Citation Codes

Equivalent Citations

citation codes

Case Number

Writ Petition No. 2181 of 1976

Judges

Varadarajan, J.

Acts

Section 55 of the Tamil Nadu General Sales Tax Act, 1959, read with Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957,
Section 55 of the Tamil Nadu General Sales Tax Act, 1959, or Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957.
Section 55 of the Tamil Nadu General Sales Tax Act, 1959,
Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957.
Section 55 of the Tamil Nadu General Sales Tax Act,
Section 8(5) of the Central Sales Tax Act, 1956,
ARTICLE 226 CONSTITUTION OF INDIA
Section 8(5) of the Central Sales Tax Act.
SECTION 35 INCOME TAX ACT 1922
Nadu General Sales Tax Act, 1959.
CENTRAL SALES TAX ACT 1956
Nadu General Sales Tax Act,
Rule 5(9)

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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The petitioner, a dealer in jaggery, filed this writ petition under Article 226 of the Constitution of India seeking certiorari/mandamus to quash the Board of Revenue, Madras order in BP. Rt. No. 3079/75 dated 20 October 1975 and to direct the Board to exercise revisionary powers to cancel the assessment made by the Deputy Commercial Tax Officer, Tiruppattur (order C.S.T.1605/67-68 dated 25 October 1968).

For the assessment year 1967-68 the petitioner submitted a return declaring taxable turnover of Rs. 6,79,810.84 under the Central Sales Tax Act, 1956. The assessing officer fixed the taxable turnover at Rs. 6,79,697.31; no objection was filed by the petitioner, the assessing authority made the assessment on 25 October 1968 and the petitioner paid the tax in full. Part of the turnover included sales of jaggery in the course of inter-State trade.

The petitioner contended that jaggery was not exigible to Central sales tax for the year in question because of G.O. Ms. No. 4586, Revenue, dated 12 December 1957 issued under Section 8(5) of the Central Sales Tax Act. There was no equivalent exemption under the Tamil Nadu General Sales Tax Act, 1959.

During the pendency of related litigation (M. Ishwarlal and Co. v. State of Madras) the 1957 notification was cancelled by G.O.P. No. 662, Revenue on 21 March 1969. On 26 September 1973 the petitioner applied for rectification of the assessment under Section 55 of the Tamil Nadu General Sales Tax Act and for refund. The Deputy Commissioner (C.T.), Trichy declined to interfere by order dated 26 April 1974, on the ground that the petitioner had allowed the assessment to become time-barred. The Board of Revenue confirmed that order. This writ petition challenges the Board of Revenue's confirmation and seeks cancellation of the assessment.

Legal Issues Presented

Whether the petition filed by the petitioner (which referenced Section 55 of the Tamil Nadu General Sales Tax Act) should be treated as an application for rectification under Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957, and thus be entertained.
Whether the petitioner was entitled to rectification and relief given that the notification G.O. Ms. No. 4586 (12 December 1957) exempting jaggery from Central sales tax was operative for the assessment year 1967-68 as declared in M. Ishwarlal and Co. v. State of Madras.
Whether the rectification application was time-barred or otherwise barred by the petitioner's decision to confine earlier writ proceedings to a different assessment year (1968-69).

Arguments of the Parties

Respondents' Arguments

The assessment has become final and the petition under Section 55 of the Tamil Nadu General Sales Tax Act was barred by time.
The petitioner had earlier filed a writ petition and confined it to assessment year 1968-69 (W.P. No. 2676 of 1969), and therefore had not pressed the challenge for assessment year 1967-68; this should prevent rectification for the earlier year. In support the respondents relied on Easun Engineering Co. Ltd. v. Sales Tax Appellate Tribunal and Benson (India) P. Ltd. v. State of Tamil Nadu.

