2017 (12) TMI 671 - MADRAS HIGH COURT

Jurisdiction - power of AO to pass order after almost 11 years from the end of the year which is beyond the period of limitation - Section 9(2) of the Central Sales Tax Act, 1956 read with Rule 5(6) and 5(10) of Central Sales Tax (Pondicherry) Rules, 1967 - power to over look the provision of the Central Sales Tax Act, 1956 and Central Sales Tax (Pondicherry) Rules, 1967 - imposition of the additional tax @ 10% for non-submission of Form 'C' for CST sales - interpretation of statute.

Held that: - The dealer has to file Form 'C' / Form 'I' / Form 'F' for the concessional rate of tax claimed for the turnover reported and determined as above. Rule 12(7) of the Central Sales Tax Registration and Turnover Rules 1957 mandates filing of the declaration in Form 'C'/'F'/'I' as the case may be, to the prescribed authority within three months after the end of the period to which the declaration forms relates. However inspite of several reminders, the dealer has not filed C, F, I Forms for the year 2005-2006 till date for some of the transactions - As per Section 2(k) of the Central Sales Tax Act, 1956, "year" in relation to a dealer, means the year applicable in relation to him under the general sales tax law of the appropriate State, and where there is no such year applicable, the financial year.

Interpretation of statute - Held that: - It is well settled that Tax Laws have to be given strict construction and interpretation. Reference can be made to few decisions. - There is no equity in tax, and the principle of strict or literal construction applies in interpreting tax statutes. Hence, on the plain language of the statute, if the assessee is entitled to two benefits, he has to be granted both these benefits - If there are two reasonable interpretation of taxing statutes, the one in favour of the assessee has to be accepted.

If initial assessment is permitted to be done, at any time, say in the case on hand, after a decade, after the submission of the returns, for the years 2004-2005 and 2005-2006 and if for any reasons, the whole or part of the turn over is assessed at a rate lower than the rate at which it is assessable then, it would give leverage to the Taxing Authority, to do assessment, as in the case on hand, after 10 years and re-assess upto a further period of another five years, on the whole, 17 years.

When a statute mandates re-assessment to be done, within five years, it cannot be contended that assessment can be done at any time. When the assessee is mandated to submit returns, within a prescribed period and the Assessing Officer has to scrutinise the accounts and to conduct any enquiry, if he considers necessary and pass an assessment order, levy tax, if any and collect the same, after the close of the financial years, it cannot be contended that initial assessment can be made at any time.

Decided in favor of assessee.