9911796707
TMI Blog1997 (10) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... cate of registration. In the said application, they, it appears, had stated that their business was mainly dealing in explosive items. They had specified the explosives under the caption for resale , so as to avail of the benefit of concessional rate of taxation at four per cent on inter-State purchases of explosives they have made for purpose of resale. (c) They, it appears, filed an application subsequently on April 1, 1984 to amend the original certificate of registration issued in their favour. The amendment sought for in the said application was for the inclusion of explosives under the caption for use in mining . (d). The amendment prayed therefor by the assessee-dealers was granted, in the sense of including the explosives under the caption for use in mining with effect from April 3, 1984. Though they had sought for such an amendment, yet, they did not pray for any amendment, as relatable to their business activity concerning mining, apart from mainly dealing in explosive items, as stated in the original application culminating in the certificate issued therefor. (e) For mining-whether available in the surface soil or in sub-soil-whether in ryotwari patta land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to why the order of the Appellate Assistant Commissioner should not be set aside and thereby the order of the assessing officer is restored, in the sense of confirming the penalty imposed upon them. The said Joint Commissioner, however, dropped the proceedings, by his order dated March 21, 1991. (b) Thereafter, it appears, the said Joint Commissioner was transferred. The successor-Joint Commissioner, in his proceedings, Ref. No. M2/113262/91 dated November 25, 1991, issued a notice under section 55 of TNGSTA to the assesseedealers, in a bid to rectify the error apparent on the face of the records, inviting their objections thereto. (c) The assessee-dealers filed their objections dated December 12, 1991 stating that as a matter of fact, detailed objections had been filed by them to the earlier show cause notice issued by his predecessor-Joint Commissioner and thereafter only, the said Joint Commissioner dropped further proceedings. They would further state that there was no error apparent on the face of the record for the successor-Joint Commissioner to interfere with and therefore it is, the order passed by the predecessor-Joint Commissioner had become final on the terminatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the pith and submissions of Mr. C. Natarajan, learned Senior Counsel representing Mr. N. Inbarajan, learned counsel appearing for the assesseedealers and Mr. K. Elango, learned Government Advocate (Taxes), representing the Revenue, the points, as below, emerge for consideration: (1) Whether the assessee-dealers could be stated to have used explosives in mining , in the activity of deepening of wells and blasting of rocks within sub-section (3) of section 8 of CSTA? (2) Whether the assessee-dealers had the benefit of reasonable excuse, having regard to the different interpretations on the expression use in mining at different stages of appeal and revision? (3) Whether the successor-Joint Commissioner had jurisdiction to exercise the power under section 34 read with section 55 of TNGSTA, having regard to the fact that the very issue had been enquired into and proceedings dropped, at an earlier stage by the predecessor-Joint Commissioner? 8.. We may now enter into the arena of discussion, in seriatim, as relatable to the points framed above, in the light of the factual matrix and the law applicable thereto. 9.. Point No. 1: Section 10(d) of CSTA, which is releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low: (3) The goods referred to in clause (b) of sub-section (1)- (a).......... (b) In the case of goods, other than declared goods are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power,............... . 11.. (a) In exercise of the powers conferred by sub-section (1) of section 13 of CSTA, the Central Government made the Central Sales Tax (Registration and Turnover) Rules, 1957 [for short CST (R T) Rules ]. Under rule 3 of the said Rules, an application for registration under section 7(1)/7(2) of CSTA has been prescribed in form A . Various columns or heads had been provided under the said form A requiring certain particulars to be furnished therein. Columns 16 and 17 in the said form-relevant for our present purpose-prescribe: 16. The following* goods or classes of goods are purchased by the dealer in the course of inter-State trade o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities and for this purpose, he drew our attention to the synonyms or meaning ascribed to the word mining in Corpus Juris Secundum, Volume LVIII at page 14; the Law Lexicon by Mr. P. Ramanatha Aiyar at pages 1231 to 1233 and Prem s Judicial Dictionary, Volume II-1992 at page 1038. He also drew our attention to the relevant provisions of the Mines Act, 1952 (Act No. 35 of 1952) and the MM (R D) Act in a bid to understand the term mining . 