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1995 DIGILAW 469 (MAD)

State of Tamil Nadu v. G. S. Raheem

1995-04-26

K.A.THANIKKACHALAM, T.JAYARAMA CHOUTA

body1995
Judgment :- In both these revisions, the State is the petitioner. The assessee is Modern Electrical, Chengam. The assessee was finally assessed by the Deputy Commercial Tax Officer II, Enforcement, Tiruvannamalai (hereinafter referred to as "the D.C.T.O.") under section16 of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act"), for the assessment year 1974-75 on an escaped turnover of Rs. 7, 600 at 9 per cent. besides levying penalty of Rs. 513 under section16(2) of the Act on the suppressed turnover of Rs. 3, 800. For the assessment year 1975-76, the assessee was assessed on an escaped turnover of Rs. 4, 200 at 8 per cent. besides levy of penalty of Rs. 250 being 1(1/2) times the tax due on the turnover actually suppressed being Rs. 2, 100. 2. Aggrieved assessee filed an appeal before the Appellate Assistant Commissioner, before whom it was submitted that there was no assessment under section12 of the Act and therefore, the assessment under section16 of the Act cannot be made. Since there was no assessment, made under section 12 of the Act, the Appellate Assistant Commissioner came to the conclusion that the assessment under section16 of the Act is not possible. Therefore he held that the assessment made under section16 of the Act is without jurisdiction. Accordingly, he remanded the assessments back to the territorial officer for making fresh assessments. 3. Aggrieved assessee filed second appeals before the Tribunal. The Tribunal also came to the conclusion that inasmuch as the assessment under section12 of the Act was not made, the assessment under section16 of the Act could not be made. Therefore, the Tribunal held that the assessment made under section16 of the Act was without jurisdiction. Accordingly, the assessments were set aside by the Tribunal. The Tribunal also pointed out that there is no case for remanding the matter to the assessing authority for making fresh assessments. It is against the order passed by the Tribunal in the assessment year under consideration, the State in revision before this Court. 4. The learned Additional Government Pleader (Taxes) submitted as under : In the present case, in the assessment years under consideration, as per the entries made in the "A" register, assessments under section12 of the Act were made and since the assessments were stated to be "nil" assessments, the order of assessment was not communicated to the assessee. 4. The learned Additional Government Pleader (Taxes) submitted as under : In the present case, in the assessment years under consideration, as per the entries made in the "A" register, assessments under section12 of the Act were made and since the assessments were stated to be "nil" assessments, the order of assessment was not communicated to the assessee. Therefore, it was submitted that the assessment made by the enforcement officials under section 16 and section16-A of the Act on the escaped turnover is perfectly justifiable. It was pointed out that the Tribunal was not correct in stating that no assessment was made in the case of he assessee under section12 of the Act. Therefore, it was submitted that the assessment made by the D.C.T.O., under section16 of the Act in the assessment years under consideration and the levy of penalty under section16(2) of the Act, are in order. 5. However, the learned counsel for the assessee submitted that the assessment made under section12 of the Act was not brought to the notice of the Tribunal at the time when the appeals were heard. Therefore, accordingly to the learned counsel for the assessee, no assessment was made in the case of the assessee under section12 of the Act. It was further submitted that without making an assessment under section12 of the Act, the assessment under section16 of the Act or under section16-A of the Act of the escaped turnover cannot be made. "It was also submitted that inasmuch as the assessment made under section12 of the Act was not served on the assessee, it will be deemed to be not exiting in the eye of law. It was, therefore, pleaded that the order passed by the Tribunal setting aside the assessments made by the D.C.T.O. II, Enforcement Wing, Tiruvannamalai, is in order. 6. We have heard the rival submissions. For the assessment years 1974-75 and 1975-76, the D.C.T.O. made an assessment under section16 of the Act on the escaped turnovers. Penalties were also levied under section16(2) of the Act for the suppressed turnover. 