M/s.Sumangala Steels Ltd. v. The Chairman, Tamilnadu Sales Tax AppellateTribunal, Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 17.04.2008Coram :THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIANandTHE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJAWrit Appeal No.3985 of 2003M/s.Sumangala Steels Ltd.,45, Chamiers Road,Chennai 600 028.Appellantv.1. The Chairman, Tamilnadu Sales Tax AppellateTribunal, Chennai.2. The Appellate Assistant Commissioner(CT-IV), Chennai.3. The Deputy Commercial Tax Officer, Mandaveli Assessment Circle, Chennai.RespondentsWrit appeal filed under clause 15 of the Letters Patentagainst the order dated 23.10.2003 made by a learned single Judgeof this Court in writ petition No.38269 of 2002 petition filedunder article 226 of the constitution of India to issue a Writ ofCertiorarified Mandamus to call for the records of the 1stRespondent herein in T.A.98/02 dated 6.8.2002 and quash the same asillegal unlawful and unconstitutional and direct the 2nd respondentherein to take the appeal on file and dispose it of on merits.For appellant :Mr.V.SundareswaranFor respondents:Mr.Haja Nazeeruddin Special Government PleaderJUDGMENTK.RAVIRAJA PANDIAN, J.The appeal is filed by the assessee questioning thecorrectness of the order dated 23.10.2003 made in writ petitionNo.38269 of 2002 since reported in 137 STC 517. https://hcservices.ecourts.gov.in/hcservices/

2. The appellant is a dealer in iron and steel and an assesseeon the file of the third respondent. For the assessment year 1997-98 the appellant assessee filed return reporting total and taxableturnover of Rs.17,95,64,901/- and Rs.4,72,07,862/- respectivelyunder the Central Sales Tax Act. On the basis of the return,assessment order was passed on 24.03.2002 arriving at the taxableturnover as follows :1. Interstate sales covered by C formRs.11,46,763/- at 4%2. Consignment Sales not covered by Form F Rs.88,25,714/- at 8%3. Stock transfer to Bangalore branch not by Form F Rs.3,72,35,862/- at 8% --------------------------- Rs.4,72,07,862/- -------------------3. After framing of the assessment, as aforesaid, theappellant filed certain Form-F for Rs.3,72,35,714/- pertaining tothe turnover of stock transfer to Bangalore branch which turnoverwas originally charged to tax at 8% in the absence of Form F andrequested the assessing officer to rectify the assessment undersection 9(2) of Central Sales Tax Act read with section 55 of theTamilnadu General Sales Tax Act. The assessing officer, afterverifying the Form F declaration filed, allowed the claim in totoin respect of the turnover in a sum of Rs.3,72,35,714/-. The saidorder was made on 31.05.2000 by invoking the provisions of section9(2) of the CST Act read with section 55 of the TNGST Act. 4. As against that order dated 31.05.2000 the assessee filedan appeal before the first appellate authority, the AppellateAssistant Commissioner, under section 31 of the Act, disputing thelevy of tax on consignment sales turnover of Rs.88,25,405/-assessed at 8% in respect of certain sales not covered by form F.The first appellate authority dismissed the appeal on the groundthat the assessee could not have any grievance about the orderdated 31.05.2000 which granted the total relief sought for by theappellant in respect of the stock transfer turnover ofRs.3,72,35,714/- and dismissed the appeal as not maintainable undersection 31 of the TNGST Act. The assesee carried the matter to theSales Tax Appellate Tribunal on further appeal under section 36 ofthe Act. The Tribunal by its order dated 06.08.2002 confirmed theorder of the first appellate authority. The assessee, notsatisfied with the order of the Tribunal, filed writ petitionbefore this Court. The learned single Judge, by reason of theorder impugned in this writ appeal, dismissed the writ petition.The correctness of the same is now assailed before us. https://hcservices.ecourts.gov.in/hcservices/

5. Mr.Sundareswaran, learned counsel appearing for theappellant submitted that all the authorities below and the learnedJudge have totally erred in coming to the conclusion that the orderdated 31.05.2000 is not an appealable order. Once the originalorder of assessment is revised, the earlier order passedautomatically merges with the subsequent order. Hence, thesubsequent order can only be regarded as an order of assessment,which is very well appealable under sections 9(2) of the CST Actread with section 31 of the TNGST Act. However, learned GovernmentPleader appearing for the respondents argued for sustaining theorder impugned in this appeal.6. Heard the learned counsel on either side and perused thematerials available on record.7. The facts are very clear. The appellant was on 24.03.2000originally