Madras High Court
Joint Commercial Tax Officer-Ii, ... vs Ekambareeswarar Coffee And Tea Works on 27 February, 1991
Author: A.S. Anand
Bench: A.S. Anand
JUDGMENT Dr. A.S. Anand, C.J.
1. These writ appeals are typical cases of an assessee seeking to make a virtue of his vice.
2. The respondent herein, a dealer having his business of sale of coconut oil, oil-cakes, pulses and grams, etc., is the assessee, who was the petitioner in W.P. Nos. 5445, 5446 and 5447 of 1980. The writ petitions had been filed by the assessee for the issue of a writ of certiorarified mandamus or any other writ, order or direction to call for the record of assessments for the years 1972-73, 1973-74 and 1974-75 in assessment proceedings, TNGST No. 526062/72-73, dated October 19, 1974, TNGST No. 526062/73-74, dated July 30, 1975 and TNGST No. 526062/74-75, dated March 19, 1976, respectively, and to quash the orders of assessment and to direct the respondent to refund the tax, additional tax as well as surcharge paid by the assessee pursuant to those orders of assessment. The circumstances in which the writ petitions were filled are :
3. While submitted the returns, the assessee had sought exemption for the packing charges and succeeded. After the completion of the assessment proceedings, the Joint Commercial Tax Officer found that the exemption of tax for packing charges had been wrongly claimed and granted and consequently, treating it as a case of escaped turnover, he initiated action under section 16 of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act") and issued notices to the assessee proposing to levy tax in respect of the escaped turnover. Ultimately, after receiving the objections from the assessee, by three separate proceedings, dated March 13, 1979, April 2, 1979 and April 2, 1979, he determined the escaped turnover relating to packing charges for the three years in question as amount to Rs. 58,309 for 1972-73, Rs. 50,002 for 1973-74 and Rs. 78,375 for 1974-75. The escaped turnover was subjected to levy of tax at 3 1/2 per cent multi-point and notices in form B8 confining to the escaped assessment were issued. Projecting that the orders of reassessment issued under section 16 of the Act on March 13, 1979, April 2, 1979 and April 2, 1979, respectively had superseded and obliterated the original assessment orders dated October 19, 1974, July 30, 1975 and March 19, 1976, the assessee filed the three writ petitions, inter alia, claiming refund of the tax paid on the original assessments. Reliance was placed by the assessee on the judgment of this Court in Deputy Commissioner (C.T.) v. Indian Refrigeration Industries Private Limited [1980] 46 STC 264. It was contended before the learned single Judge that the reassessment order reflected the assessable turnover in its entirely and perspective and after the reassessment, the original assessment order stood set aside and, therefore, the amount of tax already paid by the assessee in the original assessment proceedings ought to be refunded. The learned single Judge allowed the writ petitions by the following order :
"The prayers in these three writ petitions are on the same lines. The petitioner is one and the same. The petitioner asks for a writ of certiorarified mandamus to quash the original assessment orders for the years 1972-73, 1973-74 and 1974-75 and to order refund of the taxes, etc., indicated in the prayers in the writ petitions.
2. The case of the petitioner is built on the basis that the original assessment orders have been superseded by the orders of reassessment under section 16 of the Tamil Nadu General Sales Tax Act, 1959, and the original assessment orders can no longer survive. This case of the petitioner has got the support of the pronouncement of this Court in Deputy Commissioner (C.T.) v. Indian Refrigeration Industries Private Limited [1980] 46 STC 264. The proposition that has been settled by the pronouncement is that the reassessment order truly reflects the assessable turnover in its entirety and perspective and by such an order the original assessment order is virtually set aside. That ruling governs the present cases. However, Mr. R. Lokapriya, learned Government Advocate (Taxes), would submit that these are appeals preferred by the petitioner as against the orders of reassessment under section 16 of the Tamil Nadu General Sales Tax Act, 1959. That aspect is not at all relevant for deciding the point taken in this writ petition, which stands answered on behalf of the petitioner by the pronouncement of this Court referred to above.
