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TMI Blog1982 (11) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... ed even at the appellate stage. The contention of the appellants is that they got C form and form No. XVII after much difficulty from the dealers and the delay is due to the reasons beyond their control. We accept the plea of the appellants that they are entitled to file the C form and form No. XVII at this stage. Therefore the order of the Appellate Assistant Commissioner is liable to be set aside and the entire matter deserves to be remanded to the assessing officer for receiving the C form and the form No. XVII and for fresh disposal of the matter on merits." We have admitted the tax revision case preferred by the State against the order of the Tribunal. However, we are of the opinion that the legal position in this behalf has to be laid down with some degree of certainty, since the matter is one of repeated occurrence. Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957, deals with the production of the certificate in form No. XVII and C forms. Rule 12(7) reads as follows: "Rule 12. (7) The declaration in form C or form F or the certificate in form E-I or form E-II shall be furnished to the prescribed authority up to the time of assessment by the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iderable doubt as to whether that could be the effect of the provisions contained in rule 12(7) extracted already. In view of this, we direct the matter to be posted before a Full Bench after service of notice on the respondents in the tax revision case admitted by us. (T.C. No. 78 of 1980) The order of the Court was made by BALASUBRAHMANYAN, J.-In this case C forms had not been filed by the assessee before the assessment was concluded. The assessment was taken in appeal and at the stage of appeal before the Tribunal, the assessee produced the C forms. The Tribunal straightway accepted the C forms and gave a decision on the basis thereof. The State Government questions the power of the Tribunal to admit on record the C forms which had not been filed by the assessee at the time of the assessment proceedings. T.C. No. 196 of 1980 is a case with a slightly different set of facts, but in that case too the question which arises for consideration is whether the Tribunal has power to accept C forms produced at the appellate stage and not at the assessment proceedings. That T.C. stands posted for hearing before a Full Bench. In view of the identity of the question involved, we th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receiving C forms up to the time of assessment, is the assessing authority in view of rule 10 of the Central Sales Tax (Tamil Nadu) Rules, 1957. On the above provisions, the argument of the learned Government Pleader for the revenue before us was that C forms must be filed by the assessee before the assessing authority completes the assessment. The learned Government Pleader offered two reasons why an appellate authority, like the Appellate Assistant Commissioner or the Sales Tax Appellate Tribunal, cannot receive C forms: (i) With the completion of the assessment the time-limit for filing C forms expires. The appellate authority comes on the scene only after the assessment is over. It follows that the appellate authority cannot entertain C forms. (ii) Under the relevant statutory provisions, an assessing authority alone can allow further time. The appellate authority is different from an assessing authority. Therefore, the appellate authority cannot allow further time and receive C forms at the appellate stage, subsequent to the assessment. We accept the contention of the learned Government Pleader that the assessing authority, as the prescribed authority, has the power to allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority is empowered to exercise in relation to an assessment under appeal, has got to be exercised only in the same manner and subject to the same conditions, if any, which govern the exercise of the power of assessment by the assessing authority in the first instance. It follows, therefore, that whatever discretion is conferred on the assessing authority for purposes of assessment must so be regarded, as a matter of statutory construction, to have been conferred on the appellate authority even without the concerned statutory provision expressly naming the appellate authority in that behalf. It goes without saying that an appellate authority, engaged as it is in precisely the same task under the fiscal statute as that of the assessing authority must also be possessed of like powers as those of the assessing authority. It is implicit in the very nature of the appellate jurisdiction, as well as the purposes for which that jurisdiction is created by the statute, that the appellate authority will have to function, in the very image of the assessing authority. Appellate proceedings are often truly described as an extension of the assessment proceedings, or as a continuation of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits must be computed, so far as may be, in accordance with the method of accounting regularly employed by that tax-payer. This general rule is laid down in the substantive part of section 13 of that Act. There is, however, a proviso to the section, under which power is, in terms, conferred on the Income-tax Officer, to adopt his own basis for arriving at the business income, in cases where no method of accounting is regularly employed by the assessee or in cases where the method employed by the assessee is such that in the opinion of the Income-tax Officer, the taxable profits cannot be properly deduced therefrom. It will be noticed that the proviso expressly refers only to the Income-tax Officer as having the requisite power to discard the assessee's method of accounting. The question which arose before the Supreme Court in McMillan's case [1958] 33 ITR 182 (SC) was whether this power to ignore the assessee's method of accounting can be exercised by an Appellate Assistant Commissioner while dealing with an appeal against an assessment made by an Income-tax Officer? It was contended before the Supreme Court that the proviso to section 13 of the Income-tax Act, in