TMI Blog1979 (11) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... as to licences and licence fees. In the case of an unlicensed dealer, the question arose whether he was liable to multi-point tax. In M. A. Noor Mohamed and Co. v. State of Madras [1956] 7 S.T.C. 792., this Court held that an unlicensed dealer in untanned hides and skins was not liable to tax on his sales turnover under the provisions of the 1939 Act. It was held that rule 16(5) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, confining the right of single point taxation to dealers who chose to take out a licence, was ultra vires the rule-making power, because it contravened section 6(vi) of the Act. This decision was rendered on 2nd April, 1956. The assessing authority in this case called for the production of books by issue of a notice on 26th June, 1956. The accounts were scrutinised on 6th July, 1956, by the Deputy Commercial Tax Officer. The matter was taken up again on 17th October, 1959, when one Khalilur Rahman appeared on behalf of the assessee. On that date an assessment order was passed by the Commercial Tax Officer III, Madras City. As the decision of this Court in M. A. Noor Mohamed and Co. v. State of Madras[1956] 7 S.T.C. 792. then held the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, and whether the assessment was a nil assessment or not, the question of revision would arise only if the order sought to be revised was communicated. The result was that the proceedings in revision were quashed. After the receipt of this judgment dated 22nd April, 1963, in the assessee's writ petition, the sales tax authorities proceeded as if the communication of the said order dated 17th October, 1959, would cure the defects in the proceedings, and that the Deputy Commissioner could thereafter proceed to revise the said order when once it was communicated. It was, therefore, communicated by serving a copy on the assessee on 24th July, 1963. Though this was a nil assessment, the assessee purported to file an appeal before the Appellate Assistant Commissioner apparently to forestall the Deputy Commissioner, pointing out that the ruling of the High Court that the said order was invalid still persisted, as the order had not been preceded by a pre-assessment notice. The Appellate Assistant Commissioner was, however, of the view that since the order was served, a valid appeal was pending before him and that he could exercise his power of enhancement; and in exercise of that p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment has been passed without issuing a pre-assessment notice to the respondents calling for their objections and, therefore, it is non est in the eye of law; and (2) the assessment order not having been communicated to the respondents, the Deputy Commissioner cannot exercise the powers of revision. The decision of this Court in the said writ petition had become final." It was further added by this Court: "The decision of this Court having become final, the revenue cannot now proceed on the basis that the 'nil' assessment order dated 17th October, 1959, is valid, notwithstanding the fact that it has not been preceded by a pre-assessment notice. The Tribunal is therefore justified in holding that the 'nil' assessment order is non est in view of the decision of this Court in the writ petition and in allowing the appeal on the ground that no appeal lay against a non est order. We therefore agree with the Tribunal and dismiss the tax case." At the end of the order, this Court observed as follows: "It is, however, made clear that, on the facts and in the circumstances of this case, the assessment proceedings should be taken to be pending before the assessing authority and that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .O. Mohamed Sulaiman and Co. v. Deputy Commissioner of Commercial Taxes, Vepery, Madras[1964] 15 S.T.C. 593., that the assessment was invalid, that the assessment order was non est and that the said order had become final. The result was the assessment order dated 15th April, 1974, passed after the judgment of this Court in T.C. No. 294 of 1967 (State of Madras v. K.O. Mohamed Sulaiman Co. Page 162 infra. was cancelled. It is this order of the Tribunal that is now the subject of the present revision. The first question that arises is whether there is any period of limitation with reference to the assessment in the present case. In this connection, we may notice the decision of the Supreme Court on the point. In Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax, Nagpur[1963] 14 S.T.C. 976 (S.C.)., the matter before the Supreme Court concerned two assessment years 1949-50 and 1950-51. For the year 1949-50, the assessee submitted a return on 5th October, 1950, for only one quarter and made a default in respect of the other quarters. The Assistant Commissioner of Sales Tax issued a notice on 13th August, 1954. The assessee thereafter filed the returns for the three quart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 10(3) or under section 11(4), the proceedings will be pending thereafter before the Commissioner till the final assessment is made. " Again at page 989, their Lordships held: "As we have held that the submission of a statutory return would initiate the proceedings and that the proceedings would be pending till a final order of assessment was made on the said return, no question of limitation would arise." Raghubar Dayal, J., in a separate judgment differed on some points. It is unnecessary for our present purpose to go into the points raised in the dissenting judgment. In an earlier decision of this Court in State of Madras v. S. Balm Chettiar[1956] 7 S.T.C. 519., it was held that where an assessee did not file at any time a return of his turnover for a year, rule 17 of the Madras General Sales Tax Rules, 1939, applied and that an assessment had therefore to be made within the period of limitation mentioned in that rule. But that was a case where the assessee had not made the return, and no notices were issued to the assessee for inquiry. A passage from this case was quoted at page 981 of the case reported in Ghanshyamdas v. Regional Assistant Commissioner of Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he context