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Commissioner of Sales Tax, Maharashtra State, Bombay Vs. Shrimal Sakharchand - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMumbai High Court
Decided On
Case NumberSales Tax Reference No. 73 of 1978 in Reference Application No. 34 of 1974 with Sales Tax Reference
Judge
Reported in[1984]57STC224(Bom)
ActsBombay Sales Tax Act, 1953 - Sections 14, 14(3), 15, 15(1), 34(1) and 43; Bombay Sales Tax (Procedure) Rules, 1954 - Rules 2, 17, 47 and 47(1); Bombay Sales Tax (validating Provisions) Act, 1957 - Sections 2(1); Income-tax Act, 1922 - Sections 22(2), 34, 34(1), 63 and 63(1), ; Uttar Pradesh Sales Tax Act, 1948 - Sections 21; Central Provinces and Berar Act, 1947 - Sections 11, 11(4), 11A and 11A(1); Code of Civil Procedure (CPC), 1908
AppellantCommissioner of Sales Tax, Maharashtra State, Bombay
RespondentShrimal Sakharchand
Excerpt:
sales tax - reassessment - sections 14, 15, 34 and 43 of bombay sales tax act, 1953 and rules 2, 17 and 47 of bombay sales tax (procedure) rules, 1954 - reassessment order challenged - notice of reassessment served on employee of assessee - said employee cannot be treated as agent of assessee on whom notice can be validly served - notice served on improper person invalid - service of proper notice mandatory to initiate reassessment - invalidity of notice renders reassessment unjustified. - [couto; m.l. pendse, jj.] in the first instance the order passed under s. 132(5) is an order of a summary nature and does not conclude the rights of the petitioners, because while passing the assessment order, it is always open to the petitioners to point out that the assets recovered in the search.....shah, j.1. the respondent-assessee in these references under section 34(1) of the bombay sales tax act, 1953 (hereinafter referred to as the said act), was a registered dealer under the said act. for the period april 1, 1954, to march 31, 1955, he was assessed under sub-section (3) of section 14 of the said act by the sales tax officer, dhule, on december 17, 1956. similarly, for the period april 1, 1955, to march 31, 1956, he was assessed under the provisions of the said act on november 29, 1957, and for the period from april 1, 1956, to march 31, 1957, on november 29, 1957. thereafter, the sales tax officer got some material from a third party on the basis of which he held that the dealer had suppressed certain purchases and corresponding sales and proposed to reassess the dealer in.....
Judgment:

Shah, J.

