TMI Blog1971 (8) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... aring for the petitioners, raised two contentions before us. They are: (1) Rule 14-A(8) of the Central Sales Tax (Andhra Pradesh) Rules (hereinafter called the Rules) fixing the time-limit for making best judgment assessments in respect of escaped turnover, when read with sub-section (2) of section 9 and sub-sections (3) and (4) of section 13 of the Act goes beyond or is in excess of, the rule-making power of the State Government. Hence rule 14-A(8) of the Rules is ultra vires and is void. (2) Assuming that rule 14-A(8) of the Rules was validly made, the Act incorporates and assimilates into it the provisions of the General Sales Tax Act, which were in force in the State of Andhra Pradesh in the year 1956, when the Central Sales Tax Act, 1956, came into force. At the time when the Central Sales Tax Act, 1956, came into force, the Madras General Sales Tax Act, and the Rules made thereunder, were adopted by our State for application to Andhra area. Three years was the period fixed under those Rules for assessing the escaped turnover by making best judgment assessment. Since the assessments in question were made beyond the expiry of three years from the end of the assessment year 1963 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) within a period of six years from the expiry of the year to which the tax relates, if any such event has occurred on account of the failure of the dealer to disclose the turnover or any other particulars correctly; (b) within a period of four years from the expiry of the year to which the tax relates, if any such event has occurred due to any other causes." The argument of the learned counsel for the petitioners was that the provision fixing the period of limitation was a substantive law and not a mere rule of procedure. The impugned provisions of the Central Sales Tax Act have not fixed any time-limit for making best judgment assessments in respect of escaped turnover and so the State Government under its delegated powers cannot make a rule fixing the time-limit for making best judgment assessments in respect of escaped turnovers. Section 13(3) of the Act empowers the State Government to make rules to carry out the purposes of the Central Sales Tax Act. The purpose of the Central Sales Tax Act is to assess and collect the Central sales tax and that power did not include the power to fix any time-limit for making the assessments. Hence rule 14-A(8) of the Rules is in e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us also came up for consideration before a Full Bench of this Court in Allied Exports and Imports, Gudur v. State of Andhra Pradesh T.R.C. No. 25 of 1966; since reported at [1971] 28 S.T.C. 175. Gopal Rao Ekbote, J., speaking for the court, at page 190 of the judgment observed that: "This is plain because whether it is a question of limitation or a question of fetter on the jurisdiction, in either case it falls within the domain of adjective or procedural law and it cannot be argued that such fetter placed on the jurisdiction creates any sort of vested right in the assessee. Such fetter can always be relaxed by the Legislature. That any restriction or fetter placed on jurisdiction is also a matter of procedural law can be seen from Lalitabai v. Dominion of India A.I.R. 1954 Bom. 527. Even assuming that the time-limit imposed upon the powers of the assessing authorities to make the best judgment assessment in respect of escaped turnover within a particular time is not a fetter, but a period of limitation, still as held by a Division Bench of this Court in Employees' State Insurance Corporation v. Andhra Pradesh State Electricity Board(1970) 1 A.L.T. 20., it is sometimes an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue relied upon section 13(3) of the Central Sales Tax (Madras) Rules to sustain sub-rule (7). The learned judges repelled that contention with the following observations: "But section 13(3) is in general terms and confers power to make rules only to carry out the purposes of the Act. Nowhere in the Central Act is there any indication that one of its purposes is to provide for limitation for the exercise of the power to assess escaped turnover and to determine such turnover by best judgment. We hold that sub-rule (7) at least in so far as it provided for limitation and determination of escaped turnover by best judgment is in excess of the rule-making power and the sub-rule, as a whole, should be struck down as invalid." In Shah Co. v. State of Madras[1967] 20 S.T.C. 146., a Division Bench of the Madras High Court, following the decision in Haji J.A. Kareem Sait v. Deputy Commercial Tax Officer[1966] 18 S.T.C. 370. , held that: "Under section 9(3) of the Central Sales Tax Act, 1956, only the local procedure is applied for the assessment, collection and enforcement of penalty, which is payable by a dealer under the Central