3. Accordingly, these writ petitions are allowed. There will be no order as to costs."
The Revenue has come up in appeal.
4. Appearing for the Revenue, the learned Additional Government Pleader (Taxes), submitted that the learned single Judge failed to notice the facts and circumstances of the case and erred in directing the refund of the tax paid on the original assessments, which were not in any case involved in the reassessment proceedings initiated and completed under section 16 of the Act and as such, the orders in the writ petitions could not be sustained. In reply, learned counsel for the respondent, relying upon the following observations of Ramaprasada Rao, C.J., in Deputy Commissioner (C.T.) v. Indian Refrigeration Industrial Private Limited [1980] 46 STC 264, rendered on a difference of opinion between Sethuraman and Balasubrahmanyan, JJ., argued that after the reassessment had been made under section 16(1) of the Act, the original order of assessment stood set aside and the tax paid on the basis of an order which stood set aside was required to be refunded.
"When the assessing officer proceeds to make a reassessment, he does so for the purpose of redetermining the annual taxable turnover as a whole. The reassessment order thus reflects the assessable turnover in its entirely and perspective and as, by such an order, the original assessment order is virtually set aside, the appeal before the statutory Tribunals over such reassessment order should be deemed to enfold within its compass the entirety of the turnover. As there can be only one assessment and in a case where there has been a reopening of an original assessment, the reassessment order can only be said to be the only assessment order, the assessee has a right to challenge that order in all its aspects."
5. Before we proceed to examine as to whether the observations relied upon by the learned counsel for the assessee, which also prevailed with the learned single Judge, have any relevance or connection with the facts and circumstances of the present case, it would be desirable to notice the provisions of section 16 of the Act :
"16. Assessment of escaped turnover. - (1)(a) Where, for any reason, the whole or any part of the turnover of business of a dealer has escaped assessment to tax, the assessing authority may, subject to the provisions of sub-section (2), at any time within a period of five years from the expiry of the year to which the tax relates, determine to the best of its judgment the turnover which has escaped assessment and assess the tax payable on such turnover after making such enquiry as it may consider necessary and after giving the dealer a reasonable opportunity to show cause against such assessment.
(b) Where, for any reason, the whole or any part of the turnover of business of a dealer has been assessed at a rate lower than the rate at which it is assessable, the assessing authority may, at any time within a period of five years from the expiry of the year to which the tax relates, reassess the tax due after making such enquiry as it may consider necessary and after giving the dealer a reasonable opportunity to show cause against such reassessment.
(2) In making an assessment under clause (a) of sub-section (1), the assessing authority may, if it is satisfied that the escape from assessment is due to wilful non-disclosure of assessable turnover by the dealer, direct the dealer to pay, in addition to the tax assessed under clause (a) of sub-section (1), by way of penalty, a sum which shall not be less than fifty per cent but which shall not be more than one hundred and fifty per cent of the tax so assessed :
Provided that no penalty under sub-section (2) shall be imposed unless the dealer affected has had a reasonable opportunity of showing cause against such imposition.
(3) The powers under sub-section (1) may be exercised by the assessing authorities even though the original order of assessment, if any, passed in the matter has been the subject-matter of an appeal or revision.
(4) In computing the period of limitation for assessment or reassessment under this section, the time during which the proceedings for assessment or reassessment remained stayed under the orders of a Civil Court or other competent authority shall be excluded.
(5) In computing the period of limitation for assessment or reassessment under this section, the time during which any appeal or other proceeding in respect of any other assessment or reassessment is pending before the High Court or the Supreme Court, involving a question of law having a direct bearing on the assessment or reassessment in question, shall be excluded.
(6) In computing the period of limitation for assessment or reassessment under this section, the time during which any appeal or proceeding in respect of any assessment or reassessment of the same or part of the turnover made under any other enactment was pending before any appellate or revisional authority or the High Court or the Supreme Court shall be excluded."
