LexTHVL. BOMBAY AMMONIA PVT. LTD. versus STATE OF TAMIL NADU
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A B n 8 56 THVL. BOMBAY AMMONIA PVT. LTD. V. STATE OF TAMIL NADU March 24, 1976 [A. N. RAY, C.J., M. H. BEG AND JASWANT SINGH, JJ.] Madras General Sale Tax Act, 1959 s. 32-Suo Motu Power-Scope of exe1nption-Ext:mption not clain1ed before assessn1ent-Appeal not preferred- !/ could plead ntistake !a&cr. The appellant submitted a sales-tax return showing the taxable turn0ver. The assessing authority, while checking the accounts, discovered an lij).disclosed turnover. He added that sum to the turnover and then assessed sales-tax on that turnover. The appellant did not file any appeal against the assessmt'nt order. The Deputy Commissioner of Sales Tax issued a notice to the appel- lants in exercise of ~;uo 1notu power of revision under s. 32 of the Madras &'lies-tax Act to show cause why a penalty should not be imposed in respect 1 of the undisclosed turnover. While challenging the exercise of this !)Ower the -t- appellant alternatively prayed for exemption in respect of a sum representin!! works contracts which, they alleged, did not amount to sale of goods. The first ground was rejected; on the second ground it was held that since the appellants did not file an a!)peal in the regular course against the assessment order they were not entitled to exemption. On appeal, the Appellate Tribunal allowed the clain1 for exemption on the ground that it represented works contract. The High Court in revision set aside the order of the Tribunal granting exemption. Dismissing the appeal, E HELD : The suo n1otu power of revision of the Deputy Commissioner in ;f ·G s. 32 is wide and can be exercised both in favour of the revenue as well as the tax-payer in order to correct any error or illegality committed by the assessing -.,.. authority in his order of assessment. [860Dl State of Kerala v. K. M. Cheria Abdulla and Company (1965) 16 S.T.C. 875 [1965] 1 S.C.R. 601 and The Swastik Oil Mill" Ltd. v. fl. ll. Muushi, Deputy Cotn111issioner of Sales Tax, Bon1bay (1968) 21 S.T.C. 383 referred to. But in the present case the Deputy Commissioner was right in refusing to exercise his revisional power in favour of the appellants and the High Ccurt was right in reversing the order of the Appellate Tribunal. At no stage of the proceedings before the assessing authority did the assessee bring it to the assess- ing authority's notice that a suh.;t}Jntial portion of the turnover related to works contracts and as such exempt from liability to tax. Secondly, the appellants acquiesced in the order ot assess1nent passed by the assessing authority and did not prefer any appeal. In face of the decision of this C'ourt in State of Madras v. Gannon Dunkerley and Co. Ltd. f 1959] SCR 379 the appe!Jants .r- canr1ot plead that they did hot claim exen1ption under the mist<iken impression that the transactions iin1ounted to sale of goods. [860 E G; 86 l B] CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1699 of 1973. H Appeal by Special Leave from the Judgment and order dated 4-5-73 of the Madras High Court in T.C. No. 223 of 1969. K. S. Ramamurthi and (Mrs) S. Gopalakrishna, for the appellant. I THVL. BOMBAY AMMONIA LTD. v. TAMIL NADU (Jaswant Singh, J.) 857 P. Ram Reddy, A. V. Rangam and (Miss) A. Subhashini, for the · respondent. The Judgmen'. of the Court was delivered by JASWANT SINGH, J. This is an appeal by special leave against the judgment and order dated May 4, 1973 passed by the High Court of Madras in T.C. No. 223 of 1969. B It appears that the appellants who are dealers in refrigerators, spare parts etc. submitted a return for the year 1964-65 to the Joint Commercial Tax Officer, Madras (hereinafter called the 'Assessing Authorily') under the Madras General Sales Tax Act, 1959 (here- inafter referred to as 'the Act') showing a total taxable turnover of Rs. 6,41,031.77. On checking the accounts of the appellants, the C Assessing Authority by its order dated Jaunary 31, 1966 made an addition of Rs. 33,710.88 to the turnover reported by the appellants and assessed the sales tax on the turnover of Rs. 6,74,742.65. The ~ appellants did not choose to prefer an appeal against this assessment. ' On January 7, 1967, the Deputy Commissioner, Commercial Taxes, Madras Division, in exercise of his suo n1otu power of revision under section 32 of the Act issued a notice to the appellants calling D upon them to show cause why ~penalty of Rs. 5,056/- on the afore- said undis
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