MUKUNDLAL HIRALAL Vs. STATE OF GUJARAT

JUDGEMENT

(1.) THE applicants in this reference are the original assessees and at the instance of the assessees, the following four questions have been referred to this Court by the Tribunal under section 34 of the Bombay Sales Tax Act, 1953 (hereinafter referred to as the Act) :- " (1) Whether the notice issued by the Assistant Commissioner of Sales Tax, dated 19th July, 1961, in exercise of suo motu revisional powers is valid and legal under section 31 of the Bombay Sales Tax Act, 1953 ? (2) Whether the proceedings initiated by the Assistant Commissioner of Sales Tax by his notice dated 19th July, 1961, are barred by limitation and therefore invalid and without jurisdiction ? (3) Whether the Assistant Commissioner of Sales Tax is competent in law in exercise of his revisional powers to set aside the orders of the Sales Tax Office and remand the case to him giving him direction to assess the applicant de novo according to law ? (4) Whether in view of the facts and circumstances of the case and in view of the materials and the evidence on record, the Assistant Commissioner of Sales Tax was justified in the adoption of ratio proportion method for arriving at the turnover for the purpose of deduction under section 11 (1) (a), Bombay Sales Tax Act, 1953 (unamended) and rule 6 (1) of the Bombay Sales Tax Rules, 1952 ?"

(2.) THE facts giving rise to this reference are as follows :- THE applicants are registered dealers and at the relevant time were holding a registration certificate and a licence under the Bombay Sales Tax Act, 1953. THE applicants were carrying on business of purchasing raw cotton from agriculturists as well as from licensed dealers and of selling cotton and cotton-seeds after getting raw cotton ginned. THE assessees were also doing business of reselling raw cotton, cotton bales and cotton-seeds. THE applicants were assessed by the Sales Tax Officer under section 14 of the Bombay Sales Tax Act, 1953. In the course of the proceedings before the Sales Tax Officer, the assessees claimed deduction under section 11 (1) (a) of the Bombay Sales Tax Act, 1953 (unamended) and also under rule 6 (1) of the Rules then in force in respect of certain sales. THE Sale Tax Officer passed the assessment order on 29th January, 1954, for the period 1st November, 1952, to 30th September, 1953. He also passed another order on 22nd November, 1954, for the period 1st October, 1953, to 31st March, 1954. For the period 1st November, 1952, to 30th September, 1953, the Sales Tax Officer determined the gross turnover of the assessees at Rs. 55,66,617-1-3 and allowed deduction under section 11 (1) (a) of the Act to the extent of Rs. 30,61,841-3-6 and also allowed deductions under rule 6 (1) to the extent of Rs. 9,75,725-10-6.

(3.) THE question which now arises before as is whether under the provisions of section 31 of the Bombay Sales Tax Act, 1953 (unamended), it was open to the Assistant Commissioner to exercise these powers in revision. Mr. Kaji appearing on behalf of the asessees, contended before us that what the Assistant Commissioner was seeking to do, in the guise of exercising his powers of revision, was to reopen the assessment; and, therefore, the provisions regarding revision under section 31 should be read as limited by the provisions of section 15, which provided for reassessment. Section 15 of the Act at the relevant time read as follows : " 15. If in consequence of any information which has come into his possession the Collector is satisfied that any turnover in respect of sales or purchases of any goods chargeable to the tax has escaped assessment in any year or has been under-assessed or assessed at a lower rate or any deductions have been wrongly made therefrom, the Collector may, in any cast where he has reason to believe that the dealer has concealed the particulars of such sales or purchases or has knowingly furnished incorrect returns, at any time within five years, and in any other case, at any time within three years, of the end of that year, serve on the dealer liable to pay the tax in respect of such turnover a notice containing all or any of the requirements which may be included in a notice under sub-section (3) of section 14 and may proceed to assess or reassess the amount of the tax due from such dealer and the provisions of this Act shall apply accordingly as if the notice were a notice served under that sub-section. "