1969 (7) TMI 107 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of revision orders made by Deputy Commissioner of Commercial Taxes
2. Interpretation of section 34 of Mysore Act 9 of 1964 regarding validation of assessment orders

Analysis:

Issue 1: Validity of revision orders made by Deputy Commissioner of Commercial Taxes
The case involved revision petitions challenging the assessment orders made by the Commercial Tax Officers regarding the levy of sales tax on cloth held in stock on 14th December, 1957. The petitioners contended that the revised assessment orders were illegal as they were made beyond the prescribed time limit for revision. However, the court held that the Deputy Commissioner of Commercial Taxes acted within the statutory provisions in revising the assessment orders. The turnovers in question were not escaped turnovers but were initially brought to tax, then exempted following a court decision, and later subjected to tax again through retrospective legislative amendments. The court emphasized that the power to assess escaped turnover is distinct from revisional jurisdiction, and the Deputy Commissioner rightly exercised his powers to rectify the illegal assessment orders. Therefore, the court rejected the argument that the revised orders were illegal due to being beyond the time limit for revision.

Issue 2: Interpretation of section 34 of Mysore Act 9 of 1964 regarding validation of assessment orders
The petitioners argued that section 34 of Mysore Act 9 of 1964 validated the revised assessment orders and refunds, making them deemed validly done. However, the court clarified that the purpose of the amendment was to ensure the realization of tax on sales of cloth held in stock on 14th December, 1957, and to validate assessments made on that basis. The court emphasized that the validation did not preclude the revision or rectification of assessment orders under the Act. The court highlighted that the validation aimed to uphold the assessments and refunds made under the amended Act, but it did not restrict the authorities from revising or correcting such orders if required under the statutory provisions. Therefore, the court dismissed the argument that the Deputy Commissioner could not revise the assessment orders due to their validation under section 34. The court concluded that the validation did not prevent the authorities from rectifying mistakes or revising orders, ensuring the collection of taxes as intended by the legislative amendment.

In conclusion, the court dismissed the revision petitions, upholding the actions of the Deputy Commissioner of Commercial Taxes in revising the assessment orders and collecting taxes on cloth sales held in stock on 14th December, 1957.