R.M. Sahai, J.
1. Having found that the assessment order was passed, in respect of the assessee who was not on record and who had not filed any return, without notice to him, in consequence of an information received from the District Supply Office, the Additional Judge (Revisions) quashed the order but referred the following question for the opinion of this Court:
Whether, in the facts and circumstances of the case, the learned additional revising authority was justified in annulling the assessment order for 1967-68 for want of notice ?
2. At the time of hearing of the reference reliance was placed by the learned standing counsel on Bhandari and Company (Private) Ltd. v. Commissioner of Sales Tax  23 S.T.C. 324 and India Leather House v. Sales Tax Officer 1972 U.P.T.C. 416. On behalf of the assessee, reliance was placed on Faqir Chand v. Sales Tax Officer 1971 A.L.J. 25. As the Division Bench was of the opinion that there was some conflict in the two Division Benches, namely, the Bhandari's case  23 S.T.C. 324 and the Faqir Chand's case 1971 A.L.J. 25, and there was likelihood of misapplication of the observations made in the Faqir Chand's case 1971 A.L.J. 25, it referred the matter for hearing by a larger Bench.
3. In arguments, both the Learned Counsel, Sri V.D. Singh, the standing counsel appearing for the Commissioner of Sales Tax, and Sri S.R. Misra, appearing for the assessee, took up extreme positions. On the one hand, absolute discretion of the assessing authority, where no return was filed, without notice, was advocated. On the other, it was urged that not only notice was necessary but it was a condition precedent. Any of the extremes does not appear to be justified. The respective arguments shall be dealt in the judgment at appropriate places. Best judgment assessment under the U.P. Sales Tax Act is made under Section 7(3), but the entire section may be quoted as it may facilitate in appreciating the controversy involved. The section reads as under:
Section 7. Determination of turnover and assessment of tax.--(1) Every dealer who is liable to pay tax under this Act shall submit such return or returns of his turnover at such intervals, within such period, in such form and verified in such manner, as may be prescribed, but the assessing authority may in its discretion, for reasons to be recorded, extend the date for the submission of the return by any person or class of persons.
(1-A) Before submitting the return under Sub-section (1) or along with such return the dealer shall deposit in such manner as may be prescribed the amount of tax due on the turnover shown in, such return.
(2) If the assessing authority, after such enquiry, as he considers necessary, is satisfied that any returns submitted under Sub-section (1) are correct and complete he shall assess the tax on the basis thereof.
(3) If no return is submitted by the dealer under Sub-section (1) within the period prescribed in that behalf or, if the return submitted by him appears to the assessing authority to be incorrect or incomplete, the assessing authority shall after making such inquiry as he considers necessary, determine the turnover of the dealer to the best of his judgment and assess the tax on the basis thereof:Provided that before taking action under this sub-section the dealer shall be given a reasonable opportunity of proving the correctness and completeness of any return submitted by him.
