THE STATE OF ANDHRA PRADESH versus NAY SWADESHI OIL MILLS

Citation: [1988] 1 S.C.R. 736 · Decided: 03-11-1987 · Supreme Court of India · Bench: E.S. VENKATARAMIAH · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
THE STATE OF ANDHRA PRADESH 
'1 
v. 
' 
NAY SWADESHI OIL MILLS. 
NOVEMBER 3, 1987. 
~ 
B 
[E.S. VENKATARAMIAH AND S. RANGANATHAN, JJ.] 
Andhra Pradesh General Sales Tax Act, 1957: ss. 13 & 14(1) & 
14(3)/Central Sales Tax Act, 1956: s. 9(2)-Applicability of-Returns 
not filed within the prescribed period-Assessments made after expiry 
c of four years from assessment year-Held, cases fall under s. 14(3) and ) 
assessment can be made within six years from expiry of the assessment 
year. 
Sub-section (2) of s. 9 of the Central Sales Tax Act, 1956 makes 
D the assessment procedure prescribed under the general sales tax law of 
the appropriate State applicable to the assessment to be made under the 
Central Act. Section 13 of the Andhra Pradesh General Sales Tax Act, 
1957 requires the dealer to submit returns in such manner, within such 
period and to such authority as may be prescribed. Sub-section (1) ofs. 
14 permits the assessing authority to assess the amount of tax due on the 
\, 
E returns submitted under s. 13 only within a-period of four years from 
) 
the expiry of the year to which the assessment relates. Sub-section (3) 
permits the assessing authority to make best judgment assessment 
where a dealer (i) fails to submit return before the date prescribed; (ii) 
produces the accounts registers and other documents after inspection 
and (iii) submits a return subsequent to the date of inspection, within a 
F 
period of six years from the exp.iry of the year to which the assessment 
) 
relates. 
In the main appeal before this Court the assessee-respondent filed 
its return relating to the quarter ending 31st March, 1969 on 7th 
August, 1969 under the Central Sales Tax Act. The last date prescribed 
G by Jaw was 24th May, 1969. The Commercial Tax Officer passed the 
assessment order on 3rd August, 1973, beyond four years from 31st 
March, 1969, the last day of the assessment year 1968-69. The asses- ,)
see's appeals against that order were dismissed by the Assistant Com-
missioner and the Sales Tax Appellate Tribunal. 'the High Court in 
revision, however, held that the assessment made after four years from 
H the last day of the assessment year was not a valid assessment. 
736 
STATE OF A.P. v. SWADESHI OIL MILLS 
737 
,. 
In the connected appeal the respondent who was the assessee tiled 
the annual return in respect of the assessment year 1968·69 under the A 
provisions of the Central Act on 19th August, 1969 after the expiry of 
the prescribed date. The order of assessment was passed on 2nd August, 
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1973 beyond four years from the last day of the assessment year 1968· 
69. An appeal against that order was dismissed by the Assistant Com· 
missioner. The Sales Tax Appellate Tribunal, however, allowed the B 
appeal holding that the assessment had been passed beyond four years 
from the last day of the assessment year. The revision petition preferred 
by the State was dismissed in limine by the High Court. 
In the appeals by special leave filed by the State, it was contended 
{_ 
for the respondent that since the returns in the cases had been accepted, c 
even though they had filed been beyond the prescribed date, the assess· 
ments made thereon could not be considered as best judgment assess· 
ments and, therefore, sub-section (3) of s. 14 of the Act under which it is 
permissible to make best judgment assessments would be inapplicable. 
Allowing the appeals, 
D 
HELD: 1.1 On a true construction of sub-s. (1) and sub·s. (3) of 
s. 14 of the Andhra Pradesh General Sales Tax Act, 1957 it is apparent 
that where a return is not tiled by a dealer before the date prescribed in 
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that behalf under the Act the assessing authority has jurisdiction to 
complete the assessment within a period of six years from the expiry of E 
the year to which the assessment relates. [744CI 
1.2 The two types of cases which fall under sub-s. (1) and sub-s. 
(3) of s. 14 of the Act respectively are mutually exclusive. The return on 
the basis of which an assessment is to be made under s. 14(1) is a return 
~ 
filed ·within the prescribed period and in such a case the assessment has F 
to be completed within a period of four years from the expiry of the 
period to which the assessment relates. The Act confers a distinct 
advantage on such a dealer who is prompt in tiling his return inasmuch 
as he acquires immunity against assessment on the expiry of the said 
period of four years. All cases where the return is submitted beyond the 
p

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