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

CIVIL APPEAL No. 2593/1972Supreme Court[1973] 3 S.C.R. 74216 March 1973Bench: 3 JudgesAuthor: K.S. HEGDE, P. JAGANMOHAN REDDY, HANS RAJ KHANNA5 pages
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What were the facts?

The case involves appeals by the Revenue against a High Court decision concerning the retrospective amendment of the Central Sales Tax Act, 1956, by the Central Sales Tax (Amendment) Act, 1969. Following a Supreme Court decision that limited the taxability of inter-state sales, the amendment aimed to tax such sales irrespective of state law limitations. However, Section 10(1) of the amendment provided relief to dealers who had not collected tax on the ground of non-levyability under the unamended Act, placing the burden of proof on the dealer under Section 10(2). Sales tax authorities sought to reopen assessments under Rule 38 of the Mysore Sales Tax Rules, 1957, citing mistakes apparent on the record due to the retrospective amendment. The High Court ruled that the Sales Tax Officer lacked jurisdiction to reopen assessments as it would require additional evidence, which was impermissible for rectifying mistakes apparent on the record.

What did the Supreme Court hold?

The Tribunal held that it is well-settled that if a subsequent legislation is given retrospective effect, the amended law must be applied to determine if there is a mistake apparent on the record. The High Court erred by not considering the impact of Section 10 of the Amendment Act. Rule 38 of the Mysore Sales Tax Rules, 1957, must be read in conjunction with Section 10 of the Amendment Act. This means that assessing authorities, before reassessing dealers, must provide them an opportunity to satisfy them that they had not collected tax. The assessees cannot claim the benefit of Section 10(1) without discharging the burden of proof placed on them by Section 10(2). The Tribunal allowed the appeals, set aside the High Court's orders, and dismissed the writ petitions. In one specific case (Malnad Arecanut Syndicate), where rectification proceedings were still pending, the Sales Tax Officer was directed to proceed according to law.

What were the issues?

1. Whether, in light of the retrospective amendment of the Central Sales Tax Act, 1956, by the Central Sales Tax (Amendment) Act, 1969, the law to be applied for determining a mistake apparent on the record is the amended law. Assessee's contention: The High Court correctly held that the Sales Tax Officer had no jurisdiction to reopen assessments as it was impermissible to receive additional evidence to determine if sales tax was collected, and therefore, Rule 38 of the Mysore Sales Tax Rules, 1957, could not be invoked. Revenue's contention: The High Court erred in its interpretation. The amended law, being retrospective, should be applied to identify mistakes apparent on the record. Rule 38 of the Mysore Sales Tax Rules, 1957, when read with Section 10 of the Amendment Act, allows for reassessment, provided dealers are given an opportunity to prove they did not collect tax, as stipulated by Section 10(2).

Which sections of the Income-tax Act were involved?

Section 10,Section 10(1),Section 10(2)

AI-generated summary — verify with the full judgment below

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

The order continues below.

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