1978 (10) TMI 137 - HC - VAT and Sales Tax

Issues Involved:
1. Limitation on reassessment proceedings under Section 19 of the Sales Tax Act.
2. Continuation of assessment proceedings after remand by the appellate authority.
3. Interpretation of the term "determine" in the context of rule 33 of the Sales Tax Rules.
4. Applicability of Supreme Court decisions on the issue of limitation and reassessment.

Issue-wise Detailed Analysis:

1. Limitation on Reassessment Proceedings under Section 19 of the Sales Tax Act:

The appellants challenged the decision of a learned Judge who held that the reassessment proceedings under Section 19 of the Sales Tax Act were barred by limitation. The relevant assessment years were 1963-64 to 1966-67, and the reassessment orders were dated 31st January 1975. The original assessment orders were dated 6th and 10th January 1968. An appeal against these orders resulted in a remand for fresh assessment, leading to the issuance of a notice on 4th July 1974 and subsequent reassessment orders. Section 19 stipulates a four-year limitation period for reassessment from the expiry of the relevant tax year. The court noted that the bar of four years applies to the initiation of proceedings to determine the turnover, not to the actual determination itself. Once reassessment proceedings are initiated, they can continue beyond the four-year period.

2. Continuation of Assessment Proceedings after Remand by the Appellate Authority:

The court held that reassessment proceedings following a remand by the appellate authority are a continuation of the original proceedings, not a fresh commencement. This principle was supported by the Supreme Court's decision in Sales Tax Officer v. Sudarsanam Iyengar & Sons, which established that assessment proceedings are pending from initiation until terminated by a final order. The court emphasized that once assessment proceedings are initiated, they run their course to final termination by way of appeal, revision, or otherwise.

3. Interpretation of the Term "Determine" in the Context of Rule 33 of the Sales Tax Rules:

The court referred to the Supreme Court's interpretation of the term "determine" in rule 33 in Sales Tax Officer v. Sudarsanam Iyengar & Sons. The Supreme Court observed that the term "determine" in the context of sales tax legislation is comprehensive and includes the entirety of proceedings taken with regard to assessment. It does not merely refer to the final order of assessment. The court rejected the argument that the term "determine" implies a requirement to complete the assessment within the limitation period.

4. Applicability of Supreme Court Decisions on the Issue of Limitation and Reassessment:

The court reviewed several Supreme Court decisions, including Commissioner of Agricultural Income-tax v. L. Kochuvareed and Additional Assistant Commissioner of Sales Tax v. Firm Jagmohandas Vijay Kumar, which supported the view that reassessment proceedings following a remand are a continuation of the original proceedings. The court also referred to the decision in Jaipuria Brothers Ltd. v. State of U.P., where the Supreme Court held that the period of limitation for reassessment is unrelated to whether the order is original or pursuant to a remand. The court found that these decisions were consistent with the principle that reassessment proceedings initiated within the limitation period can continue beyond it.

Conclusion:

The court concluded that the learned Judge's view could not be sustained in light of the judicial decisions. The reassessment proceedings initiated within the four-year limitation period were valid, even if the final orders were made after the expiry of the period. The appeal was allowed, and the judgment of the learned Judge was set aside, resulting in the dismissal of the writ petition with no order as to costs.

Appeal Allowed.

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