6. A mere glance at section 16(1)(a) shows that it empowers an assessing authority subject to the provisions of sub-section (2), at any time within a period of five years from the expiry of the year to which the tax relates, to determine to the best of its judgment the turnover which had escaped assessment and assess the tax payable on "such" turnover after making such enquiry as may be considered necessary and after giving the assessee a reasonable opportunity to show cause against such assessment. The power which the assessing authority thus exercises under section 16(1)(a) of the Act is neither the power of revision nor the power of review. The power is exercised by the assessing authority in his original jurisdiction and relates to assessment in regard to the escaped turnover. The use of the expression "determine to the best of its judgment the turnover which has escaped assessment and assess the tax payable on such turnover" makes it abundantly clear that the jurisdiction under section 16(1)(a) of the Act is limited to determining, to the best of judgment, the turnover which had escaped assessment and then to assess the tax payable on that escaped turnover. The use of the word "such" turnover is only relatable to the preceding expression, viz., "escaped" assessment. The term "reassessment" or "reasons" has not been used by the Legislature in its wisdom anywhere in section 16(1)(a), obviously for the reason that the escaped turnover is brought to assessment for the first time and not on any "reassessment". In section 16(1)(b), the Legislature has used the terms "reassess the tax due" and "reassessment" but in a totally different context. Sub-clause (b) would come into play where, for any reason the whole or any part of the turnover of business of the dealer got assessed at a rate lower than the one at which it should have been assessed, in which event, the assessing authority has been empowered, by clause (b) to, at any time within a period of five years, to which the tax relates, reassess the tax due after making such enquiry as is considered necessary and after giving the assessee a reasonable opportunity to show cause against such reassessment. The reassessment of tax due has to be on the entire taxable turnover, which had been subjected to tax at a rate lower than the one applicable on the earlier occasion. Here, unlike under clause (a), the entire assessment is reopened. An order made under clause (b) would, therefore, be an order of reassessment of the tax, obliterating as it were, the original determination of the tax liability at the lower rate.
7. Even in sub-section (2), the Legislature has used the expression "assessment" for the purpose of clause (a) of sub-section (1) and not "reassessment", while considering the question of levy of penalty, which also goes to show that the distinction between assessment and reassessment was clearly present to the mind of the Legislature. Again, in sub-sections (4), (5) and (6), which deal with the computation of the period of limitation, the Legislature has used both the expressions, viz., "assessment" and "reassessment" to take care of distinct types of proceedings under clauses (a) and (b) of section 16(1) of the Act. It, therefore, follows that when the authority exercises its powers under section 16(1)(a) it only exercises the powers of "assessment" with regard to the escaped turnover. An order made in relation to the escaped assessment does not affect the operative force of the original assessment, which retains both its character and identity. The use of the expression "reassessment" for the proceedings relating to section 16(1)(a) of the Act is somewhat improper. Of course, the authorities have been using, quite often, an expression, like "reassessment" while dealing with the assessment of an escaped turnover under section 16(1)(a) of the Act, but the use of that expression is only in a rather loose sense. While making an assessment in respect of escaped turnover, the assessing authority does not at all "reassess" the entire taxable turnover but confines itself only to assessing the escaped turnover. An order under section 16(1)(a) of the Act has to be confined, after proper enquiry within the stipulated period, and giving an opportunity to the dealer to show cause, to an assessment of the escaped turnover only. An assessment which had been completed in proceedings under section 12 of the Act is not reopened or revised in the proceedings relating to assessment of escaped turnover under section 16(1)(a) of the Act, unlike in the proceedings under section 16(1)(b) of the Act, made in the circumstances detailed in that section, viz., where the dealer had been originally assessed at a rate lower than the rate at which he should have been assessed. There is, thus, a vast difference between the proceedings under sub-clauses (a) and (b) of section 16(1) of the Act. The circumstance under which either of the clauses is attracted is separate and distinct and the nature of proceedings also is different. The area of operation of the two clauses as well as the nature of proceedings under the two clauses are absolutely separate and