P K SANKARAN Vs. SALES TAX OFFICER

JUDGEMENT

(1.) THE petitioner is an assessee borne under the files of the respondent. For the assessment years 1964-65 and 1965-66 he was assessed to sales tax by the respondent on 16th February, 1967, and 15th February, 1967, respectively. In the appeal filed by the assessee (petitioner) as per the orders passed in STA Nos. 450 and 451 dated 6th March, 1968, the Appellate Assistant Commissioner, Trichur, set aside the assessments and remanded the matter for fresh disposal with certain directions. THE petitioner was not keeping good health at that time. It is averred in the original petition that after a period of 13 years by notices evidenced by exhibits P1 and P2 dated 15th July, 1981, the respondent directed the petitioner to file objections against the proposal made in exhibits P1 and P2, assessing the petitioner to the best judgment of the assessing authority. THE petitioner filed his objections exhibit P3 dated 25th July, 1981, stating that the business was abandoned long ago and that the accounts and books and other documents may not be available and that the notices exhibits P1 and P2 issued to the petitioner nearly 13 years after the order of remit by the Appellate Assistant Commissioner is totally unjustified and illegal. Notwithstanding the objections, the respondent assessed the petitioner to sales tax for the years 1964-65 and 1965-66 by order dated 28th July, 1981, evidenced by exhibits P4 and P5 in these proceedings.

(2.) THE main ground on which exhibits P4 and P5 are attacked is that there is unreasonable delay in passing the revised assessment order evidenced by exhibits P4 and P5. According to the petitioner the fresh notices of the assessing authority as also the revised assessments have been passed after an inordinate delay of 13 years and so exhibits P4 and P5 orders on the face of it are illegal and improper.

(3.) IT is true that under the Kerala General Sales Tax Act, there is not provision prescribing the time within which an assessment should completed. In the absence of express provision, will it be possible to inter or imply a time-limit ? Is the exercise of the power after an unreasonable period of time, contemplated or countenanced by law ? In Deputy Commissioner of Agricultural Income-tax and Sales Tax v. P. S. B. Paul Pandian [1981] 128 ITR 809 the question arose before this Court regarding the time within which proceedings under section 34 of the Agricultural Income-tax Act can be initiated. IT will be interesting to note that under section 34 of the Act the Commissioner of Agricultural Income-tax can take suo motu revision in exercise of the powers conferred on him but no time-limit is fixed for the exercise of such power. In the above case, the assessments under the Agricultural Income-tax Act for the years 1967-68, 1968-69 and 1969-70 were completed on 2nd November, 1967, 20th November, 1968, and 1st March, 1974. Suo motu revision proceedings were initiated by the Deputy Commissioner on 31st August, 1978. The question arose whether the initiation of suo motu revisional proceedings for the years 1967-68 after 11 years and for 1968-69 after 10 years, can be said to be justified and reasonable, or that the order passed after such an unreasonable period is bad in law. The assessment for the year 1969-70 was completed on 1st March, 1974, and its reopening as per order dated 31st August, 1978, was held to be within reasonable time. Regarding the assessments for the years 1967-68 and 1968-69, holding that the Deputy Commissioner cannot initiate suo motu proceedings under section 34 of the Act, as he purported to do on 31st August, 1978, their Lordships Sri V. Balakrishna Eradi, C. J. , and Sri K. Bhaskaran, J. , held : ". . . . To us it appears to be sound principle that even though section 34 of the Act in terms does not prescribe a time-limit within which the power under that section has to be exercised, in order to avoid prejudice and hardship to the assess it should be exercised within a reasonable time one the assessment becomes final, lest it be as Democles' sword hanging over the head of the assessee for all times. We have not been shown anything to justify the inordinate delay between the completion of assessment for the years 1967-68 and 1968-69 on November 2, 1967, and November 20, 1968, respectively, on the one hand and its reopening on August 31, 1978, on the other, the delay being about 11 years in one case and about 10 years in the other. . . . " Their Lordships referred to with approval the decision reported in Bhavani Tea & Produce Co. v. Commissioner of Agricultural Income-tax [1972] 2 Tax LR 2413, wherein it was held that initiation of proceedings under section 34 of the Act, nine years after the assessments have become final was not certainly a reasonable period within which that jurisdiction could be invoked.