STO Vs. SUNDARAM IYENGAR AND SONS

JUDGEMENT

(1.) THIS is an appeal by special leave from a judgement of the Kerala High Court. The facts may be firstly stated: The respondent was a non-resident dealer carry ing on business in Quilon, Ernakulam and Calicut in the State of Kerala . When the assessment in respect of sales tax for the assessment years 1961-62 and 1962-63 was pending the respondent had applied for a bifurcation of the assessment by treating his business at three places mentioned above as separate units. THIS request was acceded to by the Board of Revenue. The orders of assessment relating to the two years were made in April 1964 and March 1964 respectively.

(2.) THE Sales Tax Officer issued notices in December 1965 for reopening the original assessments on the ground that certain turnover had escaped assessment. THE objections of the respondent to these notices having failed a writ petition seeking to quash the orders made by the Sales tax authorities was filed. A learned Single Judge held that in respect of the assessment year 1961-52 the 'sales tax Officer had Do jurisdiction or authority to proceed under R. 33 of the Travancore-Cochin General Sales tax R. 1950 which were in force at the material time. It was found that the notice served in december 1965 relating to that assessment year was beyond the time limit of three years prescribed by the rule. As regards the assessment year 1962-63 the learned judge held that the time limit would expire on March 31, 1965. Owing to the writ petition and the stay orders which had been made the assessment could not be completed. THE learned judge felt that it was owing to the orders of the court that the Sales tax authorities had been prevented from completing the assessment within the time. While disposing of the writ petition it was observed that the Sales tax authorities would be at liberty to complete the proceedings initiated by the notice within the period of 59 days at the expiry of which the period prescribed by R. 33 was to expire. THE respondent preferred an appeal to a division bench which set aside the direction granting 59 days' extension for completing the assessment on the ground that the same was not justified under the law.

(3.) IT is undoubtedly open to the legislature or the rule making authority to make its intention quite clear that on the expiry of a specified period no final order of assessment can be made. Then the taxing authorities would certainly be debarred from completing the assessment beyond the period prescribed as was the case in sub-section (3) of S. 44 of the income-tax Act 1922; but such is not the case here and we would hold that the assessment proceedings relating to the year 1962-63 were within time.