# COMMERCIAL TAX-OFFICER, BANGALORE, .ETC. ETC v. SRI VENKATESWARA OIL MILLS & ANR. ETC. ETC

- **Citation:** [1973] 3 S.C.R. 742
- **Court:** Supreme Court of India
- **Decided:** 1973-03-16
- **Case number:** Writ Petitions Nos. 3978 of 1970
- **Bench:** K. S. Hegde, P. Jaganmohan Reddy, H. R. Khanna
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/commercial-tax-officer-bangalore-etc-etc-v-sri-venkateswara-oil-mills-anr-etc-5931
- **Pages:** 5

## Headnote

Central Sales Tax (Amendment) A.ct, 1959, s. 10 and Mysore Sales
Tax Rules 1957, r. JS-Retrospective amendment-Jn correcting
mis·
takes it is the law as amended that has lo be applied-Rule 38 has to be
read with s. 10 of amending Act-A.ssessees cannot have· adi·antate of
s. 10(1) without discharging burden placed on them ins. 10(1).
After
the
decision of this
Court in Yadalam Lakshminarasimhiah
Setty's case the President 'of India on June 9, 1969 promulgated tbe Cen·
tral Sales Tax (Amendment) Ordinance 1969 with tbe object of super·
seding the effect of that decision and to bring to tax sales effected
by
every dealer in the course of inter State trade or commerce notwithstand·
ing the fact that no tax could have beeo levied under the sales-tax law
ot the appropriate State if that sale had been an intra Sta!IY sale.
That
provision was given retrospective effect but s. 10( 1) df the Amendment
Act provided that if during the relevaJll period a dealer had not collected
sales-tax on the ground tha~ sales-tax was not leviable on the sale in question under the unamended Act be would not be liable to pay sale .. tax
under the amended Act. The burden of proving, however, that no sales-tax
had been collected was pla~d by s. 10(2) on the dealer. The Ordmance
was replaced by the Central Sales Tax (Amendment) Act, 1969. After
the Amendment Act came into force the sales-tax authorities sought to
reopen under r. 38 of the Mysore Sales Tax Rules 1957 the assessments
made on certain dealers on the ground that these assessments suffered from
mistakes apparent on the record.
In writ petitions filed by the dealers,
the High Court of Mysore accepted their contention that the Sales Tax
Officer lsid no jurisdiction to !'e9SSess the asoessees as it was impermissibl•
for him to receive any additional evidence with a view to decide the ques·
tion whether the assessees had collected sales-tax on the turnover in question and consequently he could not take any assistance
from rule 38.
Allowing the· appeals by special leave filed by the Revenue.
HELD : It is well settled that if a subsequent legislation is given retrospective effect and is deem~d to hll)>e been in force at the time when
the order to be rectified was made, then the law to be applied is the
amended law.
In other worys, for finding out whether there is a mistake
apparent on the record the authority has to look to the amended law and
not to the law that was in force at the time the original order \\'as made.
[748Hl
Rule 38 of the Mysore Sales Tax Rules must be read with s. 10 of
the Amendment Act.
If so read it is clear that the assessin2 authorities
be
1fore reassessing the dealers should afford them the opportunft}' to S'ltisfy
them that they have not co'lected the tax.
If the impact of s. IO is ignor·
ed, as the High Court had done, then the assessments
in -question afe
liable to be reopened whether the assessees had collected tax or not. The
assessees cannot have the benefit of s. 10(1) but not the burden of nroof
placed on them under s. 10(2). [746E]
·
Yadafan1 Laksfuninarasilnhial1 Setty and Sons v. State of Mysore, 13
S.T.C. 583: State of Mysore v. Yada/Qm Lakshminarasimhiah Setty and
Sons, 16, S.T.C. 231 (S.C.) M. K .. Venkatachalam, Income-tax Officer and
.A.nr. v. Bombcy Dying and Manufacturing Co. Ltd., 34 I.T.R. 143 and
A
B
c
D
E
E
G
H
C.T.O. v. VENKATESWARA OIL MILLS (Hegde, J,)
743
.A
Mabwd Arecanut Syndicate (P) Lrd. represented by Its M"""l'r K.
Rania Rao, Arecanut Merchants, Shimoga_ v. Commercial Tax
Qfficer,
Shimoga and Ors.
Writ Petition No. 5223 of 1969-0.vil Appeal No.
2632 of 1972, referred to.

## Text

742
COMMERCIAL TAX-OFFICER, BANGALORE, .ETC. ETC.
v.
SRI VENKATESWARA OIL MILLS & ANR. ETC. ETC.
