1. On 22nd May, 1957, the petitioner was assessed to sales tax for the period between 7th November, 1953, and 26th November, 1954, in regard to his turnover as a registered dealer in sanitary goods. By the same order a penalty of Rs. 2,000 was levied on him. He was assessed to sales tax of Rs. 8,888-0-9 on a 'best judgment assessment' made under section 11(4) of the C.P. and Berar Sales Tax Act, 1947 (XXI of 1947) (hereafter referred to as the Sales Tax Act). The petitioner appealed but the appeal failed because he did not deposit the amount of sales tax ordered to be deposited. The appeal was dismissed on the short ground that the petitioner failed to make the deposit. That dismissal took place on 9th December, 1957. In a revision before the Assistant Commissioner of Sales Tax (Appeals), Eastern Division, the assessment was revised and the petitioner was saddled with sales tax amounting to Rs. 6,657-74 nP. The penalty was likewise reduced, and a penalty of only Rs. 1,500 was imposed. The petitioner before us challenges both the order of assessment and the order of imposition of penalty.
2. So far as the order of assessment is concerned the only ground is that notices served on the petitioner before making the assessment were not in compliance with law and, therefore, the subsequent assessment is illegal and should be declared bad in law. The facts necessary for the determination of this question arc not in dispute. The first notice in form XII was issued against the petitioner on 31st October, 1955. The petitioner appeared on 11th November, 1955, and later on 13th December, 1955, and requested that the case should be adjourned. The case was then fixed for 21st December, 1955, but on that date no one appeared. Thereafter a second notice was issued on 17th March, 1956, and the assessment case came up before the Sales Tax Officer on 13th April, 1956. The petitioner admittedly was not present at that hearing and so, the Sales Tax Officer passed the order dated 22nd May, 1957. The point taken in the petition is that order of assessment was made under section 11(4) which read with rule 32 of the Sales Tax Rules (sic) without the required notice. Rule 32 requires that the dealer shall be given notice 'calling upon him to show cause by such date, ordinarily not less than 30 days from the date of issue of the notice, as may be fixed in that behalf ...' The contention is that the petitioner was not given notice of 30 days, moreover the proviso to sub-section (4) of section 11 requires that he should be given a reasonable opportunity of being heard. In the instant case the first notice was given on 31st October, 1955, for appearance on 11th November, 1955. The second notice was given on 17th March, 1956, for appearance on 13th April, 1956. Under the first notice the petitioner had about 11 days and under the second notice about 27 days. So far as the second notice is concerned, the ordinary period contemplated by the rule was less by about 3 days.
3. We do not think that, in the circumstances, we can hold that the petitioner was not given a reasonable opportunity of being heard within the meaning of sub-section (4) of section 11. The petitioner well knew when he received the first notice that the Sales Tax Officer was proceeding to assess him and intended to do so. It is in the light of this fact that we must judge the adequacy of the second notice. The second notice gave him 27 days' time and, in our opinion, that time itself was sufficient compliance with the proviso to sub-section (4) of section 11 and rule 32. The rule requires that the notice shall be 'ordinarily not less than 30 days from the date of issue'. The use of the word 'ordinarily' indicates that it was not the intention to prescribe that a 30 days' notice shall be the invariable rule. That would also indicate what the Legislature had in view when it provided in section 11(4) that the assessee shall be afforded a reasonable opportunity of being heard. When we consider the fact that the petitioner had previous knowledge that assessment proceedings had commenced against him, we think that the notice of 27 days was more than adequate and he had a very reasonable opportunity of being heard. What is reasonable is by the statute and the rules entrusted for determination by the authorities concerned, and we do not think that under the circumstances we can hold that the view taken by the authorities was so erroneous or perverse as to call for interference under our Constitutional powers. Then we turn to the question as to the penalty.
4. The power to impose a penalty is contained in section 10 of the Sales Tax Act. Sub-sections (1) and (3) of section 10 run as follows :
'10. (1) Every such dealer as may be required so to do by the Commissioner by notice served in the prescribed manner and every registered dealer shall furnish such returns by such dates and to such authority as may be prescribed.'