4. In the scheme of the Act, this section deals with filing of return and quantification of tax. The power to determine the turnover to the best of judgment is provided in Sub-section (3). It does not speak of issue or service of notice. Even in the proviso, the expression used is reasonable opportunity of hearing. The primary question, therefore, is whether, from the language of the section itself or reading it along with the other sections of the Act, issuing of notice or service of notice can be implied in best judgment assessment in respect of a dealer who is liable to pay tax but who has not filed any return. It is well-known that in order to have a valid tax there must be levy of tax and assessment. The former is a legislative and the latter judicial or quasi-judicial function. How is the function to be discharged depends on the language of the enactment. The power to assess to the best of judgment is a common feature of the taxing statute. Such power is normally conferred on the assessing authority if the assessee does not file his return. The reason is obvious. The return filed by the assessee furnishes the basis of making inquiry and determination of turnover. But, where no return is filed, the assessing authority is required to make inquiry and assess the tax to the best of judgment. But the power to assess to the best of judgment is one thing and jurisdiction to determine turnover without notice is another. Sub-section (3) not only confers power to assess to the best of judgment where no return is filed but also deals the manner in which the power is to be exercised by using the words 'after making such inquiry as he considers necessary'. The word 'inquiry' is of very wide import. But what meaning should be given to it depends in the context it has been used. An examination of Sub-sections (2) and (3) reveals that the word 'inquiry' has been used in both the sub-sections, but the scope is not the same. In Sub-section (2), it is confined to the examination of return, but where no return is filed, the ambit is different. The difference is brought out by the use of the word 'making'. In Oxford, one of the meanings assigned to the word 'make' is to acquire by effort. Similarly, according to Webster, it means 'to carry out'. The use of the word indicates something more. How has this to be achieved is different. But it cannot be confined to the examination of the information received in respect of a dealer, who is not on record. According to the learned standing counsel, the process of inquiry or its carrying out or acquiring material by effort to the determination of turnover to the best of judgment can be done without any intimation to the dealer. He maintains that the scheme is for self-assessment. And once a dealer has failed to avail of the opportunity, he has no right to claim notice. As the legislature has made non-filing of return penal, it did not provide any right of hearing to such dealer. It was emphasised that out of dealers who do not file any return and those who file incorrect and incomplete return the legislature chose to provide reasonable opportunity of hearing only to those dealers who filed the return. The mandate being clear, even the principle of natural justice cannot be invoked. It is the extreme position which is supported by cases also. But, as observed earlier, the use of the word 'making' is not without purpose. The dealer mentioned in Sub-section (3) means the dealer liable to pay tax. In a case where a return is filed, the controversy is confined to the determination of quantum only. But, where no return is filed and the dealer is not on record, the assessing authority has to ascertain whether the dealer is liable to pay tax. An information that a person is a dealer may set the machinery in motion, but the determination of turnover to the best of judgment can only be of a dealer liable to pay tax. The word 'determination' means to resolve or to take a decision. This cannot be effectively done without notice to the assessee. A reading of the entire section and the use of the words 'making' and 'determination' leave no room for doubt that the best judgment assessment in respect of a dealer who has not filed the return cannot be done without notice.
5. The same conclusion is reached by examining this sub-section along with Section 30, which permits a dealer to make an application for setting aside an ex parte order. An assessment order to the best of judgment without notice is an ex parte order. The remedy of the dealer is to file an appeal under Section 9 or make an application to get the order set aside under Section 30. For the purpose of the question referred, it may be assumed that not only the remedies under Sections 9 and 30 of the Act are concurrent but the appellate authority may also examine the sufficiency of notice. If an assessee avails of the remedy under Section 30 and the assessing authority is satisfied that no notice was issued or, if issued, it was never served, the order is bound to be set aside. It is not a matter of discretion. If the argument of the learned standing counsel is accepted that no notice is necessary in best judgment assessment under Section 7(3), then Section 30 becomes inoperative. Such an interpretation cannot be accepted. The use of the words 'in any case in which an assessment order is passed ex parte' in Section 30 are wide enough to embrace in its fold any and every order. A reading of Section 7(3) along with Section 30, therefore, leaves no room for doubt that notice has to be sent to the dealer before the determination of his turnover to the best of judgment whether the dealer is on record or not and whether he has filed return or not.
6. The cases cited by the Learned Counsel may now be examined. He relied on the following observations in the Full Bench decision in Adarsh Bhandar v. Sales Tax Officer  8 S.T.C. 666 at 681 (F.B.):
The contention is that the inquiry which the Sales Tax Officer may consider necessary to make for the purpose of determining the turnover of the dealer to the best of his judgment is a judicial inquiry in which the dealer is entitled to participate and at which he has the right to be heard. With this submission I am unable to agree. The dealer is required to furnish a full and correct return and he is entitled to an opportunity of proving that his return is a proper one. If he fails to satisfy the assessing authority that this is so he, in effect, drops out of the picture. . . .
7. It is obvious that the Full Bench was considering a case where a return was filed but the dealer failed to avail of the opportunity afforded to him of proving the correctness of the return. Moreover, the challenge to the assessment order for lack of opportunity was negatived in the earlier paragraph at page 681 on the ground that the plea was not raised.
