VISWAM AND COMPANY Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE above tax revision case has been filed by the assessee which is a firm carrying on business in the purchase and sale of groundnut and groundnut kernel. For the assessment year 1974-75, the assessee was originally assessed on a total and taxable turnover of Rs. 3, 38, 43, 928.30 and Rs. 1, 39, 71, 444.91, respectively under the provisions of the Tamil Nadu General Sales Tax Act, 1959, hereinafter referred to as "the Act". Subsequently, the authorities came to know that the assessee also purchased groundnut kernel from the decorticating mills at Alangudi to the tune of Rs. 40, 46, 275.73. On the view that the nature of the business activities and dealings of those decorticators does not constitute them to be dealers so as to render them the first purchasers of the commodity in question, the purchases effected by the assessee were treated as first purchases in the State liable to tax. Consequently, proceedings have been initiated under section 16 of the Act proposing to assess them on the purchases effected by them from the decorticating mills at Alangudi and inviting their objections to the said proposal. THE assessee seems to have opposed the proposal on the ground that the tax has been paid already by the decorticators and that the assessee should be permitted to go through the records of the decorticators and examine the representatives of the said decorticators. THE assessing authority rejected the plea of the assessee on the ground that the decorticators from whom the assessee purchased the commodity in question were held to be not dealers as per the orders of the Sales Tax Appellate Tribunal (Additional Bench), Madurai, in T.A. Nos. 546 to 556 of 1976 and that, therefore, they cannot be treated as dealers so as to render them liable to tax treating them as first purchasers. Consequently, the purchases of the assessee from the decorticators were treated as first purchases exigible to tax under the Act. Time was given by the authorities to the assessee to enable them to look into the records of the decorticators and to get the refund of tax, if any, paid by them and since the said time also expired by April 24, 1980, the assessing authority overruled the objections and confirmed the proposed proposal by an order dated May 7, 1980 revising the earlier assessment.

(2.) AGGRIEVED, the assessee filed an appeal before the first appellate authority objecting to the assessment to tax of a turnover of Rs. 40, 46, 275.73 at 3 per cent. The first appellate authority, after referring to the judgment of the Tribunal in the appeals of the decorticators and similar other cases, confirmed the revised proceedings and the levy on the turnover in question by its proceedings dated September 6, 1980. Thereupon, the assessee filed a further appeal before the Tribunal. The Tribunal, by its order dated March 25, 1981, while rejecting the appeal, confirmed the orders of the authorities below. Hence the above revision before this Court.

(3.) AFTER a careful consideration of the respective submissions of the learned counsel on either side and the materials on record in the light of the decisions placed before us for consideration, in our view, no interference is called for in favour of the assessee in this revision petition. Learned counsel for the petitioner, in support of the plea of violation of the principles of natural justice, relied upon the decisions reported in State of Kerala v. Shaduli Yusuff 1977 (6) CTR 260, 1977 AIR(SC) 1627, 1977 (39) STC 478, 1977 (2) SCC 777, 1977 (3) SCR 233, 1977 UJ 318 (SC) and S. L. Kapoor v. Jagmohan 1981 AIR(SC) 136, 1980 (4) SCC 379, 1981 (1) SCR 746. In the first of the decisions referred to above, which arose under the Kerala General Sales Tax Act and the rules made thereunder, the Apex Court had an occasion to consider the question of opportunity to be given to an assessee while rejecting his accounts and making a best judgment assessment on the basis of certain entries in third party's accounts. It was in that context the said court came to the conclusion that inasmuch as the evidentiary materials procured from third parties were sought to be relied upon for showing that the return and the accounts submitted by the assessee in that case were incorrect and incomplete, the assessee would be entitled to have such third parties summoned as witnesses for cross-examination for the purpose of establishing the truth and exposing falsehood. The failure to summon for cross-examination such third parties was found to vitiate the orders of assessment made against the assessee in that case. That principle of audi alteram partem is applicable to the proceedings before the taxing authorities while discharging quasi-judicial functions, is beyond controversy. But at the same time, it cannot be denied that the scope and content of the opportunity contemplated by the said rule is of a variable content depending on the nature of the inquiry, the framework of the law under which it is held, the constitution of the authority holding the inquiry, the nature and character of the rights affected, the materials sought to be relied upon and the consequences flowing from the decision. Therefore, it may not be possible to say that in every case a particular and specified procedure has to be invariably followed irrespective of the peculiar features and exigencies of the case.