STATE OF MADRAS Vs. V GURUVIAH NAIDU

JUDGEMENT

(1.) THIS appeal is preferred against the decision of Veeraswami J. allowing a writ petition preferred by the respondent and issuing a writ of prohibition against the appellant prohibiting them from proceeding with their proposed revision of sales tax contemplated in their order B. 4846/61--1 dated 25-6-1961.

(2.) THE respondent is an unlicensed dealer in hides and skins. For the assessment year 1954-55 he submitted a return for a gross turnover of Rs. 46,14,995-5-1. Out of this amount he claimed a sum of Rupees 45,48,305-2-10 as not liable to tax. The Deputy Commercial Tax Officer by his order dated 29-2-1956 assessed the respondent to a taxable amount of Rs. 66,691-2-3 basing his conclusions on the decision in Noor Mohamed and Co. v. State of Madras, , that unlicensed dealers in hides and skins were not liable to tax under Sec. 6-A of the madras General Sales-tax Act 1939. Not satisfied with this order the respondent preferred an appeal to the Commercial Tax Officer claiming a deduction of the entire amount. The Commercial Tax Officer allowed a further deduction of Rs. 52,220-1-9, and assessed the taxable turnover at Rs. 14,471-0-6 by his order dated 7-8-1957. On 12-8-1960 the Supreme Court in State of Madras v. Noor mohamed and Co. reversed the decision in and held that unlicensed dealers in hides and skins were liable to tax under Sec. 6-A of the Act. The Board of Revenue on the strength of the decision of the supreme Court in , gave a notice under Sec. 34 of Madras Act I of 1959 on 23-6-1961 to show cause why the turnover for 1954-55 should not be fixed at Rs. 45,52,329-6-1 in accordance with the decision of the Supreme Court. A writ petition was preferred by the respondent for prohibiting the State of Madras from proceeding with the proposed revision of the assessment. The writ petition having been allowed, the State of Madras have preferred the present writ appeal.

(3.) THE only question that arises in this writ appeal is whether the order of the board of Revenue, seeking to refix the turnover by its notice dated 23-6-1961 is within time. According to the State, under clause (i) of sub-section (3) of Section 12 of the Madras General Sales-tax Act, 9 of 1939, the Board of Revenue may exercise its power of revision within a period of 4 years from the date on which the order was communicated to the assessee, as provided under Section 12 (4) (b) of the Act. The order referred to in the sub-section, it is submitted, is the order dated 7-8-1957, passed by the Commercial Tax Officer in which, it is contended, the order of the Deputy Commercial Tax Officer dated 29-2-1956 became merged in law; whereas, on the side of the assessee, it is contended that the order referred to in the sub-section is the order of the Deputy Commercial Tax Officer dated 292-1956 and as the notice is more than four years from that date, the order is barred by time.