# Mangilal v. Suganchand Rathi

- **Citation:** [1964] 5 S.C.R. 253
- **Court:** Supreme Court of India
- **Decided:** 1963-10-29
- **Case number:** Civil Appeals Nos. 454 to 465 of 1962
- **Bench:** A.K. Sarkar, K.C. Das Gupta, N. Rajagopala Ayyangar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/mangilal-v-suganchand-rathi-2975
- **Pages:** 17

## Headnote

Sales Tax-Revision against order of assessment-Time limitOrissa Sales Tax Act, 1947 (Orissa 14 o/1947), ss. 12, 23.
The respondents were assessed to sales tax under the provisions
of the Orissa Sales Tax Act, 1947, by the Sales Tax Officer, who
rejected their claim to certain deductions from their taxable turnover,
but, on appeal, the Assistant Collector allowed the claim. The
Collector of Sales Tax, however, acting under s. 23(3) of the Act
revised the orders of the Assistant Collector by raising the taxable
turnover allowed by him to be deducted. The respondents moved
the High Court of Orissa under Art. 226 of the Constitution of
India to quash the orders of the Collector on the ground that
they were illegal under the Act as they had been made more than
thirty six months after the expiry of the quarters in respect of which
the assessments had originally been made. The High Court took
the view that the orders in revision were really reassessments
under sub-s. (7) of s. 12 of the Act of turnover which had escaped
assessment or been under assessed and as such they were barred
by limitation.
1963
Mangilal
v.
Suganchand
Rathi
Mudho/kar J.
1963
October 29
1963
The State of
Orissa
V.
Dabaki Devi
SarkarJ.
254
SUPREME COURT REPORTS
[1964]
Held: (i) The view taken by the High Court that the impugned
orders were really reassessments under s. 12(7) of the Orissa Sales
Tax Act, 1947, was erroneous.
(ii) (per Das Gupta and Rajagopala Ayyangar, JJ ., Sarkar,
J. dissenting). Orders of assessment made by the revising authority
must be considered to be
orders passed under s. 12 as well as
under s. 23 of the Act and, therefore, the period of limitation
prescribed in the second proviso to s. 12 (6) became applicable.
Gajo Ram v. State of Bihar, (1955) 7 S.T.C. 248, disapproved.
per Sarkar, J.-(i) The time-limit of thirty-six months prescribed in s. 12(7) was only for calling for a return and not for
making the order of reassessment in respect of escaped or under-
~
assessed turnover.
·
(ii) An order made in revision under s. 23(3) was not an order
of assessment and the period of limitation in the second proviso
to s. 12(6) was not applicable.

## Text

•
5 S.C.R.
SUPREME COURT REPORTS
253
rent by the plaintiffs would not by itself operate as
waiver.
As regards the last point, we have in fact dealt
with it already.
What was contended was that the
notice of April I I, I 959 was not a valid notice with
reference to both the Jaws, that is, the Transfer of
Property Act and the Accommodation Act. We
have pointed out that though the notice could be
construed to be compo>ite notice it was ineffective
in so far as it purports to be under s. 106 of the Transfer
of Property Act. It was not suggested that in so
far as it was a notice under the Accommodation
Act it was invalid. There is, therefore, nothing
more to be said about it.
For the foregoing reasons we uphold the decree
of the High Court and dismiss the appeal with costs.
Appeal dismissed.
THE STATE OF ORISSA
v.
DABAKI DEVI AND OTHERS
(And connected appeals)
(A.K. SARKAR, K.C. DAS GUPTA AND N. RAJAGOPALA
AYYANGAR JJ.)
Sales Tax-Revision against order of assessment-Time limitOrissa Sales Tax Act, 1947 (Orissa 14 o/1947), ss. 12, 23.
