LexSALES TAX OFFICER & ANR. versus SUDARSANAM IYENGAR & SONS
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A SALES TAX OFFICER & ANR. V. SUDARSANAM IYENGAR & SONS August 13, 1969 859 B [J. C. SHAH, ACTING <;.J., V. RAMASWAMI AND A. N. GROVER, JJ.] c D E F G H Travancore-Cochin General Sales Tax Rules, 1950, Rule 33-Determi- nation and assessment of escaped turnover-Limit of three years-Pro .. ceedings !or assessment whether must be initiated or finally completed within that period. The respondent was assessed to sales tax in the State of Kerala for the year 1962-63 in March, 1964. In December, 1965 the Sales Tax Officer issued notice under R. 33 of the Travancore-Cochin General Sales Tax Rules, 1950 in force at that time for reopening the original assessment on the ground that c~rtain turnover had escaped assessment. According to the relevant portion 0£ the snid rule the assessing authority "may at any time within three years next succeeding that to which the tax ....... . relates determine to the best of his judgment the turnover which has escaped asseissment and assess the tax payable. . . on such turnover aftgr issuing a notice to the 1dealer . . . and after making such enquiry as he considers necessary". The respondent's objection to the notice having failed it filed a writ petition in the High Court. The learned Single Judge who heard the writ petition felt that it was due to the orders of the court that the Sales tax authorities had been prevented from completing the assessment within the time allowed by Rule 33. While disposing of the writ petifion he observed that the Sales Tax Authorities would be at liberty to complete the proceedings initiated bv the notice within a further period of 59 days. The respondent preferred an appeal to the division bench which s·et aside the dir~ction granting 59 days extension for completing the asse·ssment. The .Revenue appealed. On behalf of the appellant it was contended that on a ttue construction of Rule 33 it should be held that the proceedings under that rule have to commence within three years next succeeding that to wli.ich the tax relates and that it is not necessary that the entire proceedinga relating to the escaped assessment should be com- pleted within that period.. On behalf of the respondent it was urged that the word 'determirte' ·in Rule 33 meant that the final determination of the turnover which had e!caped assessment and the assessment of the tax have to be done within ttn;ee years. Allowing the appeal. HELD : In vie\v Of the previous decisions of this Court in which pro- visions similar to Rule 33, namely, sub-clauses (2), (4) and (5) of s. 11 o'f the Punjab Genera! Sales Tax Act, 1948 came up for consideration, the principle is firmly e.~ablished that assessment proceedings under the Sales Tax Act must be taken to be pending from the time the proceedings are initiated until they· ·fire terminated hy a final orJer of assessment. In these cases the initiation o( proceedings within the prescribed period was considered sufficient, . -The fact that the word used in Rule 33 is 'determine' whereas in ss. 11(4} and (5) of the Punjab Act the words 'proceed to assess' are use_(!, canfiot, in the context of sales tax legislation lead to a different result. f862 H-863 CJ The words which follow the word 'detelrmine' in Rule 33 must be accorded their due s;ignification. The words 'assess the tax payable' can- not be ignored an,.d,. i~ is clearly meant that the assessment has to be made within the petjod·-prescribed. ·~essmenf is a comprehensive word and can 860 SUPREME COURT REPORTS [ 19701 I s.c.R. denote the entirety of proceedings '-"·hich arc taken \vith rcg;nd to it. It canI'lot and does not mean a final order Of asseso;mcnt alone unless there is $Omething in the context of a particular provision v.·hich compels such a meaning being attributed to it. Rule 33 mus.I not be so interpreted that it may be defeated by taking certain collateral proceeding<; and obtaining a stay order as was done in the present case or by unduly delaying a<.>.lcss- mcnt proceedings beyond a period of three years. It must he interpreted like the analogous provisions considered in earlier cases. l'his must parti- cularly be so when there is no provision in the Ruic in question analogous to sub-s. (3) of s. 34 of the Income-tax Act, 1922 by v;hich the Income Tnx authorities v.·crc deharred from completing the assessment beyond the ptriod prescribed. [863 D-Gl The State of Punjab v. Tera Chn11d Laipat Roi. 19 S.T.C.
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