MYSORE CEMENTS LTD Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) ALL these petitions are disposed of by this common judgment since the controversy involved is common. Notices issued Under Section 12a of the Karnataka Sales Tax Act, 1957, relying the decision given in Ramco Cement Distribution Co. Pvt. Ltd. v. State of Tamil Nadu [1993] 88 STC 151 (SC) have been challenged in these petitions. It is stated that the notices are time-barred and that the provisions of Section 12-A (2) are not applicable. The said proviso is as under :

(2.) THE wording in Section 12-A (2) "in consequence of, or to give effect to, any finding, direction or order" should be pertaining to the assessee. Reliance is placed on the judgment given in the case of Hungerford Investment Trust Ltd. v. I. T. O. 1998 II AD (SC )262 , AIR1998 SC 1592 , [1998 ]231 ITR175 (SC ), JT1998 (1 )SC 700 , 1998 (1 )SCALE624 , (1998 )3 SCC168 , [1998 ]1 SCR905 where the proviso to Sub-section 3 of Section 34 of the Income-tax Act were interpreted by the apex court. It was found that if the person is intimately connected with the assessee he would be covered by the phrase "assessee or any other person". The decision given in Income-tax Officer v. Murlidhar Bhagwan Das AIR1965 SC 342 , [1964 ]52 ITR335 (SC ), [1964 ]6 SCR411 , was accepted and applied. In Murlidhar's case AIR1965 SC 342 , [1964 ]52 ITR335 (SC ), [1964 ]6 SCR411 , the words "assessee or any other person" were interpreted to mean a person who would be liable to be assessed for a whole or part of the income under appeal or revision. In the case of S. Zoraster and Company (Supplies) Pvt. Ltd. v. State of Rajasthan [1995] 99 STC 281, the High Court of Rajasthan held that the extended time for reassessment to give effect to an order of competent court, would mean an order passed under the sales tax law and not under any other Act. In S. C. Prashar v. Vasantsen Dwarkadas AIR1963 SC 1356 , [1963 ]49 itr1 (SC ), [1964 ]1 SCR29 , Godbole (P. V.), Income-tax Officer v. Jagannath Fakirchand AIR1963 SC 1399 , [1963 ]49 ITR88 (SC ), [1962 ]1 SCR130 and commissioner of Income-tax v. Sardar Lakhmir Singh [1963] 49 ITR 70, it was observed that the second proviso to Section 34 (3) of the Income-tax Act relating to any person other than the assessee is a stranger and has nothing to do with the assessment proceedings in which a finding or direction is given is ultra vires Article 14 of the Constitution. In Daffadar Bhagat Singh and Sons v. Income-tax Officer AIR1969 SC 340 , [1969 ]71 ITR417 (SC ), [1969 ]1 SCR828 , the view taken in Murlidhar Bhagwan Das's case AIR1965 SC 342 , [1964 ]52 ITR335 (SC ), [1964 ]6 SCR411 , was again reiterated. In Rajinder Nath v. Commissioner of Income-tax AIR1979 SC 1933 , [1979 ]120 ITR14 (SC ), (1979 )4 SCC282 , [1980 ]1 SCR272 , 1979 (11 )UJ762 (SC ) and consolidated Coffee Ltd. v. Income-tax Officer [1985 ]155 ITR729 (KAR ), [1985 ]155 ITR729 (Karn ) on the term finding, direction or order the view expressed in murlidhar Bhagwan Das's case AIR1965 SC 342 , [1964 ]52 ITR335 (SC ), [1964 ]6 SCR411 , was upheld. In Navabharat Agrl. and Commercial Corporation v. Commissioner of Commercial Taxes [1995 ]97 STC435 (AP ), it was held that pursuant to the law declared by the authority under the Act, whose orders are binding on the assessing authority, the assessing authority can reopen the assessment Under Section 14 (4) of the Act.

(3.) I have considered over the matter. The power Under Section 12-A for assessment of escaped turnover can be exercised if the assessing authority has reason to believe that the whole or part of the turnover of a dealer has escaped the assessment to tax or under-assessed or assessed at too low a rate. The reason to believe for a assessing authority could be for different grounds. If a law is declared by the apex court then under Article 141 of the Constitution of India it is binding. The assessing authority, therefore, has the jurisdiction to invoke the provisions of Section 12-A.