of a particular provision which compels such a meaning being attributed to it. In our judgment, despite the phraseology employed in rule 33, the principle which has been laid in other cases relating to analogous provisions in sales tax statute must be followed as otherwise the purpose of a provision like rule 33 can be completely defeated by taking certain collateral proceedings and obtaining a stay order as was done in the present case or by unduly delaying assessment proceedings beyond a period of three years." The decision was that it was enough if the proceedings for assessment of the turnover which had escaped assessment were initiated within three years, and that it was not necessary that the final order of assessment should be made within that period. As the notice was given in December, 1965, for the year 1962-83 within the period of three years, the proceedings were held to be in time. This decision of the Supreme Court came up for application in Anglo French Textiles Limited, Pondicherry v. State of Tamil Nadu, represented by the Deputy Commercial Tax Officer, MaduraiW.P. Nos. 3939 to 3941 of 1971 decided on 14th March, 1972 (Madras High Court)., the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be completed at any time, and the issue of notice under section 8(2) on 17th September, 1962, did not attract the bar of section 10. That was a case where there was a pending proceeding since the assessee had filed a return. R.E. M. Ramakutty Nadar v. State of Madras[1973] 31 S.T.C. 44., another decision relied on by the assessee, was a case where an assessee had not submitted any return for the years 1962-63 and 1963-64. There was a surprise inspection of the business premises of the assessee on 26th July, 1961, and certain statements were recorded. The assessments were made for both the years on 30th September, 1964, to the best of his judgment. One of the contentions taken before this Court was that the assessing authority had proceeded to assess the assessee under section 12(2) of the Act on the basis of best judgment on the ground that no return had been submitted by him and that, in a case where no return was submitted, the assessment could only be made under section 16 and that, therefore, the assessments under section 12(2) could not be sustained. It was in this connection that the decision of the Supreme Court in Regional Assistant Commissioner of Sales Tax v. Malwa Vana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termine the turnover of the dealer to the best of his judgment. Thus rule 11 itself contemplates a kind of enquiry where no return is submitted by the assessee. The notice under form XII was only such a notice because the assessee had failed to submit a return. In these circumstances, there is absolutely no bar of limitation standing in the way of the order now under consideration being made. During the course of the hearing, the learned counsel for the assessee drew our attention to the decision of the Patna High Court in State of Bihar v. Bal Kishun Halwai[1974] 34 S.T.C. 354. In that case the assessee was assessed for two periods. Appeals were preferred against the orders of assessment, and the appellate authority remanded the proceedings to the assessing officer with a direction to make local enquiry to ascertain the actual state of the assessee's business and volume of sales. The periods under consideration were 1st April to 30th September, 1957, and 1st October, 1957, to 31st March, 1959. The relevant appellate orders were passed on 2nd July, 1960, and 11th November, 1960, respectively. These orders were received by the assessing officer in August, 1960, and January, 1961. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as to what was meant thereby. The clear pronouncement was that the assessment proceedings were pending and had not terminated. This is in line with the decisions, which we have examined. It was not open to the Sales Tax Appellate Tribunal to take upon itself the task of scrutinising the correctness or otherwise of this Court's order. The law on this point is clear that the bar of limitation does not apply to the pending proceedings. It has been ruled in the present case that the proceedings were pending. It was, therefore, the duty of the Sales Tax Appellate Tribunal to have acted upon the judgment of this Court. If really any error had been committed in the said order, then the appropriate forum was either this Court in revisional proceedings after the Tribunal passed an order in conformity with the ruling of this Court or any superior court. The Tribunal is clearly wrong in proceeding as if this Court did not bear in mind the question of limitation when it pronounced in the manner done at the close of the judgment. The revision is accordingly allowed with costs. Counsel's fee Rs. 250. Petition allowed. Appendix [The judgment of the Division Bench of the Madras High Court co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents, the Deputy Commissioner cannot exercise the powers of revision. The decision of this Court in the said writ petition had become final. Later, on 24th July, 1963, the nil assessment order passed on 17th October, 1969, was communicated to the respondents. As against the said order, which did not impose any tax liability on the respondents, they, however, filed an appeal before the Appellate Assistant Commissioner. The Assistant' Commissioner in disposing of the appeal set aside the "nil" assessment and fixed the taxable turnover of the respondents at Rs. 19,80,562-13-3 by an order dated 30th November, 1963. Against the said appellate order, the respondents filed an appeal before the Tribunal. Before the Tribunal it was contended by the respondents that as this Court in K.O. Mohamed Sulaiman and Co. v. Deputy Commissioner of Commercial Taxes(1) (Writ Petition No. 855 of 1961) had held that the nil assessment order is non est in-view of the fact that there has been no pre-assessment notice, there cannot be any valid appeal against an order which is non est. The Tribunal accepted the above contention and held that the nil assessment order appealed against was non est and, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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