distinct. Unlike the reassessment proceedings under section 16(1)(b) of the Act, in the proceedings under section 16(1)(a) while assessing the turnover which had escaped assessment, the authority does not ipso facto reopen the concluded assessment but confines itself to the turnover, beyond the one already assessed, which had escaped assessment. Even after an order in relation to the escaped turnover is made, the original assessment would still retain its distinctive character besides operative force. The order under section 16(1)(a) of the Act, therefore, does not require reflection of the original order of assessment in that order, but in the event the authority chooses to make a composite order by including in the order relating to the escaped turnover, the tax liability already determined in the original assessment proceedings by bodily lifting the original assessment order and adding to it the order under section 16(1)(a) of the Act, it may clothe the assessee with the right, while questioning an order under section 16(1)(a) to also question the original assessment, which has been included in the order under section 16(1)(a) of the Act and the period of limitation in such a case may commence from the date of the composite order, irrespective of the fact that the period for questioning the original order of assessment had expired from the date of the original assessment. It is, therefore, preposterous to contend that after the turnover which had escaped assessment is subjected to assessment, that alone reflects the total tax liability of the assessee and the original assessment on the turnover which had already been assessed becomes null and void, entitling the assessee to a refund of the tax already paid on the completed assessment which had become final. Acceptance of such an argument would amount to placing premium on the assessees whose total turnover, for one reason or the other, had escaped assessment at the initial or the original stage. This is opposed to commonsense, morality, legality and equity, because what the assessee had paid on the taxable return originally filed was the sales tax collected by it from the customers, to whom the burden had passed in accordance with the law.
8. The observations from the judgment reported in [1980] 46 STC 264 (Mad.) [Deputy Commissioner (C.T.) v. Indian Refrigeration Industries Private Limited], which on the first blush seem to support the plea of the assessee, but do not stand deeper scrutiny, have been torn out of context by the assessee. Ramaprasada Rao, C.J., who agreed with Balasubrahmanyan, J., made those observations in a totally different context. The broad observations that "reassessment" truly sets aside the entirety of the original assessment and brings about an overall fresh assessment of the taxable turnover and not merely of the amount brought to charge as escaped turnover, have application only where the order of assessment made after assessing the turnover which had escaped assessment includes within it the original turnover as also the original assessment. In Deputy Commissioner (C.T.) v. Indian Refrigeration Industries Private Limited [1980] 46 STC 264 (Mad.) the fact situation was different. A perusal of the operative portion of the Joint Commercial Tax Officer's order, which has been extracted in that judgment itself, unmistakably shows that it did not depict the escaped turnover alone. On the contrary, it meticulously set down the turnover which originally figured in the initial assessment and to that amount was added the amount of the escaped turnover, in order to arrive at the total figure of turnover and the final figure of the aggregate taxable turnover, was thus, arrived at not merely as an end-product of the arithmetical addition but on which the tax liability as a whole was redetermined. Thus, on facts, reliance on [1980] 46 STC 264 (Mad.) [Deputy Commissioner, (C.T.) v. Indian Refrigeration Industries Private Limited] or on any observation in that judgment would be misplaced. That apart, the question which was under consideration of the Court in [1980] 46 STC 264 (Mad.) [Deputy Commissioner (C.T.) v. Indian Refrigeration Industries Private Limited] as framed by the court was :
"Whether it is open to an assessee, in an appeal against an order of reassessment, to take up matters which are already concluded against him in his original assessment ?"
It was in answer to that question, that relying upon certain other judgments, including those of the Apex Court in Commissioner of Sales Tax v. H. M. Esufali H. M. Abdulali [1973] 32 STC 77 and Deputy Commissioner of Commercial Taxes v. H. R. Sri Ramulu [1977] 39 STC 177, the Bench expressed the opinion that once an assessment is "reopened", the initial order of assessment ceases to be operative and is replaced by the order of "reassessment". That decision, therefore, does not lay down any principle of universal application to orders made under section 16(1)(a) of the Act. The scope and authority of [1980] 46 STC 264 (Mad.) [Deputy Commissioner (C.T.) v. Indian Refrigeration Industries Private Limited] is limited and applicable to the context of that case alone.
