TMI Blog1963 (10) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... PTA and RAJAGOPALA AYYANGAR, JJ.) was delivered by DAS GUPTA, J., SARKAR, J., delivered a separate judgment. SARKAR, J. -These appeals raise the question whether the Orissa Sales Tax Act, 1947, sets a time-limit for making an order under section 23(3) of the Act revising an order of assessment. The question depends on the interpretation of some of the provisions of the Act to which reference will be made in due course. The facts are these. The respondents had been assessed to sales tax under the Act in respect of various quarters by a Sales Tax Officer. They appealed to the Assistant Collector of Sales Tax against the assessments contending that the Sales Tax Officer had wrongly rejected their claim to certain deductions from their taxable turnover. The appeals were allowed. Subsequently the Orissa High Court delivered a judgment in another case from which it appeared that the Assistant Collector was wrong in allowing the deductions. Thereupon the Collector of Sales Tax acting under section 23(3) of the Act which provided that " the Collector may, upon application or of his own motion, revise any order passed under this Act...............by a person appointed under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry of such period." The sub-section would no doubt apply if the orders made in this case were orders "assessing the amount of tax due" contemplated by it. The question therefore is what do the words "order assessing the amount of tax due" in the proviso mean? Of course, the whole of section 12 has to be considered for deciding the meaning of these words and I will presently do so. In the meantime however I may observe that though section 12 talks of assessment by a Collector it includes assessment by other officers appointed under the Act to assist the Collector for under section 17 the Collector can delegate his powers to such officers, who are subordinate to him. I now turn to section 12. It has seven sub-sections each of which except sub-section (6) deals with assessment in a specified case. Each of them expressly provides for an order of assessment being made. The first sub-section deals with a case where the assessing officer is satisfied without hearing the dealer or taking evidence that the return is correct. The second sub-section covers a case where he is not so satisfied and provides for the assessment being made after hearing evidence. The third sub-section concerns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viso with which this case is concerned no doubt contains no express reference to assessment under the section but it would be strange if that proviso was intended to apply to orders of assessment made in appeals or by way of revision, assuming that such orders could properly be called orders of assessment. If it was intended to provide a period of limitation for an order in appeal or by way of revision then the provision containing it would not have been put in section 12 nor would the order have been described as an "order assessing the amount of tax due." It may be that the time-limit specified in the second proviso does not apply to an order of assessment under sub-section (7). That would not however affect the question. A recent amendment to section 12 has expressly provided that the time-limit in the second proviso does not apply to an order under sub-section (7). Lastly, it seems to me that if the second proviso in section 12(6) fixes a period of thirty-six months from the end of the period within which an order can be made under section 23(3) revising an order of assessment in respect of that period, the consequence would be so disastrous for the taxpayer that it could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision must be of doubtful validity. I am not prepared to accept that interpretation as it is neither the only interpretation nor an interpretation which is clearly supported by the language used. It is true that if an order in appeal or revision can be made at any time, the case may be kept hanging over the head of the dealer for a very long time at the option of the authority concerned. This consideration however does not lead me to accept the view advanced by the respondents. The calamity and the anomaly resulting from it, to which I have earlier referred, seems to me to be much more serious than the inconvenience that it avoids. Further the inconvenience imagined seems to me to be more fanciful than real. It is not likely that the authorities would deliberately keep an appeal or a revision application pending for no reason at all as that would not given them any advantage whatever. I would for these reasons allow the appeals. DAS GUPTA, J. -These twelve appeals by the State of Orissa are in respect of twelve separate orders of assessment of sales tax that were made by the Collector of Sales Tax, Orissa, in exercise of his powers of revision under section 23 of the Oriss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing such evidence as the dealer may produce in support of the returns after the issue of a notice and such other evidence as the Collector may require on specified points [sub-section (2)]. If the registered dealer fails to comply with the terms of the notice issued the Collector shall assess the amount of tax to the best of his judgment [sub-section (3)]. Sub-section (4) deals with the case where the registered dealer does not furnish returns by the prescribed date. In such a case also the Collector shall also assess the tax to the best of his judgment after giving the registered dealer a reasonable opportunity