1. The respondent-assessee in these references under section 34(1) of the Bombay Sales Tax Act, 1953 (hereinafter referred to as the said Act), was a registered dealer under the said Act. For the period April 1, 1954, to March 31, 1955, he was assessed under sub-section (3) of section 14 of the said Act by the Sales Tax Officer, Dhule, on December 17, 1956. Similarly, for the period April 1, 1955, to March 31, 1956, he was assessed under the provisions of the said Act on November 29, 1957, and for the period from April 1, 1956, to March 31, 1957, on November 29, 1957. Thereafter, the Sales Tax Officer got some material from a third party on the basis of which he held that the dealer had suppressed certain purchases and corresponding sales and proposed to reassess the dealer in respect of such escaped turnover under section 15 of the said Act. Accordingly, on December 13, 1962, he issued three notices in form No. XIV in respect of the said assessment periods to the dealer. These notices were served on one Purshottam Darshi who was then an employee of the dealer, but was not an agent of the dealer as provided in rule 2(i) of the Bombay Sales Tax (Procedure) Rules, 1954. In pursuance to these notices the dealer's Advocate Mr. P. S. Agarwal attended before the Sales Tax Officer and filed objections to the proposed reassessment of the dealer under section 15 of the Act. He also sought adjournment of the proceedings. In the said letter of objections the validity of service of notices of reassessment in form No. XIV was not challenged. In due course on March 16, 1963, the Sales Tax Officer passed orders of reassessment under section 15 of the Act bringing to tax the turnover of purchases and sales which according to the Sales Tax Officer had escaped assessment. The dealer challenged these orders of the reassessment by filing appeal before the Assistant Commissioner of Sales Tax. The point regarding the validity of service of notices of reassessment in form No. XIV was not canvassed in this appeal and the challenge was restricted to the merits of the case. The Assistant Commissioner, however, upheld the decisions of the Sales Tax Officer and dismissed all the tree appeals. These orders in the three appeals relating to the said three periods were challenged by the dealer by filing revision applications before the Deputy Commissioner of Sales Tax. In these revision applications apart from raising the grounds already raised before the two lower authorities a further ground raised was that the reassessment under section 15 of the Act was barred by limitation. However, none of these contentions found favour by the Deputy Commissioner and all the three revision applications were rejected. The dealer carried the matter to the Maharashtra Sales Tax Tribunal by filing revision applications. In these revision applications before the Tribunal the only ground urged by the dealer was that the reassessment proceedings were barred by limitation. By its judgment and order dated July 19, 1968, the Tribunal upheld the Contention of the dealer that the reassessment proceedings were barred by limitation and set aside the orders of the lower authorities. After the said decision, however, the same question, viz., the question as to whether the reassessment proceedings were barred by limitation arose in another case, viz., M/s Ambika Oil Mills in Reference Application No. 19 of 1968, and on December 31, 1969, the Special Bench of the Tribunal took a contrary view on the question of limitation in view of the retrospective amendment of section 15 of the Act by Amending Act 4 of 1959. By this amendment the period mentioned in section 15 of the Act was enhanced from 3 to 5 and 5 to 8 years. In view of the said decision of the Special Bench of the Tribunal in Ambika Oil Mills case the department filed Rectification Applications Nos. 4, 5 and 6 of 1970 for rectifying the decisions of the Tribunal dated July 19, 1968, in the case of the dealer. The Tribunal allowed the rectification applications on November 3, 1970, and set aside the decision given by the Tribunal dated July 19, 1968, on the three revision applications filed by the dealer and directed that the revision applications be heard in respect of the grounds which were not considered earlier while disposing of the revision applications. While the revived revision applications were pending, another matter filed by M/s. Hansraj Vishram Ravani was decided by the Tribunal and one of the points decided by it was that the reassessment made was bad in law as there was no proper service of notice under section 15 of the Act read with rule 47(1)(i) of the Bombay Sales Tax (Procedure) Rules, 1954, governing the service of notices. It was held in that case that service of notice was neither on the dealer nor on the agent as defined in rule 2(i) of the said Rules. Thereafter, the revision applications of the dealer were heard by the Tribunal and it was then for the first time that the dealer raised the contention that the reassessment proceedings were invalid as the service of the notice on Purshottam Darshi was bad in law because he was not an agent of the dealer as defined in rule 2(i) and as per rule 47(1)(i) of the Bombay Sales Tax (Procedure) Rules, 1954, notice can be served on the dealer or his agent. In support of the contention, the dealer relied on the decision in Ravani's case. It was contended on behalf of the dealer that the mere fact that his Advocate had appeared and filed objections to the reassessment would not cure the defect in the service of notice. In other words, it was contended that the proper service of notice as required by the rules was a condition precedent for initiating reassessment proceedings under section 15 of the Act. The Tribunal accepted this contention and held that the notices of reassessment in form No. XIV were not validity served on the dealer and consequently the orders of the reassessment passed by the Sales Tax Officer were without jurisdiction and bad in law. On the application of the department the Tribunal has referred the following questions for our determination :

'(1) Whether on the facts and in the circumstances of these cases this Tribunal erred in allowing the opponent to raise the question of validity of the service of notices of reassessment in form No. XIV on the opponent at the late stage of Revision Applications Nos. 210-211 and 212 of 1967 ?