9. The question which fell for decision of the Supreme Court in Commissioner of Sales Tax v. H. M. Esufali H. M. Abdulali [1973] 32 STC 77 was altogether different. In that case, an assessment under the Madhya Pradesh General Sales Tax Act, 1958, was made on a dealer for a particular year. Later, on a surprise inspection of the dealers' account books, it was discovered that certain items of sales had escaped assessment. The assessing authority, thereupon, reopened the assessment and while making the reassessment did not confine its attention to the addition of just those suppressed items of sales which were actually brought to light during the subsequent inspection, but invoked his powers by assessing the entire turnover to the best of his judgment by including what he considered to be suppressed turnover. The estimated figure was larger than the aggregate of the amounts noted down in the surprise inspection report. The argument of the assessee that the assessing authority, while reopening the assessment for bringing to charge the escaped turnover, had no power to make a best judgment reassessment, based on his own estimate was repelled. In dealing with the contentions raised in that case, the Supreme Court went into the real nature and object of "reassessment" in that case and held that when once the initial assessment had been reopened by the assessing authority, the reassessment that follows was to take the place of the initial assessment. Thus, it would be seen that the situation and the circumstances which invited the observations of the Supreme Court, as noticed in [1980] 46 STC 264 (Mad.) [Deputy Commissioner (C.T.) v. Indian Refrigeration Industries Private Limited] were completely different.
10. In Deputy Commissioner of Commercial Taxes v. H. R. Sri Ramulu [1977] 39 STC 177, what was directly in issue before the Supreme Court was, whether an order of enhancement made by the Deputy Commissioner sitting in revision was barred by limitation. That question arose under the Mysore Sales Tax Act, 1957. The said Act fixed a time limit for the exercise of revisional power of the Deputy Commissioner. The Deputy Commissioner's order of enhancement in revision related to certain items which had already figured in the original assessment and not added for the first time in the reassessment. If the date of the original assessment were to enter into the reckoning, the Deputy Commissioner's order was time-barred. It would, however, have been within time if the date of reckoning was taken as the assessment date. It was in this context that the Apex Court, with reference to the provisions of the Mysore Sales Tax Act, 1957, rendered the judgment. Those facts also, therefore, are entirely different. In neither of the two judgments of the Supreme Court was a direct question involved as to the limited scope of assessment under section 16(1)(a) of the Act. Their Lordships were not called upon to consider whether or not an order of assessment on an escaped turnover under section 16(1)(a) of the Act is a distinct and separate order which covers only the amount escaping the assessment and that it does not obliterate, let alone render null and void the original assessment, where the same is not in any way involved in the proceedings under section 16(1)(a) of the Act. The question as to whether the original assessment retained its distinctive character, identity and operative force, after an order under section 16(1)(a) of the Act is made, was not at all involved for consideration.
11. Reliance, therefore, on the observations (extracted supra) from [1980] 46 STC 264 (Mad.) [Deputy Commissioner (C.T.) v. Indian Refrigeration Industries Private Limited] to urge that by the order under section 16(1)(a) of the Act, in the instant case, the original order of assessment which neither formed a part of the order under section 16(1)(a) nor was otherwise under consideration in the proceedings under section 16(1)(a) of the Act stood set aside, entitling the assessee to refund of the tax paid on the basis of the original assessment, is completely misplaced. The learned single Judge, in our opinion, fell in error in relying upon those observations ignoring the context in which the same had been rendered.
