TMI Blog1969 (11) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... ble under section 3(2) of the said Act to an additional rate of 2 per cent. on Rs. 11,052. In fact, the said revision was undertaken on the basis of discovery of material from a pocket-book seized by the Special Assistant Commercial Tax Officer, Madurai 1, during his surprise inspection on 10th November, 1960. The estimate at Rs. 11,052 was based on the incriminating material seen from the pocket-book. An appeal to the Appellate Assistant Commissioner was partly successful, since the appellate authority deleted the assessment of Rs. 11,052 to additional tax at 2 per cent. under section 3(2) of the Act. It however confirmed the assessment order relating to the sum of Rs. 98,872 at 2 per cent. under section 3(1) of the Act. This order was dated 23rd March, 1963. The Board of Revenue (C.T.), in the purported exercise of their special powers under section 34 took up the file and issued notice on 29th January, 1964, proposing to set aside the orders of the assessing authority and the appellate authority and refix the turnover at Rs. 2,43, 220. The appellant contended before the Board that the action of the Board under section 34 was illegal as any such action by then to be made by the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e five years period of limitation prescribed in section 16 of the Act from the year of escape, for making exigible escaped turnover. In the instant case the year of escapement of assessment is 1958-59 (that is ending with 31st March, 1959). The jurisdiction under section 16 was exercisable by the assessing authority within five years from 31st March, 1959. A power to reopen, even if it could be attributed to an order of the Board passed under section 34 of the Act, the prescribed time-limit operates and the Board having passed an order only on 28th December, 1965, the order is beyond time and in consequence the demand raised by the assessing authority is unenforceable. Learned Assistant Government pleader on the other hand strenuously contended that the power exercisable by the Board under section 34 is an independent one having no relation to that exercisable by an assessing authority under section 16 of the Act. It is stated that the two powers are different in scope and application. In any event, it is said that the period of limitation prescribed under section 16 of the Act applies only to orders passed under that section and the impugned order not having been passed under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be called upon to explain the incriminating material found by them. Thereafter the Board can consider such materials and adjudicate upon them. But it should be noted that while deciding on such additional material, the Board's function is to see whether in the light of such material, the order sought to be revised is illegal, irregular or improper and whether such illegality is intrinsic in the order sought to be revised. Even then the Board can make an order prospective in effect and scope and direct the assessing authority to hold a fresh enquiry in the light of its observations and finding. It cannot relegate itself to the arm-chair of the assessing authority and entrench upon the powers of the prescribed statutory authorities. The revisional powers exercised by the Board under section 34 are subject to the other provisions of the Act. So a best judgment assessment or an original assessment on the ground of escapement by the Board under section 34 is bad in law and unsustainable. Hence it is that the Legislature has provided that it could make "such orders as it thinks fit". It is not a mere subjective satisfaction that is envisaged in section 34. It should stand the test o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to enter generally upon enquiries which may properly be made by the assessing authorities and to reopen assessments." In Swastik Oil Mills Ltd. v. H.B. Munshi[1968] 21 S.T.C. 383 at p. 396. , the above decision has been reiterated. We are, therefore, of the view that the impugned order of the Board which is extrovertly an original assessment, is fallacious as the Board exceeded its powers to pass such an assessment order. The second contention is that the Board's order was passed beyond the prescribed period of limitation. The scheme of the relevant provisions of the Act may, in so far as it is necessary, be noticed. Section 2(c) defines an "assessing authority" as meaning any person authorised by the Government or by any authority empowered by them, to make any assessment under this Act. Section 2(f) defines "Commercial Tax Officer" as any person appointed to be a Commercial Tax Officer under section 28. Section 2(i) explains a "Deputy Commissioner" meaning any person appointed as such under section 28. Section 3 is the charging section. Section 12 prescribes the procedure to be followed by the assessing authority, whilst seeking to assess a dealer either on the return submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for a proper understanding as to its scope. "34. (1) The Board of Revenue may, of its own motion, call for and examine an order passed or proceeding recorded by the appropriate authority under section 4-A, section 12, section 14, section 15, or sub-section (1) or (2) of section 16 or an order passed by the Appellate Assistant Commissioner under sub-section (3) of section 31 or by the Deputy Commissioner under sub-section (1) of section 32 and may make such inquiry or cause such inquiry to be made and subject to the provisions of this Act may pass such order thereon as it thinks fit." This section deals with the special powers of the Board of Revenue. Amongst the various sections mentioned in the body of sub-section (1) of section 34, sub-section (1) or (2) of section 16 is to be noted in particular, In the instant case. It is pertinent to observe that the special power of the Board of Revenue under this section is subject to the provisions of the Act. The Board of Revenue can, after making such inquiry or causing such inquiry to be made and always subject to the provisions of the Act, may pass such order as it thinks fit. Section 34-A deals with the power of the Board of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order. Thus it is argued that the order in issue having been passed within four years from 18th July, 1962, it is valid for all purposes. This overlooks the fact that the order revised is one relating to escaped turnover. Section 16(1) is a special legislative provision having an impact on assessments relating to escaped turnover. The impact is conveyed through the unsnapped chain of assessment, which is one contiguous process embracing within it the special power of the Board under section 34 of the Act, which power is again a creature of the very same statute. We have noticed that section 34 is made subject to the provisions of the Act. Section 16 is one such provision. If section 16 stood alone like any other section such as sections 12, 14, 15, 31 or 32 the position would be different. But section 16(1) adumbrates a substantial rule of limitation. If the assessing authority could not bring into the net of taxation escaped turnover, beyond a period of five years from the date of the year of escape, can the Board, which is expected to revise the order of the assessing authority, make an order so as to defeat the subjective legislative provision as to limitation under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an assessment. But any order of assessment made by the revising authority under section 23(3) is an order passed under section 12 as well as section 23(3) and therefore the period of limitation prescribed in the second proviso to section 12(6) applies to such an assessment also." The revenue there pointed out the anomaly if the interpretation put upon the relevant provision of the Orissa Sales Tax Act, 1947, were to be accepted. The learned Judges, repelling the argument, said: "The obvious answer to this argument is that if that was the intention of the Legislature nothing could have been easier than to say so." As contended by the learned Assistant Government Pleader before us counsel for the revenue then pointed out several practical difficulties in the matter of the reopening of assessment which has escaped the clutches of taxation; but again the Supreme Court would say that even taking into consideration such difficulties it cannot be said that the Legislature intended, without saying so, that the period of limitation prescribed applied only to original orders of assessment. Respectfully adopting the reasoning of the learned Judges in the above case, we have no hesita ..... X X X X Extracts X X X X X X X X Extracts X X X X
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