ELECTRO DIESEL PRIVATE LIMITED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THESE four revision petitions relate to the assessment years 1961-62 to 1963-64. In respect of the last assessment year, there are two assessment orders and two revision cases, because of the change in the firm of the petitioners. The petitioners are dealers in asbestos sheets, etc. They were originally assessed on a certai turnover, accepting the returns submitted by them. Later on, on the ground that certain turnover in their returns under the central Sales Tax Act relating to inter-State sales had escaped assessment, proceedings were initiated by the joint Commercial Tax officer, Coimbatore-IV.

(2.) THE petitioner submitted their written objections to the proposed assessment and levy, and contended that the transactions which were sought to be taxed as inter-State sales were really local sales in Kerala State, as they were effected locally in that State after a transfer of stock from this State to the depot in that State. THEy, however, obtained C form declarations from the purchasers in Kerala and enclosed them with a note that they were producing the same without prejudice to their contention that the transaction were not inter-State sales. THE joint Commercial Tax Officer, after considering the nature of the transactions and the evidence available, came to the conclusion that they were inter-State sales, and that, since the goods had moved from this state. they were liable to be taxed under section 3 (a) of the Central Sales Tax act, 1956 (herein after referred to as the Act ). But, as regards the concessional rate claimed by the petitioners, he held that, as the C form declarations were not filed along with the original returns or, at any rate, before the final assessment, they could not be accepted in the reassessment proceedings. Accordingly he held that tax was leviable at the higher rates and that the concessional rate under section 8 (1) of the Act was not applicable. This order was confirmed by the Appellate Assistant Commissioner, who also held that the C form declarations could not be accepted at the stage of reassessment. THE Tribunal also, while confirming the finding that they were inter-State sales, further held that, since the C form declarations were not filed before the assessments were finalised, the refusal to accept them at the reassessment stage could not be interfered with. In these revision petitions, the learned counsel for the petitioners challenges the findings of the Tribunal both on the question of inter-State nature of the transactions, and also the rejection of the C form declarations as not being in accordance with law. So far as the nature of the transactions is concerned, we are satisfied that they were inter-State sales. THE goods were despatched from this State to the buyers directly, as has been found by the Tribunal and the assessing officers. Though the orders were placed with the Kottayam office, they were transferred to this state for execution. THE finding of the Appellate Assistant Commissioner and the Tribunal further was that, even at the time of the contract, it was under the contemplation of the parties that the goods should move from the this State to out-of-State purchasers. On these facts, we are not able to interfere with the finding of the Tribunal that the the disputed turnover related to inter-State sales.

(3.) IN that particulars case, the production of the declarations before the final order of assessment was made was considered as reasonable compliance with the requirements of section 8 (4) (a) of the Act. The ratio of this judgment was applied by this court in Tirukoilur Oil Mills Ltd. v. State of Madras ( 1967 (20) STC 888.), with reference to the validity of the time-limit prescribed in rule 5 (1) of the Madras Rules, and it was held that that rule, in so far as it prescribed a time-limit for filling declarations in form C, was invalid as being in excess of the rule-making power of the state government. This court also held that what would be reasonable time within which the declaration in the prescribed form should be filed in a given case would depend on the particular circumstances of the case. IN that case, the assessee originally filed a single declaration in form C before the assessing authority along with the connected monthly return. But when it was pointed out to him that rule 10 of the Madras Rules require separate declarations in respect of each of the transactions, the assessee obtained separate declarations in form C for each of the transactions and tendered them to the assessing officer before the assessment was completed. The assessing authority considered that he had no power to condone the delay in filing the declarations and that, therefore, the assessee was not entitled to the concessional rate of tax in respect of those transactions. IN respect of certain other transactions, for which the assessee had produced the declarations in form C, the assessing authority taxed him at the concessional rate. When the assessee filed an appeal questioning the rejection of the fresh declarations filed by him complying with the proviso to rule 10 (1), the Appellate Assistant Commissioner not only confirmed the view of the assessing authority, but he also stated that even some of the declarations in form C which had been accepted by the assessing authority were defective, in that the registration numbers of the purchasing dealers had either not been correctly given or not given at all. Thereafter the assessee produced rectified C form declarations which showed the correct registration numbers of the purchasers, but the Appellate Assistant commissioner rejected them as filed out of time. After holding that the time prescribed in rule 5 (1) for the production of the declarations in C form was ultra vires the powers of the State Government, this court proceeded to consider whether the assessee could be said to have produced the declarations within a reasonable time, as held by the Supreme Court. This court held : "in our view, an appeal, after all, is, in a sense, an extension of the original jurisdiction, especially when the Appellate assistant Commissioner reopened the order which was in favour of the assessee and when the appeal was one filed by the latter. Apart from that, even the principles of natural justice would require that, when somethings discovered at the appellate stage which exposed the assessee to the higher rate of tax, the dealer should be given an opportunity to rectify the defects within a stipulated time granted for the purpose. IN our view, therefore, the fresh particulars furnished before the Appellate Assistant Commissioner, which rectified the defects in the C forms filed before the assessing authority, should have been received and, if they were found to be in order, the Appellate assistant Commissioner should have confirmed the original order applying the lower rate of tax in respect of the three items of sales covering a total turnover of Rs. 48, 681. 08."