12. The learned single Judge ignore the caution administered by the Supreme Court itself, on occasions more than once, while deprecating the practice of picking up a word or a sentence from a judgment of the Supreme Court and treating it as the complete exposition of law on the subject, unmindful of the facts and circumstances of the case or the context in which the sentence had appeared. The Supreme Court cautioned the High Courts in treating such sentences or words as binding precedents. Indeed under article 141 of the Constitution of India, the law laid down by the Supreme Court is binding on all the courts. But, while considering the scope of article 141, it has to be borne in mind that it is the law laid down by the Supreme Court and not every observation, divorced from the context in which it was made, which can form a binding precedent. It would be advantageous in this connection to note the following observations of the Supreme Court in Madhav Rao Jivaji Rao Scindia Bahadur v. Union of India :
"It is not proper to regard a word, a clause or a sentence occurring in a judgment of the Supreme Court, divorced from its context, as containing a full exposition of the law on a question when the question did not even fall to be answered in that judgment.
13. Again, in Prakash Amichand Shah v. State of Gujarat , the Apex Court, while dealing with the binding nature of the precedent of the judgments, observed thus :
"A decision ordinarily is a decision on the case before the court while the principle underlying the decision would be binding as a precedent in a case which comes up for decision subsequently. Hence while applying the decision to a later case, the court which is dealing with it should carefully try to ascertain the true principle laid down by the previous decision. A decision often takes its colour from the questions involved in the case in which it is rendered. The scope and the authority of a precedent should never be expanded unnecessarily beyond the needs of a given situation."
14. Thus, considered in the light of the observations made by the Supreme Court with regard to the binding nature of the precedent and the proper manner of reading and interpreting the judgments of the Supreme Court and other courts, it becomes obvious that the observations in [1980] 46 STC 264 [Deputy Commissioner (C.T.) v. Indian Refrigeration Industries Private Limited] on which the learned counsel seeks to rely, have been torn completely out of context. The question which was involved in the three writ petitions was not involved at all in [1980] 46 STC 264 [Deputy Commissioner (C.T.) v. Indian Refrigeration Industries Private Limited]. It had not been considered in the context which arises before us. That judgment, therefore, cannot be said to be an authority or the precedent for deciding the question involved in the present appeals in the fact situation prevailing herein. A precedent is an authority only for what it actually decides and not, as the Apex Court said in Goodyear India Ltd. v. State of Haryana [1990] 76 STC 71, for what may remotely or even logically follow from it. Passing reference based on some phraseology of the section is not the dictum of case. The context in which the judgment came to be rendered in [1980] 46 STC 264 (Mad.) [Deputy Commissioner (C.T.) v. Indian Refrigeration Industries Private Limited] and the questions which their Lordships were called upon to decide, as already noticed, were totally different. The observations relied upon are, therefore, totally inapplicable to the present cases and cannot come to the rescue of the respondent in these writ appeals.
15. We find that in State of Madras v. Mettur Industries Limited [1973] 32 STC 239 certain observations have been made by a Division Bench of this Court, which support the view we have taken on the ambit and scope of an order under section 16(1)(a) of the Act. In that case, the Division Bench was considering the question, whether a petition for enhancement filed by the State against the relief granted in the original assessment was maintainable. That question arose in the following circumstances. The assessee filed appeals before the Sales Tax Appellate Tribunal challenging only the correctness of the reassessment orders under section 16 of the Act, assessing canteen sales, which was affirmed on appeal by the Appellate Assistant Commissioner and in those appeals, the State filed applications for enhancement of the original assessments made by the assessing authority under section 12 by bringing to charge the purchase turnovers of cotton exempted by the assessing authority on the ground that they were inter-State purchases. The enhancement petitions were dismissed by the Tribunal which took the view that the Revenue could not file a petition for enhancement of the original assessment in an appeal filed against an order under section 16 of the Act for the reason that it was a separate and independent appeal from the one relating to the original order of assessment. As against the said dismissal, revision petitions were filed by the State. The Bench, in the said circumstances, opined :
"Admittedly, the question of exemption of the alleged turnovers relating to inter-State purchase of cotton was not the subject-matter either before the assessing authority in proceedings under section 16, or before the appellate authority, or before the Tribunal in the appeals filed by the assessee. As pointed out by the Tribunal, the original orders of assessment were not before the Tribunal and as such the Revenue cannot seek to canvass the correctness or otherwise of the original orders of assessment in appeals filed by the assessee against orders passed under section 16, bringing to charge certain escaped turnovers. The Tribunal has taken the view that the Revenue cannot file a petition for enhancement of the original assessment in an appeal filed against an order under section 16 for the reason that it is a separate and independent appeal from the one relating to the original order of assessment. The reasoning given by the Tribunal appears to us to be quite tenable. It is only when the original order of assessment comes before the Tribunal in some form or other, the Revenue can seek to canvass the findings given by the assessing authority in that order so far as they are against the Revenue, but not in appeals filed by the assessee against orders under section 16, where the subject-matter was only the escaped turnovers, and not the entire assessments."
