(1.) THE firm M/s. Lakshminarayana Rice Mill, Shamsergunj, Hyderabad, was carrying on business of rice milling and the petitioner and one Raja Reddy were partners. The firm was dissolved in the year 1959 and the sales tax authorities, with whom the firm was registered, were informed accordingly. For the year 1959-60, the firm was assessed as per order No. 1008/59/60 dated 30th March, 1962. The turnover was determined at Rs. 3,46,992. 14 and the total tax was fixed at Rs. 13,879. 12. By the time of the assessment an advance tax of Rs. 6,512. 57 was paid by the assessee as demanded by the sales tax authorities. The petitioner aggrieved by the assessment order, filed an appeal to the appellate authority being Appeal No. 267 of 1962-63. The appellate authority by its order dated 14the September, 1962, allowed the appeal and remanded the case for fresh disposal after setting aside the assessment order. No action had been taken by the assessing authority. After a lapse of four years the first respondent issued a notice dated 6th October, 1966, asking the petitioner to produce his account books for the year 1959-60 so as to enable him to make the assessment. The demand of the assessing authority calling upon the firm to produce the account books being illegal and untenable, the petitioner filed a Writ Petition No. 1969 of 1966 on the file of this court. When this writ petition came up for hearing before a Bench consisting of Jaganmohan Reddy and Kumarayya, JJ. (as they then were), on 6th February, 1967, the Government Pleader represented to the court that the proceedings had been closed and there was no question of any assessment. On that assurance the court dismissed the writ petition. The petitioner avers that as the assessment proceedings were dropped by the authorities concerned, there was no leviable for the year 1959-60. The petitioner sent a notice to the second respondent, Commissioner of Commercial Taxes, asking him to pay back the amount illegally detained by him without any power or authority whatsoever. The second respondent had not complied with the notice. In this writ petition, the petitioner seeks a writ of mandamus directing the respondents to give complete effect to the course of the assessment proceedings by refunding the amount of Rs. 6,512. 57 levied and collected from him.
The Commercial Tax Officer, 1st Circle, Hyderabad, which is the first respondent herein, has filed a counter-affidavit stating that in the appeal preferred by the petitioner, the Assistant Commissioner, Commercial Taxes, considered the question of levy of tax on a turnover of Rs. 68,641. 09 relating to the sales of rice. The appeal was allowed and the matter was remanded by the Assistant Commissioner for fresh disposal on 14th September, 1962. It is thus averred that the assessment relating only to Rs. 68,641. 09 was set aside in appeal and not the entire assessment. After giving deduction of the tax allowed in appeal, the petitioner was still liable to pay a sum of Rs. 8,350. 56. The petitioner paid a sum of Rs. 8,642. 79 and thus the petitioner is only entitled to a refund of Rs. 292. 93.
(2.) FROM the counter filed by the respondents, the first question to be considered is whether by the appellate order, the assessment order made by the first respondent had been set aside only in part or in full. To determine that it is necessary to refer to the appellate order. Before the Assistant Commissioner of Commercial Taxes the appellant had raised two contentions : (1) against the levy of tax on Rs. 68,641. 09 and (2) against the rate of tax at 4 per cent on Rs. 3,46,992-14-8 for the year 1959-60. Both these contentions were considered by the appellate authority. As regards the first contention, the appellate authority directed the assessing authority to verify the transactions and conduct inquiries in the matter and pass fresh orders pursuant to the results thereof. The second contention was that the entire turnover of Rs. 3,46,992-14-8 could not be assessed to tax at 4 per cent as the rice and paddy were sold for consumption inside the State and they were fully covered by bills. In terms of G. O. Ms. No. 27 Revenue, dated 4th January, 1959, the tax on the aforesaid turnover was leviable at the reduced rate of three naye paise in a rupee under clause (b) of sub-section (3) of section 5 of the Andhra Pradesh General Sales Tax Act. The appellate authority observed : "it does not appear that any verification of the sale bills was made to ascertain the compliance of the above-said G. O. The substance of justice lies in finding out on the basis of the evidence produced, if rice sold was consumed inside the State. The Deputy Commercial Tax Officer shall now verify and pass fresh orders fixing their liability at the reduced rate of 3 per cent to the extent the dealer's transactions are within the terms of the G. O. Ms. No. 27 Revenue, dated 4th January, 1959. So far as these two disputed items are concerned, the matter is remitted back to the assessing authority for fresh disposal according to law in the light of the observations made above. "
From the aforesaid extract, it is very clear that the order of the first respondent was completely set aside by the appellate authority and a direction was given to the assessing authority in regard to the tax on Rs. 68,641. 09 to verify the transactions and conduct inquiry into the matter and pass fresh orders pursuant to the result thereof. In regard to the levy of tax at 3 per cent as claimed by the petitioner it was ordered that the assessing authority will verify whether the aforesaid transactions are within the terms of G. O. Ms. No. 27 Revenue, dated 4th January, 1959, and then fix liability at the reduced rate of 3 per cent. The last portion of the order is very clear that the matter is remitted back to the assessing authority for fresh disposal according to law. From this order it cannot be argued that the assessment made by the assessing authority was set aside by the appellate authority only to the extent of Rs. 68,641. 09 and the assessment to the extent of Rs. 3,46,992-14-8 at the rate of 3 per cent was upheld. In my opinion, the assessment order passed by the assessing authority was set aside and the assessing authority was directed to pass a fresh assessment order. It is admitted that the assessing authority did not pass any assessment order. After the notice dated 6th October, 1966, was given to the petitioner to produce his account books, the petitioner filed Writ Petition No. 1969 of 1966 and this court passed the following order :
" In view of the statement of the learned Government Pleader that the proceedings have been closed, the writ petition becomes infructuous. It is ordered that this writ petition be and hereby is dismissed. "
(3.) THIS order also shows that the assessment proceedings against the petitioner had been closed as far back as 6th February, 1967, and that there was no assessment order against the petitioner. The Government Pleader then advanced the argument that in view of the provisions of section 5 read with section 33 of the Andhra Pradesh General Sales Tax Act, the liability to pay tax arises as soon as the taxable event occurs and as the petitioner had admitted that he had sold rice of the value of Rs. 2,78,351 (Rs. 3,46,992 minus Rs. 68,641. 09) and as he had admitted that these sales were within the State he became liable to pay tax at the rate of 3 per cent. As such, he is not entitled to claim any refund. In reply, the learned counsel for the petitioner argued that no doubt the liability to pay tax arises on the happening of the taxable event; but for purpose of refund the tax will have to be assessed and quantified and as there is no tax assessed and quantified the petitioner is entitled to the whole of the amount of advance tax paid by him.
In order to appreciate the argument advanced, it is necessary to refer to the provision of section 5 of the A. P. G. S. T. Act, which reads :
" 5. Levy of tax on sales or purchases of goods.- (1) Every dealer (other than a casual trader and an agent of a non-resident dealer) whose total turnover for a year is not less than Rs. 15,000 and every agent of a nonresident dealer whatever be his turnover for the year, shall pay a tax for each year at the rate of three paise on every rupee of his turnover. Every casual trader shall pay a tax at the rate of three paise on every rupee of his turnover : Provided that if and to the extent to which such turnover relates to articles of food or drink. . . . . . . . . (4) The taxes under this section shall be assessed, levied and collected in such manner, as may be prescribed;. . . . . . . . . . " ;