1962 (10) TMI 54 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Applicability of section 14(1) versus section 14(3) of the Andhra Pradesh General Sales Tax Act, 1957.
2. Limitation period for assessments under the Central Sales Tax Act, 1956.
3. Validity and enforceability of the assessment order.

Issue-wise Analysis:

1. Applicability of Section 14(1) versus Section 14(3) of the Andhra Pradesh General Sales Tax Act, 1957:
The primary issue revolves around whether the assessment falls under section 14(1) or section 14(3) of the Act. Section 14(1) applies when the assessing authority is satisfied that the return submitted is correct and complete, requiring the assessment to be completed within four years. Section 14(3) applies if the dealer fails to submit the return on time, allowing the assessment to be completed within six years. The court noted that the assessees submitted their return late but before any inspection. The court held that a belated return should not be treated as a case of no return, referencing the case of State of Andhra Pradesh v. Pyarelal Malhotra, where a return filed after the prescribed time was still considered valid under section 14(1).

2. Limitation Period for Assessments under the Central Sales Tax Act, 1956:
The court examined whether the period of limitation prescribed under section 14(1) of the Andhra Pradesh General Sales Tax Act applies to assessments under the Central Sales Tax Act. The court referred to section 9(2) of the Central Sales Tax Act, which empowers state authorities to assess and collect tax as if it were under the state law. The court found no inconsistency between rule 14-A(5) of the Central Sales Tax (Andhra Pradesh) Rules, which prescribes no specific limitation period, and section 14(1) of the Act. The court emphasized that the four-year limitation period under section 14(1) is applicable, ensuring consistency and avoiding confusion.

3. Validity and Enforceability of the Assessment Order:
The court concluded that the assessment was made under section 14(1) since the return was accepted as correct and complete, and the assessment was not based on the best judgment of the assessing authority. Therefore, the assessment should have been completed within four years from the expiry of the assessment year. Since the assessment was completed beyond this period, it was deemed invalid and unenforceable. The court referenced the Supreme Court's decision in State of Madras v. S.G. Jayaraj Nadar & Sons, which supports the view that accepting account books and records negates the need for a best judgment assessment.

Conclusion:
The court allowed the revision case, setting aside the impugned assessment order due to its completion beyond the prescribed four-year limitation period under section 14(1) of the Andhra Pradesh General Sales Tax Act, 1957. The assessment was deemed invalid and unenforceable, with no order as to costs, and an advocate's fee of Rs. 150 was awarded.