1966 (9) TMI 125 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of sub-sections (2) and (3) of section 21 of the Mysore Sales Tax Act, 1957; Revisional power of the Commissioner under section 21(2) of the Act; Applicability of time limitation under section 21(3) of the Act.

The judgment of the Court, delivered by HEGDE, J., involved the interpretation of sub-sections (2) and (3) of section 21 of the Mysore Sales Tax Act, 1957. The case revolved around the assessment of turnover for a dealer in hardware and iron materials, where certain turnovers were excluded for sales of agricultural implements exempt from taxation. The Deputy Commissioner of Commercial Taxes initially allowed the exemption, but the Commissioner, using his revisional power under section 21(2) of the Act, later revoked the exemption. The Commissioner contended that only sales of agricultural implements from cottage industries were exempt. The assessee failed to provide evidence supporting the exemption claim. The issue arose regarding the time limitation for the Commissioner's revisional power under section 21(3) concerning the initiation of proceedings within four years from the date of the order.

Regarding the time limitation issue, the Court analyzed the language of section 21(2) and (3) of the Act. It was determined that the Commissioner's power to revise orders commences when records are called for and ends upon passing an order. The power is considered a single entity encompassing calling for records, examining them, and passing orders. The Court clarified that the initiation of the Commissioner's power under section 21(2) within the specified time under section 21(3) is crucial, rather than completing all facets of the power within that time frame. The power to call for records was deemed an integral part of the Commissioner's revisional authority, contrary to the argument presented by the assessee's counsel.

The Court rejected the contention that all powers under section 21(2) needed to be exercised within the time limit specified in section 21(3) and emphasized that the time limitation pertains to the initiation of proceedings, not their conclusion. Consequently, the Court dismissed the appeals, upholding the Commissioner's revisional order and emphasizing the importance of adhering to the statutory time limits for the exercise of revisional powers under the Act. The appeals were dismissed with costs, including advocate's fees.