14.. But, on the facts and in the circumstances of these cases, we rather feel that there is no need at all to refer to the meaning or synonyms ascribed to the term mining , as defined in Corpus Juris Secundum, Law Lexicon or Prem s Judicial Dictionary, the Mines Act and MM(R D) Act and if we go by the meaning of the term mining , as defined therein, pretty certain it is that the activity of the assessee-dealers-deepening of wells and blasting of rocks-one of the various activities associated with the operation of mining would tantamount to mining activity . 15.. The moot question that arises for consideration is as to whether such an enlarged definition of mining is contemplated under the scheme, as reflected by various provisions unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se granted under this Act and the Rules made thereunder. 18.. The activity done by the assessee-dealers, as already stated, is to indulge in deepening of wells and blasting of rocks by the use of explosives. Even the blasting of rocks, it appears, by the use of explosives, has been done only for the purpose of deepening the wells. Deepening of wells and blasting of rocks, by the use of explosives by the assessee-dealers is permissible by obtaining the necessary and requisite licence under the Explosives Act, 1884 (Act No. 4 of 1884). The possession of licence under the Explosives Act by the assessee-dealers for carrying on their activity of blasting of rocks and deepening of wells had been referred to by the Tribunal in disposing of certain appeals of the assesseedealers relatable to the subsequent assessment years by order dated August 30, 1984, about which we have made a reference in paragraph 6 supra in the process of summation of facts of the case. The carrying of such operations by the assesseedealers can, by no stretch of imagination, be stated to tantamount to mining , on the face of the salient provisions adumbrated under CSTA. The application in form A and the certifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the absence of reasonable excuse for such failure. It is thus crystal clear that to sustain the imposition of a penalty under section 10-A, in respect of violation or refraction of the provisions under section 10(d), the Commercial Tax Officer has to record a finding that the goods purchased for the purpose of section 8(3)(b) were not used for those purposes and the failure to use those goods for those purposes did not have the support of reasonable excuse. [Vide: State of Mysore v. S.S. Umandi [1969] 24 STC 11 (Mys.)] 22.. The superior courts of jurisdiction-apex Court and High Courtshappened to consider the question relatable to the benefit of reasonable excuse inhering in favour of the assessee-dealers in case of differing interpretations made by the authorities at different stages, either on the question of law or on facts, relatable to an activity. In this connection, we may refer to some of the precedents, which may serve as guidelines for us to arrive at a just conclusion in answering the question now focussed for consideration: (a) In Commercial Tax Officer v. Foreign Import Export Association [1980] 45 STC 265 (Raj), the assessee was engaged in the business of dy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er v. Foreign Import Export Association]. (b) In State of Rajasthan v. Jaipur Udyog Limited [1972] 30 STC 565 (SC), the certificate of registration issued to the respondent-assessee-dealer described his business as wholly manufacture of cement . The respondent-assessee-dealer purchased from outside the State earth-moving machinery comprising bull-dozers, dumpers and tipping wagons, paying the preferential rate of tax under section 8(1) read with section 8(3)(b) of CSTA. Holding that the respondent-assessee-dealer was not entitled to have the benefit of the preferential rate, the assessing authority imposed a penalty under section 10-A for the offence of falsely representing that the goods were covered by the certificate of registration. (i) One Member of the Board of Revenue took the view that the goods were covered by the certificate of registration and, on a reference, the High Court held that the goods were chargeable only at the preferential rate under section 8(3)(b) and that, therefore, penalty was not leviable. (ii) What the Supreme Court said, on appeal, is reflected below (at page 567): Now, the only question is whether the respondent was guilty of falsely re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this view of the matter, though the activity of the assessee-dealers cannot at all be construed to be one relatable to mining activity under the scheme of CSTA, the order passed by the successor-Joint Commissioner, in restoring the penalty imposed upon the assessee-dealers for all the four assessment years, as had been done by the assessing officer deserves to be set aside. This point is answered accordingly. 