assessed for the assessment year 1997-98 on a taxableturnover of Rs.4,72,07,862/- as follows :1. Interstate sales covered by C formRs.11,46,763/- at 4%2. Consignment Sales not covered by Form F Rs.88,25,714/- at 8%3. Stock transfer to Bangalore branch not by Form F Rs.3,72,35,862/- at 8% --------------------------- Rs.4,72,07,862/- --------------------8. By order dated 31.05.2000 accepting the Form-F filed by theassessee for the third turnover stated above, i.e., stock transferof Bangalore Branch, the assessing officer deleted that portion ofthe turnover from the liability. The earlier order dated24.03.2000 was rectified to that effect. In respect of the otherturnover, i.e., interstate sales covered by 'C' form Rs.11,46,763/-at 4% and consignment Sales not covered by Form F Rs.88,25,714/-taxable at 8%,there was no change. The entire relief sought for bythe appellant in respect of the third turnover, i.e., stocktransfer to Bangalore branch has been totally granted by acceptingthe Form F produced by the appellant. Thus, the order rectifyingthe earlier order dated 24.03.2000 is only the rectification ordergranting the relief as sought for by the assessee. In respect ofthe rest of the turnover, no dispute was raised by the assessee.The contention of the learned counsel that the order passed undersection 55 of the Act granting the relief is an appealable order isnot acceptable .9. Section 55 of the Act read as follows:55. Power to rectify any error apparent on the face of therecord(1) An assessing authority or an appellate or revisingauthority (including the Appellate Tribunal) may, at anytime within five years from the date of any order passed byit rectify any error apparent on the face of the record:PROVIDED that no such rectification which has the effect ofenhancing an assessment or any penalty shall be made unless https://hcservices.ecourts.gov.in/hcservices/ such authority has given notice to the dealer and hasallowed him a reasonable opportunity of being heard(2) Where such rectification has the effect of reducing anassessment or penalty the assessing authority shall makeany refund which may be due to the dealer(3) Where any such rectification has the effect ofenhancing an assessment or penalty, the assessing authorityshall give the dealer a revised notice of assessment orpenalty and thereupon the provision of this Act and therules made thereunder shall apply as if such notice hadbeen given in the first instance.(3A) The powers under sub-section (1) may be exercised bythe assessing authorities even though the original order ofassessment, if any, passed in the matter has been thesubject-matter of an appeal or revision.(4) The provisions of this Act relating to appeal andrevision shall apply to a order of rectification made underthis section as they apply to the order in respect of whichsuch order of rectification has been made.10. Learned counsel placed reliance on sub clause (4) whichprovides that the provisions of TNGST Act relating to the appealand revision shall apply to an order of rectification made undersection 55 as they apply to the order passed in respect of whichsuch order of rectification has been made. 11. As already stated, the appellant cannot have any grievanceabout the order dated 31.05.2000 which granted the relief as soughtfor by it. In respect of the consignment sales turnover, no reliefhas been sought for by filing necessary declaration form asrequired under the TNGST Act. Clause 4 of Section 55 of the TNGSTAct could be taken in aid only when an adverse order is passed inan application taken out under section 55, which is subject to therevisional jurisdiction by the Deputy Commissioner under section 33of the TNGST Act, which gives a revisional remedy against an orderor proceedings recorded under the Act for which an appeal has notbeen provided for in section 31 or Section 31A of the TNGST Act. 12. The appealability of an order can also be tested from theangle of the appeal provision. Section 31 of TNGST Act providesfor appeal to the appellate Assistant Commissioner which statesthat any person objecting to an order passed by the appropriateauthority under section 4A, sub section 3 of section 10, section12, section 12A, section 14, section 15, sub-sections 1 and 2 ofsection 16, section 18, sub section 2 of section 22, section 23 orsection 27, other than an order passed by the AssistantCommissioner (Assessment) may, within a period of 30 days from thedate on which the order was served on him in the manner prescribed,appeal against such an order to the Appellate AssistantCommissioner having jurisdiction. Section 31A provides for anAppeal to the Appellate Deputy Commissioner which states that Anyperson objecting to an order passed by the