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TMI Blog1983 (7) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... e business was abandoned long ago and that the accounts and books and other documents may not be available and that the notices exhibits PI and P2 issued to the petitioner nearly 13 years after the order of remit by the Appellate Assistant Commissioner is totally unjustified and illegal. Notwithstanding the objections, the respondent assessed the petitioner to sales tax for the years 1964-65 and 1965-66 by order dated 28th July, 1981, evidenced by exhibits P4 and P5 in these proceedings. 2.. The main ground on which exhibits P4 and P5 are attacked is that there is unreasonable delay in passing the revised assessment orders evidenced by exhibits P4 and P5. According to the petitioner the fresh notices of the assessing authority as also the revised assessments have been passed after an inordinate delay of 13 years and so exhibits P4 and P5 orders on the face of it are illegal and improper. 3.. The counsel for the revenue, Mr. Hassan, contended that once the order of assessment is set aside by the appellate authority and remitted back, the entire proceedings are pending. There is no provision in the Act which mandates the Sales Tax Officer to pass revised assessment within a particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner cannot initiate suo motu proceedings under section 34 of the Act, as he purported to do on 31st August, 1978, their Lordships Sri V. Balakrishna Eradi, C.J., and Sri K. Bhaskaran, J., held: "...........To us it appears to be a sound principle that even though section 34 of the Act in terms does not prescribe a time-limit within which the power under that section has to be exercised, in order to avoid prejudice and hardship to the assessee it should be exercised within a reasonable time once the assessment becomes final, lest it be as Democles' sword hanging over the head of the assessee for all times. We have not been shown anything to justify the inordinate delay between the completion of assessment for the years 1967-68 and 1968-69 on November 2, 1967, and November 20, 1968, respectively, on the one hand and its reopening on August 31, 1978, on the other, the delay being about 11 years in one case and about 10 years in the other........" (emphasis supplied*) Their Lordships referred to with approval the decision reported in Bhavani Tea & Produce Co. v. Commissioner of Agricultural Income-tax [1972] 2 Tax LR 2413, wherein it was held that initiation of proceedings unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Act it is open to it to exercise its power after any number of years that would be an unsustainable approach. If in such a case the court finds that such exercise has been beyond unreasonable time and there is no scope for an examination of the explanation for, there is none the action which may be found to be bad, we are indicating that perhaps had there been an explanation for the delay and the explanation called for appreciation of the facts and circumstances of the case this Court under article 226 of the Constitution might not be the appropriate body to consider it." (emphasis supplied*) 7.. No counter-affidavit has been filed in this case. Various averments have been made in the original petition alleging that there is unreasonable delay in completing the assessment. The learned Government Pleader, Mr. Hassan, brought to my notice that after the order of remit by the Appellate Assistant Commissioner, by order dated 6th March, 1968, a notice was sent to the petitioner by the assessing authority on 20th April, 1973, and another notice was sent on 26th June, 1973. The assessee-petitioner did not respond. So a fresh notice was sent on 9th June, 1981, followed by exhibits P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute and the vestries are, like other public bodies, liable to be controlled by this court if they Proceed to exercise their powers in an unreasonable manner whether they are induced to do so by improper motive or by error of judgment." In Mayor of Westminster Corporation v. London and North-Western Railway Company [1905] AC 426 at 430 Lord Macnaghten said: "It is well-settled that a public body invested with statutory powers such as those conferred upon the corporation must take care not to exceed or abuse its powers. It must keep within the limits of the authority committed to it. It must act in good faith. And it must act reasonably. The last proposition is involved in the second, if not, in the first." In Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1947] 2 All ER 680 (CA) at 682 Lord Green, M.R., said: "Bad faith, dishonesty-those, of course, stand by themselves-unreasonableness, attention given to extraneous circumstances, disregard of public policy, and things like that have all been referred to as being matters which are relevant for consideration. In the present case we have heard a great deal about the meaning of the word 'unreasonable'. It is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he House of Lords-[1976] 3 All ER 679 (HL). The observations of Lord Greene, M.R., in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1947] 2 All ER 680 (CA) were quoted with approval by the Court of Appeal and by the House of Lords in Tameside case [1976] 3 All ER 679 (HL). It is fairly evident from the above, that this Court can interfere if the action of the public authority is "unreasonable" or if the statutory powers are not exercised in a "reasonable manner". Viewed in the above background, it has to be said that in this case no explanation at all has been offered for the delay in the matter. The delay, Prima facie, is unreasonable, and the assessee has himself said in his objections that it is not possible for him to produce the documents and accounts at this distance of time after lapse of nearly 13 years. That certainly voices the prejudice and hardship that have resulted to him. So I am of opinion that there is inordinate and unreasonable delay on the part of the assessing authority to complete the assessments, exhibits P1 and P2. In this case, it cannot be said that the assessing authority has acted bona fide either. 9.. Rule 32(21) of the Kerala Ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed only for a period of four years. That should be for a purpose. It is a pointer to state that the period prescribed therein is the (normal) period which will be required to complete the assessments. Taking a broad and practical view of the matter, it could be said that it is at the motion of the assessee's appeals are taken and the order of remit is made for his benefit by the appellate authority, then he should preserve the accounts and other documents for a reasonable time after the order of remit. But since rule 32(21) mandates, the preservation of the documents and the accounts only for a period of four years after the accounting year, can it be assumed in all cases of remit irrespective of the time specified in rule 32(21) that the assessee is bound to preserve the accounts and documents for ever or for all time? Rule 32(21) should be construed reasonably and in a business sense. In my opinion the assessee is bound, ordinarily, to preserve the accounts and documents even in cases of remit, only for a reasonable period of time. We get an indication about the reasonable period in rule 32(21). Bearing in mind that provision, it can be said that in cases of remit by the appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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