TMI Blog1977 (5) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner, that though the subsequent deliberations of the Representative Assembly of 29th September, 1962, enabled the collection of turnover tax from the textile mills, the machines and raw materials having been taxed at the time of their entry at Cochin Port to an import duty, the turnover tax cannot be claimed from the appeallant a second time in Pondicherry territory and that, in any event, the claim is barred by limitation as the one year period prescribed had expired. The Justice of Peace, hereinafter called as the court of the first instance, who notified the demand and before whom the opposition was entered by the appellant framed, among others, the following three issues: (1) Whether the dealings of the appellant which had been subjected to tax constitute import, (2) whether they have been exempted from the payment of "transaction tax" and (3) whether the levy is barred by limitation. The court of the first instance held that by virtue of the deliberations of the General Council of Pondicherry dated 25th April, 1953, approved by the decret of 17th August, 1953, and made applicable to the State of Pondicherry by the order dated 8th September, 1953, a tax called "tax on tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellate court took the view that though the period of limitation prescribed is one year, as the tax cannot be demanded unless the appellant had furnished all the materials required for quantifying the amount of tax, limitation cannot run against the department till that is done, and that as the plaintiff had never produced the details enabling the department to quantify the tax, he cannot contend that the tax has become demandable even on the date of import. Having held that all the contentions raised by the appellant were not tenable, the appellate court dismissed the appeal. This second appeal is directed against the judgment of the lower appellate court. In this second appeal, it has been urged by the appellant that the machineries in question were not imported into Mahe, that they were imported by its main office in Cannanore in Kerala State, that the import of the said machineries was complete on their landing at the Cochin Port and that, therefore, the view taken by the courts below that the machineries were imported into Mahe and, therefore, clause 6 of the deliberations dated 25th April, 1953, stands attracted, is erroneous. It has also been urged that the delibera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ober, 1946, has been promulgated by an arrete dated 10th November, 1946. The Representative Assembly of French Settlements in India constituted by the decret dated 25th October, 1946, in exercise of the powers conferred on it by articles 33 to 48 deliberated at its meeting held on 25th April, 1953, and decided to impose a tax called "transaction tax" on all transactions effected in the French Establishments in India by natural or artificial persons who usually or occasionally purchase for reselling or perform acts coming under an industrial, commercial or artisanal operation. The said deliberations of the Assembly were approved by the decret dated 17th August, 1953, of the French Government. The said deliberations as approved have been made enforceable by an arrete dated 8th September, 1953. As we are concerned with the ambit and scope of the said deliberation, it is necessary to scan through these provisions. As already stated, a tax called "transaction tax" has been imposed on all transactions of purchase for resale or for use in industrial, commercial or artisanal operations. Article 2 of the deliberations exempts from tax certain transactions in respect of certain articles in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government has not claimed within one year with effect from the date on which the said duties and taxes were claimable ..... The person liable for the tax can cause the prescription to run in his favour only from the date when the employees could ascertain the taxes, ....." It is in the light of the provisions referred to above the first three contentions of the appellant have to be dealt with. There cannot be any dispute that clause 6 provides for a compensatory tax (double tax) in respect of all import of goods made by industrial concerns for their own use and not for resale. The question, however, is whether there has been an import of the goods by the appellant for its own use during the relevant period for which the tax is sought to be imposed. According to the appellant, the goods were imported from Japan and England by its head office at Cannanore and then transported to Mahe and, therefore, the goods cannot be taken to have been directly imported to Mahe. The word "import" occurring in clause 6 seems to mean bringing into the territory of Pondicherry either by sea or by land from outside. Therefore, even if the goods have landed at Cochin Port and then taken to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the recovery of tax is barred by limitation, the law relating to prescriptions provides that the tax is to be claimed within one year from the date on which the tax and duties were claimable by the revenue. But it also provides that the period of one year prescribed for recovery of tax will run in favour of the person liable for the tax only from the date when the revenue authorities could ascertain the tax. The revenue authorities could ascertain the tax payable by the appellant in this case only if he has submitted a return giving his turnover, etc., relating to the period in question. It is true, in this case, the demand in question has been issued after the expiry of one year from the date of the import. But the law of limitation provides that the assessee can raise the plea of limitation only when he has furnished the necessary materials to the revenue authorities to determine the tax payable by him. The appellant, not having admittedly furnished the required materials even up to this date, is not entitled to raise the plea of limitation. Though the tax is demandable from the date of the import of the goods, the amount of tax could be quantified only when the requisite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actments set out in column 3 of the Schedule to that Order and, therefore, it ceases to have any effect. In substance what is urged on behalf of the appellant is that the law imposing transaction tax which was in force in the French Settlements before 1st November, 1954, corresponds to the Sea Customs Act referred to in column 3 of the Schedule and, therefore, transaction tax can no longer be levied after 1st November, 1954, in the State of Pondicherry in view of clause 6 of the said Order. It is also contended that even if the law relating to transaction tax cannot be taken to correspond to the Sea Customs Act, it can be taken to correspond to the Indian Tariff Act and, as such, transaction tax cannot be levied any further. The said French Establishments (Application of Laws) Order, 1954, came to be made simultaneous with the French Establishments (Administration) Order, 1954, by S.R.O. No. 3314. The said Administration Order by clause 5 laid down: "All laws in force in the French Establishments or any part thereof immediately before the commencement of this Order and not repealed by paragraph 6 of the French Establishments (Application of Laws) Order, 1954, shall continue to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments became part of the Indian territory by the Treaty of Cession and after such de jure merger, the Pondicherry (Administration) Act (49 of 1962) came to be enacted by the Parliament. Section 4(1) of that Act stated that all laws in force immediately before 16th August, 1962, the appointed day, in former French Establishments or any part thereof shall continue to be in force in Pondicherry until amended or repealed by a competent legislature or other competent authority. Section 4(2) specifically states that for the purpose of facilitating the application of any such law in relation to the administration of Pondicherry and for the purpose of bringing the provisions of any such law into accord with the provisions of the Constitution of India, the Central Government may, within three years from the appointed day, by order, make such adaptations and modifications, whether by way of repeal or amendment as may be necessary or expedient and thereupon every such law shall have effect subject to the adaptations and modifications so made by the Central Government. This provision indicates that any tax that was being levied by the former French Settlements will continue to be levied for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
