NATHMAL TOLARAM vs. SUPERINTENDENT OF TAXES, DHUBRI AND ANOTHER.

CIVIL APPEAL No. 196/1958Supreme Court[1961] 2 S.C.R. 4018 October 1960Bench: 5 JudgesAuthor: S.K. DAS, M. HIDAYATULLAH, K.C. DAS GUPTA, J.C. SHAH, N. RAJAGOPALA AYYANGAR8 pages
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What were the facts?

The appellants, dealers registered under the Assam Sales Tax Act, 1947, submitted a return for the period April 1, 1948, to September 30, 1948. The Superintendent of Taxes assessed them for sales of jute despatched to Calcutta during this period. Appeals to the Assistant Commissioner and Commissioner of Taxes were unsuccessful. The appellants then sought a reference to the High Court on whether these jute sales were taxable. The High Court opined that the consignments were not sales within the meaning of Section 2(12) of the Act and thus not taxable, but expressed no opinion on whether they could be assessed under the Explanation to Section 2(12). The Commissioner directed the Superintendent to dispose of the case in accordance with the High Court's judgment. The Superintendent, on January 30, 1953, issued a notice to the appellants to produce evidence to determine if the sales fell under the Explanation to Section 2(12). The appellants contended this was beyond the three-year limitation period under Section 19.

What did the Supreme Court hold?

The Supreme Court held that the High Court, in answering the reference, exercised an advisory jurisdiction and did not direct the sales tax authorities to proceed with or refrain from assessing the appellants. The High Court merely gave its opinion that the transactions were not sales within the meaning of Section 2(12) and were not taxable. While the Commissioner directed the Superintendent to dispose of the case in accordance with the High Court's judgment, the Superintendent's subsequent action of issuing a notice to re-open assessment proceedings to determine taxability under the Explanation to Section 2(12) was without authority. The Court found that the Commissioner had not issued any notice under Section 19A or exercised his revisional authority under Section 31. Therefore, the Superintendent had no jurisdiction to initiate fresh reassessment proceedings under Section 19 after the expiry of three years from the assessment period. The principle from the Bombay Trust Corporation case was distinguished as it involved the Commissioner exercising revisional authority, which was not the case here. The appeal was allowed, and the proceedings commenced by the Superintendent's notice dated January 30, 1953, were quashed.

What were the issues?

1. Whether the Superintendent of Taxes had the jurisdiction to commence further proceedings for assessment after the expiry of three years from the end of the assessment period, as provided by Section 19 of the Assam Sales Tax Act, 1947, in light of the High Court's opinion and the Commissioner's direction. Assessee's contention: The Superintendent had no jurisdiction to commence further proceedings for assessment as the notice issued was beyond the three-year period prescribed by Section 19 of the Act. Revenue's contention: The judgment does not record specific arguments from the revenue regarding the Superintendent's jurisdiction or the applicability of Section 19.

Which sections of the Income-tax Act were involved?

Section 2(12),Section 17(4),Section 19,Section 19A,Section 31,Section 32(8),Section 34

AI-generated summary — verify with the full judgment below

z960 Octobef' z8. 40 SUPREME COURT REPORTS [1961] . NATHMAL TOLARAM v. SUPERINTENDENT OF TAXES, DHUBRI AND ANOTHER. (S. K. DAS, M. HIDAYATULLAH, K. c. DAS GUPTA, J.C. SHAH and N. RAJAGOPALA AYYANGAR, ,JJ.) Sales Tax-Reassessment-] uri iction of the Sales Tax Officer-High Court's power in References-Advisor>' juri iclion- Period of limitation for proceedings for reassessment-Assam Sales Tax Act. r947 (Assam r7 of r947), ss. 2(r2). r6(2), r9, r9A, 32(8),

34.

The appellants who were dealers registered under the Assam Sales Tax Act, r947, submitted a return of their turnover for the account period April I, r948 to September 30, r948, which included sales in Assam of all goods other than jute. The Superintendent of Taxes, however, summarily assessed the appellants under sub-s. 4 of s. 17 of the Act by order dated September 30, 1950, to pay tax on sales of jute despatched by them to Calcutta during the account period. The order of assessment was confirmed by the Commissioner of Taxes. On an application by the appellants the Commissioner referred certain questions of law arising out of the assessment to the High Court, which then gave its opinion that as the c

The order continues below.

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