REGIONAL ASSISTANT COMMISSIONER OF SALES TAX, INDORE versus MALWA VANASPATI & CHEMICAL COMPANY LTD.

Citation: [1968] 2 S.C.R. 431 · Decided: 24-11-1967 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A 
REGIONAL ASSISTANT COMMISSIONER OF SALES TAX, 
INDORE 
B 
c 
D 
E 
F 
G 
H 
v. 
MALWA VANASPATI & CHEMICAL COMPANY LTD. 
November 24, 1967 
[J. C. SHAH. V. RAMASWAMI AND V. BllARGAVA, JJ.] 
Madhya Bharat Sales Tax Act (30 of 1950), ss. 
8(2) 
and !{}-
Returns filed by registered dealer-Notice under s. 8(2) 
after 3 years 
from year· of assessment-Assessment if barred. 
The . re~Pondent was a registered dealer. 
For the four quarters of 
1958-59, it submitted returns of turnover from it' inter-State sale 
transactions. 
Though the proceedings relate to levy of Central sales tax 
lhe tax; was liable to be assessed and recovered in the present case. under 
the Madhya Bharat Sales Tax Act, 
19'50. 
The 
Assessing 
Authority 
i•sucd a notice on September 17, 1962 under s. 8(2) of the Act, calling 
upon 1he respondent to show cause why the transactions should not be 
taxed ar the full rate. 
The respondent then filed a writ petition in the 
High Court contending that since the assessment was not completed with· 
in three years from the last day of the year of assessment as prCY\ided 
hv s. !O of the Act. the Authority had no power to continue the proceed-
ing. 
The High Court allowed the petition. 
In appeal to this Court, 
HELD : 
Where a dealer has not filed the prescribed return of his 
lumover at an, it would be a case of 'escaped assessment' and the pro.. 
ceeding for assessment must be conunenced in respect of that turnover 
within the period of three years prescribed by s. 10. 
Similarly, if a 
proceeding for assessment was completed and it was then found that 
any turnover had escaped assessment the proceeding for bringing to tax 
that turnover must be commenced within three years next succeeding the 
year to which the tax relates. 
But, where a return has been filed by the 
dealer under s. 7, as in the present case, the proceeding for assessment 
commences and remains pending until it is determined by a final order 
of assessment. 
Therefore, a notice under s. 8(2) is only a step in the 
proceedin~ for completing the assessment. 
Since the Act contains no 
provision that the proceeding shall be completed within any fixed period, 
the Assessing 1\uthority is entitled to complete the proceeding without 
any restriction as to time and the bar of s. 10 is not attracted to· the 
proccedinf?'. [435 D-G; 437 HJ 
Ghanskyam Das v. Regional Assistant Commissioner of Sales 
Tax. 
11964] 4 S.C.R. 436, explained and followed. 
Mah.,,·o Vanaspati & Chemical Co. Ltd. v. The ReRional AssistGnt Com-
missioner of Sales Tax Indore, Misc. Petition No. 356 of ·1963 
(High 
C'our1 of M.P.) overruled. 
Firm Ju,;Fnohandas Vijayakumar Y. Addi. Assistant Co1nmissioner oj 
Sales Tax, Indore. :>.foe. Petition No. 37 of 1963 (High Col!rt of M.P.) 
:efcrred to. 
432 
SUPREME COURT llEPORTS 
[1968] 2 S.CR 
Ov1L API•ELLATF. JURISDICTION : Civil Appeal No. 770 of 
1966. 
Appeal by special leave from the judgment and order dated 
March 31, 1 964 of the Madhya Pradesh High Court in Misc. 
Pelition No. 355 of 1963. 
l.N. Shro[/. for the appellant. 
A. K. Sen, G. M. Chaphekar, H. K. Puri and K. L. Arora. for 
the respondent. 
The Judgment of the Court was delivered by 
Shah, J. 
The Malwa Vanaspati & Chemical Company Ltd.-
hereafter called 'the respondent'-is a public limited company 
which carries on the business of manufacturing and selling hydro-
genated oil and is registered as a dealer under the Madhya Bharat 
Sales Tax Act, 1950, and also under the Central Sales Tax Act. 
1956. For the four quarters of 1958-59 the respondent submitted 
returns of turnover from its inter-State sale transactions. 
The 
Madhya Bharat Sales Tax Act, 1950, was repealed with effect 
from April I, 1959 by the Mac!hya Pradesh General Sales Tax 
Act 2 of 1959. but it is common ground that assessment in this 
ca~e is go\'erncd by the provisions of the Madhya Bharat Sales 
Tax Act, 1950. 
After certain infructuous attempts made to tax the turnover 
of the respondent under Act 2 of 1959, the Additional Assistant 
Commi~sioner of Sales Tax, Indore Region, by notice dated 
September 17, 1962, called upon the respondent to show cause 
why the transactions included in the taxable turnover of the res-
pondent be not taxed at the full rate. The respondent then pre-
sented a petition under Art. 226 of the Constitution in the High 
Court of Madhya Pradesh for an order quashing the proceeding 
for assessment, contending, inter alia, that since the assessment 
was not completed w

Excerpt shown. Read the full judgment & AI analysis in Lexace.