The respondents were assessed to sales tax under the provisions
of the Orissa Sales Tax Act, 1947, by the Sales Tax Officer, who
rejected their claim to certain deductions from their taxable turnover,
but, on appeal, the Assistant Collector allowed the claim. The
Collector of Sales Tax, however, acting under s. 23(3) of the Act
revised the orders of the Assistant Collector by raising the taxable
turnover allowed by him to be deducted. The respondents moved
the High Court of Orissa under Art. 226 of the Constitution of
India to quash the orders of the Collector on the ground that
they were illegal under the Act as they had been made more than
thirty six months after the expiry of the quarters in respect of which
the assessments had originally been made. The High Court took
the view that the orders in revision were really reassessments
under sub-s. (7) of s. 12 of the Act of turnover which had escaped
assessment or been under assessed and as such they were barred
by limitation.
1963
Mangilal
v.
Suganchand
Rathi
Mudho/kar J.
1963
October 29
1963
The State of
Orissa
V.
Dabaki Devi
SarkarJ.
254
SUPREME COURT REPORTS
[1964]
Held: (i) The view taken by the High Court that the impugned
orders were really reassessments under s. 12(7) of the Orissa Sales
Tax Act, 1947, was erroneous.
(ii) (per Das Gupta and Rajagopala Ayyangar, JJ ., Sarkar,
J. dissenting). Orders of assessment made by the revising authority
must be considered to be
orders passed under s. 12 as well as
under s. 23 of the Act and, therefore, the period of limitation
prescribed in the second proviso to s. 12 (6) became applicable.
Gajo Ram v. State of Bihar, (1955) 7 S.T.C. 248, disapproved.
per Sarkar, J.-(i) The time-limit of thirty-six months prescribed in s. 12(7) was only for calling for a return and not for
making the order of reassessment in respect of escaped or under-
~
assessed turnover.
·
(ii) An order made in revision under s. 23(3) was not an order
of assessment and the period of limitation in the second proviso
to s. 12(6) was not applicable.
CIVIL APPELLATE JURISDICTION : Civil Appeals
Nos. 454 to 465 of 1962.
Appeals by special leave from the judgment and
order dated July 8, 1958 of the Orissa High Court
in O.J.S. Nos. 289, 296 and 300 of 1956.
K.N. Rajagopal Sastri and R.N. Sachthey, for
the appellant (In all the Appeals).
Santosh Chatterjee and B. Kishore, for respondent
No. 2 (In C.A. Nos. 454 to 460of1962) and the Respondents (Jn C.A. Nos. 461 to 465 of 1962.)
The Judgment of K.C. Das Gupta and N. Rajagopala Ayyangar JJ., was delivered by Das Gupta
J. A.K. Sarkar J. delivered a dissenting opinion.
SARKAR J.-These appeals raise the question
whether the Orissa Sales Tax Act, 1947, sets a timelimit for making an order under s. 23(3) of the Act
revising an order of assessment. The question depends
on the interpretation of some of the provisions of the
Act to which reference will be made in due course.
The facts are these. The respondents had been
assessed to sales tax under the Act in respect of various
quarters by a Sales Tax Officer. They appealed
to the Assistant Collector of Sales Tax against the
t
•
5 S.C.R.
SUPREME COURT REPORTS
255
assessments contending that the Sales Tax Officer
had wrongly rejected their claim to certain deductions
from their taxable turnover. The
appeals
were
allowed. Subsequently the Orissa High Court delivered a judgment in another case from which it appeared
that the Assistant Collector was wrong in allowing
the deductions. Thereupon the Collector of Sales
Tax acting under s. 23(3) of the Act which provided
that "the Collector may, upon application or of
his own motion, revise any order passed under this
Act ............ by a person appointed under s. 3 to
assist him" revised the orders of the Assistant Collector by raising the taxable turnover allowed by him
to be deducted.
The respondents moved the High Court of Orissa
under Art. 226 of the Constitution to quash the
orders of the Collector in revision on the ground
that they were illegal under the Act as they had been
made more than thirty-six months after the expiry
of the quarters in respect of which the assessments
had originally been made.
This contention was
accepted by the High Court. Hence these appeals.
