1974 (7) TMI 96 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of rectification orders passed after the expiry of five years.
2. Interpretation of Section 25A of the Karnataka Sales Tax Act.
3. Applicability of precedents and comparative statutory provisions.

Issue-wise Detailed Analysis:

1. Jurisdiction of Rectification Orders Passed After the Expiry of Five Years:
The primary contention raised by the petitioner was that the rectification orders were invalid as they were passed after the expiry of five years from the original assessment orders. The petitioner did not dispute that the notices for rectification were issued within the five-year period but argued that the final rectification orders should have been passed within this timeframe. The court had to determine whether the rectification orders were without jurisdiction due to being passed beyond the five-year limit.

2. Interpretation of Section 25A of the Karnataka Sales Tax Act:
Section 25A authorizes the rectification of mistakes apparent from the record within five years from the date of the original order. The petitioner emphasized the phrase "may at any time, within five years from the date of an order passed by it, amend such order," arguing that this implied the final rectification order must be passed within five years. The court considered the language of Section 25A and whether the issuance of a notice within the five-year period sufficed to validate a rectification order passed after this period.

3. Applicability of Precedents and Comparative Statutory Provisions:
The petitioner relied on a Division Bench decision in *K.G. Subramanya v. T.V. Reddi*, which dealt with Section 35(2) of the Karnataka Agricultural Income-tax Act. The court in that case held that the final order must be passed within the prescribed period, despite the initiation of proceedings within that period. Conversely, the respondent cited a Supreme Court decision in *Sales Tax Officer, Special Circle, Ernakulam, and Another v. Sudarsanam Iyengar & Sons*, where the Supreme Court held that assessment proceedings are pending from initiation until terminated by a final order, and the issuance of a notice within the prescribed period was sufficient.

Detailed Analysis:

Jurisdiction and Timing of Rectification Orders:
The court analyzed Section 25A, emphasizing the phrase "within five years from the date of an order passed by it, amend such order." The court noted that the issuance of a notice within the five-year period should be considered an integral part of the rectification process. The court found that the expression "amend" does not solely refer to the final rectification order but includes the initiation of proceedings by issuing a notice.

Precedent Analysis:
The court compared the language of Section 25A with Rule 33 of the Travancore-Cochin General Sales Tax Rules, as interpreted by the Supreme Court in *Sudarsanam Iyengar & Sons*. The Supreme Court held that the term "determine" in Rule 33, although typically implying a final decision, in the context of sales tax legislation, meant to "proceed to assess." The court applied this reasoning to Section 25A, concluding that the issuance of a notice within the five-year period sufficed to validate a rectification order passed after the expiry of this period.

Distinguishing Precedents:
The court distinguished the petitioner's cited case, *K.G. Subramanya v. T.V. Reddi*, by noting that Section 25A's language differs from Section 34(3) of the Income-tax Act, 1922, which explicitly barred final orders beyond a specified period. The court held that the language of Section 25A is analogous to Rule 33 of the Travancore-Cochin General Sales Tax Rules, making the Supreme Court's decision in *Sudarsanam Iyengar & Sons* applicable.

Conclusion:
The court concluded that the rectification orders were not without jurisdiction, as the notices were issued within the prescribed five-year period. The petitions were dismissed, affirming the validity of the rectification orders despite being passed after the five-year period.

Final Judgment:
The court dismissed the petitions, holding that the Commercial Tax Officer did not exceed his jurisdiction in passing the rectification orders, as the show cause notices were issued within the prescribed period. The petitions were dismissed without costs.