C.S.P. Singh, J.
1. The Additional Revising Authority, Varanasi, has referred the following two questions for our opinion :
(a) Whether,on the facts and circumstances of the case, the learned Additional Judge (Revisions) was justified in considering the service of assessment order on an ernployee,who had actually no authority,as proper service ?
(b) Whether,under the facts and circumstances of the case, the learned Additional Judge (Revisions) was justified in dismissing the revision on the point that no application for condonation of delay had been moved, nor any medical certificate regarding the illness of Sri Mahavir Prasad had been produced ?
2. In the assessment year 1963-64, the dealer carried on business in bhang. No regular accounts had been maintained by him and in the assessment proceedings, the dealer pleaded that he had a turnover below the taxable limit and, as such, no tax should be imposed on him. This contention was rejected and a best judgment assessment made and the turnover fixed at Rs. 22,500. An appeal was filed against this order. The appeal was dismissed as time-barred. Thereafter, a revision was filed by the dealer.
3. It appears that the appeal was 2:25 PM 12/29/05filed by the dealer on 29th April, 1968, showing that the demand notice had been served on 29th March, 1968. It was, however, found that the notice of the assessment order and demand notice had been served on one Jagannath Prasad, an employee of the assessee on 25th March, 1968. The Assistant Commissioner dismissed the appeal as time-barred counting the time from the date of service on Jagan-nath Prasad and on the finding that no good ground existed for condoning the delay. Before the revising authority it was contended that Jagannath Prasad had been dismissed from service and, as such, service of the order on him was not service on the dealer. This plea was not taken note of, as the revising authority was of the view that it was an afterthought. It held that there was nothing on the record to show that Jagannath Prasad was a dismissed employee. The plea of the assessee that the appeal could not be filed within time as he was seriously ill was also rejected. The revising authority upheld the view of the Assistant Commissioner,Sales Tax, that service on Jagannath Prasad, a servant of the dealer, was sufficient service and, in this view of the matter,dismissed the revision.
4. In order to answer the first question,it is necessary to set out Rules 77 and 77-A of the Rules framed under the U.P. Sales Tax Act:
77. Modes of service.-The service of any notice,summons or order under the Act or the Rules may be effected in any of the following ways, namely:
(a) by giving or tendering a copy thereof to the dealer or licensee, or his manager or agent; or
(b) if such dealer or licensee or his manager or agent cannot easily be found, by leaving a copy thereof at his last known place of business or residence, or by giving or tendering it to some adult member of his family ; or
(c) if the address of such dealer or licensee is known to the Sales Tax Officer,by sending a copy thereof to him by registered post; or
(d) if none of the modes aforesaid is practicable, by affixation of a copy thereof in some conspicuous place at his last known place of business or residence.
77-A. Unless otherwise provided in the Act or the Rules thereunder, anything which is by the Act or the Rules required or permitted to be done by a dealer, except when he is required to attend personally for examination on oath or affirmation may be done by a lawyer, 2:44 PM 12/29/05an accountant or an authorised agent appointed by the dealer in writing in this behalf; and process served on or notice given to such lawyer, accountant or authorised agent shall be as effectual as if the same had been served on or given to the dealer in person; and all provisions of the Act or the Rules relating to the service of process on or the giving of a notice to a dealer shall be applicable to the service of process on or the giving of a notice to such lawyer,accountant or the authorised agent.
5. We will concentrate our attention to Rule 77 as we are concerned with the case of service of notice. It is this rule which has to be primarily considered. Now, in this case, notice of the assessment order and the demand notice was served on Jagannath Prasad.The Assistant Commissioner has found that Jagannath was an employee of the applicant and,as such,service on him was sufficient.The notice not having been served on the dealer, the question is as to whether Jagannath Prasad could be treated as the manager or agent of the dealer.There is no finding that Jagan-nath Prasad was managing the affairs of the dealer qua the business and as such this aspect need not be considered.The only question is whether Jagannath could be treated to be the agent of the assessee. The finding is that he was an employee of the assessee, i.e.there was a contract of employment between him and the dealer.The order of the Assistant Commissioner shows that Jagannath was one of the employees of the dealer which postulates that the dealer had other employees as well. Now, if one turns to Section 182 of the Contract Act, an agent has been defined as being a person employed to do any act for another, or to represent another in dealings with a third person. Section 186 lays down that the authority of the agent may be expressed or implied. Section 187 lays down that an authority is said to be expressed when it is given by the words spoken or written, while it is implied when it is to be inferred from the circumstances of the case and things spoken or written or the ordinary course of dealings. It will thus be seen that under the Contract Act, an agent may be authorised expressly by the principal to do a particular act or his power to do such act may be implied from other circumstances. Neither the Assistant Commissioner nor the revising authority have set out the nature of employment of Jagannath Prasad. The word 'employee' as commonly understood in vernacular, means a servant and the present case has been argued by the parties on this footing. Now a servant is not an agent of the master for all purposes.The distinction between an agent and a servant has been considered by their Lordships of the Supreme Court in the case of Lakshminarayan Ram Gopal & Son Ltd. v. Government of Hyderabad through the Commissioner of Excess Profits Tax 25 I.T.R. 449 (S.C.). Their Lordships of the Supreme Court after referring to Halsbury's Laws of England have approved of the distinction laid down by these authorities between an agent and a servant.It will be profitable to extract the decision of the Supreme Court on this point :
(10) The distinction between a servant and an agent is thus indicated in Powell's Law of Ageney, at page 16 :
(a) Generally a master can tell his servant what to do and how to do it.
(b) Generally a principal cannot tell his agent how to carry out his instructions.
(c) A servant is under more complete control than an agent,'
and also at page 20 :
(a) Generally, a servant is a person who not only receives instructions from his master but is subjected to his master's right to control the manner in which he carries out those instructions.An agent receives his principal's instructions but is generally free to carry out those instructions according to his own discretion.
(b) Generally, a servant, qua servant, has no authority to make contracts on behalf of his master. Generally, the purpose of employing an agent is to authorise him to make contracts on behalf of his principal.
(c) Generally, an agent is paid by commission upon effecting the result which he has been instructed by his principal to achieve. Generally, a servant is paid by wages or salary.
(11) The statement of the law contained in Halsbury's Laws of Eng-land-Hailsham Edition-Vol. 22, page 113, para. 192, may be referred to in this connection:
The difference between the relations of master and servant and of principal and agent may be said to be this : a principal has the right to direct what work the agent has to do : but a master has the further right to direct how the work is to be done.
6. The position is further clarified in Halsbury's Laws of England- Hailsham Edition-Vol.1, at page 193, Article 345, where the positions of an agent,a servant and independent contractor are thus distinguished :
An agent is to be distinguished on the one hand from a servant,and on the other from an independent contractor.A servant acts under the direct control and supervision of his master and is bound to conform to all reasonable orders given him in the course of his work ;an independent contractor,on the other hand,is entirely independent of any control or interference and merely undertakes to produce a specified result, employing his own means to produce that result.An agent,though bound to exercise his authority in accordance with all lawful instructions which may be given to him from time to time by his principal,is not subject in its exercise to the direct control or supervision of the principal.An agent as such is not a servant,but a servant is generally for some purposes his master's implied agent,the extent of the agency depending upon the duties or position of the servant.
7. In the present case, there is no finding that Jagannath Prasad, the servant, had been authorised by the dealer to receive notice on his behalf. The mere fact that Jagannath Prasad was the servant of the dealer would not entitle him to accept the notice; there is no finding that Jagannath Prasad was the agent of the dealer for the purposes of receiving the notice. Service of notice on a servant cannot be equated with service of notice on an agent. To hold that service of notice on a servant is sufficient compliance with Rule 77 would be to obliterate the distinction in law which exists between a servant and an agent.
8. Reliance on behalf of the assessee was placed on Rule 77-A of the Rules. It was urged that before a person can be treated to be an agent for the purposes of service, he must be appointed by the dealer in writing in this behalf. It is not necessary to decide whether Rule 77-A applies to cases of service of notice, for we have held that Jagannath Prasad was not the agent of the dealer for the purposes of receiving notice.
9. For the reasons given above, we answer the first question in the negative, in favour of the assessee and against the department. We return the second question unanswered. The assessee is entitled to his costs, which is assessed at Rs. 100. Counsel's fee is assessed at the same figure.