'(3) If a dealer fails to comply with the requirements of a notice issued under sub-section (1) or a registered dealer fails to furnish his return for any period within the prescribed time to the prescribed authority without any sufficient cause, the Commissioner may, after giving such dealer a reasonable opportunity of being heard, direct him to pay, by way of penalty, a sum not exceeding one-fourth of the amount of the tax which may be assessed on him under section 11.'
5. These provisions relating to the imposition of penalty have to be read along with section 16 of the Sales Tax Act. Section 16 provides as follows :
'16. Subject to such restrictions and conditions as may be prescribed, the Commissioner may, by order in writing, delegate any of his powers under this Act except those under sub-section (2) of section 24 to any person appointed under section 3 to assist him : Provided that if the power to impose penalty conferred upon the Commissioner by sub-section (3) of section 10, sub-section (5) of section 11, section 11-A, and section 22-C is delegated by him under this section to any person appointed under section 3 to assist him, such person shall not exercise the power without obtaining the previous approval of the Commissioner.'
6. It is clear that the proviso to section 16 governs the exercise of the power under section 10(3). Section 10(3) in its turn deals with two classes of cases. Firstly, the case where a dealer fails to comply with the requirements of the notice issued under sub-section (1), and secondly, where a registered dealer fails to furnish his return for any period within the prescribed time to the prescribed authority without any sufficient cause. By section 16 the Commissioner has to approve the action to be taken under section 10(3). It may be noticed here that so far as section 16 is concerned it speaks of the Commissioner and no other authority. But the opening words of section 16 permit the Commissioner to delegate any of his powers under the Act, except the powers under section 24(2), to any person appointed under section 3 of the Act to assist him 'subject to such restrictions and conditions as may be prescribed.' The argument on behalf of the petitioner has been that, in the instant case, the Commissioner did not approve of the imposition of the penalty under section 10(3). On the other hand, admittedly, it was the Assistant Commissioner who gave his approval. The question therefore that arises for our determination is, whether the approval of the Assistant Commissioner was sufficient compliance with the proviso to section 16.
7. On behalf of the department reliance has been placed upon the provisions of rule 67 read with section 28 of the Sales Tax Act under which the rules purport to be made. The relevant provision of rule 67 reads as follows :
'67. Delegation of Commissioner's powers. - The Commissioner shall not delegate any powers other than those enumerated below in respect of the sections mentioned, nor shall be delegate any power specified in column (3) to any officer below the rank specified in the corresponding entry in column (4) or contrary to the conditions mentioned therein :- ------------------------------------------------------------------------ Serial Section Description of Designation of officer No. power. and conditions of delegation. ------------------------------------------------------------------------ (1) (2) (3) (4) ------------------------------------------------------------------------ 7 10 To direct a dealer Deputy Commissioner (with who fails to furnish the previous approval of returns for any the Commissioner). Assistant period within the Commissioner (with the prescribed time to previous approval of the the prescribed Commissioner). Sales Tax authority without Officer (with the previous any sufficient approval of the Assistant cause to pay a Commissioner). Assistant penalty. Sales Tax Officer (with the previous approval of the Assistant Commissioner).' ------------------------------------------------------------------------
8. It will be noticed that this provision of rule 67 is relative to the power under section 10(3) to direct a dealer who fails to furnish returns for any period within the prescribed time to the prescribed authority without any sufficient cause, to pay a penalty. We have already indicated in discussing the provisions of section 10(3) that they deal with two classes of cases. It is obvious from the entry in column 3 under serial No. 7 in rule 67, that that entry deals only with the second of the two classes dealt with in section 10(3), and it is with reference to that class that the provision is made in column 4 giving power under section 10(3) to the Assistant Sales Tax Officer but subject to the 'previous approval of the Assistant Commissioner.'
9. It was rightly pointed out to us that here there is an apparent conflict between the provisions of section 16, proviso, which expressly limits the power of approval to the Commissioner, whereas the entry No. 7 gives the power of approval to the Assistant Commissioner. On behalf of the department Mr. Palshikar urged that in view of section 28 under which rule 67 was enacted, there is here an apparent conflict between the two provisions of the statute itself and so an attempt must be made to reconcile the two provisions. He referred to section 28(2)(n) which runs as follows :-
'In particular and without prejudice to the generality of the foregoing power, the State Government may make rules prescribing - (n) the conditions subject to which the Commissioner may delegate his power under section 16.'
