CHOLAYIL PRIVATE LIMITED Vs. ASSISTANT COMMISSIONER (ASSESSMENT)

JUDGEMENT

(1.) Heard the learned counsel on all sides.

(2.) This Writ Appeal is before the Full Bench on a reference by the Division Bench, pointedly on the issue as to whether Tirur Medical Stores v. State of Kerala, 1978 KHC 102 : 1978 (42) STC 118 (Ker.) was correctly decided by the Division Bench. The issue that arose before the Division Bench in the case in hand was on a plea as to the scope of sub-section (1) of S.25 of the Kerala Value Added Tax Act, 2003, for short, the 'K.V.A.T. Act'. The Division Bench noted that the said provision and S. 19 of the Kerala General Sales Tax Act, 1963, for short, the 'KGST Act', as it then stood, are in pari materia. Though Tirur (supra) was rendered construing S. 19 of the K.G.S.T. Act, that decision became relevant for the present case and hence, a reference doubting the correctness of that precedent.

(3.) Tirur (supra) was rendered holding that the phrase 'proceed to determine' in S.19 of the K.G.S.T. Act does not require the determination and assessment, to the best of judgment, being completed within the period of time mentioned in S. 19 of the K.G.S.T. Act and all that was required was that the relevant proceeding was initiated within the statutory time frame. In that case, the Bench referred to the decisions of the Hon'ble Supreme Court of India in Sales Tax Officer, Special Circle, Ernakulam & Ann v. Sudarsanam Iyengar & Sons, 1970 (25) STC 252 (SC), State of Punjab v. Murlidhar Mahabir Parshad, 1968 (21) STC 29 (SC), Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax, Nagpur & Ors., 1963 (14) STC 976 (SQ) and State of Punjab & Ors. v. Tara Chand Lajpat Rai, 1961 (19) STC 493 (SC). In Sudarsanam Iyengar (supra) Court considered the other decisions referred here. Assimilating the ratio in those precedents, the Bench took the view that the use of the 'proceed to determine' in S.19 of the K.G.S.T. Act which provides for best judgment of escaped turnover, means that the assessing authority has to proceed to determine, in the sense, that the proceedings for the determination of the escaped turnover must commence within the period stipulated and the word 'assess' in that section is used in the wider sense as given to it by the Hon'ble Supreme Court in Sudarsanam Iyengar (supra), so as to include the proceeding leading to the final order of assessment. In Tirur (supra), it was also laid down that it does not matter that the final order itself was passed beyond the period stipulated in S.19 of the K.G.S.T. Act. Tirur is precedent for the principle that proceeding has to be initiated by the issuance of notice within the period prescribed in S. 19 of the K.G.S.T. Act. The next specific view taken in Tirur is that the phrase 'proceed to determine' in S.19 of the K.G.S.T. Act only requires the assessing authority to proceed to determine and commence such activity of decision making by issuance of notice within the period fixed in S.19 of the K.G.S.T. Act. Having regard to the law laid down in Sudarsanam Iyengar(supra) which is binding, we see no reason to persuade ourselves to disagree with the decision in Tirur (supra) on the interpretation of S.19 of the K.G.S.T. Act as it stood at that relevant point of time. That statutory provision is in pari materia with sub-section (1) of S.25 of the K.V.A.T. Act which falls for consideration in the case in hand. So much so, to the aforesaid extent, Tirur applies to cases falling under S.25(1) of the K.V.A.T. Act as well, including the case in hand.