SOURN NITROCHEMICALS LTD Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE assessee is the petitioner in the above tax revision case. THE assessee was carrying on business in chemicals and for the assessment year 1977-78, though he returned a total and taxable turnover of Rs. 43,99,134 and Rs. 29,09,064, respectively, on the basis of the materials secured on a surprise inspection of the shop, the accounts were rejected and making an addition, a best judgment assessment was made determining the total and taxable turnover of the assessee at Rs. 33,62,653 and Rs. 33,52,031, respectively. Penalty under section 12 (3) of the Tamil Nadu General Sales Tax Act, 1959, hereinafter referred to as "the Act", was also levied. Aggrieved, the assessee filed an appeal before the appellate authority, namely, the Appellate Assistant Commissioner. Before the Appellate Assistant Commissioner, what was disputed by the assessee was the quantum of addition of Rs. 3,82,572 on the basis of the materials secured from the inspection. THE appellate authority, after considering the various contentions raised, while sustaining the addition and repelling the challenge to the turnover assessed by the best judgment assessment, cancelled the penalty levied under section 12 (3) of the Act.

(2.) THEREAFTER, the petitioner filed a further appeal before the Sales Tax Appellate Tribunal and the Tribunal, though, repelled the challenge to the best judgment assessment made, reduced the turnover by Rs. 1,23,224 by adopting an average rate of Rs. 2 per kilogram as against Rs. 3 per kilogram adopted by the assessing officer in quantifying the turnover said to have been suppressed. In respect of a further submission made by the assessee that sodium nitrate sold by them falls under item 21 (5) of the First Schedule and, therefore, was liable to tax at 3 1/2 per cent instead of 8 per cent as adopted by the assessing authority, the Tribunal rejected the claim on the ground that such a point was not raised before the Appellate Assistant Commissioner who is the first appellate authority and that having regard to the decision of this Court reported in [1980] 46 STC 341 [deputy Commissioner (C. T.) v. Govindaraju Chettiar] the assessee cannot raise such a point for the first time before the Tribunal. At any rate in respect of a portion of the turnover to the tune of Rs. 86,400, which was the subject-matter of dispute before the first appellate authority as well as the Tribunal, the rate of 3 1/2 per cent as claimed was allowed to be raised and sustained. Not satisfied with the order of the Tribunal, the above tax revision case has been filed.

(3.) THE decision in State of Tamil Nadu v. Arulmurugan and Company [1982] 51 STC 381 (Mad.) related to two tax revision cases which were directed to be placed before a Full Bench for consideration. In one of the cases, though under rule 12 (7) of the Central Sales Tax (Registration and Turnover) Rules, 1957, a declaration in form C shall be furnished to the prescribed authority up to the time of assessment by the first assessing authority, the assessee did not produce C forms before the assessing officer. THE C forms were produced before the Appellate Assistant Commissioner at the time of appeal and the appellate authority declined to entertain the C forms at that stage. A further appeal before the Tribunal was made and the Tribunal received the C forms, set aside the order of assessment and remanded the matter. It is in that context the matter came up before this Court for consideration as to whether such a course was possible to be adopted. In the second on of the cases, the C forms as in the other case had not been filed by the assessee before the assessment was concluded. THE assessment was taken in appeal and at the stage of appeal before the Tribunal, the assessee produced the C forms. On such production, the Tribunal entertained the C forms which had not been filed before the assessing authority and once again the question arose as to whether such a course is possible. THErefore, the matter was placed before the consideration of the Full Bench having regard to the earlier decision on the point reported in State of Tamil Nadu v. Chellaram Garments (P.) Ltd. [1979] 44 STC 239 (Mad. ). Balasubrahmanyan, J. , who spoke for the Bench, came to the conclusion that the real question that was before the said Bench was as to whether the appellate authority has the same power as the assessing authority to allow further time for accepting the C forms and not how and by what process the assessing authority itself could exercise the power after the completion of the assessment. A careful consideration of the judgment goes to show that the entire discussions centered round the proviso to section 8 (4) of the Central Sales Tax Act, 1956, the scope of rule 12 (7) of the Central Sales Tax (Registration and Turnover) Rules, 1957 and the power of the appellate authority to do in an appeal what the original authority itself could have done. None of the earlier judgments of this Court either reported in [1980] 46 STC 341 [deputy Commissioner (C. T.) v. Govindaraju Chettiar] or those considered and followed in the said judgment, have been either referred to or considered. Apparently, that was on account of the fact that an issue of the nature and in the form it arose before the Court which decided the case reported in [1980] 46 STC 341 (Mad.) [deputy Commissioner (C. T.) v. Govindaraju Chettiar] or the issue in the manner it is now raised before us, was never in the forefront or projected for consideration, except making a passing reference to section 36 of the Act and an observation that the Tribunal has the power under section 36 to set aside an assessment either in whole or in part and direct the assessing authority to redo the assessment.