Act. Unless a penalty con be levied under the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed sales tax on the respondent on a net turnover of Rs. 12,56,178-14-0 and the appeal taken against that order to the Commercial Tax Officer was dismissed. The Deputy Commissioner of Commercial Taxes issued notice to the assessee to show cause why escaped turnover for the period of assessment should not be determined. After hearing the assessee the Deputy Commissioner determined the revised turnover. Appeal against the revised assessment before the Sales Tax Appellate Tribunal failed. The matter was taken up in revision to the High Court of Kerala. One of the contentions raised before the High Court was that the notice issued by the Deputy Commissioner of Commercial Taxes, proposing to assess the escaped turnover was without jurisdiction. That contention was upheld by the High Court of Kerala. The State of Kerala filed an appeal to the Supreme Court. The Supreme Court reversed the decision of the High Court. It was contended before the Supreme Court by the assessee that section 12(2) contains the totality of the powers of the Deputy Commissioner and the power to assess escaped turnover is merely incidental to the power of revision and may be exercised only when revisional jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-making power of the State Government as contained in section 19." Similar are the provisions of the Central Sales Tax Act and hence the decision fully applies to the present case. The next case relied upon by the learned Government Advocate was C.A. No. 1034 of 1966, on the file of the Supreme Court of India in M/s. Kangra Valley Slate Co., Ltd. v. The State of Punjab and Others. Mr. Gupta for the appellant in that case contended that: "Rule 28 laying down the period of limitation for renewal application was ultra vires section 13(2) of the Act as the time-limit prescribed in the rule does not fall under any of the matters set out in that subsection." That contention was rejected by their Lordships of the Supreme Court as without substance with the following observation: "Therefore the provisions of sub-section (2) were not restrictive of sub-section (1) and indeed was expressly stated by the words 'without prejudice to the generality of the powers conferred by sub-section (1)'. The general language of sub section (1), therefore, amply justified the terms of rule 26 and avoided the contention that it was not justified under sub-section (2)." From the aforesaid discussion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of the Central Sales Tax Act to find out whether rule 14-A(8) of the Rules made by the State Government in pursuance of the power conferred by section 13 of the Central Sales Tax Act is or is not beyond the rule-making power of the State Government. Now section 9 of the Central Sales Tax Act was substituted for the old section 9, by Act No. 28 of 1969 with retrospective effect. New section 9(1) of the Central Sales Tax Act empowers the Central Government to levy tax in respect of inter-State sales and leaves the collection of such tax to the State Government from where the movement of the goods commenced. New sub-section (2) of section 9, which is by far the most important section, reads as follows: "9. (2) Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time being empowered to assess, re-assess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, re-assess, collect and enforce payment of tax, including any penalty, payable by a dealer under this Act as if the tax or penalty payable by such a dealer under this Act is a tax or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us that the State Government has got power to make rules for carrying out the purposes of the Central Sales Tax Act. One of the purposes of the Central Sales Tax Act is to levy Central sales tax, make assessments and recover the tax so levied. Since the Central Government has not established any separate department for that purpose and prescribed procedure for making such assessments, sub-section (2) of section 9 empowers the State authorities under the general sales tax law to do the same and to follow the procedure laid down under the general sales tax law of the State. Under the general sales tax law, the time-limit has been fixed for making the best judgment assessment and that time-limit under section 14(3) of the Andhra Pradesh General Sales Tax Act is four years from the expiry of the year to which the assessment relates. As has already been stated in the earlier portion of our judgment, the fixing of time-limit is only a fetter on the jurisdiction of the assessing authority not to make assessments after expiry of that period. Thus, irrespective of the power conferred upon the State Government under section 13 of the Central Sales Tax Act, the State Government is empowered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d escaped assessment and