6. We have heard the rival submissions. For the assessment years 1974-75 and 1975-76, the D.C.T.O. made an assessment under section16 of the Act on the escaped turnovers. Penalties were also levied under section16(2) of the Act for the suppressed turnover. According to the assessee, the assessment under section16 or 16-A of the Act cannot be made for the first time and the assessment can be made under the aforesaid sections only after the original assessment was made under section12 of the Act or the assessment made under section16-A of the Act should again be ratified by an assessment made under section12 of the Act. 7. Section 12 of the Act prescribes the procedure to be followed by the assessing authority while making an assessment. Section 16(1)(a) of the Act states that where, for any reason, the whole or any part of the turnover of business of a dealer has escaped assessment to tax, the assessing authority may, subject to the provisions of sub-section (2) at any time within a period of five years from the expiry of the year to which the tax relates, determine to the best of its judgment the turnover which has escaped assessment and assess the tax payable on such turnover after making such enquiry as it may consider necessary and after giving the dealer a reasonable opportunity to show cause against such assessment. Section 16(1)(b) of the Act states that where, for any reason, the whole or any part of the turnover of business of a dealer has been assessed at a rate lower than the rate at which it is assessable, the assessing authority may, at any time within a period of five years from the expiry of the year to which the tax relates, reassess the tax due after making such enquiry as it may consider necessary and after giving the dealer a reasonable opportunity to show cause against such reassessment. 8. Therefore, under section12 of the Act, original assessment can be made and under section16 of the Act, assessment can be made on the escaped turnover. "Assessing authority" under section2(c) of the Act means, any person authorised by the Government or by any authority empowered by them, to make any assessment under this Act. 8. Therefore, under section12 of the Act, original assessment can be made and under section16 of the Act, assessment can be made on the escaped turnover. "Assessing authority" under section2(c) of the Act means, any person authorised by the Government or by any authority empowered by them, to make any assessment under this Act. In the present case, there is not dispute with regard to the fact that the D.C.T.O. II, Enforcement Wing, Tiruvannamalai, was empowered to assess as per the Notifications No. 2437 of 1962, No. II(1)/CTRE/116/77 dated April 16, 1977 and No. II(1)/CTRE/59(a)/80 dated February 15, 1980. Under these notifications, any officer of the Intelligence Wing above the rank of a D.C.T.O., is empowered for assessment of escaped turnover under sections 16 and 16-A of the Act. 9. In the present case, the learned Additional Government Pleader (Taxes) brought to our notice that as per the entries made in the "A" register for the assessment year 1974-75, the assessment was completed on August 2, 1975. It was a "nil" assessment. So also for the assessment year 1975-76, the assessment was completed on December 31, 1976. This is also a "nil" assessment. Therefore, in the case of the assessee, in both the assessment years under consideration original assessments under section12 of the Act were said to have been made. It is true that the copy of the copy of the assessment orders were not served on the assessee. According to the learned Additional Government Pleader (Taxes), since the assessment order was not served on the assessee, that would not lead to the conclusion that the assessment itself would become invalid. 10. After the original assessments were made under section 12 of the Act in the assessment years under consideration, the D.C.T.O., II, Enforcements Wing Tiruvannamalai, under section16 of the Act completed the assessments on the escaped turnovers and also levied penalties on the suppressed turnovers under section16(2) of the Act. Therefore, the assessments made on the escaped turnover by the D.C.T.O. II, Enforcement Wing, Tiruvannamalai, are valid assessments, and that the same cannot be considered as invalid assessments on the allegation that no assessment was made under section12 of the Act originally in the case of the assessee for the assessment years under consideration. 11. Therefore, the assessments made on the escaped turnover by the D.C.T.O. II, Enforcement Wing, Tiruvannamalai, are valid assessments, and that the same cannot be considered as invalid assessments on the allegation that no assessment was made under section12 of the Act originally in the case of the assessee for the assessment years under consideration. 11. A similar question came up for consideration before this Court in the decision reported in Joint Commercial Tax Officer-II, Tuticorin v. Ekambareeswarar Coffee and Tea Works 1991 (83) STC 457 wherein this Court held that" * the order of assessment made after assessing the turnover which had escaped assessment includes within it the original turnover as also the original assessment." Accordingly, we hold that the Tribunal was not correct in setting aside the assessments made and the penalty orders passed by the D.C.T.O. II, Enforcement Wing, Tiruvannamalai, under section 16 and 16(2) of the Act for the assessment years under consideration. In that view of the matter, the common order passed by the Tribunal in both the assessment years under consideration is set aside and the orders passed by the D.C.T.O. II, Enforcement Wing, Tiruvannamalai, stand restored. Both the revisions are allowed. No costs.