P.K. Goswami, C.J.
1. This judgment will govern the four Civil Rules Nos. 214, 215, 216 and 217 of 1968. The facts of C.R. No. 214 alone may be noted.
2. The petitioner No. 1 (briefly petitioner) is a registered firm under the Indian Partnership Act and runs a roller flour mill at Gauhati and the petitioner No. 2, one of the partners, manages the affairs of the firm. The Government supplies to the petitioner wheat in gunny bags and it has to mill the same in its mills and sell the wheat products to the allottees at a fixed price in the original gunny bags and the petitioner does not charge any price for the bags. The petitioner filed a return of its turnover of this business for the period ending 30th September, 1965. The Superintendent of Taxes, Gauhati, made an order of assessment on 6th July, 1967 and the taxable turnover was assessed at Rs. 11,429. The Superintendent of Taxes on 11th November, 1967, issued a notice to the petitioner under Section 19-A of the Assam Sales Tax Act, 1947 (hereinafter called 'the Act'), stating that from the information in his possession he had reasons to believe that during the return period ending on 30th September, 1965, its turnover in respect of sales of goods chargeable to tax escaped assessment to the tune of Rs. 97,830 being the value of the containers of the wheat products. The petitioner objected to the notice as illegal and without jurisdiction, but all the same submitted a return showing nil turnover under protest. This has led to this application under Article 226 of the Constitution and the petitioner obtained the present rule on 5th July, 1968 and the operation of the impugned notice of 11/13th November, 1967, was stayed.
3. Mr. S.M. Lahiri, the learned counsel for the petitioner, submits as follows:
(1) that the condition precedent for the exercise of power under Section 19-A of the Act being absent, the notice is without jurisdiction;
(2) that there was no basis for holding prima facie that the escaped assessment was to the tune of Rs. 97,830;
(3) that the powers under Section 19-A being specifically conferred on the Commissioner of Taxes, the same could not be delegated to and exercised by, the Superintendent of Taxes ;
(4) that Section 19-A confers naked and arbitrary power on the Commissioner and as such the same is ultra vires of Article 14 and Article 19(l)(g) of the Constitution of India; and
(5) that in the facts and circumstances of the case, the gunny bags used as containers for supply of flour are not liable to payment of sales tax.
4. We will take up the submissions of Mr. Lahiri in the order they are made. Mr. Lahiri addressed us on the third point first and did not choose to argue the fifth point at this stage of the matter in this proceeding, reserving his right to take up the point, if necessary, at a future time. According to him, Section 19-A(1) and Section 19-A(2) should be read and considered as an integral whole. He contends that under Section 19-A(2), if the word 'Commissioner' is substituted by the word 'Superintendent', that Sub-section becomes unworkable. According to him, in that case, the Superintendent may authorise any person appointed under Section 8 to assist him, namely, Superintendent, in investigating any case. He points out that under Section 8, the State Government may appoint a Commissioner of Taxes and such other persons to assist the said Commissioner of Taxes as it thinks fit. The State Government, therefore, is not competent under Section 8(1) to appoint any persons to assist the Superintendent. Thus, since under Section 19-A(2), it is inconceivable to give the power under that section to the Superintendent, necessarily the power under Section 19-A(1) cannot be exercised by the Superintendent, who is not specifically mentioned in the Sub-section. If the word 'Commissioner' is read for what it stands for both in Section 19-A(1) and in Section 19-A(2), there will be no anomaly, says Mr. Lahiri. The learned counsel, therefore, submits that on this interpretation the notice by the Superintendent in this case is illegal and without jurisdiction.