Petitioner's Arguments

Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957 (providing for rectification of assessment orders) was in force when the rectification petition was filed on 26 September 1973 and was omitted only later (on 29 October 1975).
The rectification petition was filed within five years of the assessment order dated 25 October 1968, and therefore the authorities could have exercised the rectification power under Rule 5(9).
G.O. Ms. No. 4586 dated 12 December 1957 was in force during the assessment year 1967-68 and therefore the petitioner was not liable to Central sales tax for that year, as declared in M. Ishwarlal & Co. v. State of Madras.
Even though the petition referenced Section 55 (Tamil Nadu General Sales Tax Act) and did not expressly cite Rule 5(9), the petition should be treated and dealt with as one for rectification under Rule 5(9).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
M. Ishwarlal and Co. v. State of Madras [1973] 32 S.T.C. 377	Held that the notification in G.O. Ms. No. 4586 dated 12 December 1957 exempted jaggery from Central sales tax and that the notification was operative for the relevant assessment year.	The Court relied on this decision as establishing that jaggery was not exigible to Central sales tax for 1967-68 and that the assessing authority erred in ignoring that provision; it formed the substantive basis for allowing rectification.
R. Kuppuswamy Mudaliar and Sons v. State of Madras (W.P. No. 2676 of 1969) — reported as part of M. Ishwarlal & Co. batch	Referenced as part of the batch of writ petitions addressed in the M. Ishwarlal decision.	Cited to explain the context of the batch litigation and the petitioner's prior proceedings; the Court noted the petition had been confined by the petitioner to 1968-69 but held that this did not prevent rectification for 1967-68.
Appellate Assistant Commissioner v. N. Kuppanna Gounder [1975] 35 S.T.C. 170	Principle that when a law is declared by a court it operates not only from the date of decision but from the inception of the statutory provision (retrospective effect of a declaration of law).	The Court applied this principle to hold that the declaration in M. Ishwarlal applied retrospectively to the assessment year, supporting the petitioner's entitlement to rectification.
S.A.L. Narayana Row, Commissioner of Income-tax v. Model Mills Nagpur Ltd [1967] 64 I.T.R. 67 (S.C.)	Principle that an application may implicitly be one for rectification and that if authorities have treated an application as one for rectification, it should be so regarded (implicit rectification applications).	The Court relied on this decision to justify treating the petitioner's application (though referring to Section 55) as a rectification petition under Rule 5(9), since rectification was implicit and authorities could have dealt with it as such.
Easun Engineering Co. Ltd. v. Sales Tax Appellate Tribunal [1972] 29 S.T.C. 378	Addressed by respondents to argue that issues not argued before a tribunal or not raised in grounds of appeal cannot be revisited later.	The Court held this decision was inapplicable to the present facts because, at the time of the tribunal hearing referenced there, the relevant question had not been argued or raised in the grounds of appeal; thus respondents' reliance on it failed.
Benson (India) P. Ltd. v. State of Tamil Nadu [1972] 30 S.T.C. 228	Principle that a decision of a quasi-judicial/judicial tribunal can be scrutinised on rectification only where the aggrieved person raised the issue and thereby provoked the tribunal to decide it; absent such provocation, rectification cannot be invoked later.	The Court distinguished Benson's case from the present facts and concluded it did not prevent rectification here because the circumstances required by Benson were not present.
Khosla's case [1966] 17 S.T.C. 473 (S.C.)	Question whether part of turnover should be deemed to be sales which occasioned the import (principle referenced in context of Easun decision).	The Court noted that Khosla's case was not argued in the Easun matter and used that point to explain why Easun was inapplicable here; Khosla's case itself was mentioned only in that context.

Court's Reasoning and Analysis

The Court proceeded through the following analytical steps, relying only on matters stated in the opinion:

Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957 (which provides for rectification of assessment orders) was in force on 26 September 1973 when the petitioner filed the rectification petition. The rule was omitted only later (29 October 1975). Therefore the rule was available at the relevant time.
The petitioner had presented a petition that referred to Section 55 of the Tamil Nadu General Sales Tax Act; however, the Court treated the petition as one for rectification, concluding that the petition should have been dealt with as a petition under Rule 5(9). The Court relied on S.A.L. Narayana Row (Income-tax case) for the principle that an application may implicitly be for rectification and, where authorities treat it as such, it should be regarded accordingly.
The decisive substantive legal point was the effect of the decision in M. Ishwarlal and Co. v. State of Madras, which held that G.O. Ms. No. 4586 dated 12 December 1957 (issued under Section 8(5) of the Central Sales Tax Act) exempted jaggery from Central sales tax and was operative for the relevant period. The Court treated that decision as a declaration of the law that applied from the inception of the statutory provision (endorsing the retrospective effect principle noted in Appellate Assistant Commissioner v. N. Kuppanna Gounder).
The respondents' contention that the rectification was barred because the petitioner had confined an earlier writ to assessment year 1968-69 was considered and rejected: the Court found that confining W.P. No. 2676 of 1969 to 1968-69 did not prevent the petitioner from seeking rectification in respect of the 1967-68 assessment within the time allowed by Rule 5(9).
The Court examined the respondents' reliance on Easun Engineering and Benson (India) and concluded those authorities were inapplicable on the facts: Easun did not apply because the relevant question had not been argued there and was not in the grounds of appeal; Benson did not apply because its circumstances (provocation of the tribunal to decide an issue) were absent in the present case.
Having found the law as declared in M. Ishwarlal to be applicable retrospectively and that the rectification petition was maintainable and filed within the five-year period, the Court concluded the assessing authority had committed an error in ignoring the operative notification and that rectification was open to the petitioner.

Holding and Implications

Holding: The writ petition is allowed; the orders of the respondents are quashed and the assessment made on the petitioner by the second respondent is cancelled.

Direct consequences for the parties (as stated in the opinion):

The impugned orders of the respondents (Deputy Commissioner and Board of Revenue) are quashed.
The assessment dated 25 October 1968 is cancelled.
The petitioner is awarded costs, including advocate's fee of Rs. 250.

The opinion does not articulate any broader new legal principle beyond applying and distinguishing existing authorities; it rests the decision on established precedent (notably M. Ishwarlal and Appellate Assistant Commissioner v. Kuppanna Gounder) and on the finding that the rectification rule was available and the petition was filed within the prescribed period.

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R. Kuppuswamy Mudaliar & Sons v. The Board Of Revenue (Commercial Taxes), Chepauk, Madras-5, And Another

1. This writ petition is filed under Article 226 of the Constitution of India for the issue of a certiorarified mandamus or other order or direction calling for the records in BP. Rt. No. 3079/75 dated 20th October, 1975, on the file of the Board of Revenue, Madras, the first respondent herein, and quashing the same and directing the Board of Revenue to exercise the powers of revision and cancel the assessment made on the petitioner by the Deputy Commercial Tax Officer, Tiruppattur, North Arcot, in his proceedings C.S.T.1605/67-68 dated 25th October, 1968.

2. In this writ petition, we are concerned with the assessment year 1967-68. The petitioner is a dealer in jaggery, etc., and he was assessed to sales tax. He submitted a return declaring the taxable turnover of Rs. 6,79,810.84 for the assessment year 1967-68 under the Central Sales Tax Act, 1956. The assessing officer determined the taxable turnover at Rs. 6,79,697.31 and called for objection which was not filed by the petitioner. The petitioner was assessed to Central sales tax on that turnover by the assessing authority's order dated 25th October, 1968, and he paid the tax in full. The turnover included sale of jaggery in the course of inter-State trade. According to the petitioner, during the assessment year in question, jaggery was not exigible to tax by virtue of Notification G.O. Ms. No. 4586, Revenue, dated 12th December, 1957, issued in exercise of the power conferred by Section 8(5) of the Central Sales Tax Act. However, there was no such exemption from sales tax under the Tamil Nadu General Sales Tax Act, 1959. In M. Ishwarlal and Co. v. State of Madras [1973] 32 S.T.C. 377, which dealt with a batch of cases including W.P. No. 2676 of 1969 (R. Kuppuswamy Mudaliar and Sons v. State of Madras [1973] 32 S.T.C. 377.), the State contended that, in view of the fact that jaggery had been subjected to tax under the Tamil Nadu General Sales Tax Act, the notification dated 12th December, 1957, issued in pursuance of Section 8(5) of the Central Sales Tax Act must be deemed to have been cancelled. But, that contention was negatived by this Court and it was held that the notification had the effect of exempting jaggery from sales tax under the Central Sales Tax Act. The notification dated 12th December, 1957, was, however, cancelled on 21st March, 1969, in G.O.P. No. 662, Revenue, during the pendency of the case in M. Ishwarlal and Co. v. State of Madras [1973] 32 S.T.C. 377, which was disposed of only on 26th July, 1912. Thereafter, the petitioner applied for rectification of the assessment on 26th September, 1973, under Section 55 of the Tamil Nadu General Sales Tax Act and for refund of the tax paid by him. The second respondent directed the petitioner to file a revision petition before the Deputy Commissioner (C.T.), Trichy, which the petitioner did. But the Deputy Commissioner (C.T.), Trichy, by his order dated 26th April, 1974, declined to interfere with the order of the assessing authority on the ground that the petitioner had allowed the assessment to get time-barred. The petitioner filed a revision petition before the Board of Revenue, which confirmed the order of the Deputy Commissioner (C.T.), Trichy, and dismissed the revision petition. The present writ petition has been filed to quash that order of the Board of Revenue as aforesaid.

