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Sashi Prasad Baruah Vs. Agricultural Income-tax Officer and ors. - Court Judgment

LegalCrystal Citation
Subject;Direct Taxation
CourtGuwahati High Court
Decided On
Case NumberCivil Rule No. 151 of 1967
Judge
ActsAssam Agricultural Income Tax Act, 1939 - Sections 19(1), 19(2), 20(4) and 30
AppellantSashi Prasad Baruah
RespondentAgricultural Income-tax Officer and ors.
Appellant AdvocateS.K. Ghose, Adv. General, Nagaland, J.P. Bhattacharjee and D.C. Goswami, Advs.
Respondent AdvocateJ.C. Medhi, Adv. General, Assam and A.M. Mazumdar, Junior Government Adv.
Excerpt:
- - the agricultural income-tax officer, therefore, had no jurisdiction to make the best judgment assessment under section 20(4) of the act. if, therefore, section 30 applies in this case, the order is clearly without jurisdiction being barred by the rule of three years laid down under that section. that is why the learned advocate-general, assam, sought to establish service by relying upon annexures 'a' and 'b'.we are, however, clearly of the opinion that service of notice under section 19(2) has not been established in this case and hence the order of assessment being beyond the period of three years from the end of the relevant financial year is without jurisdiction and invalid......of rs. 1,01,605 for the year. the petitioner states that no notice under section 19(2) of the assam agricultural income-tax act, 1939, hereinafter called ' the act ', was served upon him prior to the order of assessment. as the tax demand has not been complied with by the petitioner, the respondent no. 1 issued certificate for recovery of the tax and a bakijai proceeding was started against the petitioner in the court of the bakijai officer, jorhat. in connection with the aforesaid bakijai proceeding, steps were taken in land sale case no. 60/1968 for sale of immovable properties. 2. the petitioner raised in his petition several pleas including a challenge to the validity of some of the provisions of the act and the rules framed thereunder. the learned advocate-general, nagaland,.....
Judgment:

Goswami, C.J.

1. The petitioner is the managing director of Thengalbari Tea Estate (Private) Ltd. with its head office at Na-ali, Jorhat. The company carries on business in tea and owns and possesses several tea gardens in the State of Assam including the Thengalbari Tea Estate. The Agricultural Income-tax Officer, Shillong (respondent No. 1), by an order dated June 30, 1962, determined the income of the petitioner from cultivation, manufacture and sale of tea of Thengalbari Tea Estate at Rs. 3 00 000 for the assessment year 1957-58, and assessed the petitioner to pay the agricultural income-tax of Rs. 1,01,605 for the year. The petitioner states that no notice under Section 19(2) of the Assam Agricultural Income-tax Act, 1939, hereinafter called ' the Act ', was served upon him prior to the order of assessment. As the tax demand has not been complied with by the petitioner, the respondent No. 1 issued certificate for recovery of the tax and a Bakijai proceeding was started against the petitioner in the court of the Bakijai Officer, Jorhat. In connection with the aforesaid Bakijai proceeding, steps were taken in Land Sale Case No. 60/1968 for sale of immovable properties.

2. The petitioner raised in his petition several pleas including a challenge to the validity of some of the provisions of the Act and the Rules framed thereunder. The learned Advocate-General, Nagaland, while arguing the petitioner's case before us, confines himself only to one submission. He contends that in the absence of a notice under Section 19(2) of the Act served on the petitioner, the assessment is one under Section 30 of the Act and hence the order of assessment is illegal and without jurisdiction.

3. It is specifically averred by the petitioner in paragraph 4 of the petition that 'no notice under Section 19(2) of the Act was served upon the petitioner and the order of assessment was passed without service of such notice upon the petitioner.' With reference to this allegation of the petitioner, the Assistant Commissioner of Taxes, Shillong, in paragraph 3 of his counter-affidavit states as follows :

