1963 (4) TMI 25 - HC - VAT and Sales Tax

Issues Involved:
1. Competence of the Board of Revenue to revise the order beyond the statutory limitation period.
2. Interpretation of Section 34 of the Madras General Sales Tax Act, 1959.
3. Comparison with the Madras Agricultural Income-tax Act and its implications.

Detailed Analysis:

Competence of the Board of Revenue to Revise the Order Beyond the Statutory Limitation Period:
The petitioner, a dealer in ghee, butter, and oil, was initially assessed to sales tax for the year 1954-55, and an exemption was granted by the Deputy Commercial Tax Officer for certain inter-State sales. The Commercial Tax Officer later reviewed this assessment and disallowed a minor exemption, resulting in a slight increase in tax. Subsequently, the Board of Revenue initiated further revision proceedings and disallowed the exemption for a significant turnover, leading to the present dispute.

The primary contention by the petitioner was that the Board of Revenue was not competent to revise the order of the Commercial Tax Officer due to the bar of limitation enacted in Section 34 of the Madras General Sales Tax Act, 1959. The petitioner argued that the Board should have passed an order within four years from the date of the original order (14th December 1957), and since the Board's order was dated 18th December 1961, it was beyond the permissible period and thus illegal.

Interpretation of Section 34 of the Madras General Sales Tax Act, 1959:
Section 34 of the Act stipulates that the Board of Revenue may call for and examine an order passed by the appropriate authority and pass such order thereon as it thinks fit, provided that no order shall be passed if more than four years have expired after the passing of the original order. The court emphasized that the crucial words "the Board of Revenue shall not pass any order if more than four years have expired after the passing of the order" clearly indicate that the Board's powers to alter, modify, or interfere with an order become extinct after the lapse of four years from the date of the original order.

The court found that the Board's interpretation, which suggested that the four-year limitation period should commence from the date the Deputy Commercial Tax Officer modified his previous assessment order, was incorrect. The court clarified that the limitation period should be reckoned from the date of the original order, and not from any subsequent modifications.

Comparison with the Madras Agricultural Income-tax Act and its Implications:
The learned Government Pleader for the State relied on a previous decision of the court under the Madras Agricultural Income-tax Act, arguing that the principles laid down in that case should apply here. However, the court distinguished the provisions of the Agricultural Income-tax Act from those of the General Sales Tax Act.

In the Agricultural Income-tax Act, the term "revise" includes both the initiation of revision proceedings and the actual passing of the order in revision, allowing the Commissioner to act beyond the limitation period if the proceedings were initiated within the permissible time. In contrast, Section 34 of the General Sales Tax Act explicitly limits the Board's power to pass an order beyond four years from the date of the original order, without any provision for extending this period based on the initiation of proceedings.

The court concluded that the language of Section 34 of the General Sales Tax Act is express, explicit, and mandatory, and does not allow for any interpretation that would extend the Board's revisional powers beyond the specified four-year period.

Conclusion:
The court allowed the appeal, setting aside the order of the Board of Revenue, and held that the Board's powers under Section 34 to revise suo motu the order of the Commercial Tax Officer dated 14th December 1957 had become extinct by 18th December 1961. The petitioner was awarded costs, with a counsel's fee of Rs. 100.

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