5. The salient scheme for exercise of powers under the Sales Tax Act is that the State Government appoints a Commissioner of Taxes and other persons to assist him in administering the Act. Under Section 8(2), the Commissioner and other persons appointed under Section 8(1) shall exercise such powers as may be conferred and perform such duties as may be required by or under the Act. Under Section 50, the Commissioner may, subject to such restrictions and conditions as may be prescribed, delegate by notification in the Official Gazette any of his powers under this Act to any person. This at once takes us to the restrictions and conditions prescribed under the rules with regard to the delegation of Commissioner's powers. By Rule 69, the Commissioner shall not delegate his powers under Section 31 (power of revision) to any officer below the rank of a Deputy Commissioner. By Rule 69-A, the officer to whom powers under Section 31 had been delegated shall exercise the powers in respect of such persons or classes of persons and in respect of such cases and areas, as the Commissioner may direct. By Rule 70, the powers to call for returns, to make assessments, to cancel or rectify them, to impose a penalty, to compound offences and to order maintenance of accounts shall not be delegated to any officer below the rank of a Superintendent. By Rule 71, the officer to Whom powers may be delegated under Section 50 shall exercise the powers subject to the provisions of the Act and the Rules thereunder and to such restrictions as may be imposed by the Commissioner in delegating the powers. It is, therefore, clear that the Commissioner can delegate his powers under the Act under Section 50, subject to the restrictions and conditions laid down under Rules 69 to 71. In this context, we may also notice Rules 3 and 4. By Rule 3(1), the State Gpvernment may appoint under Section 8(1) the classes of officers specified therein, namely, Deputy Commissioner of Taxes, Assistant Commissioners of Taxes, Superintendents of Taxes and Inspectors of Taxes. By Sub-rule (2) of Rule 3, the State Government may authorise the Commissioner to appoint Sub-Inspectors of Taxes for the purpose of this Act. By Rule 4, subject to the provisions of the Act and the Rules, the Commissioner may delegate the powers to be exercised by the officers specified in Rule 3 notifying the respective areas in which powers are to be exercised.
6. Bearing in mind the above-mentioned provisions of the Act and the Rules, it is absolutely clear that the Commissioner, who is at the apex of the administration, is not required to do assessments at the base. Although the power resides in the Commissioner, in order to carry on the tax administration smoothly, the Act provides for delegation of his powers. No objection has been made with regard to the power of delegation conferred on the Commissioner. Although at one stage Mr. Lahiri faintly mentioned that if the Commissioner is permitted to delegate his powers under Section 19-A(1), it will amount to excessive delegation of legislative functions, he did not choose-and we think rightly-to address us under that head. There is no question of excessive delegation of legislative functions if the power under Section 19-A(1) is delegated by the Commissioner to the Superintendent. This delegation is permitted under Section 50 read with the Rules. While there is some restriction regarding delegation of powers under Rules 69 and 70, there is no bar under the law against delegation of powers under Section 19-A(1) by the Commissioner to the Superintendent. The delegation of power is, therefore, perfectly, valid and the notice under Section 19-A(1) by the Superintendent cannot be held to be invalid on that ground.
7. With regard to the submission of Mr. Lahiri that Section 19-A(2) will be unworkable, we are unable to accede to the same. We find that there is a hierarchy of officers with the Commissioner at the apex and the Sub-Inspector of Taxes at the lowest rung. That being the position, there is no difficulty in working Section 19-A(2) if the Superintendent authorises an Inspector or a Sub-Inspector of Taxes, who is certainly subordinate to him, to investigate a case under the said Sub-section. Mr. Lahiri, however, emphasised that there is no one appointed under Section 8 to assist the Superintendent and, therefore, he cannot take the help of the officers appointed under Section 8 to assist the Commissioner in exercising power under Section 19-A(2). We are, however, unable to read Section 19-A(2) that way to give effect to the submission. In our opinion, the words 'to assist him' in Section 19-A(2) have no reference to Section 8 and the Superintendent, who is exercising delegated powers under Section 19-A, may authorise any of the persons appointed under Section 8 to assist him in the investigation. It is obvious that under Section 8 the State Government does not appoint persons to assist the Commissioner in investigating any case, which is what is specifically authorised under Section 19-A(2). The submission that Section 19-A(2) runs counter to Section 8 is, therefore, not well-founded. The third submission of Mr. Lahiri, therefore, cannot be accepted.