March 16, 1973
[K. S. HEGDE, P. JAGANMOHAN REDDY AND H. R. KHANNA, JJ.]
Central Sales Tax (Amendment) A.ct, 1959, s. 10 and Mysore Sales
Tax Rules 1957, r. JS-Retrospective amendment-Jn correcting
mis·
takes it is the law as amended that has lo be applied-Rule 38 has to be
read with s. 10 of amending Act-A.ssessees cannot have· adi·antate of
s. 10(1) without discharging burden placed on them ins. 10(1).
After
the
decision of this
Court in Yadalam Lakshminarasimhiah
Setty's case the President 'of India on June 9, 1969 promulgated tbe Cen·
tral Sales Tax (Amendment) Ordinance 1969 with tbe object of super·
seding the effect of that decision and to bring to tax sales effected
by
every dealer in the course of inter State trade or commerce notwithstand·
ing the fact that no tax could have beeo levied under the sales-tax law
ot the appropriate State if that sale had been an intra Sta!IY sale.
That
provision was given retrospective effect but s. 10( 1) df the Amendment
Act provided that if during the relevaJll period a dealer had not collected
sales-tax on the ground tha~ sales-tax was not leviable on the sale in question under the unamended Act be would not be liable to pay sale .. tax
under the amended Act. The burden of proving, however, that no sales-tax
had been collected was pla~d by s. 10(2) on the dealer. The Ordmance
was replaced by the Central Sales Tax (Amendment) Act, 1969. After
the Amendment Act came into force the sales-tax authorities sought to
reopen under r. 38 of the Mysore Sales Tax Rules 1957 the assessments
made on certain dealers on the ground that these assessments suffered from
mistakes apparent on the record.
In writ petitions filed by the dealers,
the High Court of Mysore accepted their contention that the Sales Tax
Officer lsid no jurisdiction to !'e9SSess the asoessees as it was impermissibl•
for him to receive any additional evidence with a view to decide the ques·
tion whether the assessees had collected sales-tax on the turnover in question and consequently he could not take any assistance
from rule 38.
Allowing the· appeals by special leave filed by the Revenue.
HELD : It is well settled that if a subsequent legislation is given retrospective effect and is deem~d to hll)>e been in force at the time when
the order to be rectified was made, then the law to be applied is the
amended law.
In other worys, for finding out whether there is a mistake
apparent on the record the authority has to look to the amended law and
not to the law that was in force at the time the original order \\'as made.
[748Hl
Rule 38 of the Mysore Sales Tax Rules must be read with s. 10 of
the Amendment Act.
If so read it is clear that the assessin2 authorities
be
1fore reassessing the dealers should afford them the opportunft}' to S'ltisfy
them that they have not co'lected the tax.
If the impact of s. IO is ignor·
ed, as the High Court had done, then the assessments
in -question afe
liable to be reopened whether the assessees had collected tax or not. The
assessees cannot have the benefit of s. 10(1) but not the burden of nroof
placed on them under s. 10(2). [746E]
·
Yadafan1 Laksfuninarasilnhial1 Setty and Sons v. State of Mysore, 13
S.T.C. 583: State of Mysore v. Yada/Qm Lakshminarasimhiah Setty and
Sons, 16, S.T.C. 231 (S.C.) M. K .. Venkatachalam, Income-tax Officer and
.A.nr. v. Bombcy Dying and Manufacturing Co. Ltd., 34 I.T.R. 143 and
A
B
c
D
E
E
G
H
C.T.O. v. VENKATESWARA OIL MILLS (Hegde, J,)
743
.A
Mabwd Arecanut Syndicate (P) Lrd. represented by Its M"""l'r K.
Rania Rao, Arecanut Merchants, Shimoga_ v. Commercial Tax
Qfficer,
Shimoga and Ors.
Writ Petition No. 5223 of 1969-0.vil Appeal No.
2632 of 1972, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 2593,
2594-2596, 2599, 2601-2605, 2609-2614, 2615, 2616, 2618,
8
2619-2627, 2628, 2629-2631, 2632 and 2634 of 1972.
Appeals by special leave from the judgment and order dated
O~tober 12 and 13, 1971, November 15, 1971, October 25, and
13, 1971 and November 18, 1971 of the Mysore High Court at
Bangalore in Writ Petitions Nos. 3978 of 1970, 1003-1005 of
1971. 5542, 6343, 6428, 6466, 6469, 6790, 6988, 7035, 7057,
c
5504, 5514, 5525, 6001, 6082, 6110, 5959, 6111, 6775, 2779,
5538, 5540, 6080, 6081 and 6084 of 1969, 2780, 2925, 2926,
3347170, 5006 of 1970, 997 and 998 of 1971, 844 of 1971,
and 699 of 1969.