The High Court held that the orders in revision were
illegal as they were real!y reassessments of turnover
which had escaped assessment or been under-assessed
and under sub-sec. (7) of s. 12 of the Act, such reassessment could not be made in respect of any quarter
after thirty-six months from its expiry. It is not
in dispute that many of the orders in revision had
been made after the expiry of the said period of thirtysix months. It seems to me that the High Court
was clearly in error in basing itself on sub-sec. (7)
of s. 12. The material part of the sub-section is
in these terms: "If ......... the turnover of a dealer
for any period ......... has escaped assessment or has
been under-assessed, the Collector may at any time
within thirty-six months of the end of that period
call for a return ......... and may proceed to assess
........... " The time-limit of thirty-six months prescribed here is only for calling for a return. The
sub-section prescribes no time-limit for making the
1963
The State of
Orissa
v.
Dabaki Devi
Sarkar J.
1963
The State of
Orissa
v.
Dabaki Devi
Sarkar J.
256
SUPREME COURT REPORTS
[1964]
order of reassessment in respect of escaped or underassessed turnover. Consequently this provision does
not make the orders with which these appeals are
concerned, in any way illegal.
We were then referred to the second proviso in
sub-sec. (6) of s. 12 of the Act as specifying a time
limit of thirty-six months for these orders. The
sub-section is in these terms:
"Any assessment
made under this section
shall be without prejudice to any prosecution
instituted for an offence under this Act:
Provided that when the Collector has imposed a penalty in addition to the amount assessed
under this section, no further proceedings either
revenue or criminal shall be taken against the
dealer.
Provided further that no order assessing the
amount of tax due from a dealer in respect of
any period shall be passed later than thirty-six
months from the expiry of such period."
The sub-section would no doubt apply if the orders
made in this case were orders "assessing the amount
of tax due" contemplated by it. The question therefore is what do the words "order assessing the amount
of the tax due" in the proviso mean. Of course,
the whole of s. 12 has to be considered for deciding
the meaning of these words and I will presently do
so. In the meantime however I may observe that
though s. 12 talks of assessment by a Collector it
includes assessment by other officers appointed under
the Act to assist the Collector for under s. 17 the
Collector can delegate his powers to such officers,
who are subordinate to him.
1 now turn to s. 12. It has seven sub-sections
each of which except sub-~ec. (6) deals with assessment in a specified case. Each of them expressly
provides for an order of assessment being made.
The first sub-section deals with a case where the assessing officer is satisfied without hearing the dealer
or taking evidence that the return is correct. The
~
I
• -
•
5 S.C.R.
SUPREME COURT REPORTS
257
second sub-section covers a case where he is not so
satisfied and provides for the assessment being made
after hearing evidence. The third sub-sestion concerns a case where the dealer fails to attend or produce
evidence when called upon to do so under the preceding sub-section. Sub-section (4) provides for a
case when a dealer does not furnish returns which
he is required by the Act to do. The fifth sub-section
relates to a case where a dealer wrongfully fails to
apply for registration. The sixth sub-section has
earlier been set out.
The last and seventh ;uh-section
as already seen, deals with assessment of turnover
which had escaped assessment or was under-assessed.
Now it does not seem to me that an order made
under s. 23(3) can properly be called an order "assessing the amount of tax due" as contemplated by ·the
Act at all. I first observe that the only section which
expressly provides for assessment of tax is s. 12.
No other section refers to an order of assessment.
It would follow that an order is not an order of assessment of tax due unless it is made under this section.
Then J find that an order made under s. 23(3) is not
described as an order of assessment. Indeed that
sub-section deals with an order revising an order
passed under the Act and, therefore, revising an
order of assessment made under s. 12. This also
supports the view that the Act does not consider
such an order as an order of assessment. Again
the same conclusion is also suggested by sub-sec. (2)
of s. 23 which says that, "The appellate authority
in disposing of any appeal .................. may-(a)
confirm reduce, enhance or annual the assessment."
Obviously it is not considered that an appellate authority makes an assessment when it confirms, enhances
or reduces an assessment. If an appellate order
enhancing the assessment is not considered as an
assessment order, neither can a similar order passed
in revision be so considered. In my view, the Act
does not contemplate an order which is not made
under s. 12 as an order assessing the amount of tax
due.
1 SCl/64-17
1963
The State of
Orissa
V.
Dabaki Devi
Sarkar J.
1963
The State of
Orissa
v.
Dabaki Devi
Sarkar J.
