STATE OF MADRAS versus MADURAI MILLS CO., LTD.

Citation: [1967] 1 S.C.R. 732 · Decided: 04-10-1966 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

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

Judgment (excerpt)

STA TE OF MADRAS 
v. 
MADURAI Mll.LS CO., LTD. 
October 4, 1966 
(J.C. SHAH, V. RAMASWAMI AND V. BHARGAYA, JJ.J 
Madras General Sales-taJC Act (9 of 1939), s. 12(4) (b)--Order of 
assuslng authority-When merges In thaJ of appel/att or revlsional autlw-
rlty-Period of /lmitatiot>---Starting point. 
For the asses.men! year 1950-51 the resl"?ndent submitted a return 
of its net turnover to the Deputy Commercial Tax Officer who was the 
assessing authority. As he determined 
the net turnover 
at a higher 
amount the respondent appealed to the Commercial Tax Officer, 
who 
allowed the appeal with respect to one item. On 28th November 1952, 
the assessing abthority mued a revised assessment order as per the order 
of the Commercial 1'ax Officer. 
On 27th December 1952, the respon-
dent presented a revision petition before the Deputy Commissioner 
of 
Commercial Taxes raising the only objection, as a new contention, that 
it should not have been assessed to tax on amounts collected by it by way 
of tax. 
On 21st August 1954, the Deputy Commissioner dismissed the 
petition on the ground that the respondent was not entitled to raise a new 
contention for the first time. On 4th August I 958, the Board of Revenue 
issued a notice to the respondent stating that it proposed to revise 
the 
assessment by including in the net turnover a sum representing the value 
of cotton purchased by the respondent from outside the State and which 
was excluded by the assessing authority. 
After considering the respon-
dent's objections the Board fi<ed the net ta<able rurnover by including 
that amount. The respondent's appeal to the High Court was allowed. 
In appeal by the State, 
HELD : The order of the Board of Revenue 
was invalid, because, 
under s. 12(4)(b) of the Madras General Sales-tax Act, 1939, the Board 
of Revonue could invoke its revisional jurisdiction only within four years 
from the dak on which the order of the assessing authority was commu-
aicated to the assesseo. 
[734 G; 736 B-C] 
(i) The subject-matter of the revision proceedings before the Board 
of Revenue was only the revised assessment order of the assessing autho-
rity dated 28th November 1952, and not the 
Deputy Commissioner's 
order dated 21st August 1954. 
(736 CJ 
The objection taken by the Board was with regard to 'the question 
of e<emption allowed by the assessing authority on the value of conon 
purchased from outside, and that question was 
not raised in revision 
before the Deputy Commissioner of Commercial Taxes. 
(736 C-D) 
(ii) It cannot he said that the order of the Deputy Commissioner of 
Commercial Taxes, in revision, is the only operative 
decision in 
law 
on the basis that the order of the inferior Tribunal 
(the order of the 
assming authority dated 28th November 1952) 
merged in that of the 
superior Tribunal (order of the Deputy 
Commissioner of Commercial 
Taxes, dated 21st August 1954). (736 FJ 
1be application of the doctrine of merger depends on tho nature of 
the appcUate or revfsional order in each case and the scope of the statu-
A 
B 
c 
D 
E 
F 
G 
H 
MADRAS v. MADURAI MILLS (Ramaswami, J.) 
733 
A 
tory provisions conferring the appellate or revisional jurisdiction. Jn the 
circumstances of the present case it could not be said that there was a 
merger of the order of assessment dated November 28, 1952 with tho 
order in revision dated 21st August 1954, because, the question of ex-
clusion of the value of yarn purchased from outside the State was not 
the· subject-matter of revision 
before the Deputy Commissioner of 
Commercial Taxes. [737 A·B, F-HJ 
B 
Commissioner of lncome-twc, Bombay v. Amritlal 
Bhogilat cl Co. 
[1959) S.C.R. 713 and State of Uttar Pradesh v. Mohammed 
Nooh. 
[1958] S,C.R. 595, followed. 
c 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 539 of 
1965. 
Appeal by· special leave from the judgment and order dated 
September 13, 1961 of the Madras High Court in T.C. No. 162 of 
1958. 
Bishan Narain and A. V. Rangam, for the appellant. 
A. K. Sen and D. N. Gupta, for the respondent. 
D 
The Judgment of the Court was delivered by 
E 
F 
G 
H 
Ramaswami, J. This appeal is brought by special leave against 
the judgment of the Madras High Court dated the 13th September, 
1961 in T.C. 162 of 1958. 
The Madurai Mills Co., Ltd., (hereinafter called the respon-
dent) is 
a dealer in yarn, purchasing raw material like cotton 
staple-fibre, etc., manufacturing them into yarn and selling the 
yarn. Jn .. the assessment year 19

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