(2) Whether the Tribunal erred in holding that the service of reassessment notices in form No. XIV on Mr. Purshottam Darshi, an employee of the opponent, was bad as the said Mr. Purshottam Darshi was not 'agent' of the opponent as contemplated by rule 47(1)(i), read with rule 2(i), B.S.T. (Procedure) Rules, 1954 ?

(3) Whether this Tribunal erred in holding that reassessment proceedings in relation to the opponent were commenced and completed by the Sales Tax Officer without jurisdiction to do the same ?'

2. Sales Tax Reference No. 73 of 1978 arises out of Reference Application No. 34 of 1974 and is in respect of the assessment period April 1, 1954, to March 31, 1955. Sales Tax Reference No. 74 of 1978 arises out of Reference Application No. 33 of 1974 relating to the assessment period April 1, 1955, to March 31, 1956, and Reference No. 75 of 1978 arises out of Reference Application No. 32 of 1974 and relates to the assessment period April 1, 1956, to March 31, 1957. Since the facts as well as the questions referred to in all these three references are identical it would be convenient to dispose of all these references by this common judgment.

3. Mr. Jetly, the learned counsel appearing for the department, submitted that a distinction has to be made between a notice which is rendered invalid by reason of its defective contents and service of a notice on a wrong person; whereas in the case of a defective notice the reassessment proceedings would be rendered without jurisdiction, the same cannot be said of a notice being served on a wrong person which may amount to a mere procedural irregularity which cannot invalidate the proceedings particularly so when the dealer had appeared through his Advocate taken part in the proceeding before the Sales Tax Officer and raised objections on merits without making any grievance about validity of service of notice. It was submitted that the purpose of service of notice on the dealer is to acquaint him with the intention of the Sales Tax Officer to initiate reassessment proceedings and it is open to the dealer to waive such a notice and appear and participate in the proceedings before the Sales Tax Officer and no grievance about service of notice can be allowed to be made at a late stage having regard to the fact that the contention was never raised either before the Sales Tax Officer or the Appellate Commissioner or in the revision application before the Deputy Commissioner and the Tribunal of the Sales Tax.

4. Before we proceed to deal with the contentions of the learned counsel it would be necessary to refer to the relevant provisions of the Act and the Rules. Whereas section 14 provides for regular assessment, section 15 provides for reassessment in respect of turnover escaping assessment. Under section 15, if in consequence of any information which has come into his possession the Collector is satisfied that any turnover in respect of sales or purchases of any goods chargeable to the tax has escaped assessment in any year or has been under-assessed or assessed at a lower rate or any deductions have been wrongly made therefrom, the Collector may in any case where such turnover has escaped assessment or has been under-assessed or assessed at a lower rate for the reason that the provisions of sub-section (1) of section 2 of the Bombay Sales Tax (validating Provisions) Act, 1957, were not then enacted, at any time, within eight years, and in any case where he has reason to believe that the dealer has concealed the particulars of such sales or purchases or has knowingly furnished incorrect returns, at any time within eight years, in any other case, at any other time within five years of the end of that year, serve on the dealer liable to pay the tax in respect of such turnover a notice containing all or any of the requirements which may be included in a notice under sub-section (3) of section 14 and may proceed to assess or reassess the amount of the tax due from such dealer and the provisions of the Act shall apply accordingly as if the notice were a notice served under that sub-section. Sub-section (3) of the section 14 which is referred to in section 15 relates to the issue of a notice in regular assessment proceedings requiring the presence of a dealer who has furnished his returns or requiring such dealer to produce evidence. The rule-making power is contained in section 45 which inter alia provides that the State Government may make rules for carrying out the purposes of the Act and under clause (z) of sub-section (2) of the sad section 45, such rules may provide for the manner in which, and the time within which the application shall be made, information furnished and notices served under the Act. The relevant rules are contained in the Bombay Sales Tax (Procedure) Rules, 1954. Rule 17 provides that the notice under section 15 shall be in form No. XIV and the date fixed for compliance with the notice shall be not less than 15 days from the date of service thereof. Rule 47 provides for the manner in which the notice under the Act or the Rules made thereunder may be served. It is useful to reproduce in extenso sub-rule (1) of rule 47 which runs as under :

