1967 (4) TMI 102 - SC - VAT and Sales Tax

Order of nil assessment under section 11 of Act 9 of 1939 - Held that - Appeal allowed. There was however no assessment of tax against the respondents. There could be no appeal against the order of nil assessment under section 11 of Act 9 of 1939 and no bar to the jurisdiction of the Deputy Commissioner under sub-section (1) of section 32 of the Act could arise. The High Court was in our judgment in error in holding that because the order of nil assessment was not communicated the respondent could not appeal against that order and the time for appealing against that order had not expired within the meaning of sub-section (2) of section 32 of Act 1 of 1959. We are unable also to agree with the High Court that in an appeal under section 11 of Act 9 of 1939 an assessee may object to a mere statement setting out the sales and purchases during the course of his business or even his turnover.

Summary

Issues:
1. Validity of assessment and jurisdiction of Deputy Commissioner under Madras General Sales Tax Act.
2. Communication of assessment order to the assessee and its impact on the appeal process.
3. Interpretation of provisions related to appeal and revision under different Sales Tax Acts.

Detailed Analysis:
1. The judgment dealt with the validity of assessment and the jurisdiction of the Deputy Commissioner under the Madras General Sales Tax Act. The respondents, a firm engaged in the hides and skins business, were initially exempted from tax based on a judgment by the Madras High Court. However, subsequent proceedings under the new Sales Tax Act of 1959 led to a reassessment by the Deputy Commissioner, resulting in a dispute over the legality of the reassessment. The High Court set aside the Tribunal's order, emphasizing the necessity of communicating assessment orders to the assessee for appeal purposes. The Supreme Court disagreed with the High Court's decision, asserting that the assessment was valid even if not communicated to the assessee, and there was no bar to the Deputy Commissioner's jurisdiction for reassessment.

2. The issue of communication of assessment orders to the assessee and its impact on the appeal process was crucial in this case. The High Court, relying on previous judgments, held that failure to communicate the assessment order prevented the assessee from appealing within the stipulated time frame. However, the Supreme Court disagreed, stating that the absence of communication did not invalidate the assessment process. The Court clarified that the assessment was complete once made by the competent authority, even if not served on the assessee. This interpretation differed from the High Court's view, emphasizing that the assessment's validity did not hinge on formal communication to the assessee.

3. The judgment also involved an interpretation of provisions related to appeal and revision under different Sales Tax Acts. The Court analyzed the applicability of appeal mechanisms under the old Act of 1939 and the new Act of 1959 concerning the order of "nil assessment." It was established that since there was no tax assessed against the respondents, no appeal could be filed under the old Act. The Court rejected the argument that an appeal could be made under the new Act, which came into force after the order. Additionally, the Court did not delve into the alternative argument regarding the Deputy Commissioner's power to revise the "nil assessment" order. Ultimately, the Supreme Court set aside the High Court's order and reinstated the Sales Tax Tribunal's decision, emphasizing the validity of the assessment process and the jurisdiction of the Deputy Commissioner for reassessment.