3. The objection raised on behalf of the respondents is that the assessment has become final and that the petition filed under Section 55 of the Tamil Nadu General Sales Tax Act was barred by time. However, it is submitted by the learned counsel for the petitioner that Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957, providing for rectification of assessment order was omitted only on 29th October, 1975, in S.R.O. No. A-21/76 and that rule was in force on the date on which the rectification petition was filed by the petitioner on 26th September, 1973, within five years from the date of the assessment order, which was made on 25th October, 1968, and that it was open to the authorities below to exercise the power conferred by Rule 5(9) and they could not refuse to rectify the assessment order. It could not be denied by the respondents that G. 0. Ms. No. 4586, Revenue, dated 12th December, 1957, was in force until it was cancelled by G. 0. P. No. 662, Revenue, dated 21st March, 1969, after the year of assessment, namely, 1967-68. Therefore, the petitioner was not liable to Central sales tax in respect of the turnover in question. That is the position of law that has been declared by this Court in M. Ishwarlal & Co. v. State of Madras [1973] 32 S.T.C. 377. A Bench of this Court has pointed out in Appellate Assistant Commissioner v. N. Kuppanna Gounder [1975] 35 S.T.C. 170. that when a law is declared it has effect not only from the date of the decision but also from the inception of the statutory provision. The petition filed by the petitioner before the Deputy Commercial Tax Officer and, subsequently, before the Deputy Commissioner (C.T.), Trichy, was clearly for rectification although Section 55 of the Tamil Nadu General Sales Tax Act, 1959, was referred to and no reference was made to Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957. A contention, similar to the one urged by the respondents in the present case, was also raised before the Supreme Court in S.A.L. Narayana Row, Commissioner of Income-tax v. Model Mills Nagpur Ltd [1967] 64 I.T.R. 67 (S.C.). in respect of Section 35 of the Income-tax Act, 1922. It was urged before the High Court that no application for rectification under Section 35 of the Income-tax Act was presented by the respondent-company and, therefore, the company was not entitled to the relief claimed by it. The High Court rejected the contention principally on the ground that the income-tax authorities had themselves treated the application as one under Section 35 and had rejected the same on the merits. The Supreme Court observed that the application to the Income-tax Officer was one in which a request for rectification of the order was implicit and the Commissioner in dealing with the application for refund treated that application in that light. In the circumstances, I am of the opinion that the petition for rectification, though specifically mentioned only Section 55 of the Tamil Nadu General Sales Tax Act, was a petition for rectification and must have been dealt with by the authorities below as a petition under Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957, which was in force at the relevant time.

