initiated under section 19(1) of the Sales Tax Act were barred by limitation of five calendar years from the date of original order of assessment which was passed on March 19, 1991. However, the petitioner's contentions were not accepted by the assessing authority and the order of reassessment was passed on December 26, 1998 (annexure P9). In the reassessment order purchase tax under section 7(1) of the Sales Tax Act was levied on purchase of coal and high speed die ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the honourable Chief Justice for constituting an appropriate Bench. On the basis of the orders passed by the honourable Chief Justice this Full Bench has been constituted. Heard Shri G.M. Chaphekar, learned senior counsel for the petitioner and Shri L.N. Soni, learned Additional Advocate-General, for the respondents and perused the record. Shri G.M. Chaphekar, learned senior counsel for the petitioner, argued that the assessing authority, the appellate authority and the revisional authority have committed error in holding that the proceedings of reassessment initiated by the fourth respondent under section 19(1) of the Sales Tax Act were not barred by limitation since they were initiated within the period of five calendar years from the date of order of fresh assessment passed on October 26, 1994 in terms of the order of remand. His contention was that the appeal which was filed against the original order of assessment passed on March 19, 1991 was on a limited point and the case was remanded by the appellate authority vide order dated May 20, 1992 (annexure P6) only to the extent of the ground on which the appeal was filed. According to him as per the doctrine of me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions contained in section 43(1) of the Sales Tax Act which empowers the Commissioner or the appellate authority by providing that in the course of any proceedings under the Act, on being satisfied that dealer has concealed his turnover or the aggregate of purchase price in respect of any goods or has furnished inaccurate particulars for such sales or purchases as the case may be, or has furnished a false return, the Commissioner or the appellate authority, as the case may be after giving dealer a reasonable opportunity of being heard, direct the dealer to pay penalty in addition to the tax payable by him. In the circumstances, according to him the judgment passed by the Division Bench of this court in the case of Himmatlal Co. [1981] 47 STC 415 has not taken a correct view. He supported the view taken by the Division Bench in the case of Commissioner of Sales Tax v. Jammatlal Prahaladrai [1983] 54 STC 392 (MP) which is in conformity with the provisions of section 43(1) of the Sales Tax Act in which it has been held that the appellate authority, while hearing an appeal and finding that the circumstances of the case showed that the dealer was guilty of concealment of turnove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Sales Tax Act will be taken from the date of the order of the first appellate authority or from the date of the order of the assessing authority. From the facts narrated it is clear that in the said case the order of assessment passed by the assessing authority was confirmed in appeal by the appellate authority, however with a slight modification in the penalty under section 17(3) of the Sales Tax Act. It was held by the Division Bench that in the assessment order no penalty under section 43(1) of the Sales Tax Act was imposed on the assessee on the ground of alleged concealment of its turnover. In the assessee's appeal before the Appellate Assistant Commissioner only two questions had arisen for consideration; one was about the estimate of the turnover and another about the penalty for late filing of the return under section 17(3) of the Sales Tax Act. The Division Bench held that the Appellate Assistant Commissioner was not called upon to consider the question of penalty under section 43(1) of the Sales Tax Act and, therefore, the default if any was in the assessment order itself. Having held so the Division Bench held that the order of the assessing authority did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, therefore, revisional proceedings were within limitation. Having regard to the aforesaid we find that the view taken by the Division Bench in the case of Commissioner of Sales Tax, M.P. v. Jammatlal Prahaladrai [1983] 54 STC 392 (MP) to be in consonance with the provisions contained in section 43 of the Sales Tax Act whereas, we find that the Division Bench in the case of Commissioner of Sales Tax, M.P. v. Himmatlal [1981] 47 STC 415 (MP) has overlooked the opening words of section 43 which empowers the appellate authority also to take proceedings for imposition of penalty and in the circumstances if the appellate authority while hearing an appeal if is satisfied that the circumstances of the case show that the dealer was guilty of concealment of turnover it can take proceedings for imposition of penalty and in not doing so while disposing of the appeal if the appellate authority had passed an order the same can be clearly said to be prejudicial to the interest of the Revenue. Therefore, the view taken in the case of Commissioner of Sales Tax, M.P. v. Himmatlal [1981] 47 STC 415 (MP) cannot be approved, as a result we hold that in the case of Commissioner of Sales Tax, M.P. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable turnover. This was the only point raised before the Deputy Commissioner and was rejected by him in revision proceedings. On the contrary the question before the Board of Revenue was whether the Deputy Commercial Tax Officer, Madurai was right in excluding from the net taxable turnover of the respondent the sum of Rs. 7,74,62,706-16. Having noticed the facts as stated the Supreme Court has held that there was no merger and the doctrine of merger cannot be invoked in the circumstances of the case. In the case of Commissioner of Income-tax, Bhopal v. R.S. Banwarilal [1983] 140 ITR 3; [1982] MPLJ 296, the Full Bench of this court which was constituted on being suggested at the time of hearing the matter before the Division Bench that the two Division Bench of this court in Commissioner of Income-tax v. Narpat Singh Malkhan Singh [1981] 128 ITR 77 and Alok Paper Industries, Indore v. Commissioner of Income-tax [1983] 139 ITR 1064 (M.C.C. No. 142 of 1978 decided on January 14, 1981) appear to have taken contrary views, after considering the law laid down by the Supreme Court in the case of State of Madras v. Madurai Mills Co. Ltd. [1967] 19 STC 144 on the doctrine of merge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and. We find that against the original order of assessment passed on March 19, 1991 (annexure P2) deciding various aspects of tax liability against the petitioner the appeal was preferred by the petitioner on a limited ground: The learned Assistant Commissioner has erred in not granting time period as desired by us vide our letter dated March 11, 1991 to procure the forms B2 and appendix declaration from our buyers. Before the appellate authority the petitioner raised the aforesaid sole ground in regard to its grievance that the assessing authority has not granted it time to procure and submit forms B2 and appendix declarations from buyers. The Appellate Deputy Commissioner considering the very sole ground raised and urged by the petitioner remanded the matter to the assessing authority by setting aside the assessment order with a direction to the assessing authority to grant the petitioner opportunity to submit form B and appendix declarations and pass appropriate assessment order. Thereafter, in compliance with the order of remand passed on May 20, 1992 (annexure P6) the assessing authority passed a fresh order dated October 26, 1994 (annexure P7) by maintaining its ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment merges in the order of reassessment. Whereas, as would be clear from the facts of the present case the remand order of assessment was not under section 19(1) but was passed in terms of the order of appellate authority in order to give opportunity to the petitioner to file form B and appendix declaration. In the circumstances, the reliance of the respondents on the judgment of the Supreme Court in the case of Deputy Commissioner of Commercial Taxes v. H.R. Sri Ramulu [1977] 39 STC 177 is misplaced. Applying the doctrine of merger, we find that the petitioner's appeal against the original order of assessment was on limited point about not giving of opportunity to furnish form B, appendix declarations by the assessing authority. While deciding the appeal the appellate authority without touching any other ground though set aside the order of assessment but the remand was confined to give opportunity to the petitioner to file form B and appendix declarations and to pass a fresh appropriate assessment order. In compliance with the order of remand the assessing authority maintained its earlier order except to the extent ordered by the appellate authority in the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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