8. With regard to the fourth submission, it is submitted that if the Commissioner as well as the Superintendent may exercise powers under Section 19-A, while orders passed by the Superintendent will be appealable to the Assistant Commissioner and to the Board of Revenue, orders passed by the Commissioner under the section will not at all be appealable. There is, therefore, always a scope for arbitrariness and discrimination in exercising powers under Section 19-A, while one case may be taken up by the Commissioner and another may be done by the Superintendent. The learned Advocate-General submits that, as a matter of practice, the Commissioner after delegating powers under various sections of the Act does not exercise the same powers. We are not required to consider this aspect of the matter in that light. It is sufficient to point out in this case that the petitioner cannot make any grievance because the notice to him is issued by the Superintendent. We are, therefore, unable to entertain the objection on the score of Article 14 and Article 19(1)(g) of the Constitution in this case at the instance of the petitioner. The fourth submission of Mr. Lahiri is, therefore, of no avail.
9. We now come to the first submission of Mr. Lahiri. He submits that the condition precedent for the exercise of power under Section 19-A(1) does not exist in this case. We will, therefore, read Section 19-A(1) so far as material for our purpose :
If, upon information which has come into his possession, the Commissioner is satisfied that any turnover in respect of sales of any goods chargeable to tax under this. Act has escaped assessment during any return period or has been under-assessed or assessed at a lower rate or any deduction has been wrongly made therefrom, he may...serve on the dealer liable to pay the tax in respect of such turnover a notice...and may proceed to assess or reassess the dealer in respect of such period...
10. So far as material for our purpose, the original assessment orders in all the four cases are in identical terms and we may quote the same :
All wheat products were sold at net weight and no separate containers were charged. The prices of wheat products are fixed by the Government of India, excluding octroi, sales tax, etc. Further it is stated that gunnies which were received along with wheat were supplied with the products.
In terms of the above order, the Superintendent of Taxes accepted the returns submitted by the assessee and passed the orders on the basis of the returns in all the four cases on 6th July, 1967. The same Superintendent on 13th November, 1967, issued the impugned notices. The affidavit in each of these cases is submitted by the Assistant Commissioner of Taxes, Research and Procedure Cell and Law Cell, Assam. We may quote the material portion from paragraph 3 of his affidavit:
I submit that the petitioner in the course of his business sells gunny bags in which the wheat products dealt in by him are sold. During the relevant period also he sold gunny bags as containers of wheat products. But the petitioner was not assessed to tax by the assessment order dated 6th July, 1967, in respect of such sales of gunny bags on the ground that the containers were supplied free. In the course of subsequent investigation, however, it came to light that the prices of wheat products sold by the petitioner were fixed by the Roller Mills Wheat Products (Price Control) Order, 1965, as amended. Clause 3(2)(iii) of the said order specified that the prices of wheat products as fixed by the order were for net weight (inclusive of the cost of the bag). It is, therefore, obvious that the gunny containers sold by the petitioner were not supplied free to the customers and that a price, in fact, was charged for the same. It also, therefore, follows that the petitioner was liable to pay tax in respect of his sales of gunny containers which, however, was neither paid by him nor demanded by respondent No. 1 by his assessment order dated 6th July, 1967, thus leading to an escapement of turnovers liable to tax. This piece of information, however, came into the possession of respondent No. 1 after he had already passed the assessment order dated 6th July, 1967. It is, therefore, denied that there was no basis, as alleged, for respondent No. 1 to be satisfied that the petitioner's turnover had escaped assessment. It is submitted that respondent No. 1 passed the assessment order without considering the provisions of the aforesaid Price Control Order and that he, therefore, cannot be said to have considered all the relevant materials and records, as alleged, before passing his order dated 6th July, 1967.
He has affirmed the above as true to the information derived from the official records.