'(1) Notices under the Act or any rules made thereunder may be served by any of the following methods :-

(i) by delivery to the addressee or his agent, by hand of a copy of the notice;

(ii) by post :

Provided that if upon an attempt having been made to serve any such notice by any of the abovementioned methods, the sales tax authority concerned is satisfied that the addressee is evading the service of notice or that for any other reason, the notice cannot be served by any of the abovementioned methods, the said authority shall cause such notice to be served by fixing a copy thereof -

(a) if the addressee is a dealer on some conspicuous part of the dealer's office or the building in which the dealer's office is located, or upon some conspicuous part of any place of the dealer's business last notified by the dealer, and

(b) if the addressee is not a dealer, on some conspicuous part of his residence or office or the building in which his residence or office is located, and such service shall be effectual as if it had been made on the addressee personally.'

5. Thus under the said rule the service of notice can be effected by delivery of the notice to the addressee, i.e., the dealer or his agent. The word 'agent' is not defined in the Act, but is defined in the Rules. According to rule 2(i), the 'agent' means a person authorised in writing under clause (a) or (c) of section 43 to appear on behalf of a dealer or other person before any sales tax authority. Section 43 of the Act provides for appearance before any authority in the proceedings under the Act and as per clauses (a) and (c) thereof any person who is entitled to attend before any authority in connection with any proceedings under this Act may attend before the authority (a) by a person authorised by him in this behalf being his relative or a person regularly employed by him or (c) subject to such conditions as may be prescribed, by an accountant or sales tax practitioner who possesses the prescribed qualifications.

6. Now, it is not disputed that in this case the notice has not been served on the dealer. It is also not disputed that the person on whom the notice is served is not a person authorised in writing under clause (a) or (c) of section 43 to appear on behalf of the dealer before the sales tax authority which means that the notice has not been served on the agent as defined by section 2(i) of the Rules. It is well-settled that the service of a valid notice is the foundation of jurisdiction of the Sales Tax Officer in making the reassessment order. We may only refer in this connection the decision of this Court in S. K. Manekia v. Commissioner of Sales Tax [1977] 39 STC 426. In that case also a notice under section 15 of the Act was served on the manager of the dealer. The notice was neither served on the dealer nor his agent. The dealer, however, appeared before the Sales Tax Officer through his Advocate. Thereafter, the Sales Tax Officer passed an order reassessing the dealer. It was contended that since the proper service of a valid notice under section 15 was the foundation of the jurisdiction of the Sales Tax Officer who acted under delegated authority in making the reassessment order to initiate reassessment proceedings and make an order of reassessment, the service of notice being contrary to law the Sales Tax Officer acquired no jurisdiction to initiate the said reassessment proceedings under section 15 or to reassess the dealer and the reassessment proceedings were invalid. While examining this contention the Court observed :

'We fail to see why a mistake in the contents of the notice would invalidate the notice although the assessee may subsequently come to know what the correct position was, but a defect in the service of the notice, such as servicing the notice upon a wrong party or other non-compliance with the provisions of law in that behalf, would not invalidate the notice if the assessee came to learn about the issue of the notice at a later day and appeared before the reassessing authority.'

7. After referring to the decisions of the various High Courts and also of the Supreme Court, the Division Bench in Manekia's case [1977] 39 STC 426 summarised its conclusions as under :

'(1) Under section 15(1) of the Bombay Sales Tax Act, 1953, the reassessing authority would acquire jurisdiction only if a valid notice under that section was issued and duly served upon the assessee.

