Case: State of Madras Vs. A. M. Safiulla and Company

SHAH, J. 1. This appeal arises out of a proceeding which was treated as companion to the proceeding out of which Appeal No. 578 of 1966, The State of Madras v. P. M. Batcha & Co. ([1967] 20 S.T.C. 273), has arisen. In this case, for the year 1954-55, following the judgment of the Madras High Court in Messrs M. A. Noor Mohamed & Co. v. State of Madras and Another ([1956] 7 S.T.C. 792; A.I.R. 1957 Mad. 33) , the Commercial Tax Officer passed an order on October 12, 1959, that the net turnover of the respondents was "nil"; the tax paid was "nil"; tax due was "nil"; and the balance was "nil". He further recorded that "no demand under section 8-B(2) or section 3(2)" arose. This order was not communicated to the respondents. After the judgment of this Court in The State of Madras and Another v. M/s M. A. Noor Mohammed & Company ([1960] 11 S.T.C. 570; A.I.R. 1960 S.C. 1254), the proceedings under section 32 were commenced by the Deputy Commissioner and the turnover was determined and brought to tax. 2. In The State of Madras v. P. M. Batcha & Company ([1967] 20 S.T.C. 273) - C.A. No. 578 of 1966 - the original order of assessment was made when Act 9 of 1939 was in operation and the order of assessment was sought to be revised under Act 1 of 1959. In the present case, the order of assessment was made after Act 1 of 1959 was brought into force, and process of revision of assessment was initiated under section 32 of Act 1 of 1959. But, in our judgment, the order determining the net turnover being "nil" is not one against which a person may object. It raises no grievance which can be ventilated by him; the order does not compute the turnover, nor does it determine the tax. Failure to serve a notice of such an order does not invalidate the order, and no appeal against such an order lies under section 31. There is, therefore, no bar to the exercise of the jurisdiction of the Deputy Commissioner under section 32 of the Act to review "the order of nil assessment".The High Court was, in our judgment, in error in holding that the jurisdiction of the Deputy Commissioner was barred, because the order of "nil assessment" was not communicated and on that account the period for filing the appeal had not expired, and therefore the jurisdiction of the Deputy Commissioner could not be exercised.

Decision reasoning: 1[ds]But, in our judgment, the order determining the net turnover being "nil" is not one against which a person may object. It raises no grievance which can be ventilated by him; the order does not compute the turnover, nor does it determine the tax. Failure to serve a notice of such an order does not invalidate the order, and no appeal against such an order lies under section 31. There is, therefore, no bar to the exercise of the jurisdiction of the Deputy Commissioner under section 32 of the Act to review "the order of nil assessment".The High Court was, in our judgment, in error in holding that the jurisdiction of the Deputy Commissioner was barred, because the order of "nil assessment" was not communicated and on that account the period for filing the appeal had not expired, and therefore the jurisdiction of the Deputy Commissioner could not be exercised.