VENKATESWARA METAL INDUSTRIES Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THIS is a tax case appeal by the erstwhile partners of M/s. Venkateswara Metal Industries, against the order of the Board of Revenue, revising the order of the Appellate Assistant Commissioner and also the order of assessment of the Joint Commercial Tax Officer, Tondiarpet, withdrawing the exemption granted with respect to certain turnover for the assessment year 1969-70.

(2.) FOR the assessment year 1969-70, the appellants, manufacturers and dealers in M.S. rounds, were assessed on a total and taxable turnover of Rs. 35, 91, 555.70 and Rs. 5, 26, 237.20 respectively by the Joint Commercial Tax Officer, Tondiarpet, by his order dated 19th May, 1975 and he has exempted to the tune of Rs. 30, 65, 318.59 relating to sale of M.S. rounds rerolled out of local purchases of scrap. The taxable turnover of Rs. 5, 26, 237.20 related to sales of M.S. rounds amounting to Rs. 5, 23, 375.20 and Rs. 2, 862 related to sales of machinery. The assessee filed an appeal before the Appellate Assistant Commissioner disputing the assessment made on the above two items. The Appellate Assistant Commissioner by his order dated 29th August, 1975 confirmed the assessment made at Rs. 2, 862 towards the sales of machinery and out of the disputed turnover of Rs. 5, 23, 375.20 he gave relief to a turnover of Rs. 4, 51, 000. The Board of Revenue by exercising its power under section 34 of the Tamil Nadu General Sales Tax Act, 1959, after notice to the erstwhile partners of the appellant since the partnership had since stood dissolved and after hearing the submissions made by the partners of the assessee, revised the orders of the assessing officer and the Appellate Assistant Commissioner and determined the taxable turnover at Rs. 35, 01, 984. The Board of Revenue have come to the conclusion that the sales of M.S. rounds, manufactured out of local purchases of iron scrap, are also liable to tax though the iron scrap suffered tax earlier in view of the decision of the Supreme Court reported in Pyare Lal Malhotra's case 1976 AIR(SC) 800, 1976 (2) SCR 168, 1983 (13) ELT 1582, 1976 (37) STC 319, 1976 (1) SCC 834, 1976 (3) SCR 168, 1976 UPTC 282, 1976 (5) CTR 278, 1976 TaxLR 1519, 1976 CTR(SC) 278, 1976 SCC(Tax) 102. The present appeal is against the order dated 30th June, 1978 of the Board of Revenue by the erstwhile partners of the firm, the appellants.

(3.) THE learned counsel for the appellants mainly relied on Velayutha Raja v. Board of Revenue 1970 (26) STC 176 (Mad.) which in turn relied on a decision of the Supreme Court in State of Kerala v. Cheria Abdulla and Company 1965 AIR(SC) 1585, 1965 (16) STC 875, 1965 (1) SCR 601, 1965 (2) ITJ 351 . Section 16 of the Act gives power to the assessing officer to bring to tax the turnover which escaped original assessment and that power can be exercised by the assessing officer within a period of five years from the expiry of the year to which the tax relates. Under section 34 of the Act as it then stood, the Board of Revenue can revise the order of any taxing authority subordinate to it like the assessing officer, Appellate Assistant Commissioner and Deputy Commissioner within a period of four years from the date of the order sought to be revised (now raised to five years). In Velayutha Raja v. Board of Revenue 1970 (26) STC 176 (Mad.) the assessee was reassessed on the basis of discovery of materials subsequent to the original assessment and his taxable turnover was redetermind with an addition of Rs. 11, 052. On appeal the Appellate Assistant Commissioner, deleted the additional assessment of Rs. 11, 052. Subsequently, on a revision, the Board, rejecting the claim of the assessee that the proceedings by the Board were barred by the limitation of five years, passed an original order of assessment refixing the taxable turnover. In that case, this Court held that :