1987 (11) TMI 343 - SC - VAT and Sales Tax

Time within which an assessment can be made under the provisions of the Andhra Pradesh General Sales Tax Act, 1957 where the return is not filed by the dealer within the time prescribed in that behalf Held that - Appeal allowed. On a true construction of sub-section (1) and sub-section (3) of section 14 of the Act we are of opinion that where a return is not filed by a dealer before the date prescribed in that behalf under the Act, the assessing authority has got jurisdiction to complete the assessment within a period of six years from the expiry of the year to which the assessment relates. Admittedly, in these cases the returns were not filed within the prescribed date and the assessments have been made within six years from the expiry of the year to which the assessments relate. The orders of the High Court against which these appeals have been filed are therefore liable to be set aside.

Summary

Issues Involved:
1. Validity of the assessment order passed beyond four years but within six years.
2. Applicability of Section 14(1) and Section 14(3) of the Andhra Pradesh General Sales Tax Act, 1957.

Issue-wise Detailed Analysis:

1. Validity of the assessment order passed beyond four years but within six years:

The Supreme Court addressed the issue of whether the assessment orders, which were passed beyond four years but within six years from the last day of the assessment year, were valid. The Court noted that the returns for the assessment year 1968-69 were filed late by the assessee, M/s. Nav Swadeshi Oil Mills, and the assessment orders were consequently issued on 2nd August 1973.

The Court emphasized that under Section 14(3) of the Andhra Pradesh General Sales Tax Act, 1957, if a dealer fails to submit a return before the prescribed date, the assessing authority is empowered to make an assessment within six years from the expiry of the year to which the assessment relates. The Court concluded that since the returns were not filed within the prescribed period, the assessments made within six years were valid.

2. Applicability of Section 14(1) and Section 14(3) of the Andhra Pradesh General Sales Tax Act, 1957:

The Supreme Court analyzed the provisions of Section 14(1) and Section 14(3) to determine the applicable period for completing the assessment. Section 14(1) pertains to assessments based on returns filed within the prescribed period, which must be completed within four years from the expiry of the assessment year. In contrast, Section 14(3) applies to cases where returns are filed late, allowing the assessment to be completed within six years.

The Court clarified that the two subsections are mutually exclusive. If a return is filed late, the case falls under Section 14(3), and the assessment can be made within six years. The Court rejected the argument that since the returns were accepted, the assessments should not be considered best judgment assessments and thus should fall under Section 14(1). The Court stated that the period for assessment depends on whether the return was filed within the prescribed period, not on whether the assessment is a best judgment assessment.

Conclusion:

The Supreme Court concluded that in cases where the return is not filed within the prescribed period, the assessment can be made within six years from the expiry of the assessment year under Section 14(3). Consequently, the Court set aside the judgments of the High Court and the Tribunal, restoring the judgments of the Assistant Commissioner (CT), Appeals, Warangal. The appeals were allowed, and the respondent was ordered to pay the costs of the appellant in both cases.