Jeewanlal (1929) Limited vs Joint Commercial Tax Officer

Ramaprasada Rao, J.—Writ Petitions Nos. 832, 833, 992 and 993 can be grouped together and dealt with. Even so, Writ Petitions Nos.

834, 835, 994 and 995 can be grouped together and dealt with.

In the first batch of cases for the assessment year 1962-63, final assessments were passed as against the Mysore Premier Metal Factory in

respect of their dealings for the year in question. On 1st January, 1965, the Mysore Premier Metal Factory ceased to do business, but the writ

petitioner (M/s. Jeewanlal (1929) Limited, Madras) became its successor. After such dissolution and reconstitution, on 28th November, 1967, the

assessing authority purporting to act u/s 16 of the Tamil Nadu General Sales Tax Act issued notice to the writ petitioner calling upon him to

produce all the trade accounts relating to the year 1962-63 along with all documents, registers, bills, invoices, etc., on a specified date. A summons

in form No. 12 was also sent. But, even in the summons there was no detailing of the particulars or the materials required excepting to repeat what

was contained in the notice calling upon to produce documents. As the notices were so hopelessly vague, the petitioner came up to this court in

Writ Petitions Nos. 832 and 833 and sought for a writ of mandamus prohibiting the authority from proceeding further pursuant to such a vague

notice as above. These writ petitions were filed on 26th February, 1968. It so happens that the assessing authority on its own volition gave another

notice, obviously in substitution of the earlier notice, for the very same purpose, but this time taking the precaution of giving details as to why and in

what circumstances the documents or account books are called for and how according to the revenue there has been an escapement of assessment

of tax for the assessment year in question and the writ petitioner was once again called upon to produce such specified documents on an appointed

date. The petitioner again has filed Writ Petitions Nos. 992 and 993 for the issue of a writ of prohibition restraining the assessing authority from

proceeding any further pursuant to the notice dated 27th February, 1968, which is impugned in Writ Petitions Nos. 992 and 993.

In so far as the Writ Petitions Nos. 832 and 833 are concerned, the notices are so vague that it would be impossible for any one who is called

upon to act thereunder; to furnish any relevant particulars connected with the subject to be enquired into by the revenue. The assessing officer

himself felt this difficulty and therefore issued the second notice. The petitioner is therefore entitled to succeed so far as the first notice dated 28th

November, 1967, is concerned, but as courts do not issue futile writs, knowing that it would be futile, I refrain from making the rule nisi absolute as

it would unnecessarily complicate matters in view of the later attitude of the revenue who themselves ignored the first notice arid followed up action

by a second independent notice for the purpose. In this view, Writ Petitions Nos. 832 and 833 are dismissed.

Even so, Writ Petitions Nos. 834 and 835 which relate to a notice dated 28th November, 1967, and addressed to M/s. Jeewanlal (1929) Ltd.,

Madras, have to be dismissed since the notices so issued by the assessing authority was followed up by another notice dated 27th February, 1968,

which is also challenged by the petitioner in Writ Petition No. 994 of 1968. In the view that I held in Writ Petitions Nos. 832 and 833 that no futile

writ should be issued, I am not inclined to make the rule nisi absolute in these two cases also. These writ petitions also are dismissed.

We come to the substantial point which has been raised by Mr. Venkatarama Ayyar in Writ Petitions Nos. 992 and 993, and 994 and 995. The

first two writ petitions are by the successor in interest of Mysore Premier Metal Factory and the latter two writ petitions are by M/s. Jeewanlal

(1929) Ltd., Madras. The gravamen of the charge is that the notice dated 27th February, 1968, issued by the assessing authority in each of these

writ petitions calling upon the petitioner to submit the relevant records and documents objecting to the proposal made in the said notice

whereunder the assessing authority has undertaken to revise the assessments on the basis of escapement are issued without jurisdiction and cannot

be processed further in law. The argument is, that, as there is an independent provision in the Tamil Nadu General Sales Tax Act itself for revising

assessment orders which have become final, the respondent in each of these writ petitions has no jurisdiction to act in the manner proposed.

It is no doubt true that the Act provides for various means to avoid evasion and detect escapement, One such prescribed process is for the

assessing authority itself to act u/s 16 of the Act. If for any reason and according to the assessing authority, the whole or any part of the turnover of

business of a dealer has escaped assessment to tax, he can, within the prescribed period, determine the tax liability after giving the dealer a

reasonable opportunity to show cause against the proposal to reassess. No doubt, whilst the assessing authority exercised its power u/s 16 so as

to reassess the dealer to tax by reason of the alleged escapement, he incidentally revises his own assessment. But that does not mean he is

exercising revisional powers as could be done by another specified authority u/s 32 of the said Act. Section 32 empowers the Deputy

Commissioner of Commercial Taxes to act suo motu and call for and examine an order passed by the appropriate authority under the Act as

specified in the section and after making such enquiry as he deems fit, pass such orders as are necessary. There is also a specific provision which

enables the Board of Revenue to act in appropriate cases so as to pass an order in revision upon a closed assessment. Properly speaking, the

jurisdiction exercised by the Board of Revenue u/s 34 and the Deputy Commissioner u/s 32 may squarely fall within the normal concept of revision

of assessment. But, the revision of assessment, if it can be loosely adopted, undertaken by the assessing authority himself in exercise of its power

u/s 16 is a totally different power which is not in any way relatable to the revisional jurisdiction contemplated by the Act under Sections 32 and 34.

u/s 16 it is an original jurisdiction of the assessing authority who, by his own volition discovers that a whole or any part of the assessable turnover

of a dealer has escaped assessment to tax ; this discovery is made by him and on his own ; however, this he could do within the prescribed time.

He cannot, however, finalise the proposals initiated by him u/s 16 without giving an effective opportunity to the person aggrieved. Therefore, the

entire concept embedded in the principle in Section 16 is that the original authority or the assessing authority as he is called, has the power to

reopen an assessment when there is an escapement of tax and which escapement has been discovered by him within the prescribed time. The

words ""for any reason"" has been often explained by judicial precedents as an expression of wide import. Therefore, the power vested in the

assessing authority u/s 16 is not in the nature of the revisional jurisdiction, as is ordinarily understood, but it is a special original jurisdiction vested in

the assessing authority itself under certain stated circumstances which is exercisable by him for any reason but to bring to tax escaped taxable

turnover.

I am unable, therefore, to agree with the learned counsel for the petitioner that as the word ""revision"" is used in the impugned notices, such

power should be exercised only by the statutory authorities, who can revise orders u/s 32 or 34 and not by the assessing authority when he acts u/s

16 of the Act. It may be that in the ultimate analysis, the assessing authority revises an order when he acts u/s 16, but the primary purpose is to

bring to tax escaped assessable turnover which for any reason has escaped the clutches of the taxing law.

The other contention that the notice is vague is unsustainable. All material particulars, which ought to be normally given in a case where the

assessing authority acts u/s 16 are found in the challenged notices. The petitioner was called upon to file his objections and, therefore, an effective

opportunity which is contemplated u/s 16 has also been given. I am unable to sustain the argument that the challenged notice cannot be pursued

because it is vague or indefinite. The writ petitions therefore fail and they are dismissed. There will be no order as to costs. The assessing authority

would fix another date for enquiry, hear the objections of the petitioner and pass necessary orders finally thereafter.