Assistant Commissioner(Assessment) under section 4A, sub section 3 of section 10, section12, section 12A, section 14, section 15, sub-sections (1) and (2) https://hcservices.ecourts.gov.in/hcservices/ of section 16, section 18, sub-section (2) of section 22, section23 or section 27 may, within a period of thirty days from the dateon which the order was served on him in the manner prescribed,appeal against such order to the Appellate Deputy Commissionerhaving jurisdiction. The proviso appended is not relevant to thepoint in issue in this case.13. A rectification order under section 55 of the TNGST Acthas not been stated in the appeal provisions which specify theorder passed under various provisions as appealable one. 14. Learned counsel placed reliance on the decision in thecase of Kundan Lal Srikishan v. Commissioner of Sales Tax, U.P,65 STC 62 to contend that because of the order dated 31.05.2000revising the earlier assessment order dated 24.03.2000, the earlierassessment order dated 24.03.2000 has got re-opened and did nothave an independent existence thereafter and the only orderavailable is the order dated 31.05.2000 and that order is anappealable order. 15. We are not able to approve the contention of theappellant's counsel that the decision of the Supreme Court inKundan Lal's case supports the case of the appellant. That was acase in which the appellant-assessee was assessed on its turnoverunder the UP Sales Tax Act, 1948 on February 07,1949 and thereafteron January 8, 1980 the Sales Tax Officer issued notice undersection 21 of the said Act reopening the assessment on the groundthat mandi cess and arhat (commission) has escaped assessment. OnJanuary 18, 1980, the Sales Tax Officer passed an order holdingthat on examination it was found that the appellant has alreadyincluded the arhat and mandi cess amount in the turnover and he hadalready been assessed and therefore, the appellant was not liableto pay any more tax under the said Act. In 1982, the appellantrealised that it was not liable to pay sales tax on purchase madeon behalf of Ex.-UP principals as such purchases had occasionedinter-state movement and were, therefore, exempt, and filed anapplication under section 22 on November 4, 1982 for rectificationof the assessment. This application was rejected on the groundthat it was not filed within three years against the original orderdated February 7, 1979. The Tribunal, on appeal, held that theapplication was within time since the original order dated07.02.1979 had ceased to exist on the reopening of the assessmentunder section 21. The final order was passed on 08.01.1980. Therectification application was filed within 3 years. On thosefacts, the Supreme Court held as follows :"Once the reassessment notice was issued undersection 21 of the U.P. Sales Tax Act the original order ofassessment got reopened and thereafter any order undersection 21 alone would be the order of assessment." 16. Section 21 of the UP Sales Act is the pari materiaprovision to section 16 of the TNGST Act, which provides forreopening of the assessment on the ground of escapement ofturnover. If the original order dated 24.03.2000 was subjected to https://hcservices.ecourts.gov.in/hcservices/ revision under section 16, then, the order passed under section 16alone be the order of assessment on the principle of merger. Inthe case on hand, the original order dated 23.04.2000 had neverbeen re-opened under section 16 on the ground of escapement ofturnover for assessment. Hence, the cited judgment is notapplicable to the facts of the case.17. It is pertinent to refer to the decision of a DivisionBench of the Madras High Court in the case of The India CementsLtd. v. Deputy Commissioner of Commercial Taxes, Madurai, 30 STC516 wherein it is held as follows :"But we do not agree with the learned counsel for thepetitioners that the subject matter of appeal before theAppellate Assistant Commissioner was the entire turnoverincluding the turnover which was originally assessed. Sofar as the original turnover assessed is concerned, anappeal lay to the Appellate Assistant Commissioner undersection 31 and no appeal having been filed, that order hadbecome final." 18. In view of the reasoning given in the foregoingparagraphs we dismiss this appeal. No costs. The connectedmiscellaneous petition is consequently dismissed. sd/-Asst.Registrar /true copy/Sub Asst.RegistrarmfTo1. The Chairman, Tamilnadu Sales Tax AppellateTribunal, Chennai.2. The Appellate Assistant Commissioner(CT-IV), Chennai.3. The Deputy Commercial Tax Officer, Mandaveli Assessment Circle, Chennai.1 cc To The Special Government Pleader (Taxes), SR.21710+1 cc To Mr.V.Sundareswaran, Advocate, SR.22352WA.No.3985 of 2003mdr [co]gkg/24.4