258
SUPREME COURT REPORTS
[1964]
Then again I think it is clear from what I have
set out above that sub-secs.(l) to (5) and (7) of s. 12
deal with original orders of assessment as distinguished
from orders made in appeals from or by way of revision of such original orders or by way of review
of them. Now the first part of sub-sec. (6) and the
first proviso to it deal expressly with orders made
under the section. Therefore they do not apply
to appellate or revisional orders. The second proviso with which this case is concerned no doubt contains no express reference to assessment under the
section but it would be strange if that proviso was
intended to apply to orders of assessment made in
appeals or by way of revision, assuming that such
orders could properly be called orders of assessment. If it was intended to provide a period of
limitation for an order in appeal or by way of revision
then the provision containing it would not have been
put in s. 12 nor would the order have been described
as an "order assessing the amount of tax due." It
may be that the time limit specified in the second
proviso does not apply to an order of assessment
under sub-sec. (7). That would not however affect
the question.
A recent amendment to
s. 12 has
expressly provided that the time limit in the second
proviso does not apply to an order
under
sub-sec. (7).
Lastly, it seems to me that if the second proviso
in s. 12(6) fixes a period of thirty-six months from the
end of a period within which an order can be made
under s. 23(3) revising an order of assessment in
respect of that period, the consequence would be so
disastrous for the tax-payer that it could not have
been intended. It would then be open to the Collector
to make the application for revision preferred by a
dealer against an assessment order made on him
or against an appellate order, infructuous by the
simple expedient of allowing the thirty-six months'
time to pass. It is important to observe that there
is no provision anywhere in the Act requiring the
revising authority to dispose of an application in
-
,
'
,J
•
5S.C.R.
SUPREME COURT REPORTS
259
revision filed before him within any particular period
1963
of time and the original order of assessment can be
made at any time within the period of thirty-six months.
The State of
Further a dealer has no remedy against any delay
Orissa
in making an assessment so long as it is made within
v.
the period of thirty-six months. Therefore it
i~
Dabaki Devi
not unlikely that in many cases there may not be
much time left between the filing of an application
Sarkar J.
in revisicn by a dealer and the expiry of the period
of thirty-six months. If the time limit specified in
the second proviso applied to an order under s. 23(3),
it would be open to the authorities to deprive a taxpayer of his right to apply under s. 23(3). An interpretation leading to such a result cannot be accepted.
This aspect of the matter is made clearer by
s. 23(1) which gives a dealer the right to file an appeal
within thirty days of the receipt of the order of assessment. Obviously, if an order in revision can be an
assessment order, so can an appellate order be.
The appellate order would then have to be made
within the period of thrity-six months. Now suppose
the period of thirty-six months expires within the
thirty days mentioned in s. 23(1 ), as it well may since
the order of assessment can be made at any time
within the thirty-six months. In such a case on the
interpretation for which the respondent dealers contend, the right to file the appeal within the thirty
days mentioned ins. 23(1) would venish; there would
be a conflict between s. 23(1) and the second proviso
to s. 12(6). An interpretation leading to such a result
cannot be correct. The position would be the same
in the case of an application for revision for the Act
provides no time-limit for making such an application
and therefore contemplates the making of it at any
time. An interpretation of a provision in the Act
which imposes, not expressly but practically, a time
limit on the right to apply in revision given by another
provision must be of doubtful validity. I am not
prepared to accept that interpretation as it is neither
the only interpretation nor an interpretation which
is clearly supported by the language used.
1963
The State of
Orissa
V.
Dabaki Devi
Sarkar J.
Das Gupta/.
260
SUPREME COURT REPORTS
[1964]
It is true that if an order in appeal or revision
can be made at any time, the case may be kept hanging over the head of the dealer for a very long time
at the option of the authority concerned. This consideration however does not lead me to accept the
view advanced by the respondents. The calamity
and the anomaly resulting from it to which I have
earlier referred, seems to me to be much more serious
than the inconvenience that it avoids.
Farther the
inconvenience imagined seems to me to be more
fanciful than real. It is not likely that the authorities
would deliberately keep an appeal or a revision application pending for no reason at all as that would not
give them any advantage whatever.
