ORDER
V.K. Singhal, J.
1. All these petitions are disposed of by this common judgment since the controversy involved is common.
Notices issued Under Section 12A of the Karnataka Sales Tax Act, 1957, relying the decision given in Ramco Cement Distribution Co. Pvt. Ltd. v. State of Tamil Nadu [1993] 88 STC 151 (SC) have been challenged in these petitions. It is stated that the notices are time-barred and that the provisions of Section 12-A(2) are not applicable. The said proviso is as under :
“12-A(2) In computing the period of limitation for assessment of the escaped turnover under this section, the time during which an assessment has been deferred on account of any stay order granted by any court or other authority in any case, or by reason of the fact that an appeal or other proceeding is pending before the appellate Tribunal or the High Court or the Supreme Court, shall be excluded :
Provided that nothing contained in this section limiting the time within which any action may be taken or any order, assessment or reassessment may be made, shall apply to an assessment or reassessment made on the assessee or any person in consequence of, or to give effect to any finding, direction or order made Under Sections 20, 21, 22, (22A), 23 or 24 or any judgment or order made by the Supreme Court, the High Court, or any other court.”
2. The wording in Section 12-A(2) “in consequence of, or to give effect to, any finding, direction or order” should be pertaining to the assessee.
Reliance is placed on the judgment given in the case of Hungerford Investment Trust Ltd. v. I.T.O. where the proviso to Sub-section 3 of Section 34 of the Income-tax Act were interpreted by the apex Court. It was found that if the person is intimately connected with the assessee he would be covered by the phrase “assessee or any other person”. The decision given in Income-tax Officer v. Murlidhar Bhagwan Das , was accepted and applied. In Murlidhar’s case , the words “assessee or any other person” were interpreted to mean a person who would be liable to be assessed for a whole or part of the income under appeal or revision.
In the case of S. Zoraster & Company (Supplies) Pvt. Ltd. v. State of Rajasthan [1995] 99 STC 281, the High Court of Rajasthan held that the extended time for reassessment to give effect to an order of competent court, would mean an order passed under the sales tax law and not under any other Act.
In S.C. Prashar v. Vasantsen Dwarkadas , Godbole (P.V.), Income-tax Officer v. Jagannath Fakirchand and Commissioner of Income-tax v. Sardar Lakhmir Singh [1963] 49 ITR 70, it was observed that the second proviso to Section 34(3) of the Income-tax Act relating to any person other than the assessee is a stranger and has nothing to do with the assessment proceedings in which a finding or direction is given is ultra vires Article 14 of the Constitution.
In Daffadar Bhagat Singh and Sons v. Income-tax Officer , the view taken in Murlidhar Bhagwan Das’s case , was again reiterated.
In Rajinder Nath v. Commissioner of Income-tax and Consolidated Coffee Ltd. v. Income-tax Officer on the term finding, direction or order the view expressed in Murlidhar Bhagwan Das’s case , was upheld.
In Navabharat Agrl. & Commercial Corporation v. Commissioner of Commercial Taxes , it was held that pursuant to the law declared by the authority under the Act, whose orders are binding on the assessing authority, the assessing authority can reopen the assessment Under Section 14(4) of the Act.
3. I have considered over the matter.
The power Under Section 12-A for assessment of escaped turnover can be exercised if the assessing authority has reason to believe that the whole or part of the turnover of a dealer has escaped the assessment to tax or under-assessed or assessed at too low a rate. The reason to believe for a assessing authority could be for different grounds. If a law is declared by the apex Court then under Article 141 of the Constitution of India it is binding. The assessing authority, therefore, has the jurisdiction to invoke the provisions of Section 12-A.
4. The second question is of limitation.
Section 12-A(1) provides the limitation of eight years from the expiry of the year to which the tax relates. The assessing authority can proceed to assess or reassess the dealer after issuing the notice. It is not necessary that the assessment itself should be completed within a period of eight years.
The other question which arises is as to whether the bar of limitation could not have come in the way assessing authority in proceeding for assessment/reassessment Under Section 12-A if a finding or direction or order has been given in the case of any other person. It may be observed that the proceedings can be taken in consequence of or to give effect any finding, direction or order made Under Sections 20, 22, 22-A, 23, 24, etc. If a judgment or order has been given by the High Court or Supreme Court then also there is no problem. The word “any person” which has been used in the proviso though is similar to the provisions of the Income-tax Act, but may have a different concept in sales tax law. If a judgment is given by the Supreme Court or by the High Court of that very State, the judgment being binding could be a ground for reopening the assessment or making the assessment of escaped turnover. But if the judgment itself has been given, in some other case unconnected with the assessee, then it cannot be interpreted with the word “any person” referred under the proviso to Section 12-A(2) should even extend the limitation of eight years as prescribed Under Section 12-A(1). It is stated that the appeal against the order passed Under Section 25-A are pending. Under the proviso to Section 12(B) (sic), the time limit prescribed Under Section 12(1) or 12(2) is not applicable for an action to be taken or order assessment or reassessment to be made. The assessment has to be made of the assessee or any person ; such assessment could be in consequence of or to give effect to any finding, direction or order as mentioned in the proviso.
Learned counsel for the respondent has relied on the decision given in the case of N.A. Jailabdeen v. State of Kerala [1999] 113 STC 100 (Ker), wherein it was held that initiation of reassessment proceedings applying the decision given in another case by the Supreme Court is justified as the Supreme Court does not make the law and only declares the existing law. The word “any person” here could therefore only be interpreted to mean a person other than the assessee. The words “in consequence of or to give effect” are not in dispute. But if the assessment or reassessment is made in consequence of or to give effect to any finding, direction or order of the various authorities mentioned in the proviso, the directions could be interpreted to mean the directions given by the said authority or court in the case. The finding also stand on the same footing and therefore the finding recorded in a particular cases are sufficient for initiation of the proceedings for assessment/reassessment in that case. If the direction is given in that very case, then it has to be considered that the directions relate to that very assessee as held in the case of Murlidhar Bhagwan Das [1964] 52 STC 335 (SC). If there is no finding or direction and it is only the order of judgment of the High Court and Supreme Court in another case, then for that purpose it has to be seen that the proviso to Section 12-A(2) could be considered as an extension to the main section and thus the order or judgment referred in the proviso of the High Court, Supreme Court or any other court will extend the period of limitation. Section 12-A(2) has extended the time-limit during which the stay was granted by any court or any other authority. It is only the time during which the stay granted is extended. But in a case where the stay is not granted and ultimately the matter is decided against the assessee requiring to make the assessment on the basis of the ultimate order or judgment given then the proviso further extends the time but, if a judgment is given in other case, then it would justify reopening of the assessment only within the time prescribed Under Section 12-A(1) and if it is in the case of the same assessee or person then, proviso to Sub-section (2) of Section 12-A thereof extends the time-limit for initiation of the assessment/reassessment of that assessee. The petitioners may file their objections to the respondent who may decide the same following the observations made above.
Petitions stand disposed of.