26.. Point No. 3: Admittedly the predecessor-Joint Commissioner, though issued notice in suo motu revision proceedings under section 34 of TNGSTA calling upon the assessee-dealers why the order of the Appellate Assistant Commissioner should not be set aside by restoring the order of the assessing officer, however, dropped further proceedings in the matter later. It is also not in dispute that the successor-Joint Commissioner under the facade of rectification of an error, apparent on the face of the record, revised the order of the predecessorJoint Commissioner under section 55 of TNGSTA restoring the imposition of penalty, as had been done by the assessing officer, of course, after setting aside the orders of the Appellate Assistant Commissioner. So moot a question it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pportunity of being heard. (4) In computing the period referred to in clause (c) of sub-section (2), the time during which the proceedings before the Joint Commissioner of Commercial Taxes remained stayed under the order of a Civil Court or other competent authority shall be excluded. 28.. (a) From sub-section (1), it is crystal clear that the Joint Commissioner may initiate suo motu revision proceedings of the orders passed by the appropriate authorities under various sections referred to therein, if the order so passed is prejudicial to the interests of the Revenue and in such process, he may make such inquiry or cause an inquiry to be made and subject to the provisions of TNGSTA may initiate proceedings to revise, modify or set aside such order or proceeding and may pass such order thereon as he thinks fit. (b) Certain limitations in exercise of such a power had been provided under sub-section (2) and within such limits, as had been provided therefor-about which, no detailed discussion is necessary for the present purpose-and within which such a power has to be exercised. (c) Sub-section (3) thereof prescribes that an order under the section should not be passed, withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n proceedings afresh under section 34 of TNGST, by issue of a show cause notice to the assesseedealers calling for objections and ultimately passing an order thereon. That sort of an order had admittedly not been passed by the successor-Joint Commissioner and the order so passed by him is definitely one under section 55 of TNGSTA, in such circumstances. He would further submit that a mistake, apparent on the face of the record, must be an obvious and patent mistake and not something, which can be established by a long-drawn-out process of reasoning on points, on which there may be presumably two opinions and therefore it is, he would say, there is no apparent mistake on record requiring to be corrected by the successor-Joint Commissioner, by resorting to the provisions of section 55 of TNGSTA. 33.. Such rival submissions may now fall for consideration in the arena of discussion, in the light of precedents emerging from the apex Court and the High Courts. (a) In M. Ramaswamy Pillai v. State of Madras [1968] 22 STC 224 (Mad.), an assessing authority in its notice proposing to add a certain sum to the turnover returned by the assessee, called upon the assessee to show cause why ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessorJoint Commissioner, by resorting to the provisions of section 55 of TNGSTA and not until then. 36.. The further question that falls for consideration is as to whether the order of the predecessor-Joint Commissioner dropping proceedings could be construed to be suffering from an error, apparent on the face of it calling for rectification under section 55 of TNGSTA, as had been resorted to by the successor-Joint Commissioner. 37.. In T.S. Balaram, Income-tax Officer v. Volkart Brothers [1971] 82 ITR 50 (SC) the original assessments on the respondent, a firm duly registered under the Income-tax Acts, were made on the slab rates prescribed under the respective Finance Acts applicable to registered firms. In the individual assessments of the partners of the firm their respective shares were included and tax was assessed at the maximum rate since the partners were assessed as non-residents. (i) Thereafter, initiating rectification proceedings under section 154 of the Income-tax Act, 1961, on the ground that there was a mistake apparent from the record inasmuch as the firm had not been charged at the maximum rate of tax under section 17(1) of the Income-tax Act, 1922, the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India) Ltd. v. Lt. Governor, Delhi [1980] 45 STC 212 (SC); AIR 1980 SC 674, the Supreme Court also happened to consider the question as to what is an error apparent on the face of the record means. What the Supreme Court said in that connection is getting reflected at the relevant portion of page 217 of STC paragraph 9 (at page 678), which reads as under: ...........we may also examine whether the judgment suffers from an error apparent on the face of the record. Such an error exists if of two or more views canvassed on the point it is possible to hold that the controversy can be said to admit of only one of them. If the view adopted by the court in the original judgment is a possible view having regard to what the record states, it is difficult to hold that there is an error apparent on the face of the record. 38.. The rationale or reasoning, as projected by the Supreme Court, in the cases referred to above, if applied to the factual matrix of the instant cases, we rather feel, cocksure it is, that the orders passed dropping further proceedings by the predecessor-Joint Commissioner under section 34 of TNGSTA cannot at all be stated to be suffering from the infirmity of an er ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