I would for these reasons allow the appeals.
DAS GUPTA J.-These twelve appeals by the
State of Orissa are in respect of twelve separate orders
of assessment of sales tax that were made by the Collector of Sales Tax, Orissa, in exercise of his powers of revision under s. 23 of the Orissa Sales Tax Act. The
several dealers who are the respondents in the appeals
moved the Orissa High Court under Art. 226 of the
Constitution for the issue of appropriate writes directing the State of Orissa not to collect the amounts
which were said to have been illegally assessed. These
several petitions have been allowed by the High Court
and the orders of assessment made by the Collector
nave been quashed. The State of Oriss1 has filed
the present appeals against the High Court's orders
on special leave granted by this Court.
All the orders made by the Collector were passed
later than 36 months from the expiry of the period
in respect of which the assessment was made. The
common question of law which arises in these appeals
is whether the High Court was right in holding that
these orders are bad in law on the ground that they
contravene the provisions of the second proviso to
sub-s. 6 of s. 12 of the Orissa Sales Tax Act.
}
Section 4 of the Act is the charging section and
declares the incidence of taxation on sales. Section
~
5 deals with the rate of tax. It is unnecessary for
•
5 S.C.R.
SUPREME COURT REPORTS
261
our present ·purpose to examine the provisions of
1963
ss. 6 to 10 which deal with the power of State Government to declare certain goods as tax free goods, to
The State of
exempt certain dealers from tax, the power of the
Orissa
State Government to prescribe points at which the
v.
goods may .be taxed, the registration of dealers, the
Dabaki Devi
publication of the list of registered dealr.rs and the
matters of collection of tax by dealers. Section
Das Gupta J.
11 lays down that such dealer as may be required
to do so by the Collector by notice served in the prescribed manner and every registered dealer shall furnish
such returns by such dates and to such authority
as ma} be prescribed.
Section 12 of the Act, with
which we are primarily concerned, deals with the
question of assessment of tax.
In the first five subsections of this se-::tion the legislature has laid down
the different modes in which assessment of tax may
be made.
Under the first sub-section the Collector
shall assess the amount on the basis of the return
furnished if he is satisfied. without requ;ring the
presence of a registered dealer or the production by
him of any evidence that they are correct and complete. The second and third sub-sections deal with
the case where he is not so satisfied. In such cases
the Collector shall assess the amount after hearing
such evidence as the dealer may produce in support
of the returns after the issue of a notice and such
other evidence as the Collertor may require on specified points (sub-s. 2); if the registered dealer fails to
comply with the terms of the notice issued the Collector
shall assess the amount of tax to the best of his judgment (sub-s.3).
Sub-section 4 deals with the case
where the registered dealer does not furnish returns
by the prescribed elate. Jn such a case also the Collector shall also assess the tax to the best of his judgment
after giving the registered dealer a reasonable opportunity of being heard. Sub-section 5 provides for
asses~ment bv the Collector of taxes due from a dealer
about whom he is satisfied that he has been liable
to pay tax under the Act in respect of any period
and has nevertheless failed to apply for registration.
Then comes sub->ection 6 which runs thus :-
1963
The State of
Orissa
v.
Dabaki Devi
Das GuptaJ.
262
SUPREME COURT REPORTS
(1964]
"(6) Any assessment made under this section
shall be without prejudice to any prosecution
instituted for an offence under this Act:
Provided that when the Collector has impo~ed a penalty in addition to the amount assessed
under this section, no further proceedings either
revenue or criminal shall be taken against the
order:
Proviaed further that no order assessing
the amount of tax due from a dealer in respect
of any period shall be passed later than thirtysix months from the expiry of such period".
Sub-section 7 provides that if for any reason
the turnover of a dealer has escaped assessment
or has been under-assessed the Collector may
call for a return within 36 months of the end
of the period in question and may proceed to
assess the amount of tax in the manner laid
down in sub-s. 5.