11. The stand which has been taken in the affidavit, which is not by the Superintendent who initiated the proceeding, is that the information contained in the provisions of the Price Control Order came to the officer subsequent to the assessment order. It is submitted by Mr. Lahiri that this is not the true position in view of the recitals in the original assessment order. The assessment order refers to the price of wheat products fixed by the Government of India and this necessarily establishes, according to the learned counsel, that the Price Control Order was taken note of by the Superintendent at the time of assessment. This will be, therefore, a case of change of opinion by him later, irrespective of any subsequent information. Since the affidavit has been made with reference to informations derived from the records, we ourselves examined the original records. In the order sheet of the assessment case relating to the return period ending 31st March, 1967, we find the following order recorded by the Superintendent on 11th November, 1967 :
Seen S.L.-5. Issue notice under Section 19-A fixing on 22-11-67.
The S.L.-5 (page 5 of the record) referred to in this order contains the following :
In view of the Control Order at S.L.-4, the dealer is to be assessed in respect of containers of wheat products.
Value of containers @ 2 1/2% Value of wheat
of wheat products. products.
T. E. 30-9-65 Rs. 97,830 Rs. 39,13,228
" 31-3-66 Rs. 58,754 Rs. 23,50,156
" 30-9-66 Rs. 1,43,685 Rs. 57,47,422
" 31-3-67 Rs. 1,18,321 Rs. 47,32,857
S.L.-4 in the record shows a copy of the Roller Mills Wheat Products (Price Control) Order, 1965. Clause 3 of the Order may be quoted :
Maximum ex-mill prices of wheat products.-(1) No owner or other person in-charge of a roller mill shall sell, or offer for sale, ex-mill, any of the wheat products specified in column (1) of the Table annexed to this order, at a price exceeding the price specified in the corresponding entry in column (2) thereof.
(2) For the purposes of Sub-clause (1) the prices specified are-
(i) exclusive of the pro rata amount of octroi or terminal tax, if any, paid by the mill in respect of wheat used in the manufacture of the wheat products;
(ii) exclusive of sales tax, if any, paid by the seller;
(iii) for net weight (inclusive of the cost of the bag), but where such wheat products are sold in cloth bags in quantities of 40 kg. net, 20 kg. net and 10 kg. net a sum of 70 paise, 37 paise and 19 paise respectively towards the cost of the cloth bag may be charged in addition to the said prices.
Since the same officer initiated the action under Section 19-A and his order refers to the prices 'fixed by the Government of India, excluding octroi, sales tax, etc.', it is not possible to hold in this case that he did not have before him the provisions of the aforesaid Price Control Order. His reference to octroi, etc., in the original order of assessment furnishes internal evidence of the availability and knowledge of information from the records at the time of assessment. This is, therefore, a case where the initiation of proceeding has no nexus with any subsequent information received after the assessment, but is inevitably because of the change of opinion of the officer with regard to the chargeability to tax.
12. Under Section 19-A, the information on which the officer is satisfied that any turnover chargeable to tax has escaped assessment must be information which he receives subsequent to the assessment order in order to confer upon him the jurisdiction to initiate proceedings under that section. Mere escaping of assessment is not enough, but the Superintendent is to be satisfied that there is escape of assessment based upon information which he has come by subsequent to the assessment order.
13. As discussed above, we have come to the conclusion that the Superintendent of Taxes in this case has not initiated proceedings under Section 19-A being satisfied upon information which was received by him subsequent to the assessment order. The information was already there in the records and he knew about it and also referred to the same in the original assessment order. It is, therefore, a case of mere change of opinion about the chargeability of certain turnover to tax. That being the position, the impugned notices are without jurisdiction and must be quashed, which we hereby do.
14. The view we have taken receives support from the ratio decidendi of the decision of the Supreme Court, The Commissioner of Income-tax, West Bengal v. Dinesh Chandra H. Shah and Ors.  82 I.T.R. 367 (S.C.). Although that was a case under Section 34(l)(b) of the Income-tax Act, 1922, the said section is substantially similar to Section 19-A(1) of the Assam Sales Tax Act, 1947.
15. In view of our decision, it is not necessary to deal with the second submission of Mr. Lahiri, which was not even seriously advanced by him.
16. In the result, the application in each of the Civil Rules Nos. 214, 215, 216 and 217 of 1968 is allowed. Rules nisi made absolute. We will, however, make no order as to costs.
R.S. Bindra, J.
17. I agree.