TMI Blog1957 (10) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... Special Deputy Commercial Tax Officer, Guntur, intimating the plaintiff that the return submitted appeared to be incorrect and incomplete and that it should produce its accounts and prove the correctness and completeness of the return at the time and place specified therein. One of the partners of the firm duly appeared before the Deputy Commercial Tax Officer, produced the accounts and offered his explanation. The Deputy Commercial Tax Officer passed the assessment order now in question on 28th March, 1947. The order was confirmed by the Commercial Tax Officer, Guntur, on 15th July, 1947, and also by the Board of Revenue on 24th February, 1948. (Vide Exs. A-12 and A-16 respectively). The present suit was thereupon instituted on 6th November, 1948, impeaching the validity of the order of assessment. In the present second appeal, three points are made by Mr. Ramanarasu, learned counsel on behalf of the appellant-firm. The first contention urged by him is that the Special Deputy Commercial Tax Officer had no jurisdiction to issue the notice, Ex. B-3, under rule 9 above-mentioned and therefore the order of assessment is wholly illegal. His contention may be elaborated thus: Rule 9 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer is other than a Deputy Commercial Tax Officer. I therefore think that he could issue Ex. B-3. Even apart from that, I am unable to follow the contention that the invalidity of a notice preceding an assessment order such as Ex. B-3 would render the assessment void. It may be when a notice is issued by a person not authorised to issue it, the person who receives the notice may ignore it without risk. But if he complies with the terms of that notice and has had an opportunity of making the explanations to the proper officer which the notice directed him to offer, then the resulting order passed after hearing him cannot be challenged. I therefore hold in agreement with the lower Courts that there is no substance in this submission made by the learned counsel on behalf of the appellant. The next point urged by Mr. Ramanarasu on behalf of the appellant is that the Commercial Tax Officer enhanced the taxable turnover by a sum of about Rs. 8,409-8-0 and this he had no jurisdiction to do under rule 14(1) of the Madras General Sales Tax Rules, 1939, without previous notice to the assessee. It is true that where the result of a proposed variation of an order under appeal would be an enhan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view. The Deputy Commercial Tax Officer further stated that the plaintiff violated the terms of the licence granted to him by his borrowing from the banks at a lower rate of interest and debiting his principals with a higher rate and was thus making a profit over and above the agreed rate of commission. This was only based upon suspicion and the view of the Deputy Commercial Tax Officer was not justified by any evidence. The lower appellate court was right in thinking that there is no substance in this objection raised by the department. The third ground related to the sale of gin cotton of the value of Rs. 5,705-8-0. The sale purported to have been effected on behalf of one Sriramulu Company. The explanation offered on behalf of the plaintiff before the Commercial Tax Officer was that it was a commission transaction carried out by the plaintiff on behalf of a firm consisting of Sriramulu, one Subba Rao and the plaintiff. This transaction was not included in the return of its independent business but in the plaintiff's turnover as a commission agent. It was objected by the department that the plaintiff having a proprietary interest in the transaction could not treat it as part of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uling of the Full Bench which dealt with a licence containing the same terms applies and that whatever the position may be under the latter form of licence and under the Act as subsequently amended these collections cannot be treated as unauthorised or improper in so far as they conform to mercantile usage. Now I shall turn to the language of section 8 under which the licence was granted. That section empowers the Government to grant a licence to any person who for an agreed commission or brokerage buys or sells on behalf of known principals specified in his accounts in respect of each transaction and may exempt from the tax under section 3 such of his transactions as are carried out in accordance with the terms and conditions of the licence. Now under this section that exemption is to be limited to transactions which are carried out in accordance with the terms and conditions of the licence. The terms and conditions of his licence therefore must be in relation to "the carrying out" of the transactions. The third of the conditions in the licence granted to the plaintiff states that the licence shall not apply to the transactions of the licensee, otherwise than for an agreed commi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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