After the assessment order has been made
under >. 12 a dealer may appeal to the prescribed
authority against such order. This is provided
by s. 23, sub-s. (l ). Then follows provisions
dealing with the orders which an
appellate
authority might pass and with revisions which
we shall set out:
"Subject to such rules or procedure as may
oe prescribed, the appellate authority, in disposing of any appeal under sub-section (1),
may-
( a) confirm, reduce, enhance or annul the
assessment or penalty, if any, or both or
( b) set aside the assessment or penalty, if
any or both and direct the assessing authority to pass a fresh order after such further
inquiry as may be directed.
(3) Subject to such rules as may be prescribed
and for reasons to be recorded in writing, the
Collector may upon application, or of his own
•
I
•
5 S.C.R.
SUPREME COURT REPORTS
263
motion, revise any order passed under this Act
or the rules thereunder by a person appointed
under s. 3 to assist him, and, subject as aforesaid,
the Revenue Commissioner may, in like manner,
revise any order passed by the Collector."
1963
The State of
Orissa
v.
Dabaki Devi
While nothing as regards the period within
which such revisional powers may be exercised is
Das Gupta J.
stated in the Act itself, the power is in terms made
subject "to such rules as may be prescribed".
Rule
54 of the Rules made by the State Government under
s. 29 of the Act lays down that the Collector may
of his own motion exercise such powers of revision
within one year from the date of the passing of the
order made while the Revenue Commissioner may
exercise his powers of revision within one year from
the date of the passing of any order by the Collector.
Though in all these cases the impugned orders
were made by the Collector of Sales Tax in purported
exercise of powers of revision under s. 23(3), the
petitioners in the several petitions claim that the
orders were in substance made under s. 12(7) of the
Act. The High Court was of opinion that s. 12(7)
includes also the order of assessment made by the
revising authority under s. 23(3) and in that view
held that the orders of assessment passed beyond
thirty-six months from the end of the period in question were barred by limitation.
The first contention urged on behalf of the State
of Orissa is that the High Court is wrong in holding
that an order of assessment of revising authority
is necessarily one made under s. 12(7). The power
of revision granted by s. 23(3) is clearly a di3tinct
and separate power from the power to assess after
calling for a return in case of under-assessment or
escaped assessment. The mere fact that in a particular case the revi>ing authority has by a fresh order
of assessment made the dealer liable for tax in respect
of which he can be said to have been under-assessed
or to have escaped assessment does not make the
two powers one and the same. We therefore find it
1963
The State of
Orissa
V.
Dabaki Devi
Das GuptaJ.
264
SUPREMt COURT REPORTS
[1964]
difficult to agree with the High Court that s. 12(7)
includes also the re-assessment made by the revising
authority under s. 23(3).
The question however still
remains whether
accepting the position that the orders made by the
Collector in the present case were not orders under
s. 12(7) they were still orders of assessment to which
limitation prescribed by the second proviso to s. 12
(6) applied. On behalf of the appellant it is urged
that the limitation prescribed in this proviso applies
only to orders of assessment made under s. 12 and
that the impugned orders were made not under s. 12
but under s. 23 and so the limitation prescribed in
this proviso does not apply to the impugned orders.
It is worth noticing first of all that what appears
as the second 'proviso' in s. 12 (6) has no connection
with the legislative provision in the first part of the
sub-section. That provision which has already been
set out is that assessment made under s. 12 shall be
without prejudice to any prosecution instituted for
an offence under the Act. The first proviso is undoubtedly connected with the main provision. The
second proviso however contains nothing by way
of saving or exception to that main provision. It
has nothing to do with the question of any prosecution.
If we look at the substance of the matter, as we must,
it appears clear that the provision of a period of
limitation of 36 months for the passing of an order
of assessment of tax is really an independent legislative provision of the Act and though it has been inserted by the draftsmen in the form of 'a proviso'
in s. 12(6), it is m substance not a real 'proviso' to
the main provision. That independent legislative provision lays down that no order "assessing the amount
of tax shall be passed after the lapse of 36 months
from the expiry of the period" for which the assessment is made. The provision is not in terms limited
only to orders of assessment made under s. 12 but
on its language applies to and governs any order
assessing the amount of tax which would manifestly
include an assessment under any provision of the
).