16. Once again, in State of Tamil Nadu v. C. M. Tiles [1976] 38 STC 440 a Division Bench of this Court, after noticing with approval the view expressed in [1973] 32 STC 239 (Mad.) (State of Madras v. Mettur Industries Limited) observed :
"........... This Court has held in that decision that in the reassessment proceedings under section 16 the subject-matter is only the escaped turnover and no part of the turnover which was assessed in the original assessment forms part of the proceedings under section 16 and that, therefore, the appeal and a further appeal before the Tribunal could only relate to the escaped turnover and not to the original turnover which was assessed. If the assessee had not disputed the original taxable turnover determined, he could not dispute the same in the reassessment proceedings."
17. Both these judgments support the view we have taken. It appears that these two judgments had been brought to the notice of the learned Judges during the course of arguments in [1980] 46 STC 264 [Deputy Commissioner (C.T.) v. Indian Refrigeration Industries Private Limited]. Balasubrahmanyan, J., noticed the judgments of the Supreme Court, reported in [1973] 32 STC 77 (Commissioner of Sales Tax v. H. M. Esufali H. M. Abdulali) and [1977] 39 STC 177 (Deputy Commissioner of Commercial Taxes v. H. R. Sri Ramulu), but without going into the context in which the judgments were delivered by the Division Bench of this Court in [1973] 32 STC 239 (State of Madras v. Mettur Industries Limited) and [1976] 38 STC 440 (State of Tamil Nadu v. C.M. Tiles) or the applicability of the law laid down by the Supreme Court in [1973] 32 STC 77 (Commissioner of Sales Tax v. H. M. Esufali H. M. Abdulali) and [1977] 39 STC 177 (Deputy Commissioner of Commercial Taxes v. H. R. Sri Ramulu) the learned Judge, referring to [1973] 32 STC 239 (State of Madras v. Mettur Industries Limited) and [1976] 38 STC 440 (State of Tamil Nadu v. C.M. Tiles) observed :
"........ I think that the two Bench decisions of this Court must be held to have been impliedly overruled by Deputy Commissioner of Commercial Taxes v. H. R. Sri Ramulu and Commissioner of Sales Tax, Madhya Pradesh v. H. M. Esufali H. M. Abdulali ."
18. Though Ramaprasada Rao, C.J., concurred with the view of Balasubrahmanyan, J., in so far as the judgment reported in [1976] 38 STC 440 (State of Tamil Nadu v. C.M. Tiles) is concerned, the learned Chief Justice opined thus :
"The further question for consideration is, whether an appellate authority sitting in appeal from an order of reassessment can interfere with the determination of the turnover, in the first instance, in the original assessment. The argument of the learned Additional Government Pleader on this aspect of the scope of the appellate power was also based on State of Tamil Nadu v. C.M. Tiles [1976] 38 STC 440. The view expressed by this Court in that case can be restated in terms of a simple syllogism : A reassessment only adds the escaped turnover, and it does not reassess what is already assessed in the original assessment. The appeal is against the reassessment. Therefore, the appeal cannot deal with the turnover assessed in the original assessment."
His Lordship then went on to hold that the law laid down in that case fell to the ground in view of the judgment (Deputy Commissioner of Commercial Taxes v. H. R. Sri Ramulu).
