TaxTMI 
TaxTMI 
1973 (5) TMI 91
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....ver. The assessees did not prefer any appeal against the said order of assessment. However, on 7th January, 1967, the Deputy Commissioner of Commercial Taxes, Madras Division, issued a notice to the assessees proposing to levy a penalty of Rs. 5,056 on the undisclosed turnover of Rs. 33,710.88, under section 12(3) of the Act in exercise of his suo motu powers of revision under section 32 of the Act. The assessees filed their objections on 23rd January, 1967, questioning the jurisdiction of the Deputy Commissioner to levy the penalty. In addition, they also pointed out that a turnover of Rs. 6,32,142 out of the turnover determined related to works contracts and that, therefore, if the Deputy Commissioner is inclined to revise the order of a....
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....xempted from taxation. Aggrieved against the order of the Tribunal, the revenue has come up before us. We can straightaway say that the decision of the Tribunal, in so far as it set aside the order levying penalty, cannot be taken exception to. The Tribunal is quite justified in holding that as the assessment was based on the book entries and not on the basis of best judgment, the provisions of section 12(3) of the Act cannot be invoked. We have to, therefore, uphold that portion of the order of the Tribunal. As regards the decision of the Tribunal relating to the deletion of the turnover of Rs. 5,99,468 from the taxable turnover on the ground that they related to works contracts, It is urged by the learned counsel for the revenue that th....
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....s. 4,269.66." The above extract shows that the assessees offered the above turnover for assessment on their own accord in their monthly returns and paid tax thereon. Even at the stage of the assessment, they admitted the turnover to be taxable. They never put forward a claim that the transactions relating to the said turnover were works contracts and, as such, they are not liable to be taxed under the Act. The assessing authority, therefore, had no occasion to consider the question whether the transactions in question amounted to works contracts. As a matter of fact it was not brought to the notice of the assessing authority at any stage that the transactions were in the nature of works contracts. Even after the assessment, the assessees d....
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....iscretion in favour of the assessee on the particular facts of that case by observing: "We do not think that there is any error. The Deputy Commissioner was right in his view that the petitioner having not availed himself of the remedy of appeals under the Act in respect of the assessments made on 31st December, 1966, and 10th February, 1969, he could not, notwithstanding his failure, invoke the revisional jurisdiction. We are of the view that to such a case the principle of our decision in C.M.P. Nos. 1329 to 1337 of 1969 in W.P.S.R. No. 3592 of 1969 (T.I. and M. Sales Ltd. v. Joint Commercial Tax Officer, Harbour Division I, Madras) would apply. Apart from that, we are also in agreement with the view of the Deputy Commissioner on merits.....
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....e transactions in question were works contracts and, as such, not taxable. The Deputy Commissioner, in those circumstances, felt that the assessees who have themselves offered the turnover for assessment, paid the tax provisionally along with their monthly returns and who felt satisfied about the order of assessment till the date of receipt of the show cause notice from him cannot be allowed to challenge the assessment on merits and that if they were really aggrieved they could have taken the matter in appeal to the appellate authority then and there. We cannot say that the refusal by the Deputy Commissioner to interfere with the order of assessment in those circumstances In exercise of his discretionary power under section 32 is vitiated. ....
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....ng the claim of the assessees on the ground that they have not chosen to challenge the assessment in relation to the turnover at any stage before. The learned counsel for the assessees refers to the following passage from the decision of the Supreme Court in L. Hirday Narain v. Income-tax Officer[1970] 78 I.T.R. 26 (S.C.).: "If a statute invests a public officer with authority to do an act in a specified set of circumstances, It is imperative upon him to exercise his authority in a manner appropriate to the case when a party interested and having a right to apply moves in that behalf and circumstances for exercise of authority are shown to exist. Even if the words used in the statute are prima facie enabling the courts will readily infer a....