'
t
I
5 S.C.R.
SUPREME COURT REPORTS
265
Act basides s. 12. The consequence is that even
1963
if an order of assessment made in exercise of powers
of revision under section 23 be held to be not an
The State of
order made under s. 12 this limitation of 36 months
Orissa
from the expiry of the period for which the assessv.
ment is made will still be applicable.
Dabaki Devi
Mr. Sastri however submitted that as the proDas Gupta J.
vision under consideration actually appears as a
'proviso' in s. 12(6) the intention of the legislature
was to make it applicable to only those orders of
assessment to which the main provision which uses
the words "Any assessment made under this section"
related. As the main provision expressly relates
only to orders of assessment under s. 12 it was argued
that the period of limitation in the second proviso
was intended to govern only orders of assessment
made under s. 12.
We have already set out the reasons for which
we think that this provision of limitation though
it appears as a proviso in s. ·12(6) is in reality an independent legislative provision, as its subject-matter
has nothing whatever to do with the main provision
in s. 12(6), or the proviso to sub-s. 6 which precedes
it.
If therefore it is in truth an independent provision,
,-
unrelated to s. 12(6) we do not see any logic or reason
for importing into it the construction that its operation
must be confined to an assessment under s. 12, for
read by itself on any reasonable construction it would
appear to be a limitation imposed on any order of
assessment made under the Act. i.e., under any provision of the Act. Assuming, however, for argument's
sake that it applies only to orders of assessment under
s. 12, that construction is of no help to the appellant
unless it can be said that the impugned orders of
assessment were not made under s. 12. We find it
difficult to see how that can be said. It is true, no
doubt, that the orders were made by virtue of powers
conferred by s. 23. But s. 23 itself does not clothe
the appellate or revising authority with any independent powers of assessing the tax due under the Act,
independent of the powers under s. 12.
266
SUPREME COURT REPORTS
[1964)
1963
A close examination of the terms of s. 23 would
-
make this position clear. Let us first take the case
The State 01 of the powers of the appellate authority under s. 23(2).
Onssa
Among the orders he might pass in disposing of an
v.
appeal are "(b) set aside the assessment .............. .
Dabaki Devi and direct the assessing authority to pass a fresh order
D --
after sm:h further enquiry as may be directed." Mr.
as Gupta J. Sastri did not dispute the position that if the appellate
authority exercised the power underlined the "assessing authority" can proceed to carry out the fresh
assessment only under s. 12 and that in that event,
his right to proceed further in the way of assessment
would be subject to the limitation of 3 years prescribed by the second proviso to s. 12(6). The result
would thus be that the appellate authority could
pass an order setting aside the assessment at any
time but the assessing authority cannot give effect
to the order to make a fresh assessment if by tbat
date three year period is past. This would virtually
mean that if on the date the appeal was disposed
of the 3 year period was over or nearly over, the
powers which the appellate authority could exercise
would be restricted to those set out in cl. (a) of s. 23(2),
a result which would never have been contemplated.
In other words, if the construction suggested by the
appellant were accepted, we would have the anomalous situation that if the appellate authority set aside
the assessment
and remanded it for fresh orders,
no fresh assessment can be done, but that if instead
of so doing, he himself effected the same reassessment, there would be no bar of limitation. On
such a construction therefore it would be at the option
of the appellate authority, depending on the precise
order he passed to decide, whether the period of
limitation which the statute had prescribed should
be attracted to an assessment or not. That should
be sufficient to reject the appellant's argument that
s. 23(2) was itself the source of power to effect an
assessment. We need hardly add that what applies
to an appeal under s. 23(2) applies to a revision under
s. 23(3), as the powers of the revising authority and
the orders it might pass are not conceived of as differ- 1
•
r
5 S.C.R.
SUPREME COURT REPORTS
267
ing in any manner from those of the appellate authority.
