TMI Blog1958 (11) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ke for the year 1954-55. On 25th September, 1954, the officer made a second inspection of the premises and recovered some more private account books relating to the transactions for the years 1951-52 and 1952-53 and 195354. On a verification of the transactions found in the account books recovered from the premises of the assessee, it was found that there were discrepancies between the regular account books and the books recovered as a result of the surprise inspections. On 23rd March, 1956, the Commercial Tax Officer, to whose jurisdiction the files were transferred, gave notice to the assessee of his intention to determine the escaped assessment. The managing partner of the firm intimated the Commercial Tax Officer that they were not in a position to give any explanation and requested him "to fix a proper tax after a just consideration and without estimating the turnover at a high figure". Eventually on 29th March, 1955, the Commercial Tax Officer estimated the escaped turnover at Rs. 1,50,000 for the year 1951-52 and at Rs. 3,40,000 for the year 1952-53 and revised the assessment by adding the said amounts to the turnover originally determined. The assessee then filed appeals to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of proving the correctness and completness of any return submitted by him." Section 19 confers power on the State Government to make rules to carry out the purposes of the Act, and, in particular, to provide for all matters expressly required or allowed by the Act to be prescribed. Under clause (f) of sub-section (2) the State Government is empowered to make rules providing for the assessment to tax of any turnover which had escaped assessment, and the period within which such assessment may be made not exceeding three years. Under subsection (4) the power to make rules is subject to the condition of the rules being made after previous publication for a period of not less than four weeks. Sub-section (5) provides that all rules made under the section shall be published in the Gazette, and upon such publication shall have effect as if enacted in the Act. In exercise of the powers so conferred, the Madras Government have made two sets of Rules, (1) the Madras General Sales Tax (Turnover and Assessment) Rules, and (2) the Madras General Sales Tax Rules. The material rule 17(i) of the latter set of Rules ran thus: "If for any reason the whole or any part of the turnover of business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) specifically vests in the State Government the power to make rules with regard to the assessment to tax on any turnover which has escaped assessment, the period within which such assessment may be made not exceeding three years. Under section 3(4) the rules were required to be placed before the Legislative Assembly and they were to come into force after they were approved by a resolution of the Assembly. In accordance with this provision, the rules were first published on 18th July, 1939, for eliciting public opinion. On 3rd August, 1939, they were laid before the Assembly and after considerable debate, were approved by the Assembly. The Rules were again published on 12th September, 1939, and actually came into force on 1st October, 1939. It is argued that the power to tax is essentially a legislative function and cannot be delegated to the rule-making authority. The question was fully debated in the Delhi Laws Act case(1951) S.C.J. 527. After an exhaustive review of the authorities bearing on the limits of valid delegation of legislative power, Fazl Ali, J., summed up the conclusions as follows: "(1) The Legislature must normally discharge its primary legislative function itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e him by reason of an inadvertence, omission or deliberate concealment on the part of the assessee, or because of want of care on the part of the officer the turnover though in the books, has not been taken notice of. This would be the natural and normal meaning of the expression 'turnover which has escaped" in rule 17(1)." The escaped turnover is part of the total turnover of a dealer, all of which is liable to tax under the charging section. The validity of rule 17 cannot be challenged on the ground of unconstitutional delegation of legislative power. It is then contended that the rule is inconsistent with the provisions of section 19(2)(f). The argument of the learned counsel for the petitioner that escaped turnover is not part of the total turnover involves a fallacy. Even escaped turnover will have to be determined according to the Madras General Sales Tax (Turnover and Assessment) Rules, and after addition of the escaped turnover to the disclosed turnover, the total turnover is refixed and assessed to tax. Thus there is no inconsistency between the section and the rule. It is next contended that rule 17 vests an arbitrary power on the assessing authority inasmuch as it does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority. The petitioner has not been able to show that there is a contravention of any statutory provision. Lastly it is submitted that the assessments for the years 1951-52 and 1952-53 were completed by the Deputy Commercial Tax Officer on 11th February, 1953, and 30th March, 1954, respectively and that the said assessments were revised by the Commercial Tax Officer on 29th March, 1955, and with reference to these dates it is contended that the period of limitation prescribed by rule 17 (1), as it stood on the relevant date, had expired on 31st March, 1953, in respect of the assessment for the year 1951-52 and the period of limitation for the year 1952-53 expired on 31st March, 1954, and that therefore the two assessments were made after the expiry of the time prescribed by the rule. It may be stated that this contention has not been raised in the original petitions filed in the year 1955. This is raised by means of a supplemental affidavit filed on 20th January, 1957. Assuming that it is open to the petitioner to raise this contention at this belated stage, it must be pointed out that rule 17 was amended on 11th June, 1953, by G.O. No. 1635, Revenue, prescribing a period of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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