terms, referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority. We do not find, however, any detailed discussion in this judgment on the question whether the Appellate Tribunal is competent to exercise the power to extend the time for filing C forms. What the court pertinently upheld in that case was the decision of the Tribunal to set aside the order of assessment and direct the assessing authority to go into the question of entertaining C forms, which were not produced at the time of the original assessment. This manner of disposal of the appeal by the Tribunal in that case, and in similar cases, apparently provoked Ismail, C.J., in a judgment, which is one of the referring judgments before this Full Bench, to cast doubts on the Tribunal's jurisdiction to set aside the assessment just for the sake of enabling the assessing authority to entertain the C forms, when they had not been filed at the stage of the original assessment. In the view we hold of the scope of the proviso to section 8(4), the Tribunal has undoubted jurisdiction as an appellate authority to allow further time for filing C forms beyond the assessment stage. If this power exists, as we hold it does, then we do not see that any impropriety or indiscretion is invol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns at the appellate stage. In this case, the court referred to the earlier decision in State of Tamil Nadu v. Chellaram Garments [1979] 44 STC 239. The court also referred briefly to the mode of construction of appellate powers adopted by the Supreme Court in McMillan's case [1958] 33 ITR 182 (SC). Having cited these cases, this Court proceeded to uphold the action of the Tribunal in entertaining the C forms filed at the appellate stage. Although this decision might be regarded, in some respects, as a forerunner to the present Full Bench references, the law on the subject had not had the advantage of having been fully discussed in that judgment. In another unreported decision of this Court in Imperial Match Works, Sivakasi v. State of Tamil Nadu (T.C. No. 187 of 1977) printed at page 397 infra, an attempt was made to file C form declarations before the Tribunal, the assessee not having done so at the assessment stage. The Tribunal, however, declined to entertain the C forms, not on the ground that they had no power to entertain them, but for the reason that there was no sufficient cause made out in that case to extend the time. The action of the Tribunal was upheld by this Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nent", in the strictly procedural sense of the term, so too the appellate authority sitting in appeal over the assessing authority's order of assessment is not strictly an arbitral tribunal deciding a contested issue between two litigants ranged on opposite sides. In a tax appeal, the appellate authority is very much committed to the assessment process. The appellate authority can itself enter the arena of assessment, either by pursuing further investigation or causing further investigation to be done. It can do so on its own initiative, without being prodded by any of the parties. It can enhance the assessment, taking advantage of the opportunity afforded by the tax-payer's appeal, even though the appeal itself has been mooted only with a view to a reduction in the assessment. These are special and exceptional attributes of the jurisdiction of a tax appellate authority. These attributes underline the truth that the appellate authority is no different, functionally and substantially, from the assessing authority itself. This position has been well brought out in more than one decision of the Supreme Court. The McMillan's case [1958] 33 ITR 182 (SC), which we earlier referred to, ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficient cause, further time will have to be allowed. The proviso to the section does not insist that the assessee should establish before the prescribed authority that he was prevented by sufficient cause from filing the C forms in time. The "sufficient cause" spoken of by Parliament in section 8(4) is sufficient cause which appeals to the mind of the authority concerned, and which enables it to allow further time without bothering about any onus on the assessee. The proviso to rule 12(7), however, is a study in contrast. The power to allow further time under this rule is severely circumscribed by the language of its proviso. This proviso is more or less fashioned after section 5 of the Limitation Act. Under the requirement laid down by the rule-making authority, the burden is on the assessee to make out sufficient cause by explaining why he did not file, and what prevented him from filing, the C forms before the completion of the assessment. What is more, it is for the assessing authority to be satisfied about the existence of sufficient cause and its having prevented the assessee from filing the declarations within time. The difference between the two provisos is not merely one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67 (SC). It is a matter for comment that Parliament's effort at clarity should have been neutralized, in part at least, by clumsy and unwanted rule-making. Be that as it may, we are clear in our minds that where an assessee seeks to file C forms beyond the stage of assessment, the relative power which the concerned authority should invoke is the power defined in the proviso to section 8(4) and not the power defined in the proviso to rule 12(7). Two minor points of construction which the learned Government Pleader placed before us in the course of his argument may be briefly noted and disposed of. While urging that an appellate authority could not possibly have been intended as one of the authorities invested with the power to grant further time for filing C form declarations, the learned Government Pleader referred to the description of the assessing authority, as "the first assessing authority" in the proviso to rule 12(7). The argument was that the term "first" must be given due significance, and such significance can only be given by excluding the appellate authority and all other authorities from the purview of the power to extend the time. We do not think that the inclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment Pleader. Given the assessing authority's undoubted power to allow further time for C forms to be filed on sufficient cause, the rest of it is mere procedure or follow up action. Where the assessing authority is satisfied, in a given case, about the existence of sufficient cause, it must necessarily be followed up by appropriate action, such as reopening the assessment already completed. Perhaps the requisite corrective action can be taken by invoking the assessing authority's statutory power of rectification of mistakes. Even otherwise, the implementation, in appropriate cases, of the power to allow further time cannot be withheld on the excuse that there is no express provision either in the statute or in the statutory rules for reopening the assessment. When the power is there and the facts are there demanding its exercise, the implementation must be done as a matter of course, on the doctrine of implied or ancillary powers. Where there is a power, and where there is a will, there will be a way. It is, however, unnecessary to pursue the line of discussion further, because the particular problem we are concerned with in the two cases before us is quite different. What we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s alone to be undertaken on remand. The Tribunal may, if satisfied about the sufficient cause set aside even the assessment order, and direct the assessing authority to re-do the assessment, in which event there would be no occasion for the assessing authority to go into any question of "delay" in filing the C forms, for with the setting aside of the assessment the whole thing is once again at large. It is needless to add that whatever has been stated by us as respects the Tribunal's power and the modes of its exercise apply, mutatis mutandis, to the Appellate Assistant Commissioner in like situations occurring in the appeals before him. In the result, we uphold the decision of the Tribunal in both the cases. The revisions, filed by the State Government, must therefore be dismissed. We accordingly do so. The Government will pay the costs of these revisions. Counsel's fee Rs. 250 (one set). The assessee figuring in one of the revisions did not appear at the hearing either in person or by counsel, although served with notice. We felt it necessary to have his case represented by an amicus curiae, having regard to the importance of the issues involved. Mr. C. Natarajan, at our reques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover taxable at the higher rate of 10 per cent Central sales tax was proper. In the further appeal, the Sales Tax Appellate Tribunal also found that the assessee did not raise any plea or did not show any proof of sufficient cause for non-production of C forms before the assessing authority within the time allowed, and that the assessee had not filed the C forms within a reasonable time, so that he was not entitled to any concessional rate of tax in respect of the transactions. It is this conclusion of the Sales Tax Appellate Tribunal that is sought to be challenged in the present revision petition. The only question that arose for consideration before the Tribunal was whether a reasonable opportunity was given to the assessee to produce the C forms. The assessee himself wanted time for production of the C forms up to 15th May, 1974, and that request had been granted by the assessing authority. But the assessee did not produce the C forms before 15th May, 1974. The fact that he subsequently produced the C forms cannot in any way justify the assessee's contention that necessary opportunity had not been granted to the assessee for the production of the C forms. There is no err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forms and consider the necessary reliefs after scrutinising those forms. The Tribunal, therefore, directed the C forms being accepted and then scrutinised. It is this order of the Tribunal that has given rise to the present revision filed on behalf of the State. In State of Tamil Nadu v. Chellaram Garments (P.) Ltd. [1979] 44 STC 239, we had occasion to consider a similar question. In that case, the assessee was given a period of eight days' time for filing the missing C forms and as the assessee did not do so, the assessing authority taxed the assessee and when the matter was taken on appeal before the Appellate Assistant Commissioner he refused to receive those C forms which were subsequently produced. The Appellate Tribunal took the view that the C forms were received only subsequent to the assessment and that the assessee's failure to ask for time was not due to negligence. The matter was, therefore, remanded to the assessing authority for considering the assessee's claim for a concessional rate of tax on the basis of the C forms produced. The validity of the order of the Tribunal directing that the Appellate Assistant Commissioner would transmit the C forms taken from his rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d was such as had to be rejected. The Supreme Court observed that the proviso to section 13 of the Indian Income-tax Act did not import any limitation on the power of the Appellate Assistant Commissioner and that it was, therefore, open to the Appellate Assistant Commissioner to reject for the first time the method of accounting employed by the assessee on the ground that the income, profits and gains of the assessee could not be properly deduced therefrom, even though the Income-tax Officer has not applied the proviso to section 13 and had not expressly said so. This is on the principle that what the assessing authority could do the appellate authority could also do. However, this principle was not considered in the earlier decision and we do not think it necessary to go into the said aspect in the present case. It is enough to observe that it was open to the Tribunal to direct the scrutiny of the forms in accordance with law. It is true that the question regarding the entertainability of C forms would have to be considered by the assessing authority taking into account all the facts and in accordance with law. Subject to the above observation, the revision is dismissed. There wil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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