8. These observations were relied in Qamruddin v. Commissioner, Sales Tax  14 S.T.C. 534 at 535. The Division Bench held:
If an assessee has not filed any return then the position is exactly the same as if he had filed a return which had not been accepted by the assessing authority as correct or complete and he had failed to prove that it was complete and correct in spite of a reasonable opportunity having been given to him. Under Sub-section (3), there is no distinction between an assessee who has not filed a return and an assessee who has failed to prove in spite of a reasonable opportunity that the return filed by him was correct and complete. In both cases, the assessing authority gets the right to make the best judgment assessment after making such inquiry as he considers necessary. If in one case it is not obligatory upon him to give notice to the assessee it is not obligatory for him to give notice in the other case also.
9. This decision does support the argument of the standing counsel. But the language of Sub-section (3) does not warrant equating of the two sub-sections, namely, where return is filed and where no return is filed. By filing the return, the dealer accepts the liability to pay tax. The dispute remains only in respect of quantum. But, where no return is filed, it is necessary to ascertain if the dealer is liable to pay tax and then determine turnover.
10. In Bhandari & Co. v. Commissioner of Sales Tax  23 S.T.C. 324, the provisional assessment order was challenged in a writ petition. It was held by the Division Bench that the principle of natural justice was inapplicable in provisional assessment as the petitioner had a right of hearing at the time of final assessment. In the Qamruddin's case  14 S.T.C. 534 at 535 also, it was held that the principle of natural justice was inapplicable. The learned standing counsel relied on Union of India v. J.N. Sinha  1 S.C.R. 791 and argued that, when the legislature provides for several contingencies and makes a specific provision for notice being given only in one and not the other, it can safely be assumed that by necessary implication it was excluded and the non-issue of notice cannot be said to be violative of the principles of natural justice. A large number of other decisions have also been cited. It is, however, not necessary to discuss them as the conclusion reached that notice is necessary is based not on the principles of natural justice but on the construction of Section 7 and its reading along with Section 30. Moreover, the Bench having accepted the principle of hearing at the time of final assessment, that is, while determining the turnover to the best of judgment, it accepted in principle the right of notice.
11. The decision in State of Kerala v. K.T. Shaduli A.I.R. 1977 S.C. 1627 was also cited in support of the proposition that the taxing authorities entrusted to make assessment of tax discharge quasi-judicial function and they are bound to observe the principle of natural justice. The Supreme Court was considering Sub-section (3) of Section 17 of the Kerala Sales Tax Act. The language is similar to Sub-section (3) of Section 7 of the U.P. Sales Tax Act. But the proviso is worded differently. Under it, the dealer is entitled to hearing in every case whether return is filed or not. The question before the Supreme Court was not right to notice where no return is filed but whether reasonable opportunity of hearing included right to cross-examine a third party whose accounts were the basis of best judgment assessment. The High Court's view that the assessee had a right to cross-examine was affirmed.
12. The decision in India Leather House v. Sales Tax Officer 1972 U.P.T.C. 416 was not concerned with the question of notice under Section 7(3). The assessment under Section 21 was challenged on the ground that there was no material to show that the Sales Tax Officer could have reason to believe that any part of the petitioner's turnover escaped assessment. The Bench, while considering Sections 21 and 7(3), observed that there was no statutory requirement under Section 7(3) that a notice should be served. It was considering the provision of notice in the two sections and its effect. As the question involved was different and, while considering the scope of Section 21, the Bench observed that there was no statutory requirement of notice under Section 7(3), it cannot be taken to be a decision which supports the contention of the standing counsel.
