1991 (4) TMI 401 - HC - VAT and Sales Tax

Summary

Issues involved:
The judgment involves two main issues: 1. Whether the Joint Commissioner had the authority to bring an alleged escaped turnover to tax under section 34 of the Tamil Nadu General Sales Tax Act, 1959. 2. Whether the order of the Joint Commissioner was within the limitation period prescribed under section 16 of the Act.

Issue 1: Authority of Joint Commissioner under section 34:
The appellant challenged the Joint Commissioner's order under section 34 of the Act, arguing that the alleged escaped turnover of Rs. 1,84,985 was not part of the original assessment or appellate proceedings. The appellant contended that the power to bring an escaped turnover to tax lies with the assessing authority under section 16 of the Act, not with the Joint Commissioner exercising suo motu revisional powers. The Court held that the Joint Commissioner exceeded his powers by attempting to tax the alleged escaped turnover for the first time, as it was not part of the assessment or appellate proceedings.

Issue 2: Limitation period under section 16:
The Court examined the limitation period under section 16 of the Act in relation to the alleged escaped turnover. It was found that the assessment year was 1974-75, with the discovery of the turnover in 1980. The notice under section 34 was issued in 1981, which was beyond the five-year limitation period from the year of escape as prescribed under section 16(1) of the Act. The Court emphasized that the Joint Commissioner lacked jurisdiction to bring the escaped turnover to tax not only under section 34 but also due to it being outside the limitation period. Consequently, both preliminary objections were upheld, the Joint Commissioner's order was set aside, and the Court refrained from commenting on the case's merits.

Separate Judgement:
No separate judgment was delivered by the judges in this case.