D
A. K. Sen, S. S. Javali and M. Veerappa, for the appellants
(in C.A. No. 2593).
M. Veernppa, for the appellants (in all other appeals).
K. Srinivasan and Vineet Kumar, for respondent No. 1 (in
C.A. Nos. 2624, 2616, 2611, 2614 & 2544 & 2593) for the respondent (in C. A. Nos. 2594-2596 & 2628).
M .. C. Setalvad and K. N. Bhatt, for the respondents
(in
E
C.A. No. 2598 in C.A. No. 2632).
F
G
K. R. Chowdhary and K. Rajendra ChowdhtlfY., for respondent
No. 1 (in C. A. No. 2598).
S. P. Nayar and R. N. Sachthey, for respondent No. 2 (in C.A.
Nos. 2593, 2597-2605, 2606-2608, 2609-2614, 2615-2618,
2619-2627, 2633-2634).
The Judgment of the Court was delivered by
.
HEGDE, J.-In these appeals by special leave, a common
question of Jaw arises for decision and that question relates to the
scope ancl effect of the Central Sales Ta11 (Amendment) Act,
1969.
The amendment in question came to be enacted under the
following circumstances. The High Court of Mysore in Yadalam
Lakshminarasimhiah Setty and Sons v. State of Mysore(1), held
that under s. 8 (2) of the Central Sales Ta11 Act, 1956, prior to
its amendment by Act 31 of 1958 a "sale" in the course of interState trade or commerce is to be ta11ed at the same rate and in
H
the same manner as it would have been tued, under the appropriate State law, if it had been an intra State transaction, but
fl) 13 S.T.C. 583.
744
SUPREME COURT REPORTS
fl 973] 3 S.C.R.
without taking into consideration lhe mlnimdm twrnover fixed
bly the State law for the purpose of determilring the liability of the
"dealer" to be assessed under the State sales tax law. It further
held that the words "same manner" in section 8(2) relate to the
calculation of the tax and not refer to the procedure to be adopted
while assessing the "dealer."
This decision was affirmed by the Supreme Court in State of
Mysore v. Y addalam Lakshminarasimhiah Setty and Sons.(')
Thereafter on June 9, 1969, the President of India promulgated
the Central Sales Tax (Amendment) Ordinance 1969, with the
object of superseding the effect of the decision in Y addalam
Lakshminarasimhiah Setzy's case and to bring to tax sales effected
by every dealer in the course of intrai State trade or commerce
notwithstanding the fact that no tax could have been levied under
the sales tax law of the appropriate State if that sale had been an
intra State sale. The provision was given retrospective effect but
it was provided in s. l 0 ( l ) of the Amendment Act :
"Where any sale of goods in the course of inter-state
trade or commerce has been effected during the period
between the 10th day of November, 1964 and the 9th
day of June 1969, and the dealer effeating such sale has
not collected any tax under the
principal Act on the
ground that no such tax could have been levied or collected in respect of such sale or any portion of the turnover relating to such sale and no such tax could have
been levied or collected if the amendments made in the
principal Act by this Act had not been made, then, notwithstanding anything contained in section 9 or the said
amendments, the dealer shall not be liable to pay any
tax under the principal Act, as amended by this Act, in
respect of such sale or such part of the turnover relating
to such sale."
Sub-section ( 2) of s. 10 provided :
"For the purposes of sub-section ( 1), the burden of
proving that no tax was collected under the principal Act
in respect of any sale referred to in sub-section (1) or
in respect of any portion of the turnover relating to such
sale shall be on the dealer effecting such sale."
That Ordinance was
replaced
~ the Cen_tral Sales Tax
(Amendment) Act, 1969. After the amendment came into force
several Sales Tax Officers who had earlier assessed the assessees
in accordance with the decision in Y adalam Lakshinaraslmhiah
Setty' s case issued notices to those assessees proposing to reotify
(I)
S.T.C. 231.
B
c
D
E
F
G
H
,,
c.r.o. v. VENKATESWARA OIL MILLS (Hegde, J.)