(2) Not only a defect in the notice under section 15(1) but also wrong service of the notice under section 15(1) would invalidate the notice and would confer no jurisdiction upon the reassessing authority to initiate proceedings in pursuance of such notice and to pass an order of reassessment.

(3) In the case of personal service a notice must be served either upon the dealer himself or upon his agent as defined by rule 2(i) of the Bombay Sales Tax (Procedure) Rules, 1954.

(4) In the case of initiation of fresh proceedings personal service of notice can only be upon the dealer in the manner prescribed by rule 47 of the Bombay Sales Tax (Procedure) Rules, 1954.

(5) In the case of proceedings which have already started and where for the purpose of such proceedings the dealer has appointed an agent under clause (a) or (c) of section 43 of the Bombay Sales Tax Act, 1953, personal service can either be upon the dealer or his said agent.

(6) Appearing before the sales tax authorities in order to contest the service of the notice and in the alternative to plead to the merits does not amount to waiver of or acquiescence in the invalidity or invalid service of a notice.'

8. The above conclusions would leave no room to doubt that on the interpretation of the relevant provisions of the Act and the Rules this Court has held that a Sales Tax Officer assumes jurisdiction to initiate proceedings of the assessment and make an order of reassessment only on the two conditions of a valid notice are satisfied, viz., (1) that it must be proved that a valid notice with the necessary particulars is issued and also (2) that the notice is duly served on the assessee. It is also clear that the notice gets invalidated not only by a defect in the notice itself, but also by wrong service of the notice and in the absence of these two conditions being satisfied the Sales Tax Officer cannot assume jurisdiction to initiate the proceedings or to pass an order of reassessment. Due service of notice must conform to the provisions of rule 47 read with rule 2(i) of the Rules. In other words, the Sales Tax Officer has a choice to either serve the notice on the dealer himself or upon his agent as defined by rule 2(i). Service of notice on a wrong person in contravention of the Rules would be no service in the eyes of law and consequently the Sales Tax Officer cannot assume jurisdiction in the matter and the entire proceeding gets vitiated as being without jurisdiction. Now, it is true that in the case before us the dealer had appeared before the Sales Tax Officer and raised objections on the merits of the case, but failed to raise the objection as to improper service. It is also true that the contention of invalidating of the notice on the ground of improper service was raised for the first time when the department filed the rectification application before the Tribunal, but that cannot cure the defect and confer jurisdiction on the Sales Tax Officer to make reassessment order, since service of notice on a proper person as laid down in the Rules alone confers jurisdiction on the Sales Tax Officer. It is well-settled that no consent can confer jurisdiction upon a Court if the Court has no jurisdiction. In a decision of this Court in Commissioner of Income-tax, Bombay City-I v. Ramsukh Motilal, Bombay : [1955]27ITR54(Bom) , the provisions of section 34 of the Income-tax Act, 1922, which are in pari materia with those of section 15 of the Sales Tax Act it is observed :

'.............. it is difficult to understand how there can be a waiver of the condition precedent, compliance with which alone can confer jurisdiction upon an authority or a Tribunal. It is well-settled that no consent can confer jurisdiction upon a Court if the Court has no jurisdiction, and if we take the view that the Income-tax Officer can have jurisdiction only provided he complies with the conditions laid down in section 34 (of the Indian Income-tax Act, 1922), then no consent by the assessee or no waiver on his part can confer jurisdiction upon the Income-tax Officer.'

