1972 (6) TMI 61 - HC - VAT and Sales Tax

Summary

Issues:
1. Jurisdiction of the revisional authority to enhance turnover under Madras General Sales Tax Act, 1939.
2. Validity of invoking section 32 of Madras General Sales Tax Act, 1959 for assessment year 1957-58.
3. Applicability of validating provision under Madras Act 10 of 1963 to cure jurisdictional defect.
4. Powers of Deputy Commissioner under section 12(2) of Madras Act 9 of 1939 compared to section 32(1) of Madras Act 1 of 1959.

Analysis:

1. The petitioners, who were dealers and commission agents, were assessed under the Madras General Sales Tax Act, 1939, for the year 1957-58. The Deputy Commissioner revised the assessment suo motu under section 32 of the Madras General Sales Tax Act, 1959, enhancing the net turnover significantly. The Tribunal upheld the enhancement based on suppressed purchases and sales found in the broker's accounts, despite the petitioners' objections. The court noted that the Tribunal accepted the broker's evidence and account books, which had been deemed genuine in previous cases, leading to the affirmation of the revisional authority's order.

2. The question of jurisdiction arose concerning the Deputy Commissioner's invocation of section 32 of Madras Act 1 of 1959 for the assessment year 1957-58 governed by Madras Act 9 of 1939. The court acknowledged the limitation that the Deputy Commissioner should have acted under section 12(2) of the old Act for the said assessment year. However, the court relied on a validating provision under Madras Act 10 of 1963, which deemed acts done under the new Act in connection with prior assessments to be lawful, thereby curing the jurisdictional defect.

3. The court further examined whether the Deputy Commissioner's order under section 32 of the new Act could be justified as an order under section 12(2) of the old Act. While recognizing the wider powers granted under the new Act, the court concluded that the Deputy Commissioner had not exceeded the limitations of section 12(2) in this case. The revisional authority had reevaluated existing evidence without introducing new turnover, thereby staying within the bounds of the old Act's provisions.

4. Ultimately, the court dismissed the tax case, emphasizing that the revisional authority had acted within its powers and the validating provision validated the actions taken under the new Act. The petition was dismissed without costs, affirming the enhancement of turnover by the revisional authority based on the evidence considered.