1963
We have, therefore, no hesitation in holding that
even when an appellate or revisional authority is
The State of
effecting a fresh assessment by enhancing it, it is
Orissa
exercising the power which is conferred by s. 12,
v.
and so to speak, doing the duty which an assessing
Dabaki Devi
authority would or ought to have performed. Any
order of assessment made by the appellate authority
Das Gupta J.
or as in the present appeals by the revising authority
must therefore be held to be orders passed under
s. 12 as well as under s. 23. Consequently, the period
of limitation prescribed in the second proviso in
S. 12(6) will in terms become applicable.
But, says Mr. Sastri, look at the anomalous
position that will arise if this period of limitation
of 36 months be held to apply to appellate or revisional orders of assessment. In many cases, he
rightly points out, it may happen that the original
order of assessment will be made either on the last
date of the 36 months' period or only shortly before
that. In all such cases no appellate order or revisional order of assessment can possibly be made
within this period of 36 months. Mr. Sastri has
tried to persuade us that such a result could not
have been intended by the legislature. So, he says,
the legislature should be held to have intended that
this period of limitation applies only to the original
orders of assessment. The obvious answer to this
argument is that if that was the intention of the legislature nothing could have been easier than to say
so. It is pertinent also to point out in this connection
that except for this provision in the second proviso
to s. 12(6) the Act itself contains no provision as
regards limitation for orders of assessment. If Mr.
Sastri is right, the position in law would be that once
an original order of assessment has been made within
this period of 36 months the appellate authority
or the revising authority may make his order of assessment after any amount of delay. We find it difficult
to believe that the legislature while prescribing a
period of limitation about original orders of assess-
1963
The State of
Orissa
V,
Dabaki Devi
Das Gupta J.
268
SUPREME COURT REPORTS
[1964]
'
ment would refrain from prescribing any such period
of limitation in respect of appellate or revisional
orders of assessment. It is true that the rule-making
authority has itself prescribed in Rule 54 the period
of one year from the date of the pa&sing of the order
as the time within which the Collector or the Revenue
Commissioner may of his own motion revise the
order. But this prescription of a period within which
the power may be exercised might not have been
made at all or may at any time be deleted. Even
the rule-making authority has not prescribed any
period of limitation within which an appellate order
of assessment, can be made or the time within which
the Cpllector or the revising authority when exercising revisional jurisdiction on an application by the
dealer must pass the order.
The important point
is that so far as the legislature is concerned no special
rule for limitation as regards any revisional order
or appellate order had been made. The fact that
no period of limitation has been prescribed by the
legislature itself for the passing of any order of assessment by the appellate authority or the revising authority
is a further reason for thinking that the legislature
intended that the period of limitation prescribed
in s. 12(6) should apply to all orders of assessment
irrespective of whether they were original orders,
or appellate orders or revisional orders.
The difficulty pointed out by Mr. Sastri may
really arise in certain cases. It is reasonable
to
expect that in the large majority of cases such a
difficulty will not arise if the original order of assessment is made expeditiously so that it will be possible
for the appellate authority or the revising authority
to act within this period of 36 months. If in certain
cases the difficulty does arise that is not, in our opinion,
a sufficient reason, in view of the several considerations mentioned above, to think that the legislature
intended, without saying so, that the period of limitation prescribed applied only to original orders of
J
assessment.
SS.C.R.
SUPREME COURT REPORTS
269
Mr. Sa~tri drew our attention to a decision ot
the Patna High Court in Gajo Ram v. State of Bihar('l
where construing a some what similar proviso in
s. 10(6) of the Bihar Sales Tax Act, 1944 that Court
held that the 24 months' period of limitation prescribed there applied only to original orders of assessment. The learned Judges appear to have been impressed by the argument that absurdity will remit
if the period of limitation for the original orders
of assessment and orders of assessment made by the
appellate or revisional authority be the same.
For
the reasons we have already mentioned, that argument does not appear to us to be convincing.
We have therefore reached the conclusion that
,;:.
the impugned orders of assessment were barred by
limitation, having been made more than 36 months
after the expiry of the period for which the tax was
assessed. We hold therefore that the High Court
was right in quashing the several orders of assessment.
The appeals are dismissed with costs. There
will be one set of hearing fee for all the appeals.
ORDER
In accordance with the opinion of the majority,
the appeals are dismissed with costs. One set of
hearing fee for all the appeals.
(I) 7 Sales Tax Cases 248.
1963
The State of
Orissa
v.
Dabaki Devi
Das Gupta J.