1967 (3) TMI 98 - HC - VAT and Sales Tax

Summary

Issues:
1. Competency of taxing authority to make additional assessment post-repeal of Madras General Sales Tax Act.
2. Whether additional assessment is barred by limitation.

Competency of taxing authority post-repeal:
The case involved tax revision petitions against the Sales Tax Appellate Tribunal's order imposing additional tax and penalty for escaped turnover for certain years. The dispute arose due to the repeal of the Madras General Sales Tax Act, replaced by the Andhra Pradesh General Sales Tax Act. The petitioner contended that recovered private account books referred to non-taxable transactions. However, the Tribunal upheld the additional tax and penalty. The Court analyzed the obligation of a dealer under the old Act, emphasizing the absolute liability to pay tax on total turnover, allowing additional assessment for any escaped turnover within three years. The Court interpreted Section 41 of the new Act, preserving accrued rights and liabilities, concluding that the obligation to pay tax under the old Act remained intact post-repeal. The Court held that the assessing authority had the right to proceed with additional assessments to tax the total turnover, even after the repeal.

Limitation on additional assessment:
Regarding the statute of limitation, the Court noted that the old Act was in force until June 14, 1957, and steps for additional assessment were taken post-repeal. While the old Act allowed reassessment within three years, the new Act extended this period. The Court cited a previous case to support the application of the extended limitation period when the right to reassess was not yet barred. It clarified that the additional assessment made within the extended four-year period under the new Act was valid. The Court affirmed that the penalty imposed was within statutory limits. Notably, any limitation issue could only pertain to the 1955-56 assessment year, but as the assessment was made within four years, no valid limitation objection arose. Consequently, the Court dismissed the petitions, upholding the additional assessment and penalty imposed by the taxing authority.

In conclusion, the Court affirmed the competency of the taxing authority to conduct additional assessments post-repeal and determined that the additional assessment was not barred by limitation, as it was made within the extended period under the new Act. The judgment emphasized the preservation of accrued tax liabilities and the authority's right to assess and collect taxes even after the repeal of the old Act.