1964 (9) TMI 39 - HC - VAT and Sales Tax

Issues Involved:
1. Legality of the Deputy Commissioner's order dated 3rd July, 1961.
2. Jurisdiction of the Deputy Commercial Tax Officer to revise the original assessment.
3. Scope of the Deputy Commissioner's powers under section 32 of the Madras General Sales Tax Act, 1959.
4. Applicability of section 55 of the Act to the case.
5. Comparison with relevant decisions under the Indian Income-tax Act.

Issue-wise Detailed Analysis:

1. Legality of the Deputy Commissioner's order dated 3rd July, 1961:
The primary issue was whether the Deputy Commissioner acted within his legal bounds when he restored the original assessment order dated 12th February, 1954, which was initially confirmed on appeal and later revised by the Deputy Commercial Tax Officer on 30th November, 1957. The Court upheld the Deputy Commissioner's action, stating that once the original assessment was confirmed by an appellate authority, the original order was superseded, and only the appellate authority had the jurisdiction to amend it. This principle is supported by the Full Bench decision in Pichuvayyangar v. Seshayyangar (1895) 18 Mad. 214 and the decision in Sundaram & Co. v. The First Additional Income-tax Officer [1964] 1 M.L.J. 1.

2. Jurisdiction of the Deputy Commercial Tax Officer to revise the original assessment:
The Court found that the Deputy Commercial Tax Officer lacked the jurisdiction to revise the original assessment after it was confirmed by the appellate authority. The original order of assessment got merged in the appellate order, and therefore, the Deputy Commercial Tax Officer's subsequent revision on 30th November, 1957, was without jurisdiction. This principle was reiterated by the Court, emphasizing that the only court that could amend the order after confirmation was the appellate court.

3. Scope of the Deputy Commissioner's powers under section 32 of the Madras General Sales Tax Act, 1959:
The Court dismissed the argument that the Deputy Commissioner's powers under section 32 were limited to orders under sections 12, 14, 15, and sub-sections (1) or (2) of section 16. The Court held that an order passed under section 55 after rectifying an error is essentially an order of assessment within the meaning of section 12, and thus, subject to revision under section 32. The Court emphasized that the legislative intent was not to grant immunity to erroneous orders of the assessing authority, and the revisional jurisdiction must be available to correct such errors.

4. Applicability of section 55 of the Act to the case:
The Court clarified that an order under section 55, which involves rectifying an error, results in a fresh assessment and is treated as an order under section 12. This view is supported by section 55(3), which states that any rectification affecting the assessment or penalty necessitates a revised notice of assessment or penalty, thereby attracting the provisions of section 12. The Court rejected the contention that an order under section 55 is a special jurisdiction order and not subject to revision under section 32.

5. Comparison with relevant decisions under the Indian Income-tax Act:
The Court reviewed several decisions under the Indian Income-tax Act to determine their relevance to the Sales Tax Act. The Court noted that while both Acts aim to secure revenue, the provisions regarding appeals and revisions are not identical. The Court cited Commissioner of Income-tax v. Arunachalam Chettiar [1953] 23 I.T.R. 180, where the Supreme Court held that if an assessing officer acts independently on a subsequent occasion, the order could be appealed under section 30 read with section 23 of the Income-tax Act. The Court also referred to K.S. Rashid & Son v. Income-tax Officer [1964] 52 I.T.R. 355, where the Supreme Court upheld the right of appeal and revision for assessments under section 34(1)(a) and 34(1A) of the Income-tax Act, reinforcing the principle that orders involving fresh assessments attract the right of appeal and revision.

Conclusion:
The Court dismissed the revision case, affirming that the Deputy Commissioner acted within his jurisdiction under section 32 of the Madras General Sales Tax Act, 1959, to restore the original assessment order. The subsequent revision by the Deputy Commercial Tax Officer was deemed without jurisdiction, and the Court emphasized the necessity of revisional jurisdiction to correct erroneous orders to prevent loss of revenue to the State. The Court found no merit in the arguments based on the provisions of the Income-tax Act, as the legislative intent and procedural framework of the Sales Tax Act differed. The revision petition was dismissed with no costs.

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