10. The argument of Mr. Palshikar is that rule 67 was made under this power in clause (n) and, therefore, if there is any conflict between the rule read with section 28 and section 16 it behoves us to reconcile that conflict, and the manner in which he suggested the conflict could be reconciled is that we should hold that the rule giving the power to the Assistant Commissioner is, by virtue of section 28, a further restriction upon the provisions of section 16.
11. We are quite unable to accept this contention because, in our opinion, there does not appear to be any conflict between the rule and the section. In fact, as we shall presently show, the two deal with different subjects and though their content may in some measure overlap, it is possible to hold that both these provisions have the force of law and can simultaneously apply. We have already indicated that the entry in serial No. 7 in rule 67 deals with only the second class of cases contemplated in section 10(3), namely, where a dealer fails to furnish his returns. The rule does not deal with the first class of cases contemplated in section 10(3), namely, where a dealer fails to comply with the requirements of a notice issued under sub-section (1).
12. Turning to the provisions of section 16, however, we find that this distinction between the two classes contemplated in sub-section 10(3) is not made in the proviso to section 16. On the other hand, the proviso to section 16 applies to both the classes of cases in sub-section (3) of section 10. Therefore, reading the provisions of section 16 together with rule 67 it is clear that rule 67 has provided for the previous approval of the Assistant Commissioner in the case only where a dealer fails to furnish returns for any period, whereas the proviso to section 16 makes provision for the previous approval of the Commissioner in both the classes of cases contemplated by section 10(3). It may be that where the second class is concerned the department may come up against an additional difficulty that it has to obtain the approval first of the Assistant Commissioner under entry No. 7 of rule 67 and also later the approval of the Commissioner under the proviso to section 16.
13. Mr. Palshikar urged that it could not have been the intention of the draftsman of rule 67 that a dual approval should be secured before the order contemplated under section 10(3) is passed. It is not the function of the Court to inquire what was the purpose of the draftsman, and whether the object was reasonable or not, so long as we can find that the terms of a rule or of a section are clear and can be given effect to without impinging upon the provisions of the statute itself. We think that in this case it is possible to construe both these provisions in the manner in which we have done, and in that event neither of the two approvals impinges upon the other. The consequence may only be that in the case where a penalty is sought to be imposed upon a dealer who fails to furnish returns for any period, a dual approval of two authorities may have to be obtained, but we do not see that is a very great hardship.
14. On the other hand, we find from a perusal of the other provisions of the Act that the imposition of the penalties under the Sales Tax Act is treated on a special footing throughout the Act. Whereas in the case of an offence under the Act, for which a prosecution has to be sanctioned, the power of the Commissioner under section 16 is not made delegate table at all, in other cases it is made delegate table subject to conditions and restrictions, and in the case of section 10(3), the first part, it is made delegate table subject to the approval of the Commissioner alone. Therefore, it seems to us that the Legislature was specially anxious to safeguard the assessee against any penal provisions of the Act, and it is possible that by enacting rule 67, entry No. 7, it was intended to provide that in that particular case a dual sanction was necessary. We say this because a considerable argument was advanced before us as to the object behind the enactment. We have already said, however, that we cannot consider the object where the words of the statute are clear, but since the argument was advanced, we have considered it and we do not think that even that argument can be sustained.
15. In the view we have taken, we do not think that we need consider the authorities relied upon by Mr. Palshikar as to the principles of interpretation of statutes where it is laid down that as far as possible an attempt must be made to reconcile conflicting provisions of an enactment. As we have pointed out, there does not appear to arise any conflict in the instant case.
16. Upon the view we have taken, it must be held that the penalty imposed in the instant case was without the prior approval of the Commissioner under the proviso to section 16 of the Sales Tax Act and, therefore, the imposition of the penalty must be set aside. So far as the order of assessment is concerned, the order of assessment is upheld and the contentions of the petitioner negatived. Since success and failure are fairly equal, there shall be no order as to costs.
17. Ordered accordingly.