4. The learned counsel for the respondents pointed out that, as per page 23 of the typed set in this case, the petitioner had filed a writ petition, W.P. No.2676 of1969(R.Kuppuswamy Mudaliar and Sons v. State of Madras Reported as M. Ishwarlal and Co. and Others v. State of Madras and Ors.[1973] 32 S.T.C. 377.), challenging the levy of tax on jaggery. It is stated therein that, when the writ petition was filed, the petitioner asked for stay of assessment proceedings for the assessment year 1967-68 and that, when the writ petition came up before this Court, the High Court directed the counsel to confine the petition to anyone of the above-mentioned years and it was therefore confined to 1968-69, as the assessment was not over for that year. As already stated, Ishwarlal & Co. v. State of Madras Reported as M. Ishwarlal and Co. and Ors. v. State of Madras and Ors. [1973] 32 S.T.C. 377 was in respect of a batch of writ petitions including W.P. No. 2676 of 1969. The respondents' counsel submitted that the petitioner had not pressed the writ petition for the assessment year in question, namely, 1967-68, but confined it only to the assessment year 1968-69. In this connection, he relied on the decisions in Easun Engineering Co. Ltd. v. Sales Tax Appellate Tribunal [1972] 29 S.T.C. 378. and Benson (India) P. Ltd. v. State of Tamil Nadu [1972] 30 S.T.C. 228. The decision in Easun Engineering Co. Ltd. v. Sales Tax Appellate Tribunal will not be applicable for, at the time of hearing of the application, the question whether a part of the turnover should be deemed to be sales which occasioned the import, according to the decision in the Khosla's case [1966] 17 S.T.C. 473 (S.C.), was not argued and it was also not raised in the grounds of appeal and the Tribunal had therefore no occasion to consider the facts and decide whether the transactions were sales in the course of import. Benson's case [1972] 30 S.T.C. 228 also will not apply to the facts of the present case. In that case, it was held that it is only in circumstances where the aggrieved person raises an issue and provokes a quasi-judicial or a judicial Tribunal to decide the same, that the decision rendered by that Tribunal is liable to be scrutinised by the same authority at a later stage, if it is called upon to rectify it on the ground that, in the earlier decision, a mistake has crept in. But, if there is no provocation and if the record is silent about any such ground having been raised at all, then such an assessee cannot properly invoke Section 55 of the Tamil Nadu General Sales Tax Act, 1959, or Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957.

5. In the present case, on the date of the rectification petition, there was no necessity to go into any question of fact, having regard to the decision in M. Ishwarlal and Co. v. State of Madras [1973] 32 S.T.C. 377, which has made it clear that the notification in G.O. Ms. No. 4586, Revenue, dated 12th December, 1957, made by the State Government in exercise of the power conferred by Section 8(5) of the Central Sales Tax Act, 1956, was operative at the relevant time, namely, the assessment year 1967-68. It is not possible to agree with the learned counsel for the respondents that the contention that the transaction was not liable to tax should have been urged before the assessing authority himself and that it could not be urged later on the date of presentation of the rectification petition on 26th September, 1973, taking advantage of the decision in M. Ishwarlal and Co. v. State of Madras [1973] 32 S.T.C. 377. The law was declared in that decision (M. Ishwarlal and Co. v. State of Madras [1973] 32 S.T.C. 377.) and, as held by a Bench of this Court in Appellate Assistant Commissioner v. Kuppanna Gounder [1975] 35 S.T.C. 170, it must be held to have been there from the inception. The assessing authority committed an error in ignoring that provision while assessing the petitioner. Therefore, it is open to the petitioner to have that error rectified by filing a petition under Section 55 of the Tamil Nadu General Sales Tax Act, 1959, read with Rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957, which no doubt was not specifically referred to in the rectification petition. The rectification petition having been filed within the period of five years from the date of the order of assessment, it could not be held to be barred by time and the fact that the petitioner had confined W.P. No. 2676 of 1969 for the assessment year 1968-69 alone and not for the assessment year in question, namely, 1967-68, would not prevent the petitioner from getting the error rectified within the time allowed by the rule. The writ petition is, therefore, allowed and the orders of the respondents are quashed and the assessment made on the petitioner by the second respondent is cancelled. The petitioner will have his costs. Advocate's fee Rs. 250.

R. Kuppuswamy Mudali... v. The Board Of Revenue...