Commercial Tax Officer, Bangalore, et al. v. Sri Venkateshwara Oil Mills & Anr. et al.

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** **be1** **fore 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. _A._ _K._ _Sen,_ _S. S._ _Javali_ and _M._ _Veerappa,_ for the appellants (in C.A. No. 2593). **D** _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). **D** F _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. G 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 suffe red 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. 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. ,, E F 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