13. The question then is what is the effect of non-issuance or, if issued, non-service of notice on the assessment order. The Learned Counsel for the assessee also took up the extreme position that if no notice was served, the proceedings were vitiated and the assessment was liable to annulment. He maintained that where no return is filed proceedings can be taken by the assessing authority either under Section 7(3) or Section 21 for escaped assessment as held by the Full Bench in Commissioner, Sales Tax v. Sugan Chand Shyam Lal 1970 A.L.J. 895 (F.B.) and, notice being necessary both under Section 21 and Section 7(3), the effect of non-issuance or non-service should be taken to be same. And the mere fact that under Section 21 there was express provision for notice and in Section 7(3) it was implied did not make any difference in law. The proceedings under Section 21 without service of notice are held to be invalid. The same principle be applied in proceedings under Section 7(3). Relying on Faqir Chand v. Sales Tax Officer 1971 A.L.J. 25, the Learned Counsel argued that a notice under Section 7(3) and a notice under Section 21 for all practical purposes were the same. In other words, for proceedings under Section 7(3) also, notice is a condition precedent and, unless condition precedent has been complied, the assessment order is liable to be quashed. In Commissioner, Sales Tax v. Sugan Chand Shyam Lal 1970 A.L.J. 895 (F.B.), it has been held that where no return is filed the assessing authority is empowered to proceed either under Section 7(3) or Section 21. But what procedure shall be followed shall depend on initiation of proceedings. If proceedings are initiated under Section 7(3), then the procedure provided therein shall be followed, but, if it was initiated under Section 21, then the procedure of escaped assessment shall be followed. From a comparison of the two sub-sections, namely, Section 7(3) and Section 21(1), the difference not only in procedure but in consequences is brought out. In one, notice may be issued in the process of inquiry, while in the other, inquiry to reassess cannot be initiated without issuing notice. In Section 7(3), notice is procedural. It is issued in exercise of jurisdiction to determine turnover to the best of judgment. In Section 21, it is condition precedent. The use of the words 'after issuing such notice to the dealer' before the words 'making such inquiry' makes it amply clear that, in the one, it is procedural, but jurisdictional in the other. In a case of escaped assessment, no inquiry can be made unless notice has been issued, whereas in respect of best judgment assessment under Section 7(3), jurisdiction may be assumed, but the turnover shall not be determined without making such inquiry as the assessing authority considers necessary.
14. It is this difference which reflects on the consequence if no notice is issued. In Section 7(3), the procedural irregularity of not issuing a notice may be cured by the assessing authority itself under Section 30 or by the appellate and revisional authority under Sections 9 and 10 of the Act. It does not pertain to jurisdiction but to the exercise of jurisdiction. The argument therefore that if no notice is issued or if issued and not served, then the proceedings are liable to annulment cannot be accepted.
15. For the reasons stated above, we are of the opinion that in a best judgment assessment under Section 7(3), where no return is filed, the dealer is entitled to notice. But, if the assessment order is passed without notice or service of notice, the order is liable to be set aside and the dealer may be afforded an opportunity. The proceedings are not liable to annulment.
16. In the result, the question referred to us is answered in the negative in favour of the Commissioner of Sales Tax and against the assessee. As the question was not free from difficulty, parties shall bear their own costs. The fee of the standing counsel is assessed at Rs. 200.
Reference answered in the negative.
17. After the aforesaid decision of the Full Bench, the reference came before C.S.P. Singh, J., for final disposal and the learned Judge passed the following order on 1st May, 1979:
18. The Revising Authority, Gorakhpur, has referred the following question of law for the opinion of this Court:
Whether, in the facts and in the circumstances of the case, the learned additional revising authority was justified in annulling the assessment order for 1967-68 for want of notice ?
19. As there was difference of opinion between two Division Benches of this Court, and as the dealer was entitled to notice before an ex parte assessment was made under Section 7(3) of the Act, the matter was referred to the Full Bench. The Full Bench by its order dated 27th April, 1979, has held that where best judgment assessment is made under Section 7(3), in case no return is filed by the dealer, the dealer is entitled to a notice, and the assessment order passed without notice should be set aside but cannot be annulled.
20. The reference, which is being treated as a revision, is allowed and the order of the revising authority annulling the assessment is set aside. The revising authority is directed to decide the revision in accordance with the law as laid down by the Full Bench. A copy of this judgment will be sent to the revising authority under Section 11(8) of the Act.
21. There shall be no order as to costs.