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TMI Blog1975 (7) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... ,23,403.12 and a revised assessment was made on 19th May, 1966. In respect of the assessment year 1964-65, the suppressed turnover was found to be Rs. 2,63,384.14 and a revised assessment was made on 31st May, 1966. For the assessment year 1965-66, the assessee submitted a return disclosing a taxable turnover of Rs. 7,07,764.11 in form A-2. On the ground that there was a number of discrepancies in the entries in the account books and the evidence shown in the anamath accounts recovered on 8th April, 1966, the account books were not relied on and the taxable turnover was determined at Rs. 10,56,384.23 by an order dated 30th June, 1966. In respect of these three years, the assessing authority also levied penalties. The petitioner-assessee preferred three appeals before the Appellate Assistant Commissioner. Though their objections against the reassessments for 1963-64 and 1964-65 and the preassessment notice in respect of 196566 related to the merits of the case, at the stage of the appeals the assessee also contended that the firm was dissolved on 30th April, 1966, long before the orders under appeal and that therefore the said orders were bad in law. This was on the ground that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in the amending Act and the introduction of section 19-A with retrospective effect did not have the effect of validating the levy of penalty whatever may be said of the assessment or reassessment to tax. In this connection, he referred to the absence of the word "penalty" in section 5 and the reference to that word in section 19-A(b). Section 19-A, which was inserted by the amending Act with retrospective effect from 1st April, 1959, reads as follows: "Where a dealer is a Hindu undivided family, firm, or other association of persons, and such family, firm or association is partitioned, or dissolved, as the case may be,- (a) the tax payable under this Act by such family, firm, or association of persons for the period up to the date of such partition or dissolution shall be assessed as if no such partition or dissolution had taken place and all the provisions of this Act shall apply accordingly; and (b) every person who was at the time of such partition, or dissolution a member or partner of the Hindu undivided family, firm or association of persons and the legal representative of any such person who is deceased shall, notwithstanding such partition or dissolution, be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be void or of no effect, for, that would tantamount to reversing the decision of a court of law rendered in exercise of a judicial power, which a legislature does not possess or exercise. But, in tax matters, an invalid assessment, or the decision of a court holding a tax to be invalidly imposed because of either want of power to make, or of jurisdiction, or of invalidity of the Rules, could be validated, or the decision made ineffective by removing the basis of the illegality or invalidity and making the levy legally valid. The legislature achieves this end by. re-enacting, with retrospective effect, a valid and legal taxing provision, and, then by a fiction, make the tax already collected stand under the re-enacted law. These principles could be culled out from the decisions of the Supreme Court in Janapada Sabha, Chhindwara v. Central Provinces Syndicate Ltd.A.I.R. 1971 S.C. 57., Municipal Corporation of the City of Ahmedabad v. New Shrock Spg. and Wvg. Co. Ltd.A.I.R. 1970 S.C. 1292. (, Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality[1971] 79 I.T.R. 136 (S.C.); A.I.R. 1970 S.C. 192. and State of Tamil Nadu v. M. RayappaA.I.R. 1971 S.C. 231. An assessment on a di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or collected or purporting to have been levied or collected" would include not only the sales tax payable but also the penalties levied. He also relied on the fact that no separate order levying penalty is now contemplated under the Act and, therefore, according to him, the legislature could not have intended to validate an order in part and leave off the invalidity in respect of the other part. He further contended that in this case the revenue need not even invoke the validating provision contained in section 5, as that section dealt with assessment which had reached the stage of finality, and, in respect of pending matters, the power contained in section 19-A itself is enough to levy the penalty. It is not necessary for us to go into the question whether the words "all taxes levied or collected" occurring in the validating provision contained in section 5 would also include the levy of penalty, as we consider that this case could be decided on the basis that it is a proceeding "pending" and it had not reached the stage of finality. As can be seen from the statement of facts, at the time when the Validating Act was enacted and published, the assessment proceeding was pending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment by the Sales Tax Officer, after the expiry of the period of three years prescribed by the statute. In respect of the assessment year 1948-49 the original assessment was set aside by the appellate authority on the ground that the assessee was not a dealer. But, on a further revision, by order dated 28th March, 1955, the revising authority set aside that order of the appellate authority and remanded the case to the Sales Tax Officer for fresh assessment. In the fresh assessment proceedings, it was contended by the assessee that as the original assessment was set aside by the revising authority and then the matter was remanded for fresh consideration, no proceeding in connection with that assessment was pending and the reassessment was barred because more than three years had elapsed since the end of the order of assessment. The Sales Tax Officer rejected this contention and insisted on the production of the records as directed earlier. Thereupon, the assessee filed a writ petition in the High Court of Allahabad praying for the writ of prohibition restraining the Sales Tax Officer from proceeding with the assessment and also for a writ of certiorari to quash the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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