9. It is, therefore, clear that service of the notice under section 15(1) on a wrong person would invalidate the notice and would confer no jurisdiction upon the reassessing authority to initiate proceedings in pursuance of such notice and to pass an order of reassessment. In a decision of a Division Bench of this Court in Commissioner of Sales Tax v. Paramount Industrial Stores [1976] 38 STC 555, the facts were that the Sales Tax Officer served on the assessee a notice under section 15(1) of the Bombay Sales Tax Act, 1953, stating inter alia that his sales and purchases for the period in question had escaped assessment and that he should attend the office on 19th April, 1956, to show cause against being reassessed in respect of the escaped turnover. 19th April, 1956, happened to be a public holiday, and therefore the Sales Tax Officer by his letter dated 18th April, 1956, requested the assessee to attend his officer on 24th April, 1956, instead of 19th April, 1956. The Sales Tax Officer rejected the contention of the assessee that the notice served on him was defective and made a reassessment in respect of the escaped turnover. The Tribunal, however, took the view that the notice was defective because 19th April, 1956, was a public holiday and that the defect could not be cured after the expiry of five years from the end of the assessment period and that a valid notice under section 15 was a condition precedent to the assumption of jurisdiction by the Sales Tax Officer under section 15. On a reference at the instance of the Commissioner, the Division Bench held :

'(i) that 19th April, 1956, having been declared as a public holiday by the Government, the Sales Tax Officer was not entitled to require the assessee to appear before him on that day;

(ii) that in order to be a valid notice under section 15, the date on which the assessee was required to attend must be stated and that date should not be a public holiday;

(iii) that therefore the notice served on the assessee on 29th March, 1956, was clearly defective and no reassessment proceedings taken pursuant to that notice could be regarded as valid in law;

(iv) that even if an invalid notice under section 15 is complied with by an assessee, the defect cannot be said to have been waived and the proceedings taken pursuant to such a notice would be invalid;

(v) that the defect in the notice served on the assessee on 29th March, 1956, could not be cured by reason of the subsequent letter dated 18th April, 1956.'

10. In the said case the Court relied on the decision of this Court in Commissioner of Income-tax v. Ramsukh Motilal : [1955]27ITR54(Bom) . The question there related to a notice under section 34 of the Indian Income-tax Act, 1922. It was pointed out that section 34 of the Indian Income-tax Act is in pari materia with section 15 of the said Act and section 22(2) of the Indian Income-tax Act, 1922, is in pari materia with section 14(3) of the said Act. In the abovementioned Ramsukh Motilal's case : [1955]27ITR54(Bom) Chagla, C.J., and Tendolkar, J., held that whereas it will be perfectly true to say that section 22(2) is a procedural section and the failure to give notice or a defect in a notice is a procedural defect, in the case of section 34 it is not a procedural defect but is a failure to comply with a condition precedent to the assumption of jurisdiction. Consequently, the Income-tax Officer had no jurisdiction to assess under section 34 without giving the notice referred to in that section.

11. The view taken in Ramsukh Motilal's case : [1955]27ITR54(Bom) by this Court is approved by the Supreme Court in Y. Narayana Chetty v. Income-tax Officer, Nellore : [1959]35ITR388(SC) . The Supreme Court observed :

'The notice prescribed by section 34 cannot be regarded as a mere procedural requirement; it is only if the said notice is served on the assessee as required that the Income-tax Officer would be justified in taking proceedings against him. If no notice is issued or if the notice issued is shown to be invalid then the validity of the proceedings taken by the Income-tax Officer without a notice or in pursuance of an invalid notice would be illegal and void. That is the view taken by the Bombay and Calcutta High Courts is Commissioner of Income-tax v. Ramsukh Motilal : [1955]27ITR54(Bom) and R. K. Das & Co. v. Commissioner of Income-tax : [1956]30ITR439(Cal) and we think that that view is right.'

12. Again in Commissioner of Income-tax, Kerala v. Thayaballi Mulla Jeevaji Kapasi : [1967]66ITR147(SC) , then Supreme Court held that the service of the notice prescribed by section 34 of the Indian Income-tax Act, 1922, for the purpose of commencing proceedings for reassessment is not a mere procedural requirement, but it is a condition precedent to the initiation of proceedings for assessment under section 34.