'..... the petitioner was assessed to tax payable under the Assam Agricultural Income-tax Act, 1939, ex parte, on June 30, 1962, for the assessment year 1957-58, after the general notice under Section 19(1) of the Act, for the submission of the return of agricultural income for the previous year, suo motu, by all persons who were liable to pay tax thereunder was published in the Assam Gazette, dated April 17, 1957, and after the statutory notice under Section 19(2), ibid, was issued and served on the petitioner, vide the communication bearing No. 2632/R-85, dated July 18, 1957, within the relevant financial year 1957-58. A copy of the relevant order, dated July 16, 1957, passed by the respondent No. 1 on the order sheet for the assessment year 1957-58, and also a copy of the relevant entry in the 'register of letters issued' by the respondent No. 1 showing the issue of the said notice in compliance with the aforesaid order dated July 16, 1957, are annexed hereto as annexures 'A' and 'B', respectively. I further state that, besides the above statutory notices, the petitioner was also reminded for the submission of the returns of agricultural income and certified copies of the assessment orders under the Income-tax Act, 1922, in respect of this assessment year 1957-58, along with those for the assessment years 1956-57 and 1958-59 to 1961-62, vide annexure 'C' attached hereto. I also state that the petitioner did not submit the return and the certified copy of the assessment order under the Income-tax Act, 1922, in spite of the above communications received by him from respondent No. 1.'

4. If the petitioner did not submit any return in answer to the general, notice under Section 19(1) of the Act, the Income-tax Officer was required under the law to proceed under Section 19(2), in which case he is required to serve a notice on the petitioner under that sub-section. If this has not been done, it will be a case of income escaping assessment and Section 30 will be attracted, in which case, there will be a question of limitation provided thereunder.

5. The short question that first arises for consideration is whether the notice under Section 19(2) was served on the petitioner. Ordinarily such a question will be a disputed question of fact. But, since the very foundation for the order is a service of notice on the petitioner under Section 19(2), the question will have to be decided in this case as a matter relating to the jurisdiction of the officer on the basis of the affidavits and such proof as is produced before us.

6. The department has sought to establish service of notices by producing a copy of the order under Section 19(2) dated July 16, 1957 (annexure 'A'). Next, a copy of the entry in the issue register (annexure 'B') is produced showing that a notice has been issued. Whether the notice was in fact issued is not established from this entry. It is also not established whether the notice was served by post or served personally on the petitioner through 'peon book'. The evidence produced by the department read with the affidavit does not establish that the notice under Section 19(2) was served on the petitioner. The fact that by annexure ' C ', dated February 6, 1962, the petitioner was requested to furnish the returns and copies of central assessment orders for 1956-57 to 1961-62 does not establish service of the notice under Section 19(2). There is also no evidence to show that even this notice dated February 6, 1962, was served on the petitioner. Not even an entry in the issue register is produced with regard to this notice. Section 19(2) in terms provides that 'the Agricultural Income-tax Officer may, before the end of the relevant financial year, serve a notice '. It must be, therefore, established that the notice has been served, which has not been done in this case. The Agricultural Income-tax Officer, therefore, had no jurisdiction to make the best judgment assessment under Section 20(4) of the Act. It is a clear case where Section 30 will be attracted.

7. We will, therefore, read Section 30, as it stood at the time of the assessment order and so far as it is material for our purpose :

' If for any reason any agricultural income chargeable to agricultural income-tax has escaped assessment for any financial year.....the Agricultural Income-tax Officer may, at any time within three years of the end of that financial year serve on the person liable to pay agricultural income-tax on such agricultural income or, in the case of a company on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under Sub-section (2) of Section 19, and may proceed to assess or reassess such income. .....'

8. The requirement of three years under this section has been extended to eight years by the Assam Act, XV of 1966, and the learned Advocate-General, Assam, concedes that the Amendment Act is not applicable in this case, which will be governed by the law as it stood prior to the amendment. If, therefore, Section 30 applies in this case, the order is clearly without jurisdiction being barred by the rule of three years laid down under that section. That is why the learned Advocate-General, Assam, sought to establish service by relying upon annexures 'A' and 'B'. We are, however, clearly of the opinion that service of notice under Section 19(2) has not been established in this case and hence the order of assessment being beyond the period of three years from the end of the relevant financial year is without jurisdiction and invalid. We are fortified in this view by the decision of the Supreme Court (State of Assam v. D. C. Choudhuri, [1970] 76 I.T.R. 706, [1970] 1 S.C.R. 780 (S.C.)) and also by another very recent decision of the Supreme Court in Civil Appeals Nos. 1633-1636 of 1967 (Khanikar Tea Estate v. Agricultural Income-tax Officer, Assam) delivered on July 22, 1971.

9. In the result, the application is allowed. Rule nisi made absolute. The respondents are directed to forbear from taking any action in pursuance of or in relation to the impugned assessment order. We will, however, make no order as to costs.

Baharul Islam, J.

10. I agree.


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