TMI Blog1958 (3) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer on 16th March, 1954, i.e., after the lapse of about 3 years and 9 1/2 months from the date of the coming into force of the Travancore-Cochin General Sales Tax Act-Travancore-Cochin Act, XI of 1125. The assessment also has been made after the repeal by the said Act of the Cochin Sales Tax Act-Cochin Act, XV of 1121. After the repeal of the latter Act, the 3rd respondent has no more jurisdiction to make any assessment under that Act. In fact, no proceedings were commenced nor were pending the assessment at the time when the Cochin Act was repealed. It is also stated that the 3rd respondent has not made it clear as to whether assessment is under section 11 of the Cochin Act, XV of 1121, or under section 19 of the said Act. The assessment in question is one made without jurisdiction by the Sales Tax Officer and the same is also vitiated for want of the necessary notice as per section 11 or section 19 of the Cochin Act. If the assessment is to be considered as one under the Travancore-Cochin General Sales Tax Act-Travancore-Cochin Act, XI of 1125-then it is barred by limitation. There are also certain other allegations that some exemptions claimed by the assessees have not been a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessment in this case is under the Cochin Act, Act XV of 1121, or under the Travancore-Cochin Act, XI of 1125. The assessment order of the 3rd respondent is marked as Ext. P in these proceedings. No doubt, it is headed as under rule 18 of the Travancore-Cochin General Sales Tax Act and Rules, 1950. But the notice of final assessment and demand which is marked as Ext. I in this case shows that the assessee has been assessed under the Cochin Sales Tax Act, XV of 1121. Further, it is also stated in the said notice that if the amount is not paid within 20 days from the date of service of the notice, the amount will be recovered as if it were an arrear of land revenue and that the assessee will be liable to a fine as provided in section 31 of the Cochin Sales Tax Act, XV of 1121. Therefore, to my mind, it is very clear that the assessment is not under the Travancore-Cochin Act, Act XI of 1125, but really under the Cochin Sales Tax Act, Act XV of 1121. That the assessee understood that it is an assessment under the Cochin Act is also evident from the appellate order of the 2nd respondent, Ext. P-2. The 2nd respondent, after setting out the contentions of the assessee states that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke any provision for keeping alive the rights or obligations under the repealed enactment. So ran the argument of Mr. Peter. On the other hand, Mr. Shenoi, learned Government Pleader appearing for the respondents, contended that the repeal of the Cochin Act does not take away the jurisdiction of the 3rd respondent to assess under the Cochin Act. This is a liability already incurred under the Cochin Act and there is no provision in the Travancore-Cochin General Sales Tax Act which will in any way destroy the rights of the Department to act under the Cochin Act. The learned Government Pleader further relied upon the provisions of the General Clauses Act and certain decisions in support of his contention. They will be referred to at the appropriate place later in the judgment. The learned Government Pleader further contended that this question of jurisdiction was not taken before the 3rd respondent at the time when the assessment was made and, therefore, it is not open to the petitioner to raise this contention in this writ proceedings. The learned Government Pleader further contended that the liability to pay the tax has already arisen and that has nothing to do when the final order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplete and provisionally make the assessment or for the Sales Tax Officer determining the turnover to the best of his judgment when no return is submitted or if the return submitted is found to be incorrect or incomplete. Clause (4) of section 10 provides for an assessee continuing to pay tax as in the previous year until the receipt of a notice of provisional assessment and for the tax paid to be adjusted towards the tax payable under the provisional assessment or the final assessment. Clause (7) of section 10 provides for the dealer paying each month 1/12 of the tax provisionally fixed under the scheme. Section 11 provides for the final assessment being made by the Sales Tax Officer determining the tax payable by the dealer in the preceding year. It also provides for the officer either accepting the return and making the assessment or calling upon the assessee to produce evidence in support of his return and for the officer making assessment thereafter. Clause (4) of section 11 provides for the officer assessing to the best of his judgment the amount of tax in cases where the dealer fails to comply with the terms of the notice after having furnished a return. It is the case of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with this contention, the learned Judges at page 52 observed: "This argument proceeds on a wrong assumption that chargeability to tax is the same thing as liability to pay. 'Liability' means no more than 'to be under an obligation' and does not necessarily connote an existing liability......It is clear, therefore, that the expression 'liability' occurring in section 4 refers to a contingent liability which may continue or cease upon the happening of a certain event and this liability is expressly stated to be 'subject to the provisions of sections 5, 6, 7 and 8.' .........These provisions indicate that the liability to pay does not arise until an assessment has been made according to the directions laid down in the Act................The dealer is required to furnish a return, and if the Collector is satisfied that the return furnished is correct and complete, he shall assess the amount of tax due from the dealer on the basis of such returns. Until the tax has been determined-and it cannot be determined unless the Collector is satisfied with the return furnished by the dealer-the tax does not become payable nor is the liability to pay 'incurred' under the Act.....To read into th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. observed at page 119 as follows: "The rate of tax for the year of assessment may be fixed after the close of the previous year and the assessment will necessarily be made after the close of that year. But the liability to tax arises by virtue of the charging section alone, and it arises not later than the close of the previous year though quantification of the amount payable is postponed." These observations also show that the liability to pay tax arises in view of the section charging the liability and that the assessment which quantifies the tax is not for the first time imposing a liability. The decision of the Federal Court in Chatturam and Others v. Commissioner of Income-tax, Bihar[1947] 15 I.T.R. 302., is also to the same effect. At page 307 of the reports their Lordships observed as follows: "It was next contended that in the present case notices under section 22(1) and (2) of the Income-tax Act were already issued before the notification of 26th May, 1940. The notices were the foundation of the jurisdiction of the Income-tax Officer. At that time the Finance Act of 1940 was not operative in the area in question and the Governor, by his notification, cannot give jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are all only with a view to quantify the actual amount of tax payable by a party. Therefore, it is not possible for me to accept the contention of the learned counsel for the petitioner that the liability to pay tax is imposed for the first time only when the order of assessment was passed on 16th March, 1954. No doubt, the decision of the Orissa High Court in Chakoo Bhai Ghelabhai v. State of Orissa[1956] 7 S.T.C. 36. relied upon by the learned counsel for the petitioner appears prima facie to support his contentions. But the decisions of the House of Lords, the Privy Council and our Federal Court do not appear to have been brought to the notice of the learned Judges of the Orissa High Court. With great respect, the reasoning of the learned Judges of the Orissa High Court that a liability for payment of tax can be said to be complete only when the order of assessment is made, does not appear to be correct, in view of the decision of the House of Lords which has been approved by the Privy Council and by our Federal Court. Therefore, it follows that the petitioner is liable to pay the tax for the period in question by virtue of section 4 of the Cochin Act of 1121 as amended subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties under the Cochin Act. That it is not necessary to so preserve when an Act is repealed is clear from the two decisions of the Supreme Court, the one reported in State of Punjab v. Mohar SinghA.I.R. 1955 S.C. 84. and the other in Indira Sohanlal v. Custodian of E.P. A.I.R. 1956 S.C. 77.. In State of Punjab v. Mohar Singh A.I.R. 1955 S.C. 84., their Lordships were considering clauses (c), (d) and (e) of section 6 of the General Clauses Act which corresponded to clauses (c), (d) and (e) of section 4 of the Travancore-Cochin General Clauses Act. Their Lordships in considering the effect of a repeal observed at page 88: "In our opinion the approach of the High Court to the question is not quite correct. Whenever there is a repeal of an enactment, the consequences laid down in section 6 of the General Clauses Act will follow unless, as the section itself says, different intention appears. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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