STATE OF KERALA Vs. M APPUKUTTY

JUDGEMENT

(1.) In this appeal by special leave against the judgment and order of the High Court of Kerala the appellant is the State of Kerala and the respondent is the assessee. The appeal arises out of proceedings under the Madras General Sales Tax Act, 1939 (Madras Act No. IX of 1939) read with the rules made under S. 19 of that Act. In this judgment the former will be referred to as the Act and the latter as the rules. The area of Kozhikode was originally within the State of Madras, but by the States Reorganisation Act was transferred to the State of Kerala. The Madras General Sales Tax Act, however, continued to apply.

(2.) The assessment period for the purposes of the turnover in dispute is 1952-53. By an order dated March 27, 1954 the Deputy Commercial Tax Officer, Kozhikode, imposed sales tax on the respondent on a net turnover of Rs. 12,56,178-14 -0 and the appeal taken against that order to the Commercial Tax Officer was dismissed. On March 15, 1956 a notice was issued by the Deputy Commissioner of Commercial Taxes against the assessee proposing to determine the escaped turnover for the period of assessment. By an order dated March 31, 1956, the Deputy Commissioner determined the revised turnover. An appeal was taken against that order to the Sales Tax Appellate Tribunal, Trivandrum, but that appeal was dismissed on March 23, 1957. Against that order a revision was taken to the Kerala High Court and by its judgment dated September 25, 1958 the High Court set aside the order of the Deputy Commissioner on the ground that the notice issued by the Deputy Commissioner of Commercial Taxes was without jurisdiction and the order of the appellate tribunal was therefore erroneous. Another question which had been raised before the High Court that the rule under which the Deputy Commissioner purported to act was ultra vires of the Act was not decided because of the decision on the first question i.e. of jurisdiction. Against that judgment and order the State of Kerala has come in appeal by special leave to this court.

(3.) In appeal, before us, two main contentions have been raised:One on behalf of the appellant -the State of Kerala - that the notice issued by the Deputy Commissioner was not without jurisdiction and the High Court's opinion on that point is erroneous; and the second on behalf of the respondent assessee that if the notice was not without jurisdiction then the rule under which the notice was issued was ultra vires as it was beyond the substantive provisions of the Act. For this purpose it is necessary to refer to some of the relevant provisions of the Act and the rules. The procedure to be followed and the Dower of assessment of the Assessing Authority is contained in S. 9 of the Act and we need only quote sub-ss. (1) and (2) of that section which read as under: