M.C. Desai, C.J.
1. The Judge (Revisions) Sales Tax, U. P., has referred to this Court the statement of a case from which the following two questions arise :
(1) Whether the assessment of the applicant for the year 1949-50 can be said to be barred by limitation on the ground that the notice of demand was issued to the applicant after the expiry of three years from the end of the assessment year ?
(2) Whether the assessment of the applicant on a turnover of Rs. 2,00,000 could be made on the materials on the record?
2. The statement has been referred at the instance of the assessee and the question is of assessment for the year 1949-50. The assessee was to be assessed on the turnover of 1949-50. It did not submit any return and the turnover escaped assessment. Then the Sales Tax Officer started proceedings under Section 21 and gave a notice to it and estimated its turnover for 1949-50 at Rs. 6,00,000 according to the best of his judgment. The assessment order was passed on this turnover on 31st March, 1953. The statement does not show on what date he gave a notice of demand to the assessee. The assessee went up in appeal and the Judge (Appeals) reduced the amount of the estimated turnover to Rs. 2,00,000. The assessee applied in revision to the Judge (Revisions) who rejected its application. Then at its instance he submitted the statement of the case.
3. Section 21 provides for a period of limitation only for the making of an assessment order. The Act does not contain any provision regarding a notice of demand to be served upon an assessee after passing an assessment order against him and consequently does not contain any provision prescribing a limitation within which such a notice can be served upon him. The State Government have, in exercise of the powers conferred upon them, framed rules and one of them is Rule 45 to the effect that: 'As soon as the assessment has been made the Sales Tax Officer shall send to the dealer a notice and the dealer shall pay the tax so assessed within the time and in the manner specified in the notice.' Even this provision does not contain any period of limitation for the issue or service of a notice of demand of the tax assessed upon the assessee. All that it requires is that it should be given as soon as possible after the assessment order is made. It is not stated in the statement of the case that the notice of demand served upon the assessee in this case was not issued or served upon it as soon as it was possible. What is contended is that the notice of demand should have been given before the expiry of three years but this contention is not supported by any law whatsoever. If an assessment order itself can be made up to the last day of the period of three years, it stands to reason that a notice of demand which is to follow it can be given even after the expiry of three years. We were referred to the case of Commissioner of Income-tax, Bombay v. Khemchand Ramdas1, but it does not lay down that a notice of demand must be issued or served upon the assessee before the expiry of the period prescribed for the making of an assessment order. A law may require that a notice of demand mustaccompany a copy of the assessment order when it is served upon the assessee but it does not follow that it must be served upon him before the expiry of the period for the making of the assessment order itself.
4. The question No. (1) is, therefore, answered in the negative.
5. As regards the other question, the Sales Tax Officer and the two Judges relied upon the facts that in the month of June, 1949, the assessee had sold goods for Rs. 1,20,000 and odd, that he dishonestly denied having carried on the business in the subsequent years, that he falsely stated that the business carried on in 1950-51 was a new business and that his conduct was dishonest. These facts could sustain a finding that its turnover in 1949-50 was Rs. 2,00,000. Best judgment assessment has to be by inference and if there is some material to justify the inference it must be maintained. In this case there was sufficient material to justify the inference that the assessee's turnover for 1949-50 was at least Rs. 2,00,000.
6. The question, therefore, is answered in the affirmative.
7. We direct that the copies of this judgment shall be sent under the signature of the Registrar and with the seal of the Court to the Judge (Revisions) and the Commissioner, Sales Tax, U. P., as required by Section 11(6) of the U. P. Sales Tax Act.
8. The Commissioner, Sales Tax, U. P., will get costs of this reference from the assessee which we assess at Rs. 100.
9. The counsel's fee is fixed at Rs. 100.