745
A their assessments on the ground that the earlier assessments suffered from mistakes . apparent ·on the record. The respondents in
these appeals resisted those notices on the ground that he had no
competence to reopen the assessment. The Sales-tax Officers rejected that contention. Thereafter the respondents in these
appeals challenged the orders made by the Sales-tax Officers before
B the High Court of Mysore l:fy means of petitions under Art. 226
of the Constitution on two grounds viz. ( 1) ihat the
Sales-tax
Officer had no .iurisdiction to reopen the assessment as there was
no mistake apparent on the record and (2) that the said Officer
was in error in coming to the conclusion that the assessee had
collected tax on the turnover which was earlier considered as
c exempted.
The High Court accepted the first of the two aforementioned contentions viz. that the Sales Tax. Officer had no
jurisdiction to reassess the assessees as it was impermissible for
him to receive any additional evidence with a view to decide the
question whether the assessees had collected sales tax on the turnovers in question and consequently he could not take any assistD ance from the 38 of the Mysore Sales Tax Rules, 1957.
E
F
Before proceeding to examine the question of law arising for
decision, it is necessary to note that in all the cases before us except in one which will be dealt with separately, we are told that
the assessees had been given opportunity to show that they had not
collected sales tax in respect of the turnover with which they were
concerned, but according to the OJJjcers concerned, the assessees
had failed to discharge their burden. The finding of the assessing
officers on this point is a finding of fact and was not open to review
by the High Court in petitions under Art. 226 of the Constitution.
Rule 38 of the Mysore Sales Tax Rules, 1957 empowers the
assessing, appellate or revising authority or the Appellate Tribunal
at any time within five years from the date of any order passed
by-it to rectify any mistake apparent on the record.
The High Court opined, in our opinion rightly that in order
to attract the .power to rectify, it is not sufficient, ii there is merely
a mistake in the order sougnt to be rectified. The mistake to be
G rectified must be one apparent on the record. It is well settled
that if a subsequent legislation is given retrospective effect and
is deemed to have bieen in force at the time when the order to be
rectified was made then the law to be applied is the amended lawsee M. K. VenkaNichaa/am, Income-tax Officer and Anr. v.
•-
Bombay Dyeing and Manufacturing Co. Ltd.(1). In other words
for finding out whether. there is a mistake apparent on the record,
H the authority has to look to the amended law and not to the law
that was in force at the time the original order was made. The
0) 34 I.T.R. 143.
•
746
SUPREME COURT REPORTS
[1973) 3 s.c.R.
High Court had accepted this principle but rt proceeded to rule
A
that for finding out whether there was a mistake apparent on the
record or not, it is not permissible for the Sales Tax Officer to take
any . evidence whatsoever as the mistake to be rectified must be
apparent on the record.
On that premises it held that because
it is not permissible for the assessee to adduce additional evidence
to show that they have not collected tax, It is not open to the
B
assessing authorities to reopen the assessments.
This approach
is neither !ogical nor sound in· law.
Section 10 of ihe Amendment. Act mitigates the rigor of the amendment made to s. 6 ol
the Principal Act. But for s. 10 of the Amendment Act, every
dealer would have had to pay tax on the turnovers in GUestiom
whether he had collected taJt or not.
If the impact of s. 10 isignored, as the High Court has done, then the assessments in ques•
C
tion are liable to be re-opened whether the assessees had collected
the tax or not. The assessees cannot have the benefit of s. 10(1)
but not the burden of proof placed on them under s. 10(2). If
the reasoning of the High CoUlt is correct then it is the' assessees
who will bie deprived of the benefit ol s. 10(1) of the Amendment
Act because there could not have been any finding in the original
D
assessment orders that the assessees had not collected tax. The
legislative intention is clear and beyond doubt. The law gives a
farther oppPrtunity to the assessees whose assessments are soμght
to be reopened to satisfy the assessing authorities that they had·
not collected tax in respect of the turnovers in question. Rule 3 8
of the Mysore Sales Tax Rules must be read with s. 1 a of the
E
Amendment Act. If so read, it is clear that the assessing authori~
ties before rc::,assessing the dealers should afford them reasonable
opportunity to satisfy them that they have not collected tax.
For the reasons mentioned above, we allow these appeal~. set
aside the orders of the High Court and dismiss the Writ Petitions
with costs. But in the case of Malnad Arecanut Syndicate (P)
F
Ltd., represented by its Manager K. Rama Rao, Arecanut Mar.
chants, Shimoga v. Commercial Tax Officer, Shimoga and Ors.
(Writ Petition No. 5223 ol 1969-Civil Appeal No. 2632 of
1972) we are informed that
r~tification proceedings are still
pending before the assessing authority.
If that is so, the sales tax
officer shall proceed to dispose of the same according to law.
The
G"
respondents shall pay the costs of the. appellant in these appeals
-one hearing fee .
G.C.
Appeals allowed.
B