13. A reference may also be made to the decision of a Full Bench of the Allahabad High Court in Laxmi Narain Anand Prakash v. Commissioner of Sales Tax [1980] 46 STC 71 , where a notice under section 21 of the U.P. Sales Tax Act, 1948, was served on a person who had no concern with the assessee's firm. The assessee, however, appeared on the date of hearing in the proceedings under section 21 of the Act. The Court held that the notice under section 21 having been improperly served, the initiation of proceedings was without jurisdiction and it could not be validated by participation of the assessee in the proceedings.

14. Reliance was placed by Mr. Jetly on the decision of the Gujarat High Court in Commissioner of Income-tax, Gujarat I, Ahmedabad v. Bhanji Kanji's Shop : [1968]68ITR416(Guj) , where the facts were that a notice under section 34(1) of the Indian Income-tax Act, 1922, was served upon a temporary agent of an assessee, who was not an authorised agent, for receipt of notices on behalf of the assessee. The assessee filed a return in pursuance of the notice, but did not raise any contention about the validity of the service of the notice and an order of reassessment as passed. The assessee thereupon filed an appeal and even in his petition of appeal did not challenge the validity of the service of the notice upon him. Subsequently, however, he asked for leave to raise an objection urging that the notice was not validly served upon him, which leave was granted to him. The Gujarat High Court held that the two modes of service mentioned in section 63(1) of the Indian Income-tax Act, 1922, viz., by registered post, and in the manner similar to service of writ or summons under the Code of Civil Procedure, 1908, were not exhaustive and that it was permissible to have the notice served in a way not mentioned in the said section. The Gujarat High Court further held that even if there was a procedural irregularity in the service of a notice of reassessment, if the assessee admitted that he had received the notice or from the facts it could be found that he must have received the notice even later on, the contention urged on behalf of such an assessee that the notice was improperly served must be rejected. In arriving at its conclusion that the modes of service specified in section 63 of the Indian Income-tax Act, 1922, were not exhaustive, the Gujarat High Court relied upon a decision of this High Court in K. C. Tiwari & Sons v. Commissioner of Income-tax, Bombay : [1962]46ITR236(Bom) . This decision of the Gujarat High Court has been elaborately considered by this court in Manekia's case [1977] 39 STC 426 and the discussion of the Gujarat case in Manekia's case [1977] 39 STC 426 shows that the view taken by the Gujarat High Court has not been agreed with. We feel ourselves bound by the view taken by this Court in Manekia's case [1977] 39 STC 426 with which we respectfully agree.

15. Mr. Jetly also relied on the decision of the Supreme Court in Anandji Haridas & Co. (P.) Ltd. v. S. P. Kushare, Sales Tax Officer, Nagpur : [1968]1SCR661 . That was a case under the C.P. and Berar Act, 1947. The provisions which fell for consideration in that case were sections 11 and 11A of that Act. While section 11 deals with assessment, section 11A deals with assessment on turnovers escaping assessment. Section 11(4)(a) inter alia provides that if a registered dealer does not furnish returns in respect of any period by he prescribed date, the Commissioner shall in the prescribed manner assess the dealer to the best of his judgment. The proviso to section 11(4)(a) runs thus :

'Provided that he shall not so assess him in respect of the default specified in clause (a) unless the dealer has been first given a reasonable opportunity of being heard.'

16. Sub-section (1) of section 11A which deals with assessment on turnover escaping assessment runs thus :

'If in consequence of any information which has come into his possession, the Commissioner is satisfied that any turnover of a dealer during any period has been under-assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom, the Commissioner may, at any time within three calendar years from the expiry of such period, after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he considers necessary, proceed in such manner as may be prescribed to reassess or assess, as the case may be, the tax payable on any such turnover .........'

