K. Vasudevan Chettiar vs The State of Madras

Ramanujam, J.—This is an appeal u/s 37 of the Tamil Nadu General Sales Tax Act, against the suo motu orders passed by the Board of

Revenue u/s 34 of the Act. The assessee in this case was assessed originally for the years 1959-60, 1960-61, 1961-62 and 1962-63 on the basis

of the returns filed by him. Subsequently, in or about October, 1964, the residence of the assessee was inspected and certain anamath account

books and slips were recovered pertaining to the above years in question. These anamath accounts were scrutinised by the assessing authority in

the presence of the assessee and after detailed investigation, the suppressed turnover was determined by the assessing authority in respect of each

of the years and a show cause notice was issued u/s 16 proposing to revise the original assessments. This show cause notice required the assessee

to file his objections within a period of five days. The assessee received the notice but, instead of filing the objections, he sent in his request seeking

an extension of time for filing objections on the ground that his wife was seriously ill. The assessing authority received the letter of the assessee

seeking extension of time on 11th December, 1964, but without passing any orders thereon, he proceeded to revise the assessments on 17th

December, 1964.

As against the revised assessment u/s 16, the assessee filed appeals before the Appellate Assistant Commissioner u/s 31. In the memorandum of

grounds of appeal before the Appellate Assistant Commissioner, the main point urged was that the assessing authority did not give the assessee

reasonable opportunity to put forward his objections to the show cause notice. The assessee also questioned the best judgment assessment made

by the assessing authority on the basis of the anamath accounts and slips on various grounds. The assessee has not, in fact, disowned the anamath

books and slips seized from his residence by the departmental authorities. The Appellate Assistant Commissioner taking a sympathetic view of the

situation in which the assessee was placed at the time when he received the show cause notice held that the assessing authority should have given

some reasonable time for filing objections. In that view, he set aside the revised assessment orders and directed the assessing authority to give

reasonable opportunity to the assessee to file his objections and to finalise the assessment, after a due consideration of those objections.

The said order of the Appellate Assistant Commissioner was revised by the Board of Revenue u/s 34. According to the Board, the anamath

account books and the slips recovered from the assessee''s residence was investigated in the presence of the assessee, that the assessee was all

through aware of the position emerging from the inspection of the anamath books and slips, that, in the circumstances, the show cause notice giving

five days time cannot be said to be vitiated by violation of the principles of natural justice and that, therefore, the Appellate Assistant Commissioner

was not justified in remanding the matter to the assessing authority without himself disposing of the appeal on merits.

The assessee''s counsel contends before us that the order passed by the Appellate Assistant Commissioner in appeal was the proper one in the

circumstances of the case, that the interference by the Board with such an order is not warranted u/s 34 and that in any event, the Board had no

jurisdiction to interfere with an order of remand passed by the Appellate Assistant Commissioner. The learned counsel also points out that if the

assessing authority makes a fresh assessment after giving an opportunity to the assessee to file his objections, he will have a right of appeal to the

Appellate Assistant Commissioner and such a right of appeal has been taken away by the order of the Board.

We are of the view that the Board had ample jurisdiction to pass the order u/s 34. Section 34 specifically refers to the order passed by the

Appellate Assistant Commissioner under Sub-section (3) of Section 31 as one revisable by the Board of Revenue. It is not, therefore, possible for

us to accept the contention of the learned counsel that the Board is powerless to interfere with an order of remand passed by the Appellate

Assistant Commissioner u/s 31(3). In our view, there is no merit in the assessee''s contention that the order of remand passed u/s 31(3) is a

discretionary one and that such a discretionary order cannot be interfered with by the Board u/s 34. Whether it is a discretionary order or not, if

the order is passed u/s 31(3), it comes clearly within the purview of the revisional jurisdiction of the Board of Revenue u/s 34. Once it is held that

the Board has jurisdiction to revise the order passed u/s 31(3) by the Appellate Assistant Commissioner, then the only question is whether the

Board was justified in interfering with the order passed by the Appellate Assistant Commissioner in this case.

The Board has merely directed the Appellate Assistant Commissioner to dispose of the appeal on merits. That means the assessee will have

enough opportunity to challenge the assessments and to put forward his case before the Appellate Assistant Commissioner. It is true that the Board

has stated that the assessee had sufficient opportunity before the assessing authority and the assessment orders could not be said to have violated

the principles of natural justice. Even assuming that the assessee did not have sufficient opportunity to put forward his objections before the

assessing authority he can still have that opportunity before the Appellate Assistant Commissioner in appeal. That is what was meant by the Board

when it stated that the appellate authority could have disposed of the appeal on merits. We, therefore, see no reason to interfere with the order of

the Board of Revenue in this case. We, however, make it clear that the Appellate Assistant Commissioner, who has been directed to dispose of

the appeal on merits, will give sufficient opportunity to the assessee to put forward all his objections in relation to the matters referred to in the

show cause notice as well as in the revised assessments made by the assessing authority. We also make it clear that the observations of the Board

of Revenue, if any, on the merits of the case will not bind the appellate authority in disposing of the appeal. This appeal is, therefore, dismissed with

costs. Counsel''s fee Rs. 150.