DEPUTY COMMISSIONER OF AGRICULTURAL INCOME-TAX AND SALES TAX LAW BOARD OF REVENUE TAXES ERNAKULAM Vs. M K AHAMMED KUTTY

JUDGEMENT

(1.) THIS tax revision case is filed by the revenue against the order of the Sales Tax Appellate Tribunal and the following questions are raised for consideration : " (1) Having found that the assessment was finalised properly, was the Appellate Tribunal justified in law in holding that the assessee is to be given an opportunity to produce the C forms before the assessing officer ? (2) Has the Appellate Tribunal jurisdiction to direct the assessing authority to accept the C forms filed, after the final assessment and/or to condone the delay in filing the C forms ? Is the procedure followed by the Tribunal legal, in view of rule 12 (7) of the Central Sales Tax (Registration and Turnover) Rules, 1957, and the decision of this court reported in Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Abdul Wasigh and Bros. [[1962] 13 S. T. C. 295] ?"

(2.) TO appreciate the questions certain facts have to be stated. The assessment proceedings related to the year 1969-70 under the Central Sales Tax Act, 1956. The assessing authority determined the taxable turnover at Rs. 9,07,107. 16, of which for a turnover of Rs. 25,586. 36 the assessee did not produce the C form declarations though time was given for producing the same. The relevant portion of the order of the Sales Tax Officer on this matter reads thus : " The assessee was given time till 31st January, 1971, to produce the C forms but he has failed to produce the C forms in respect of the above bills. The assessment is therefore completed as below : Taxable turnover determined Rs. 9,07,107. 16 Turnover Tax Taxable at 10 per cent Rs. 25,586. 36 Rs. 2,558. 64 Taxable at 3 per cent Rs. 8,81,520. 80 Rs. 26,445. 63 --------------- ---------------- Rs. 9,07,107. 16 Rs. 29,004. 27 --------------- ---------------- Tax paid Rs. 26,858. 27 Balance Rs. 2,146. 00 --------------- A demand notice is issued for the balance. " The time asked for by the assessee to produce the C form declarations was three weeks from 15th January, 1971, to which date the hearing was previously posted. Against the order of the Sales Tax Officer, the assessee filed an appeal to the Appellate Assistant Commissioner. The order of the Appellate Assistant Commissioner is very brief and it is useful to extract the same hereunder : " The dispute is about a turnover of Rs. 25,586. 36 not covered by the C forms and assessed at 10 per cent. It is explained that time for 3 weeks was asked for by the party and the officer had granted 2 weeks and because sufficient time was not granted the C forms could not be filed. The assessment of the year, viz. , 1969-70, was completed only in January, 1971, and, therefore, the appellant had sufficient time at his disposal to obtain the C forms for the transactions done in the previous year, which he failed to do so. The appellant could not succeed even within the further time granted to him by the officer. So I do not find any reason to hold that the assessment was wrongly done. Therefore, the appeal is dismissed. " The assessee did not submit to this decision. He took up the matter in second appeal before the Tribunal and disputed the tax levied at 10 per cent on the turnover of Rs. 25,586. 36. The Tribunal set aside the order of assessment and remitted the file to the assessing officer with a direction to him to finales the assessment after giving the appellant an opportunity to produce the C forms and verify their genuineness. The reason stated for this order of remand is that "the assessee has obtained all the C forms subsequently and has prayed the appellate authority to give an opportunity to produce them". It was further observed that "the C forms are obtained from others. The assessee cannot be held solely responsible for the delay in getting them as he has to depend other parties to obtain them". At the same time the Tribunal did not find fault with the procedure adopted by the assessing authority in finalising the assessment. The Tribunal also rejected the assessee's complaint that he was not given sufficient time to obtain the C forms from different parties. Though he had asked for three weeks time but was given only two weeks to produce the C forms, the Tribunal was of the view that the assessee could have filed another petition to extend the time, which was not done and, therefore, there is no scope for any complaint. So, in short, the Tribunal found that the procedure adopted by the assessing authority was not wrong. Still, the Tribunal thought that a further opportunity should be given to the assessee to produce the C forms and claim for reduction in the tax payment. The question for consideration is whether the Tribunal was justified in holding that the assessee is to be given an opportunity to produce the C forms. Incidentally, a question arises whether the Appellate Tribunal has got jurisdiction to direct the assessing authority to accept the C forms after the final assessment or to condone the delay in filing the C forms. We will proceed to consider these aspects hereunder.

(3.) THESE three decisions were again referred to by this court in T. R. C. No. 33 of 1964. In that case, the assessee was asking for time for production of the relevant C forms and time was granted till a definite date. However, C forms were not produced by the assessee before that date and a fresh notice was issued by the assessing authority stating that in view of the non-production of the C forms before the specified date the assessment will be completed and tax at the rate of 7 per cent will be imposed. An assessment order followed. The assessee appealed and produced the C forms before the appellate authority and contended that the delay in the production of the C forms may be excused. The reason for the delay was sought to be explained by the assessee by stating that the assessing authority was convinced that there were good reasons for the delay and actually allowed time to produce the C forms till 31st August, 1962, and so some more time should have been allowed. This contention of the assessee was rejected. On further appeal before the Tribunal, the question was considered whether the C forms produced for the first time before the appellate authority or the second appellate authority can be accepted by those authorities. The Tribunal took the view that in all cases the C forms should be produced before the assessing authority and, consequently, dismissed the appeal. After noticing that the Full Bench in Abraham v. Sales Tax Officer [[1964] 15 S. T. C. 110 (F. B.)] had left open the question whether the appellate authorities have power to condone delay in cases where sufficient cause is shown, held that the appellate authority's power is coeval with that of the assessing authority and that if, in a given case, the assessing authority had not granted sufficient time to produce the C forms, the appellate authority certainly has the power to grant the time which the assessing authority refused to give and accept the forms in appeal or remit the case to the assessing authority and direct him to receive the C forms. In support of this conclusion the decision of the Supreme Court in Commissioner of Income-tax, U. P. v. Kanpur Coal Syndicate [[1964] 53 I. T. R. 225 (S. C.)] was relied on, wherein it had been observed that the Appellate Assistant Commissioner's power is conterminous with that of the Income-tax Officer and that be can do what the Income-tax Officer can do and also direct him to do what he has failed to do. The provisions of section 34 (3) of the Kerala General Sales Tax Act being similar in terms to section 31 (3) of the Indian Income-tax Act, 1922, the above principle was held to apply. Further, this court held that as there were sufficient reasons for the non-production of the C forms before the assessing authority, the appellate authority can accept the C forms itself and dispose of it. The accident of an assessment order intervening before the production of the C forms cannot, according to that decision, limit the jurisdiction of the appellate authority or that of the Tribunal to determine the question whether the later production of the C forms was justified or not on the facts of a given case.