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TMI Blog1977 (3) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... essment years 1968-69 and 1969-70. Since there are two assessees and two assessments for two years, we are having on the whole four tax revision cases. The facts are not complicated and are very brief. Both the assessees trade in cloth and other articles. They filed A-1 (annual return) for these two assessment years showing turnover of less than Rs. 10,000 per year. At that time, turnovers of Rs. 10,000 and below were exempt from sales tax. The assessing authority accepted these returns and passed nil assessment. Sometime thereafter, information reached the officer that the assessees had other transactions like purchasing from third parties, which were not shown in the returns. Then proceedings under section 14(4) of the Act were started. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tappaiah Sastry, the learned Government Pleader, contends that the Act postulates the taxing of the entire turnover of a dealer for the year. That is so laid down under section 5(1) of the Act. Section 14 provides for assessment of tax. No interpretation can be given to any portion or part of section 14 which is inconsistent with the policy of the Act to levy tax on all turnovers which are above a particular limit fixed under section 5(1). It is in that light, so argues Mr. Sastry, sub-section (4) should be understood. Here, not only the newly discovered turnover but also the originally disclosed turnover escaped tax and, therefore, the assessing authority in exercise of his powers under section 14(4), can assess the totality of the turnove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here: "(4) In any of the following events, namely, where the whole or any part of the turnover of a business of a dealer has escaped assessment to tax, or has been under-assessed or assessed at a rate lower than the correct rate, or where the licence fee or registration fee has escaped levy or has been levied at a rate lower than the correct rate, the assessing authority may, after issuing a notice to the dealer, and after making such inquiry as he may consider necessary, by order, setting out the grounds therefor- (a) determine to the best of his judgment the turnover that has escaped assessment and assess the turnover so determined; (b) assess the correct amount of tax payable on the turnover that has been under-assessed.........." T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond the taxable limit, then certainly the situation comes squarely within the ambit of sub-section (4)(a). Since the original return showed a turnover which was less than the taxable limit, it escaped from assessment to tax. Later, more turnover was discovered. If both of them are added together, and if the total goes beyond the exemption limit, then it means that the whole of the turnover of the business of the dealer for the year has escaped assessment. That is to say, if, in the first instance, the original turnover is below the exemption limit and the assessing officer has accepted it and later discovered some more turnover, thereby making the total turnover for the year more than the exempted limit, the authority is conferred with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the circumstances of the present cases the authority has no power to add the originally disclosed turnover to the newly discovered turnover and assess the total amount to tax. Such a power is clearly provided under sub-section (4)(a). It would be a different matter if the original turnover was assessed to tax; then different considerations would prevail. In the present cases, all the original returns showed only turnovers of Rs. 4,000 to Rs. 5,000 per year and thus secured nil assessment orders from the assessing authority. Therefore, when new turnover was discovered which, along with the original assessment, took the total turnover beyond the exemption limit, the authorities were right in imposing tax on the total amount under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 959] 10 S.T.C. 574., deals with the power of revision; and the Madhya Pradesh High Court held that the power does not include the power to tax a turnover which has escaped assessment. In Tara Chand Kalloo Ram v. Sales Tax Officer[1962] 13 S.T.C. 957., the Allahabad High Court held that assessment is a judicial function and that the Sales Tax Officers should apply their minds carefully to the assessment and the material placed before them. There cannot be any doubt or dispute about this position. In Commissioner of Sales Tax, Madhya Pradesh v. Kunte Brothers[1962] 13 S.T.C. 366., which is a case before the Madhya Pradesh High Court, earlier turnover was taxed and the tax was paid. Therefore, the facts of that case have no resemblance to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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