19. Considering the facts and circumstances in which the judgments came to be rendered by the Supreme Court in [1973] 32 STC 77 (Commissioner of Sales Tax v. H. M. Esufali H. M. Abdulali) and [1977] 39 STC 177 (Deputy Commissioner of Commercial Taxes v. H. R. Sri Ramulu), it is obvious that neither the fact situation nor the questions of law debated therein were the subject-matter of consideration or debate in [1973] 32 STC 239 (Mad.) (State of Madras v. Mettur Industries Limited) and [1976] 38 STC 440 (Mad.) (State of Tamil Nadu v. C.M. Tiles). We are at a loss to understand as to how it could be said that the judgments of the Division Bench of this Court in State of Madras v. Mettur Industries Limited [1973] 32 STC 239 and State of Tamil Nadu v. C.M. Tiles [1976] 38 STC 440, had been impliedly overruled by the Supreme Court, when the context in which they were delivered were entirely different and not under consideration of the Apex Court in [1973] 32 STC 77 (Commissioner of Sales Tax v. H. M. Esufali H. M. Abdulali) or [1977] 39 STC 177 (Deputy Commissioner of Commercial Taxes v. H. R. Sri Ramulu). Even otherwise, an expression like "impliedly overruled" is not a very happy expression. It is rather vague. It is the duty of he courts to consider the facts and circumstances of the case in which the judgment came to be rendered and then comment upon the applicability. Since a decision takes its colour from the question involved in the case in which it is rendered, there can be no question of "implied overruling" unless the same questions fell for consideration by the later Benches of the same Court or of the Apex Court. The principles underlying the judgments of the Supreme Court and of this Court were entirely different and, therefore, there could be no question of any implied overruling particularly when those judgments were not even noticed or referred to in the judgments of the Apex Court. In this Connection, it would be advantageous to take note of the following observations of the Constitution Bench of the Apex Court in Prakash Amichand Shah v. State of Gujarat .
"Expressions like 'virtually overruled' or 'in substance overruled' are expressions of inexactitude. In such circumstances, it is the duty of a Constitution Bench of this Court which has to consider the effect of the precedent in question to read it over again and to form its own opinion instead of wholly relying upon the gloss placed on it in some other decisions."
20. From the aforesaid discussion, therefore, it follows that is not open to the respondent-assessee to build up a case on the observations extracted above from [1980] 46 STC 264 (Mad.) [Deputy Commissioner (C.T.) v. Indian Refrigeration Industries Private Limited] completely divorced the context in which those observations came to be made. That judgment is not at all relevant or helpful to the assessee and the learned single Judge fell in error in allowing the writ petitions on the basis of the law laid down therein.
21. Considering the facts and circumstances of the instant case, it is not disputed, as indeed it cannot be, that the orders passed under section 16(1)(a) of the Act, in respect of each of the three years, 1972-73, 1973-74 and 1974-75 on March 13, 1979, April 2, 1979 and April 2, 1979, respectively, were confined only to the turnover that had escaped assessment and were confined to the assessment of the escaped turnover only. The said orders did not deal with the original assessments which stood concluded. the orders under section 16(1)(a), therefore, did not wipe off or take away the characteristic or operative force of the orders of original assessment. Therefore, it would be a travesty of law to hold that the orders made under section 16(1)(a) of the Act had set aside the original orders of assessment, which were not even under consideration referred to or included in the order under section 16(1)(a) of the Act. The order of refund of tax, already paid on the basis of the original order of assessment is, therefore, erroneous and cannot be sustained. The learned single Judge did not advert to, much less consider and discuss the facts and circumstances of this case while ordering the writ petitions and for what we have said above, we cannot agree with the judgment of the learned single Judge in the three writ petitions. Consequently, these judgments are set aside and the writ petitions filed by the respondent-assessee would stand dismissed. In the result, the writ appeals succeed and are allowed. No costs.
22. Writ appeals allowed.