Case: State Of Kerala Vs. Shri M. Appukutty

(3A) ex facie properly fall under S. 19(2) (f). In any event, as was said by the Privy Council in Emperor v. Sibnath Banerji, 72 Ind App 241: (AIR 1945 PC 156 ) the rule making power is conferred by sub-s. (1) of that section and the function of sub-s. (2) is merely illustrative and the rules which are referred to in sub-s. (2) are authorised by and made under sub-s. (1).The provisions of sub-s. (2) are not restrictive of sub-s. (1) as expressly stated in the words :without prejudice to the generality of the foregoing power with which sub-s. (2) begins and which words are similar to the words of sub-s. (2) of S. 2 of the Defence of India Act which the Privy Council was considering Now sub-s. (1) of S. 19 of the Act provides that the State Government may make rules to carry out the purposes of this Act and the long title of the act is an Act to provide for the levy of general tax on the sale of goods in the State of Madras. Therefore in our opinion R. 17 and the various clause thereof made under S. 19 are not beyond the rule making power of the State Government as contained in S. 19. 5. The first sub-rule of R. 17 provides that the assessing authority may subject to sub-r. (1A) at any time within three years next succeeding that to which the tax relates determine the turnover which has escaped assessment and assess the tax payable on such turnover. That is the power of the assessing authority. 6. Sub-rule (1A) deals with those cases where an order has already been passed by the appellate authority under S. 11 or by a revising authority under S. 12. In those cases the assessing authority has to make a report to the appropriate appellate or revising authority and that authority can, after giving the dealer concerned reasonable opportunity of being heard, pass such orders as it thinks fit. There is then a third case and that is where there has been no appeal or revision under Ss. 11 and 12 of the Act and therefore no order of the appellate authority or on revisional authority as contemplated in Section 12(2) of the Act and in those cases the appellate authority or the revising authority as the case may be has under sub-r. (3A), the same power as the assessing authority had under sub-rr. (1) and (3) of R. 17. In the present case after an appeal to the Commercial Tax Officer there was no further proceeding and therefore the Deputy Commissioner who is the revising authority acted under R. 17 (3A) and issued a notice which, according to that sub-rule he had power to issue and then determined the escaped turnover. We have already held that R. 17 is a valid rule under S. 19 of the Act. Sub-rule (3A) of R. 17 on its plain construction confers jurisdiction on the revising authority to issue the notice which it did issue and in our opinion, and we say so with respect, the judgment of the High Court is, to that extent, erroneous and it cannot be said that the notice was without jurisdiction. Therefore the impugned order was not incorrect. 7. The respondent then argued that R. 17 is ultra vires of the provisions of the Act and he put his argument like this; that the power to assess is given to the assessing authority under S. 9 (1) and (2) which has been quoted above. The assessing authority is defined in S. 2 (a-2) to mean any person authorised by the State to make any assessment under this Act. Therefore the assessment of escaped turnover can only be done, if at all by an assessing authority and not by a revising authority as he has not been authorised by the State Government. The answer to this is in S. 2B. That section authorises the State Government to appoint as many Deputy Commissioners of Commercial Taxes as it thinks fit for the purpose of performing the functions conferred on them under the Act and such officers shall perform their functions within such local limit as the State Government in this behalf may assign to them. Rule 17 confers on the Deputy Commissioners the power to determine and tax escaped turnover in cases where revisions have been taken to them (sub-r. (1A)) and also where revisions have not been taken to them (sub-r. (3A)).Provisions of S. 9 (1) and (2) therefore are no bar to the exercise of power of assessing escaped turnovers. Moreover S. 9 does not deal with escaped turnovers but is a provision for the determination of the turnover of a dealer in the first instance nor can it be said that R. 17 is in conflict with Section 12 (2). That section deals with another state of affairs and another jurisdiction i.e. where the Deputy Commissioner suo motu or on an application made calls for the record and determines the legality or propriety of an order made by one of the subordinate officers. It cannot be said in view of R. 17 that the power of revision by the Deputy Commissioners is limited to powers under S. 12(2). Rule 17 deals with a separate and independent jurisdiction in regard to the determining and taxing escaped turnovers. The provisions of S. 12 (2) are in no way in conflict with the powers conferred under Rr. 17 (1), 17(1A) and 17(3A). 8. The further argument that sub-r. (3A) is confined to cases where the revision filed under S. 12(2) is pending is not supported by the language of that rule. Our attention was drawn to the judgment of the Madras High Court in the State of Madras v. Louis Dreyfus and Co. Ltd. (1955) 6 STC 318 at p. 328: ((S) AIR 1956 Mad 659 (FB) at p. 664). But that case does not deal with R. 3A which came into force later.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]It is true that the substantive provisions of the Act do not expressly deal with the power and procedure for assessment of escaped turnover, the legislature has left it to be dealt with by statutory rules to be framed under S. 19, and R. 17 has been framed thereunder. Rule 17 (1) and (3A) ex facie properly fall under S. 19(2) (f)Therefore in our opinion R. 17 and the various clause thereof made under S. 19 are not beyond the rule making power of the State Government as contained in S. 19In the present case after an appeal to the Commercial Tax Officer there was no further proceeding and therefore the Deputy Commissioner who is the revising authority acted under R. 17 (3A) and issued a notice which, according to that sub-rule he had power to issue and then determined the escaped turnover. We have already held that R. 17 is a valid rule under S. 19 of the Act. Sub-rule (3A) of R. 17 on its plain construction confers jurisdiction on the revising authority to issue the notice which it did issue and in our opinion, and we say so with respect, the judgment of the High Court is, to that extent, erroneous and it cannot be said that the notice was without jurisdiction. Therefore the impugned order was not incorrectIt cannot be said in view of R. 17 that the power of revision by the Deputy Commissioners is limited to powers under S. 12(2). Rule 17 deals with a separate and independent jurisdiction in regard to the determining and taxing escaped turnovers. The provisions of S. 12 (2) are in no way in conflict with the powers conferred under Rr. 17 (1), 17(1A) and 17(3A)8. The further argument that sub-r. (3A) is confined to cases where the revision filed under S. 12(2) is pending is not supported by the language of that ruleBut that case does not deal with R. 3A which came into force later.