T V SUNDARAM IYENGAR Vs. STATE OF MADRAS

JUDGEMENT

(1.) IN these tax cases filed by the assessee and relating to assessment years 1955-56 to 1956-58, the substantial question is whether the view of the Tribunal, agreeing with the department, that the supply by it of bus-bodies constructed and fitted on to chassis provided by customers amounted to sale of specific chattels as distinct units chargeable to sales tax, is correct. The turnover under this head was in the first instance, on the claim of the assessee, excluded from charge on the ground that it consisted of works contract. This was, however, included in the taxable turnover and the assessment to that extent was enhanced in disposing of an appeal filed by the assessee disputing the chargeability of certain other parts of the turnover which is not in question now. The second ground in these cases is that the appellate Assistant Commissioner, Commercial Taxes, in enhancing the assessment, as aforesaid, acted in excess of his jurisdiction in the assessee's appeals confined to parts of the turnover which, according to it, had been wrongly brought to tax by the assessing authority. A further ground is also urged that the assessment of the enhanced turnover was barred by limitation and the Tribunal's view to the contrary is not correct.

(2.) THE finding of the Tribunal on the first ground has been recorded in these words : "on an overall consideration of the entire material before us, we are inclined to hold that the predominating element in the transactions was the sale of built body, that the work and labour were only subsidiary, that it was immaterial whether a body was prepared in accordance with the specifications given by the customer, then and there and fitted on to the chassis or the body had been already prepared prior to the order and was readily fitted with the chassis, that the sale of the property was the predominating element, that the use of labour and skill was only incidental and that, therefore, the element of sale predominated over the element of contract of work and labour. " *

(3.) THE second ground of the assessee turns on the scope and effect of the word "enhance" in clause (a) (i) of sub-section (3) of section 31 of the Madras General Sales Tax Act, 1959. That section confers appellate powers on the Appellate Assistant Commissioner, Commercial Taxes, and defines their scope. Any person objecting to an order passed under section 12 by the assessing authority is, by sub-section (1) of section 31, given a right within a specified period to appeal against that order, to the Appellate assistant Commissioner. Sub-section (3) of section 31 says that in disposing of an appeal, the Appellate Assistant Commissioner may, after giving the appellate a reasonable opportunity of being heard, " (a) in the case of an order of assessment - (i) confirm, reduce, enhance or annual the assessment or the penalty or both. " *