AI Drafter 
TaxTMI 
TaxTMI 
1987 (2) TMI 448
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....ion 21 of the U.P. Sales Tax Act (hereinafter referred to as the Act) was issued to the assessee on the assumption that the amounts relating to commission charges and mandi fee had escaped assessment and were not included in the taxable turnover. After hearing the assessee the notice under section 21 was discharged by order dated 18th January, 1980, and no fresh tax was imposed. It appears that the assessee moved an application under section 22 of the Act on 4th November, 1982, stating therein that the turnover of purchases of foodgrains made on behalf of ex-U.P. principals was not liable to tax in view of the decision of this Court in Commissioner of Sales Tax v. Hanuman Trading Company [1979] 43 STC 408; 1979 UPTC 809 and prayed that the tax on the said purchases was liable to be refunded. The said application of the respondent-assessee was rejected by the Sales Tax Officer on the grounds, firstly, that the application was barred by time and secondly, that the purchases made by the dealer were not in course of inter-State sales and as such the assessee was not entitled to avail the benefit of law laid down by this Court in Hanuman Trading Company [1979] 43 STC 408; 1979 UPTC 809.....
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....236.68, which figure was accepted by the assessing authority and tax was levied at the rate of 3 per cent on the turnover of Rs. 20,36,414.18. Subsequently on examination of the record it was revealed to the assessing authority that the declarations filed by the assessee covered inter-State transactions worth Rs. 18,23,926.39 only and on the remainder of Rs. 2,12,497.79, Central sales tax should have been levied at the rate of 10 per cent and not at the rate of 3 per cent. A notice was issued to the assessee informing of the above position and proposing to reassess the assessee at the rate of 10 per cent on the turnover of his transaction of Rs. 2,12,497.79, which had been assessed at the rate of 3 per cent under the Central Sales Tax Act. The Sales Tax Officer made a reassessment under section 21 on this amount of turnover. The assessee filed an appeal before the Assistant Commissioner (Judicial) who held that the inter-State transaction entered into by the assessee amounted to only Rs. 18,23,926.29 and assessed the same accordingly. The Commissioner of Sales Tax preferred a second appeal before the Tribunal which rejected the appeal. It was contended on behalf of the department t....
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....he order dated 18th January, 1980, passed in proceedings under section 21 of the Act which resulted in the discharge of the notice, the result would be the same. The original assessment order remains intact as nothing is added or altered in pursuance of the order under section 21 of the Act. Thus in essence the assessee is claiming a refund of tax in view of the pronouncement of the High Court in Hanuman Trading Company [1979] 43 STC 408; 1979 UPTC 809 from the tax deposited on the basis of the original assessment order, which is clearly barred by the statutory period of limitation. If this is allowed under the garb of principle of merger, it would obviously frustrate the very purpose of the taxing statute, and as such, in my opinion, the principle of merger of the original assessment order into an order of reassessment under section 21 of the Act will apply only in cases where any enhancement in the original assessment order is made and not otherwise. In this view of the matter it must be held that the application under section 22 of the Act filed by the assessee is barred by the statutory period of limitation and the Tribunal was not justified in holding otherwise. Sinc....
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....-76 Section 21 ORDER UNDER SECTION 21 The original tax assessment order in respect of you was passed on 7-2-79. The audit, however, had objected that the businessman's arhat (commission) and mandi cess amount was left out from taxation. On this basis the businessman was called by issuing him notice under the said section. On the appointed day, his advocate appeared and submitted the account books. On examination it was found that the businessman had already included the arhat and mandi cess amount in the taxable income and he had already been assessed. Therefore, no tax is to be levied now and the businessman is declared as free from paying any more tax under section 21. Sd/- B. Lal Sales Tax Officer Sector 2, Mathura Dated: 18-1-80." In the year 1982, the appellant realised that it was not liable to pay sales tax on purchases made on behalf of ex-U.P. principals as such purchases had occasioned inter-State movement of the commodities in question and were as such exempt from the purview of the Act. The appellant, therefore, filed four applications under section 22 of the Act for rectification of the mistakes in the assessme....
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....ated February 7, 1979 passed in respect of the said assessment year had ceased to exist on the reopening of the assessment by the notice issued under section 21 of the Act and the final order under that section had been passed on January 18, 1980 within three years from the date of the application for rectification which had been filed on November 4, 1982. Aggrieved by the orders of the Tribunal the department filed four revision applications before the High Court of Allahabad. The High Court by its order dated November 15, 1985 dismissed three of the department's revision applications pertaining to the appellant's rectification applications in respect of the assessment orders for the assessment years 1976-77, 1977-78 and 1978-79 on merits holding that the orders of the Tribunal were correct and no ground had been made out to interfere with them. It, however, allowed the revision application filed by the department in respect of the application for rectification of the assessment order for the assessment year 1975-76 on the ground that the application for rectification had been filed beyond three years from the date of the original order dated February 7, 1979 and that the order da....
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....ection 12A of the Mysore (Karnataka) Sales Tax Act, 1957 on June 8, 1966 because certain amounts had escaped assessment under the original assessment order. Thereafter on June 28, 1967 the Deputy Commissioner of Commercial Taxes passed an order revising the order dated June 8, 1966 as a consequence of the decision of this Court in Shinde Brothers v. Deputy Commissioner, Raichur AIR 1967 SC 1512. Thereafter the assessee filed an application for rectification of the order passed by the Deputy Commissioner of Commercial Taxes requesting him to set aside the order passed on revision under section 21 of that Act on the ground that the revision of assessment was barred by limitation under section 21(3) of that Act and as such there was a mistake apparent on the record. The Deputy Commissioner of Commercial Taxes rejected the said application. The assessee questioned the order of the Deputy Commissioner of Commercial Taxes before the Mysore (Karnataka) Sales Tax Appellate Tribunal. The Tribunal too rejected that appeal. The assessee thereafter filed a petition before the High Court under article 226 of the Constitution of India. The High Court allowed the appeal and quashed the order p....
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....he orders made under section 12A of the Act and not the initial assessment orders." In reaching the above conclusion the Court relied upon three decisions of this Court, namely, V. Jaganmohan Rao v. Commissioner of Income-tax and Excess Profits Tax, Hyderabad, Andhra Pradesh [1970] 75 ITR 373 (SC); [1970] 1 SCR 726, Commissioner of Sales Tax, Madhya Pradesh v. H.M. Esufali, H.M. Abdulali [1973] 32 STC 77 (SC); [1973] 3 SCR 1005 and International Cotton Corporation (P.) Ltd. v. Commercial Tax Officer, Hubli [1975] 35 STC 1 (SC); [1975] 2 SCR 345. The third of the above three cases, namely, International Cotton Corporation (P.) Ltd. v. Commercial Tax Officer, Hubli [1975] 35 STC 1 (SC); [1975] 2 SCR 345 was a case arising out of rectification proceedings. In that case this Court held that once an assessment order had been rectified and it was sought to make a further rectification of that order the period of limitation for making such further rectification would commence not from the date of the original assessment order but from the date of the earlier rectification order. In Deputy Commissioner of Commercial Taxes v. H.R. Sri Ramulu [1977] 39 STC 177 (SC); [1977] 2 SCR 593 this ....
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....rescribed time, i.e., three years from the date of the order passed under section 21 of the Act. We do not find any merit in the submission made on behalf of the depart- ment that the order passed on January 18, 1980 should be understood as an order discharging the notice issued under section 21 of the Act and not an order of reassessment as such. This is obvious from the language of section 21 itself. Section 21 authorises the assessing authority to make an order of. assessment or reassessment. It says that if the assessing authority has reason to believe that the whole or any part of the turnover of a dealer, for any assessment year or part thereof, has escaped assessment to tax or has been under-assessed or has been assessed to tax at a rate lower than that at which it is assessable under the Act, or any deductions or exemptions have been wrongly allowed in respect thereof, the assessing authority may, after issuing notice to the dealer and making such inquiry as it may consider necessary assess or reassess the dealer or tax according to law. The assessing authority gets jurisdiction to make the reassessment by issuing a notice to the dealer as provided by section 21 of th....