assess the tax payable thereon, is a period of three years, next succeeding that to which the tax related. On passing the Andhra Pradesh General Sales Tax Act, 1957, with effect from 15th June, 1957, the Madras General Sales Tax Act and the Rules made thereunder, which were till then applicable to the Andhra area of the State of Andhra Pradesh were repealed by section 41 of the Andhra Pradesh General Sales Tax Act, 1957. Under section 14(3) of the Andhra Pradesh General Sales Tax Act, which was in force in the State of Andhra Pradesh during the relevant assessment year 1963-64, the time-limit for making best judgment assessment in respect of escaped turnover in a case where no return was filed, was fixed at four years. The simple contention of the learned counsel appearing for the petitioners was that the Madras General Sales Tax Act and the Rules made thereunder were incorporated into section 9(2) of the Central Sales Tax Act, which was introduced by Act 28 of 1969 on 30th August, 1969, with retrospective effect. Since the Central Sales Tax Act incorporated into it the provisions of the Madras General Sales Tax Act, the time-limit, which was fixed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enactment stood in 1952, with the result that any subsequent amendments to the Sea Customs Act did not and could not affect, modify or enlarge the scope of the incorporated Sea Customs Act which had become part of the Foreign Exchange Regulation Act............... We consider that the legislation regarding which the Privy Council rendered the decision bears no resemblance whatever to the matter now on hand and that the ruling in The Secretary of State v. Hindustan Co-operative Insurance Society Ltd.(1932) I.L.R. 59 Cal. 55; A.I.R. 1931 P.C. 149., cannot therefore furnish any guidance or authority applicable to the interpretation of section 23A of the Foreign Exchange Regulation Act. To consider that the decision of the Privy Council has any relevance to the construction of the legal effect of the terms of section 23-A of the Foreign Exchange Regulation Act is to ignore the distinction between a mere reference to or a citation of one statute in another and an incorporation which in effect means the bodily lifting of the provisions of one enactment and making it part of another so much so that the repeal of the former leaves the latter wholly untouched." From this decision and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been referred to in this judgment in another connection. Our attention has been drawn by the learned counsel for the petitioners to the following passage occurring in the head note in Haji J.K. Kareem Sait v. Deputy Commercial Tax Officer[1966] 18 S.T.C. 370., which reads thus: "While it is competent for the Parliament to adopt the existing provisions of a local law as part of the Central legislation without repeating those provisions in the Central Act, it cannot make a law adopting the provisions of a local law which did not exist at the time. But in applying this principle the court should look at the substance and not the form of the matter. Section 16 of the Madras General Sales Tax Act, 1959, substantially re-enacted the provisions under the Madras General Sales Tax Act, 1939, relating to assessment of escaped turnover and the period of limitation for exercising that power, and the subject-matter of section 16 was not something which the Parliament had not applied its mind to when it enacted section 9(3). Therefore section 9(3) is not unconstitutional." The other passage in Shah Co. v. State of Madras[1967] 20 S.T.C. 146., which has been strongly relied upon by the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court, we hold that this is a case where one enactment has been referred to in another, but not a case where one enactment is incorporated and its provisions bodily lifted and put in the second enactment. It, therefore, follows that all the subsequent amendments to the general sales tax law, which were made, are applicable to the facts of this case. Since the operation of section 9 has been made retrospective, it relates back to the date on which the Central Sales Tax Act had come into force. We, therefore, hold that section 14(3) of the Andhra Pradesh General Sales Tax Act is applicable to the facts of this case and also rule 14-A(8) of the Central Sales Tax Rules. In either case the assessments made are within the period of four years from the end of the relevant assessment year. The assessments are, therefore, valid. Both the contentions raised by the learned counsel fail and are therefore rejected. At the end, the learned counsel submitted that the petitioners have paid by way of Andhra Pradesh general sales tax on groundnuts for the year 1963-64 and they are, therefore, entitled to a refund of that amount even without filing an application to that effect. If any Andhra P ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
