1975 (7) TMI 143 - HC - VAT and Sales Tax

Summary

Issues:
1. Jurisdiction of the Deputy Commissioner in revising taxable turnover.
2. Legality of the order dated 3rd January, 1967, made by the Deputy Commissioner.
3. Applicability of the period of limitation under section 32(2) of the Tamil Nadu General Sales Tax Act to a remanded case.

Jurisdiction of the Deputy Commissioner in revising taxable turnover:
The respondent-assessees, unlicensed dealers in hides and skins, were initially exempt from sales tax based on a decision by the Deputy Commercial Tax Officer. However, a subsequent Supreme Court ruling held unlicensed dealers liable for tax. The Deputy Commissioner then issued a notice to revise the taxable turnover, leading to a series of orders and appeals. The Tribunal allowed the assessees to raise a new contention regarding export sales, remanding the case for further consideration. Despite an unauthorized order by the Joint Commercial Tax Officer, the Deputy Commissioner correctly set it aside and proceeded with the remanded case. The Tribunal favored the appellants' argument that the Deputy Commissioner's order of January 3, 1967, was illegal due to exceeding the prescribed period under section 32(2).

Legality of the order dated 3rd January, 1967, made by the Deputy Commissioner:
The main issue raised before the Tribunal was the legality of the Deputy Commissioner's order dated January 3, 1967, contending it was beyond the prescribed period under section 32(2). The Tribunal agreed with this argument, prompting the State to file a revision petition. The Deputy Commissioner's authority to revise the taxable turnover and make subsequent orders within the statutory limitations was crucial in determining the legality of the January 3, 1967, order.

Applicability of the period of limitation under section 32(2) to a remanded case:
The judgment clarified that the period prescribed under section 32(2) of the Act applies only to orders made by the Deputy Commissioner in his original proceedings, not to cases remanded by appellate or revisional authorities. Drawing parallels with similar provisions in the Income-tax Act, the court emphasized that the limitation period should not restrict the Deputy Commissioner's jurisdiction to act within the prescribed time frame, especially in remanded proceedings. Citing a Supreme Court decision, the judgment concluded that the period under section 32(2) does not bind fresh orders made in pursuance of a remand order, ensuring the effective administration of justice. Consequently, the tax revision case was allowed, setting aside the Tribunal's order and awarding costs to the petitioners.