MADURA MILLS COMPANY LIMITED Vs. STATE OF MADRAS

JUDGEMENT

(1.) THE Madura Mills Company Limited is the petitioner. For the assessment year 1952-53 the petitioner (assessee) was assessed on a turnover which included sales in a canteen. THE rest of the assessee's turnover covered its dealings in cotton yarn and staple fibre yarn. In so far as the assessment of the turnover relating to sales at the canteen was concerned, the assessee filed an appeal to the Commercial Tax Officer. THE appellate authority did not however dispose of the appeal but kept it pending to await the decision of the Supreme Court in Gannon Dunkerley's case wherein it was finally laid down that the turnover of sales in a canteen primarily run for the benefit of the workers in a factory did not represent taxable turnover in the course of business liable to sales tax. While the appeal was still pending, the Commercial Tax Officer in the exercise of his powers of revision under section 12 of the Madras General Sales Tax Act, 1939, issued a notice and revised the order of assessment. He did not however deal with the appeal that was before him at the same time. That revision order dealt with the turnover other than the turnover of the sales at the canteen. Against this order made in revision an appeal was taken to the Sales Tax Appellate Tribunal which was dismissed and from that order of dismissal a revision petition was taken to the High Court which also failed. During all this time it may be mentioned that the appeal filed by the assessee still remained undisposed of. In the meantime the Act of 1939 was replaced by Act I of 1959 and under the provisions of that Act the pending appeal stood transferred to the corresponding appellate authority, the Appellate Assistant Commissioner.

(2.) THE appellate authority took the view that when the Commercial Tax Officer made the order in revision under section 12(1) of the Act of 1939, the original assessment was replaced by the revised assessment and that the original assessment order was no longer in force. Notwithstanding that the appeal was pending, the Commercial Tax Officer revised the turnover, which included the disputed canteen sales. Since the turnover had been revised in that manner, the Appellate Assistant Commissioner thought that he had no jurisdiction to sit in appeal over that order. THE view that he took was that the original assessment order or the revised assessment order could not be split up into several portions and that since the assessment order was one indivisible unit, the original order was no longer in force. In the view that he had no jurisdiction to interfere at this stage, he purported to dismiss the appeal.

(3.) THE Tribunal thus concluded that the order of the Appellate Assistant Commissioner holding that the appeal before him was liable to be dismissed is correct. It is against this order that the present revision petition has been filed. All the authorities including the Tribunal appear to be fully conscious of the fact that the procedure adopted by the Commercial Tax Officer was wholly erroneous and improper. Under the 1939 Act the Commercial Tax Officer is both an appellate and a revisional authority. THEre was an appeal pending before him from the order of assessment in so far as the turnover of the canteen sales was concerned. At the same time the Commercial Tax Officer, as the revisional authority issued a notice seeking to revise the order of assessment to the extent to which he thought that that part of the turnover other than canteen sales required to be modified. It is no doubt true that in the revised assessment order he left the canteen sales intact. Even assuming that when once he had made an order in revision his power to dispose of the appeal that was before him came to an end, it does not mean that the hierarchy of the Appellate Tribunals over the order of the Commercial Tax Officer are equally deprived of their rights to entertain an appeal or revision as the case may be. When in the circumstances stated, the Commercial Tax Officer did not dispose of the appeal but by making an order in the exercise of his powers of revision deprived himself of the power to dispose of the appeal, the normal inference that should follow would be that the appeal also stood dismissed.