1976 (9) TMI 144 - SC - VAT and Sales Tax

Supreme Court Upholds Assessing Authority's Jurisdiction on Central Sales Tax Act Assessments

The Indian Aluminium Cables Ltd. and Another Versus Excise and Taxation Officer and Another

The Indian Aluminium Cables Ltd. and Another Versus Excise and Taxation Officer and Another - [1977] 39 STC 19 (SC), 1977 AIR 540, 1977 SCR (1) 716, 1977 ... Issues Involved:1. Jurisdiction and limitation for assessment proceedings under the Central Sales Tax Act.2. Liability to pay Central sales tax on sales of electric cables to State Electricity Boards.Comprehensive, Issue-Wise Detailed Analysis:1. Jurisdiction and Limitation for Assessment Proceedings:The primary issue was whether the assessment proceedings for the years 1969-70 and 1970-71 could be proceeded with and whether the assessment order could be passed beyond a period of 5 years from the end of the quarter concerned. The appellant argued that the Assessing Authority lacked jurisdiction to make assessments after this period, effectively rendering the assessments time-barred.The Court clarified that under section 10 of the Act, the filing of a return by a dealer initiates the assessment proceedings. The Court noted that the mere statutory liability to file a return or pay tax does not commence proceedings; rather, the filing of the return does. The Court emphasized that the legislature did not fix any period of limitation for actions and orders under sub-sections (1), (2), and (3) of section 11 of the Act, unlike sub-sections (4), (5), and (6), which do have specified time limits.The Court held that a notice under section 11(2) could be issued at any time after the filing of the return, and the assessment under sub-section (1) could be made at any time. The Court also pointed out that the phrase 'as soon afterwards as may be' in sub-section (3) implies that the Assessing Authority should complete the assessment promptly after the hearing of evidence.The Court overruled the Full Bench decision in Rameshwar Lal Sarup Chand v. Shri U.S. Naurath, which had held that the assessment under sub-section (3) must be completed within 3 years from the last date on which the return should be filed. The Court reiterated that the decision in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax, Nagpur, established that assessment proceedings commence when a return is filed and continue until a final order is made, without a specific time limit for completion.2. Liability to Pay Central Sales Tax:The appellant contended that it was exempt from paying Central sales tax on sales of electric cables to State Electricity Boards due to the exemption under section 8(2A) of the Central Sales Tax Act, read with section 5(2)(a)(iv) of the Punjab General Sales Tax Act, 1948. However, this issue had already been decided by the Supreme Court in Indian Aluminium Cables Ltd. v. State of Haryana, where it was held that the sales were not exempt from tax generally within the meaning of section 8(2A) of the Central Act.The Court affirmed that the appellant's liability to pay Central sales tax had been conclusively determined, and thus, this issue was not re-agitated before the Court.Conclusion:The Supreme Court dismissed the appeals, holding that the Assessing Authority had jurisdiction to proceed with the assessments beyond the 5-year period, as no specific time limit was prescribed for issuing notices under section 11(2) or for completing assessments under sub-sections (1), (2), and (3) of section 11. The Court also reaffirmed the appellant's liability to pay Central sales tax on sales to State Electricity Boards, as previously decided. The appeals were dismissed with costs, and the Court advised the Assessing Authority to complete the assessment proceedings promptly.