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1997 DIGILAW 258 (KER)

SEA ROSE MARINE PVT. LTD. v. STATE OF KERALA

1997-07-08

K.A.MOHAMMED SHAFI, K.K.USHA

body1997
JUDGMENT K. K. USHA, J. – These tax revision cases are at the instance of the assessee. They arise from a common order passed by the Sales Tax Appellate Tribunal, Ernakulam, in T.A. Nos. 317 and 318 of 1995 respectively dated November 21, 1995. The relevant assessment years are 1983-84 and 1984-85. 2. The main question raised in these tax revision cases is whether the transfer of an import licence called REP licence by the holder thereof to another person constitutes a sale of goods within the meaning of and for the purpose of the Kerala General Sales Tax Act, 1963. The Tribunal has held that the assessing authority was right in law to levy tax on the petitioner on the sale proceeds of REP licence. In the light of the decision of the Supreme Court in Vikas Sales Corporation v. Commissioner of Commercial Taxes [1996] 102 STC 106, it has to be held that the Tribunal was correct in its view regarding the exigibility to tax of the amount received for transfer of REP licence. Then the only other question pressed before us by the learned counsel for the petitioner was one relating to limitation. It was contended that the assessments for the years 1983-84 and 1984-85 were completed only by assessment orders dated July 30, 1994 and August 31, 1994 respectively, which according to the learned counsel for the petitioner, was highly belated. Reliance was placed on a decision of this Court in K. Ishwar Bhatt v. Commissioner of Agricultural Income-tax, Trivandrum (1992) KLJ (Tax Cases) 195, in support of the above contention. The learned Government Pleader pointed out that there is no merit in the contention that there was inordinate delay on the part of the assessing authority to initiate proceedings and that the Tribunal should have accepted the contention raised by the assessee on the question of limitation. The learned Government Pleader referred to the finding of the Tribunal that it was the assessee who was getting the proceedings prolonged by seeking repeated adjournments. He also referred to the provisions contained in the proviso to sub-section (6) of section 17 of the Kerala General Sales Tax Act introduced by the Kerala Finance Act, 1993. Before the introduction of the above there was no provision in the Kerala General Sales Act limiting the power of the assessing authority to pass assessment orders. He also referred to the provisions contained in the proviso to sub-section (6) of section 17 of the Kerala General Sales Tax Act introduced by the Kerala Finance Act, 1993. Before the introduction of the above there was no provision in the Kerala General Sales Act limiting the power of the assessing authority to pass assessment orders. Sub-section (6) of section 17 reads as follows : "Any assessment under this section shall be completed within a period of four years from the expiry of the year to which the assessment relates : Provided that this time-limit shall not apply in the case of dealers who, being liable to get themselves registered as provided for under the Act and the Rules made thereunder have failed to do so : Provided further that all assessments pending as on the 1st day of April, 1993 shall be completed within a period of four years from the date of publication of the Kerala Finance Act, 1993." 3. The learned Government Pleader submits that the assessment for the years 1983-84 and 1984-85 were pending and therefore even applying the provisions contained under sub-section (6) of section 17 the assessment orders were issued within time. He relied on a decision of this Court in Usha Aravind v. Sales Tax Officer, Mattancherry (1994) 2 KLT 357, in support of the above contention. The assessee had filed its return only on March 31, 1984. The assessing authority then called for the records. The assessee addressed a letter to the assessing authority dated January 22, 1992 giving authorisation for representing the assessee in the assessment proceedings. Further notice was also issued calling for details. Letter dated July 23, 1993 by the assessee was addressed to the assessing authority seeking two months' time to submit details. On June 10, 1994 another letter was sent authorising yet another person to represent the assessee. On July 7, 1994 another letter was addressed requesting time till July 15 to submit reply. Thereafter on June 16, 1994 notice under section 17(3) was issued by the assessing authority and the assessment was completed and assessment order was issued on July 30, 1994. For the assessment year 1984-85 also the assessee had filed a nil return on March 31, 1995. For that year the assessment order was dated August 31, 1994. Thereafter on June 16, 1994 notice under section 17(3) was issued by the assessing authority and the assessment was completed and assessment order was issued on July 30, 1994. For the assessment year 1984-85 also the assessee had filed a nil return on March 31, 1995. For that year the assessment order was dated August 31, 1994. It was in the light of these facts, the Tribunal observed that the delay was caused due to repeated request made by the assessee for time. 4. We find no merit in the contention raised by the assessee that the assessment orders passed in the year 1994 are to be treated as perverse, unreasonable and irrational on the ground of delay. The facts of the case reported in (1992) KLJ (Tax Cases) 195 (K. Ishwar Bhatt v. Commissioner of Agricultural Income-tax) are entirely different. Suo motu proceedings were initiated by the Commissioner under section 34 of the Agricultural Income-tax Act, 1950 as per notice dated March 9, 1966. Objections were filed in 1967. But final order was passed by the Commissioner only on October 31, 1980. This Court took the view that inordinate delay of more than 13 years in passing the order would amount to perverse, unreasonable and irrational exercise of power by the statutory authority. In the present case the assessing authority cannot be found fault with for the delay in passing the assessment order. Apart from the above, as contended by the learned Government Pleader, in the light of the provisions contained under section 17(6) of the Kerala General Sales Tax Act the assessment orders were issued in time as assessment proceedings were pending on the date of publication of the Kerala Finance Act, 1993. We are also in agreement with the view taken by the learned Judge in Usha Aravind v. Sales Tax Officer (1994) 2 KLT 357. When the statute has allowed the assessing authorities a period of time under sub-section (6) of section 17 to pass assessment orders and if assessment orders are passed within such period, it is not for this Court to conclude that the assessment orders are unsustainable since there was inordinate delay in passing the assessment order. We find to merit in the contentions raised by the petitioner. In the result, T.R.C. Nos. 51 and 52 of 1996 stand dismissed. C.M.P. No. 1606 of 1996 in T.R.C. No. 51 of 1996 dismissed. We find to merit in the contentions raised by the petitioner. In the result, T.R.C. Nos. 51 and 52 of 1996 stand dismissed. C.M.P. No. 1606 of 1996 in T.R.C. No. 51 of 1996 dismissed. Petitions dismissed.