1964 (8) TMI 67 - HC - VAT and Sales Tax

Issues Involved:
1. Jurisdiction of the Deputy Commissioner under Section 32 of the Madras General Sales Tax Act, 1959.
2. Necessity of communication of the order of assessment to the assessee.
3. Right of appeal for the assessee in the case of a nil assessment.
4. Commencement of the limitation period for appeals and revisions.
5. Finality and enforceability of the order of assessment.

Detailed Analysis:

1. Jurisdiction of the Deputy Commissioner under Section 32:
The primary issue was whether the Deputy Commissioner could revise an order of the assessing authority if the order had not been communicated to the assessee. The court held that the Deputy Commissioner could not exercise his revisional powers under Section 32 unless the order of assessment had been communicated to the assessee. The court emphasized that the communication of the order was a necessary foundation for the exercise of revisional jurisdiction.

2. Necessity of Communication of the Order of Assessment:
The court concluded that the communication of the order of assessment to the assessee was obligatory. The court stated, "An order of assessment though completed and signed by the assessing authority, if not communicated to the assessee, does not exist in the eye of law, so far as the assessee is concerned." It was held that the process of assessment under the Sales Tax Act, which results in an enforceable tax liability, is complete only when the order of assessment is communicated to the assessee.

3. Right of Appeal for the Assessee in the Case of a Nil Assessment:
The court examined whether an assessee could appeal an order that resulted in no tax liability (nil assessment). It was held that the right of appeal should not be restricted only to orders resulting in tax liability. The court stated, "If the assessee can reasonably feel aggrieved or prejudiced by any portion of an order passed by the assessing authority under section 12, he will be entitled to prefer an appeal under section 31." The court recognized that various aspects of an order could adversely affect the assessee, thus granting the right to appeal even in cases of nil assessment.

4. Commencement of the Limitation Period for Appeals and Revisions:
The court clarified that the limitation period for the assessee to prefer an appeal or revision would commence only after the order was communicated to him. However, for the department, the time for exercising powers of revision would commence from the date of the order itself. The court stated, "The limitation for the assessee to prefer either an appeal or a revision would commence to run only after the order is communicated to him."

5. Finality and Enforceability of the Order of Assessment:
The court emphasized that once an order of assessment is passed and signed by the assessing authority, it becomes final and effective as if communicated to the assessee. The court stated, "From the point of view of the assessee, a finality has been secured and there can be no variation or revision of that order except to the limited extent permitted by the Act and in accordance with the basic principles of natural justice."

Conclusion:
The court allowed the revision petition, setting aside the order of the Appellate Tribunal. It held that the Deputy Commissioner could not exercise his revisional jurisdiction under Section 32 without the communication of the order of assessment to the assessee. The court also established that the right of appeal extends to nil assessments and that the limitation period for appeals and revisions commences from the date of communication of the order to the assessee. The petition was allowed with no costs.

← Previous Next →