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Bangali Mal Bhargava Vs. Commissioner of Sales Tax - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case NumberS.T.R. No. 323 of 1967
Judge
Reported in[1973]30STC379(All)
AppellantBangali Mal Bhargava
RespondentCommissioner of Sales Tax
Appellant Advocate K.C. Agarwal, Adv.
Respondent Advocate The Standing Counsel
Excerpt:
- - 4. the revising authority took the view that an order passed under rule 23 was neither an order under section 21, nor an order under section 7(3). in its opinion, it was a consequential order on the failure of the assessee to comply with the exemption order passed under rule 20-b. , that a first assessment cannot be escaped assessment even if it is so maintained in the assessment order is still good law or should be considered overruled ? 5. we are constrained to observe that the questions framed by the revising authority are far from satisfactory......of the assessment year 1956-57, the assessee applied for exemption under rule 20-b of the u.p. sales tax rules. exemption order was passed on 30th march, 1961, determining the amount of exemption fee payable by the assessee. the assessee was required by a notice to pay the exemption fee by a certain date. this notice was not complied with, with the result that it became necessary for the department to pass an assessment order against the assessee under rule 23. accordingly, the sales tax officer issued a notice under section 21. no compliance appears to have been made of that notice, whereupon an assessment order was passed on 20th april, 1961.3. the assessee's contention was that the notice under section 21 had not been served upon him at all. the department contended that the.....
Judgment:

R.L. Gulati, J.

1. This is a reference under Section 11(1) of the U.P. Sales Tax Act at the instance of the assessee.

2. The assessee is a dealer in foodgrains. In respect of the assessment year 1956-57, the assessee applied for exemption under Rule 20-B of the U.P. Sales Tax Rules. Exemption order was passed on 30th March, 1961, determining the amount of exemption fee payable by the assessee. The assessee was required by a notice to pay the exemption fee by a certain date. This notice was not complied with, with the result that it became necessary for the department to pass an assessment order against the assessee under Rule 23. Accordingly, the Sales Tax Officer issued a notice under Section 21. No compliance appears to have been made of that notice, whereupon an assessment order was passed on 20th April, 1961.

3. The assessee's contention was that the notice under Section 21 had not been served upon him at all. The department contended that the notice was tendered to the assessee's real brother, who refused to accept the same and that amounted to a valid service. The other question which arose was as to whether Section 21 was applicable. If Section 21 was not applicable, the assessment would be time-barred.

4. The revising authority took the view that an order passed under Rule 23 was neither an order under Section 21, nor an order under Section 7(3). In its opinion, it was a consequential order on the failure of the assessee to comply with the exemption order passed under Rule 20-B. For such an order there was no period of limitation. At the instance of the assessee, the revising authority has referred the following three questions for our opinion :

(1) Whether even a real brother, who is (sic) joint with the assessee and has no connection with the assessee's business is a 'member of his family' for purposes of service under Rule 77(b) of the U. P. Sales Tax Rules ?

(2) Whether returns filed by an assessee for purpose of exemption application under Rule 20-B of the U.P. Sales Tax Rules can be regarded as returns under Section 7 of the U.P. Sales Tax Act and Rule 41 of the U.P. Sales Tax Rules for purposes of 'initiating' assessment proceedings ?

(3) That in view of the pronouncement of their Lordships of the Supreme Court cited above (Ghanshyamdas v. Regional Assistant Commissioner [1963] 14 S.T.C. 976 (S.C.)) the decision of our own High Court in Kishan Lal Gopi Kishan, Sarraf v. Commissioner, Sales Tax, U.P. in S.T.R. No. 397 of 1961 decided on 30th July, 1963, by their Lordships Desai, C.J., and Asthana, J., that a first assessment cannot be escaped assessment even if it is so maintained in the assessment order is still good law or should be considered overruled ?

5. We are constrained to observe that the questions framed by the revising authority are far from satisfactory. In question No. (2), there is a reference to the return filed by the assessee under Rule 20-B. There is no discussion about this matter in the revisional order. It appears that the assessee contended before the revising authority that as he had filed a return of its turnover under Rule 20-B, Section 21 could not be invoked. But such a question does not appear to have been considered or decided by the revising authority. Similarly, question No. (3) appears to be superfluous. Whether a particular case decided by this court has been impliedly overruled by the Supreme Court or not cannot be a separate question. The question must be related to the facts of the case. In our opinion, only the following two questions of law arise :

(1) Whether on the facts and circumstances of the case, Section 21 was applicable.

(2) Whether the service of notice under Section 21 upon the assessee's brother who is neither joint with the assessee, nor has any connection with the assessee's business is a valid notice under Rule 77(b) of the U.P. Sales Tax Rules.

6. We shall proceed to decide question No. (2) first. Under Clause (b) of Rule 77, the service of a notice may be effected on a dealer if such dealer or his manager or agent cannot be easily found by giving or tendering it to some adult male member of his family. A family of a person would ordinarily consist of himself, his wife and children. Even if a wider meaning is given to the word 'family' so as to include even the brother, the essential condition is that the brother must be residing with the family as its member. In the instant case, there is no finding that the brother was residing with the assessee's family. On the other hand, there is a positive finding that he was not joint with the assessee, nor had he any connection with the assessee's business. In the circumstances, he could not be regarded as an adult male member of the assessee's family for purposes of the service of a notice under Section 21. Accordingly, we hold that the notice under Section 21 had not been vaildly served.

7. In view of our answer to question No. (2), it is not necessary to answer question No. (1). Assuming that Section 21 was rightly applied by the department, it was necessary that a notice under Section 21 should have been served. Without the service of such a notice, the Sales Tax Officer cannot assume jurisdiction under Section 21.

8. We accordingly answer question No. (2) in the negative in favour of the assessee and against the department. We return no answer to question No. (1). The assessee is entitled to the costs which we assess at Rs. 100.


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