of being heard. Sub-section (5) provides for assessment by the Collector of taxes due from a dealer about whom he is satisfied that he has been liable to pay tax under the Act in respect of any period and has nevertheless failed to apply for registration. Then comes sub-section (6) which runs thus: "(6) Any assessment made under this section shall be without prejudice to any prosecution instituted for an offence under this Act: Provided that when the Collector has imposed a penalty in addition to the amount assessed under this section, no further proceedings either reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere in substance made under section 12(7) of the Act. The High Court was of opinion that section 12(7) includes also the order of assessment made by the revising authority under section 23(3) and in that view held that the orders of assessment passed beyond thirty-six months from the end of the period in question were barred by limitation. The first contention urged on behalf of the State of Orissa is that the High Court is wrong in holding that an order of assessment of revising authority is necessarily one made under section 12(7). The power of revision granted by section 23(3) is clearly a distinct and separate power from the power to assess after calling for a return in case of under-assessment or escaped assessment. The mere fact that in a particular case the revising authority has by a fresh order of assessment made the dealer liable for tax in respect of which he can be said to have been under-assessed or to have escaped assessment does not make the two powers one and the same. We therefore find it difficult to agree with the High Court that section 12(7) includes also the re- assessment made by the revising authority under section 23(3). The question however still remai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he intention of the Legislature was to make it applicable to only those orders of assessment to which the main provision which uses the words "any assessment made under this section" related. As the main provision expressly relates only to the orders of assessment under section 12 it was argued that the period of limitation in the second proviso was intended to govern only orders of assessment made under section 12. We have already set out the reasons for which we think that this provision of limitation, though it appears as a proviso in section 12(6), is in reality an independent legislative provision, as its subject-matter has nothing whatever to do with the main provision in section 12(6), or the proviso to sub-section (6) which precedes it. If therefore it is in truth an independent provision, unrelated to section 12(6) we do not see any logic or reason for importing into it the construction that its operation must be confined to an assessment under section 12, for read by itself on any reasonable construction it would appear to be a limitation imposed on any order of assessment made under the Act, i. e., under any provision of the Act. Assuming, however, for argument's sake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be attracted to an assessment or not. That should be sufficient to reject the appellant's argument that section 23(2) was itself the source of power to effect an assessment. We need hardly add that what applies to an appeal under section 23(2) applies to a revision under section 23(3), as the powers of the revising authority and the orders it might pass are not conceived of as differing in any manner from those of the appellate authority. We have, therefore, no hesitation in holding that even when an appellate or revisional authority is effecting a fresh assessment by enhancing it, it is exercising the power which is conferred by section 12, and, so to speak, doing the duty which an assessing authority would or ought to have performed. Any order of assessment made by the appellate authority or as in the present appeals by the revising authority must therefore be held to be orders passed under section 12 as well as under section 23. Consequently, the period of limitation prescribed in the second proviso in section 12(6) will in terms become applicable. But, says Mr. Sastri, look at the anomalous position that will arise if this period of limitation of 36 months be held to app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of assessment by the appellate authority or the revising authority is a further reason for thinking that the Legislature intended that the period of limitation prescribed in section 12(6) should apply to all orders of assessment irrespective of whether they were original orders, or appellate orders or revisional orders. The difficulty pointed out by Mr. Sastri may really arise in certain cases. It is reasonable to expect that in the large majority of cases such a difficulty will not arise if the original order of assessment is made expeditiously so that it will be possible for the appellate authority or the revising authority to act within this period of 36 months. If in certain cases the difficulty does arise that is not, in our opinion, a sufficient reason, in view of the several considerations mentioned above, to think that the Legislature intended, without saying so, that the period of limitation prescribed applied only to original orders of assessment. Mr. Sastri drew our attention to a decision of the Patna High Court in Gajo Ram v. State of Bihar, where construing a somewhat similar proviso in section 10(6) of the Bihar Sales Tax Act, 1944, that Court held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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