Madhya Pradesh High Court
Commissioner Of Sales Tax vs Himmatlal And Co. on 19 September, 1980
JUDGMENT K.N. Shukla, J.
1. The Tribunal (Board of Revenue, M.P.) has referred the following question for our opinion under Section 44(1) of the M. P. General Sales Tax Act, 1958 :
Whether, under the facts and circumstances of the case, in which penalty under Section 43(1) of the Act had not been imposed either by the assessing authority or by the first appellate authority, the time-limit for initiating the proceedings under Section 39(2) will be taken from the date of the order of the first appellate authority or the date of the order of assessment and the proceedings under Section 39(2) were time-barred ?
2. The facts in brief are as under :
The assessee is a dealer in cement, general goods, etc., and the assessment year in question is 1962-63. The assessee had shown total sales at Rs. 4,48,831.56. The accounts were considered defective and rejected and best judgment assessment was made determining the turnover at Rs. 4,90,000. The Sales Tax Officer imposed a penalty of Rs. 2,500 under Section 17(3) of the Act for delay in furnishing returns.
3. The assessee appealed against the order before the Appellate Assistant Commissioner. The appellate authority confirmed the enhancement of the gross turnover. Plowever, penalty under Section 17(3) was reduced by Rs. 500.
4. The Additional Commissioner of Sales Tax acting under Section 39(2) of the Act sent for the record of the Appellate Assistant Commissioner on the ground that the order passed by him was erroneous in so far as it was prejudicial to the interest of the revenue. The Additional Commissioner held that in so far as the dealer had deliberately concealed his turnover, penalty was imposable under Section 43(1) of the Act and as the Appellate Assistant Commissioner had failed to levy penalty, his order was erroneous. Accordingly, he levied a penalty of Rs. 3,000 under Section 43(1) of the Act.
5. The assessee appealed against the order of the Additional Commissioner passed in revision imposing a penalty of Rs. 3,000. The Tribunal (Board of Revenue, M. P.) held that the assessing officer had not imposed any penalty for concealment nor the question ever arose before the Appellate Assistant Commissioner in appeal. The Appellate Assistant Commissioner was, therefore, not called upon to consider imposition of penalty under Section 43(1) of the Act. In fact, according to the Tribunal, the Commissioner had revised the assessment order itself and as Section 39(2) provided for limitation of three years from the date of the order sought to be revised, the Additional Commissioner's order was barred by limitation. Accordingly, the order of the Additional Commissioner passed in revision was set aside. At the instance of the Additional Commissioner, the question stated above has been sent to us for opinion.
6. The assessment order, annexure II, dated 21st August, 1964, shows that no penalty was imposed on the assessee under Section 43(1) of the Act on the ground of alleged concealment of its turnover. In the assessee's appeal before the Appellate Assistant Commissioner only two questions had arisen for consideration ; one was about the estimate of turnover and the other about penalty for late fiilng of return under Section 17(3) of the Act. The Appellate Assistant Commissioner was not called upon to consider the question of penalty under Section 43(1) of the Act. The default, if any, was in the assessment order itself. The order of the assessing authority did not merge with that of the appellate authority so far as the question of penalty under Section 43(1) of the Act was concerned, because at no stage this question had arisen before the appellate authority. In State of Madras v. Madurai Mills Co. Limited A.I.R. 1967 S.C. 681, the scope and applicability of the doctrine of merger had been explained. In that case the question arising before their Lordships of the Supreme Court was whether the decision of the appellate authority was the operative decision in law as a result of the merger of the order of the inferior Tribunal with that of the appellate authority. The Supreme Court held as follows :
In our opinion, the application of the doctrine depends on the nature of the appellate or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisdiction.
Referring to the Amritlal Bhogilal and Co.'s case [1958] 34 I.T.R. 130 (S.C.) it was observed that when a question decided by the inferior Tribunal was not raised in appeal before the appellate authority and was not decided by it, it could not be said that the order of the inferior Tribunal merged with that of the appellate authority even in respect of such a question.
In the Madurai Mitts Co. Limited's case A.I.R. 1967 S.C. 681, therefore, it was held that, in fact, what the Board of Revenue in that case sought to revise was the order of the departmental Tribunal and the action was barred by limitation. The same was the case before the Tribunal (Board of Revenue, M.P.) and the Board of Revenue rightly held that the action taken under Section 39(2) by the Commissioner was barred by limitation.
7. The question referred to us, therefore, is answered as follows : Under the facts and circumstances of the case in which penalty under Section 43(1) of the Act had not been imposed either by the assessing authority or by the first appellate authority, the time-limit for initiating the proceedings under Section 39(2) of the Act will be taken from the date of the order of assessment and the proceedings under Section 39(2) were time-barred.
8. No order as to costs.