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TMI Blog1962 (1) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... at this stage mention that as against the assessment orders, which are under attack in O.P. Nos. 214 and 215 of 1960, appeals before the appropriate Appellate Assistant Commissioners are pending. In those appeals, I am informed by Mr. Rama Shenoi, learned counsel for the petitioners, that several attacks are made on questions of fact also. Therefore, I make it very clear that even in respect of those writ petitions, excepting upon adjudicating on the question regarding the legality of the levy of surcharge and the question relating to exemption from taxation on maida, all other questions are free to be canvassed by the respective petitioners in the appeals that they have filed, and which are pending before the Appellate Assistant Commissioners. 6.. The question of arbitrary assessment raised in O.P. No. 1585 of 1960 will be considered after adjudicating upon the common questions of law that have been raised in all these writ petitions. 7.. The first attack that is made as against these orders relates to the levy of surcharge under Kerala Act No. XI of 1957. The competency of the Legislature to enact the measure in question cannot now be disputed, more especially because of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales Tax Act is really to impose an indirect tax and to enable the dealers to collect the same, as will be seen from the scheme of the General Sales Tax Act itself. The learned counsel further urges that the object of Kerala Act XI of 1957, as will be seen from the preamble to the said enactment, is also clear, viz., that there should be a further tax on the sale or purchase of goods. If so, the learned counsel contends that there is absolutely no reason as to why, when a dealer is permitted to pass on the liability for the sales tax to a consumer, the same principle should not apply also in the case of a levy of surcharge. 13.. On the other hand, the learned Advocate-General appearing for the State has contended that the provision of sub-section (2) of section 3 are perfectly valid and there is absolutely no discrimination in the matter of levy of surcharge. The learned AdvocateGeneral further urged that the circumstance that a dealer is allowed to pass on the liability for sales tax under the General Sales Tax Act and that he is not so allowed to pass on the liability for payment of surcharge under Kerala Act XI of 1957, cannot be considered to be in any manner discriminatory, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Article 14 of the Constitution. 17.. After giving due consideration to the various aspects that have been presented by Mr. V. Rama Shenoi, the learned counsel for the petitioners, and also the learned Advocate-General for the State, I am satisfied that the contentions of the learned counsel for the petitioners cannot be accepted. 18.. As pointed out by the learned Advocate-General, sub-section(1) of section 3 of Kerala Act XI of 1957 makes all the dealers, whose total turnover exceeds Rs. 30,000 in a year, liable for payment of surcharge. I have already stated that there is no attack on section 3(1). The fact that under the General Sales Tax Act a dealer is permitted to pass on the tax to the consumer, and that under Act XI of 1957 such passing is not permitted, does not, in my view, by itself make the provisions of the latter Act in any manner discriminatory. In my view, there is absolutely no scope for invoking the provisions of Article 14 of the Constitution in applying the provisions of sub-section (2) of section 3 of the Kerala Act XI of 1957. All dealers, having a turnover exceeding Rs. 30,000 are treated alike, and there is no discrimination as between one dealer having a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that is directly taken in by Entry No. 54 in List II of the Seventh Schedule to the Constitution. Article 276, as pointed out by the learned Advocate-General, deals with matters provided in Entry No. 60 of List II. Therefore, the reliance placed upon Article 276 by Mr. Rama Shenoi cannot assist him in his contention that sub-section (2) of section 3 of Kerala Act XI of 1957 infringes the provisions of Article 276 of the Constitution. 22.. Therefore, the attack made on sub-section (2) of section 3 that it is violative of the provisions of Article 14 or that it is violative of Article 19(1)(f) and (g) or that it is violative of Article 276 of the Constitution, has to be negatived. Inasmuch as the competency of the State Legislature to enact such a measure has not been challenged, as I pointed out above, the attack made upon the levy of surcharge has to be negatived. 23.. The second contention that has been raised in O.P. Nos. 214 and 215 of 1960 relates to the disallowing of exemption claimed under section 5(vi) of the General Sales Tax Act. Under section 5, which deals with exemptions and reductions of tax, it is provided under clause (vi) that the sale of foodgrains shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the various items mentioned therein may be articles of food or may be fit for consumption. The learned Government Pleader urged that inasmuch as the exemption is claimed by the petitioner, he must clearly establish that the exemption claimed by him comes within the four corners of section 5(vi) read with the definition of foodgrains contained in section 2(dd) of the Act. 28.. In my view, it is not necessary to refer to the various decisions to which my attention has been drawn by Mr. V. Rama Shenoi, where it has been held that maida is wheat flour and groundnut oil does not cease to be groundnut oil, notwithstanding the fact that it is subjected to certain chemical treatments. 29.. In this case, the decision must entirely depend upon the definition of the expression foodgrains as found in section 2(dd) of the Act. In my view, the learned Government Pleader is well-founded in his contention that the Legislature intended to give exemption only in respect of foodgrains in grain form and that expression has been defined in section 2(dd), and that will clearly show that excepting the various items in their original form mentioned therein, no other by-product is contemplated by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales Tax Officer sends a notice to the effect pointing out various defects in the accounts that were produced by the party. Ultimately, the officer is of the view that the accounts cannot be acted upon and, therefore, he says that the turnover for the year is proposed to be fixed to the best of judgment. There is, no doubt, a further statement to the effect that the dealer is informed that he is to file his objections regarding the proposal within the particular time mentioned therein. 38.. It must be pointed out at this stage that the notice exhibit P-1 does not give any indication whatsoever as to the basis that the officer proposes to adopt for the purpose of making the best judgment assessment. No doubt, the officer points out certain defects in the accounts and also concludes that it is impossible for him to accept the accounts as correct. 39.. The assessee sends a reply dated 28th October, 1960, under exhibit P-2. He refers to various letters and ultimately urges the officer to accept his accounts and make the assessment on that basis. The actual order of assessment is, as I mentioned earlier, exhibit P-3 dated 15th November, 1960. After referring to the various mistakes in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any such basis being furnished to the assessee, the assessee cannot certainly be said to have had a full and fair opportunity of placing his objections. Unless the various defects are communicated, it is idle for the party to file objections to the proposal. No doubt, in exhibit P-1 the dealer is asked to file his objections against the proposal. The party did file his objections under exhibit P-2, and that certainly can and could really only be by way of explanation or clarification of the various mistakes pointed out by the officer in the books of account. More than that, the party could not do when he sent the communication, exhibit P-2. 44.. As I mentioned earlier, Mr. Rama Shenoi has stated that the assessment for the previous year, viz., 1958-59, is stated to be pending appeal before the Appellate Assistant Commissioner. In the view that I take, namely, that the assessee was not made known of the basis of the assessment, which the assessing authority proposes to adopt in this case in exhibit P-1, the only course open to me is to set aside the order exhibit P-3 and keep the assessment pending and take up fresh assessment proceedings after the disposal of the appeal, which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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