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TMI Blog1957 (9) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... mption on the turnover of Rs. 27,424-9-3 relating to his business as a buying agent. This order was however revised later by an order of the same officer marked as Ex. A-3(a) dated the 30th March, 1946 (whereof Ex. A-3 is a certified copy) whereby the exemption granted in respect of the turnover relating to the buying agency was cancelled. The appellant filed appeals to the Commercial Tax Officer against these orders, Exs. A-2(a) and A-3(a), in vain. He could also obtain no relief from the Board of Revenue to which he took up the matter. The suit out of which this second appeal arises impeached the validity of both these orders and the appellant has failed in both the courts below. I shall first deal with the appellant's contention relating to Ex. A-2 (a). In the first place, he says that he was not served with the notice prescribed by rule 9 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. That rule provides that where any return submitted by a dealer appears to the assessing authority to be incorrect or incomplete, the assessing authority shall, before determining the turnover of the dealer to the best of his judgment after making such enquiry as he consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, he could have produced it even before the Commercial Tax Officer on appeal. It is no doubt true that presumably the Deputy Commercial Tax Officer was ready with his order of assessment on 29th January, 1946, and after listening to the appellant's explanation saw no reason to alter it because his order is dated the same day as the date of the notice served upon the appellant. I agree however with the lower appellate court that in the absence of proof of any prejudice to the appellant he cannot impeach the validity of that order simply because the terms of Ex. B-4 are not in strict technical accordance with the language of rule 9. This contention must therefore be rejected. The second ground of attack directed against Ex. A-2(a) is that the reasons given by the Commercial Tax Officer on appeal-and it is those reasons which must be deemed to have governed the decision refusing the exemption-are not valid. In his order dated 9th February, 1947, marked as Ex. A-9 in the case, two principal reasons are given by the Commercial Tax Officer for rejecting the appellant's claim for exemption in repect of the sum of Rs. 1,99,118-9-6 which is the aggregate of the two sums claimed by him as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng them on to his principals. The extra collections so made are rusum, dharmam and kolagaram. The Appellate Assistant Commissioner found that such amounts were not passed on to the selling principal or the buying principal. In Radhakrishna Rao v. Province of Madras(1) which was a case which arose from the West Godavari district while the present case is from the neighbouring district of East Godavari, the learned Judges remarked as follows as regards similar collections: "The general evidence is that these charges are made by all the commission agents in the locality and have received the sanction of mercantile usage. Indeed, the learned Advocate-General did not address any argument in respect of these collections. The Government appear to have recognised this fact as is evident from condition 5 contained in the form which was substituted for the original form by a Government order dated 7th February, 1948." In fact condition 5 contained in a later form which was substituted for the original form of the licence indicates that the Government recognised the practice in respect of some of these additional charges. The condition is in these terms: "The agreed commission or brokerag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectness of the findings of the lower court on these points. I am therefore of the opinion that it has been established that the appellant did not conform to the conditions of the licence granted to him and that he is not entitled to the exemption in section 8 of the Madras General Sales Tax Act." Having regard to the observations of the Full Bench I think that these extra collections cannot be held to involve violation of the terms of the licence and there is no serious argument to the contrary. But it is argued by the learned Government Pleader that as pointed out by the learned Subordinate Judge there are several defects in the accounts and that by mixing up both the transactions, the plaintiff attempted to pass off his own business as commission business and that therefore he is not entitled to the benefit of the exemption. The learned Subordinate Judge observed in paragraph 15 of his judgment as follows: "The assessing authorities detected some defects in the accounts maintained by the plaintiff such as the maintenance of a single daybook in respect of both the transactions and the crediting of the amount which he realised by way of rusum, dharmam, commission etc. to the respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the tax payable under section 3(1) of the Madras General Sales Tax Act of 1939 only to the extent to which the goods bought or sold through him are included in the turnover of the principals or in the turnover of the dealers from whom purchases were made. 3.. This licence shall not apply to the transactions of the licenceholder carried on otherwise than for an agreed commission or brokerage on behalf of known principals (including firms) in the province specified in his accounts, or to the transactions of the licence-holder on behalf of principals outside the province. No correction in this licence shall be valid unless it is ordered and attested by the undersigned. Licensing Authority. " We are at present concerned only with the meaning and effect of condition No. 3, read in the light of section 8 of the Act the material portion of which is as follows: "The Provincial Government may on the application and on payment of such fee as may be prescribed in that behalf, license any person under this section who for an agreed commission or brokerage buys or sells on behalf of known principals specified in his accounts in respect of each transaction and may exempt from the tax under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mercial Tax Officer on two grounds. He contends in the first place that the original assessing authority has no power under rule 17 of the Madras General Sales Tax Rules, 1939, to revise his own order merely because he has changed his previous view in regard to the claim for exemption. Before proceeding to discuss the question of jurisdiction, it may be stated that Ex. A-3 purports to proceed upon the basis of a re-check of the plaintiff's accounts. In the officer's own words, "The accounts have again been checked by the Special Deputy Commercial Tax Officer and the following irregularities in accounts have been noticed which call for a revised assessment on the entire turnover." It is to be remarked that the irregularities mentioned were always there and it cannot be said that they were overlooked at the time when Ex. A-2(a) was passed. Now, rule 17 as it stood at the time in so far as it is relevant is as follows: "17. (1) If, for any reason, the whole or any part of the turnover of business of a dealer or licensee has escaped assessment of the tax in any year.the assessing authority.may at any time within the year.next succeeding that to which the tax.relates, determine to the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... novers, notwithstanding that the latter also would mean that a lesser amount of tax has been levied. So understood the two provisions would be completely reconcilable and the two jurisdictions-to revise assessments and to reopen them-would each be assigned to the proper authority. The language of rule 17(1) is consistent with this construction. The escape that serves as the foundation of the jurisdiction to reopen an assessment is that of turnover and not, be it noted, an assessment. Turnover escapes when it is not noticed by the officer either because it is not before him by reason of an inadvertence, omission or deliberate concealment on the part of the assessee or because of want of care on the part of the officer, the turnover, though in the books, has not been taken notice of. This would be the natural and normal meaning of the expression turnover which has escaped in rule 17(1)." I am in respectful agreement with the view embodied in the above passage. Applying this test, it is clear that there was no question of any escaped turnover in the present case. In the original order, this turnover was dealt with and exempted. The assessing authority had therefore no power to revis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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