17. It would thus be clear that all that these sections prescribed was that before taking any proceedings against a dealer under these provisions he should be give a reasonable opportunity of being heard. The said sections nowhere provided for any notice being issued to the dealer. It appears that rule 32 framed under that Act provides that where a registered dealer has rendered himself to a best judgment assessment as well as penalty by reason of his default in furnishing the prescribed return or returns in respect of any period by the prescribed date, the assessing authority shall serve on him a notice in form 12 specifying the default, escapement or concealment as the case may be and 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, why he should not be assessed or reassessed to tax, or a penalty should not be imposed upon him and directing him to produce on the said date his books of account and other documents which the assessment authority may require or which he may wish to produce in support of his objection. The rule further provides that no such notice shall be necessary where the dealer, having appeared before the assessing authority, waives such notice. It would at once be clear from the aforesaid provisions that neither section 11 nor section 11A provides for a notice being issued to the dealer. All that it speaks of is that reasonable opportunity of being heard should be given. The rule further specifically provides for dispensing with the notice where the dealer appears and waives such notice. It is apparent that the provisions of section 15 of the Sales Tax Act, 1953, with which we are concerned are not similar to the provisions of section 11A(1). The following observations in the said decision in the said decision of the Supreme Court are pertinent :

'We are unable to accept the contention of Mr. Gokhale that a notice under section 11(4)(a) or 11A(1) is a condition precedent for initiating proceedings under those provisions or that it is the very foundation for the proceedings to be taken under those provisions. The notice contemplated under rule 32 is not similar to a notice to be issued under section 34(1)(b) of the Income-tax Act, 1922. All that sections 11(4) and 11A(1) prescribe is that before taking proceedings against an assessee under those provisions, he should be given a reasonable opportunity of being heard. In fact, those sections do not speak of any notice. But rule 32 prescribes the manner in which the reasonable opportunity contemplated by those provisions should be afforded to the assessee. The period of 30 days prescribed in rule 32 is not mandatory. The rule itself says that ordinarily not less than 30 days' notice should be given. Therefore, the only question to be decided is whether the defects noticed in those notices had prejudiced the appellants.'

18. We have already pointed out above that the provisions of 34(1) of the Income-tax Act, 1922, are in pari materia with those of section 15 of the Sales Tax Act, 1953, and those of section 22(2) of the Income-tax Act, 1922, are in pari materia with those of section 14(3) of the Sales Tax Act, 1953. It is further to be noted that unlike the provisions of section 15 of the Bombay Act with which we are concerned, section 11A of the C.P. and Berar Act merely refers to the dealer being given a reasonable opportunity of being heard before making an order of reassessment. The provisions of these two sections, therefore, are not in pari materia with each other. The decision in Anandji's case : [1968]1SCR661 cannot under the circumstances be of any assistance in construing the provisions of section 15 of the Act. We are of the opinion that so far as the present case is concerned, the principle laid down both in the cases of Ramsukh Motilal : [1955]27ITR54(Bom) and Manekia [1977] 39 STC 426 would clearly be applicable, and the service of notice being a condition precedent for initiating the reassessment proceedings and making an order of reassessment under section 15(1), such a notice not having been served on the proper person, i.e., either on the dealer or his agent, as required by the Rules, the reassessing authority did not acquire jurisdiction in the present case to initiate the reassessment proceedings or to make an order of reassessment. It would follow that there being total lack of jurisdiction in the reassessing authority for want of valid service of notice, there is no question of the reassessment proceedings or the order of reassessment being validated by waiver on the ground that the assessee had taken part in the proceedings without raising objection as to the invalidity of the notice.

19. The question referred to us for out determination in all the three references are identical. In the view that we have taken questions Nos. (2) and (3) will have to be answered in the negative and in favour of the assessee. As fas as question No. (1) is concerned, since the facts were on record and not in dispute and the question raised was a question relating to jurisdiction of the Sales Tax Officer to entertain the proceedings, the Tribunal was justified in allowing the assessee to raise the question of validity of service of notice at the stage of rectification proceedings. The question No. (1) is also answered in the negative and in favour of the assessee.

20. As far as the question of costs is concerned, looking to the circumstances of the case we direct that there shall be no order as to costs.


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