P.K. Tare, J.
1. In this petition under Article 226 of the Constitution the petitioner challenges the order of the Additional Assistant Commissioner of Sales Tax, dated 25th January, 1968 (petitioner's annexure 'C') passed as a best judgment assessment on the premises that the petitioner had failed to furnish any proof in respect of the contentions raised by him in his return whereby he sought an exemption from sales tax in respect of certain transactions in the nature of inter-State sales and sales to outside people in the course of export.
2. The petitioner was served with a notice dated 24th September, 1962, (respondents' annexure 1), for submitting returns for the period from 21st October, 1960, to 8th November, 1961. It is not disputed by the learned Counsel for the petitioner that the returns were submitted beyond the prescribed date. Thereafter the petitioner went on filing applications before the assessing authority (respondent No. 1) for adjournment of the case sine die and for an opportunity to produce certain documents which had been seized from him by the Central excise authorities probably in connection with breach, of exchange regulations. The investigation in that behalf is said to be still incomplete despite a lapse of seven years after seizure. The seizure was effected on 28th September, 1963.
3. So far as the applications made by the petitioner before the assessing authority are concerned, they were rather too vague. These applications, which are at pages 60, 61, 62, 63, 64 and 65 of the paper book, make one uniform prayer for adjournment of the case sine die, complaining that the petitioner is unable to produce the necessary evidence because the books of accounts and other papers of the petitioner-firm are under the custody of the Central excise authorities. The learned Additional Assistant Commissioner of Sales Tax passed the impugned order on the premises that the petitioner had failed to furnish any evidence in respect of the exemptions claimed by it in the return. In this connection it is also pertinent to note that on a previous occasion the assessing authority had passed a similar order of best judgment assessment which had been set aside by the Board of Revenue by order dated 11th March, 1965 (petitioner's annexure 'A') in respect of an earlier period of assessment. But the Board of Revenue in that order had found it as a fact that the petitioner's account books and other documents had been seized by the Central excise authorities and hence he was unable to furnish the necessary evidence before the assessing authority. Therefore, on that occasion the Board of Revenue gave a direction to the assessing authority to pass a fresh order of assessment after giving the petitioner a proper opportunity to produce the necessary evidence. But it appears that the assessing authority purported to pass the order of best judgment assessment on the wrong premises that the petitioner was unable to furnish any proof in respect of the exemptions claimed by him. In the return filed in this Court also a similar vague assertion has been made. But the fact is not disputed that the account books and other documents relating to the assessment period are still under the custody of the Central excise authorities and, therefore, the petitioner cannot produce them without the assistance of the assessing authority.
4. Such power of production has been given to the assessing authority by Section 35(1)(a)(ii) of the Madhya Pradesh General Sales Tax Act, 1958. But the learned Additional Assistant Commissioner, instead of resorting to that power, wrongly assumed that the petitioner had failed to furnish the necessary evidence. Under the circumstances it is obvious that the petitioner cannot have access to the seized account books and other papers and it is for the assessing authority to exercise the statutory power conferred on him for the purpose and not to pass an ex parte best judgment assessment order in such a manner by denying the assessee a reasonable opportunity of proving his contentions. Looked at from this point of view, the impugned order clearly suffers from an illegality inasmuch as the assessing authority failed to exercise the jurisdiction vested in him by law and assumed wrongly that it was the petitioner who was responsible for the failure to furnish the requisite evidence.
5. However, the learned Government Advocate appearing for the respondents pointed out that the notice issued to the petitioner (respondents' annexure 1) was under Section 18(4)(a) of the Act and, therefore, it was not necessary for the assessing authority to comply with the requirements of Sub-section (2) of the said section. In this connection we may observe that Section 17, which relates to filing of returns, as per Sub-section (3) contemplates a penalty to be imposed on the assessee where he, without sufficient cause, fails to comply with the requirements of a notice issued under Sub-section (1). But mere late filing of a return can, in our opinion, not be visited with the drastic penalty of altogether preventing the assessee from furnishing any evidence whatsoever. Of course, for such late filing of returns, the requisite penalty can be imposed by the assessing authorities. But once an assessee is permitted to file a return, although late, that becomes a part of the record and thereafter the assessing authority has to pass an order of assessment on whatever material there might be or on whatever material the assessee might be able to produce. Therefore, we do not think that the drastic penalty of altogether preventing the assessee from furnishing any evidence whatsoever should be imposed for the lapse of late filing of return. That, in our opinion, would not be warranted by the wording of Sub-section (4) of Section 18 of the Madhya Pradesh General Sales Tax Act, 1958. Of course, the said sub-section does contemplate an order to be passed as a best judgment assessment where a registered dealer does not furnish returns in respect of any period by the prescribed date. But if returns are filed late, the assessing authority has certainly the discretion to impose penalty of the kind contemplated in Section 17(3) of the Act. It does not follow as a necessary corollary that in every case where returns are filed late, the assessing authority will not allow the assessee to furnish any evidence whatsoever. We are unable to accept such a proposition which, in our opinion, would not be warranted by the wording of Sections 17 and 18 of the Act.
6. It is thus clear that the impugned order has not been passed by the assessing authority after complying with the provisions of the Act. In this connection we may also refer to Rule 33 of the Madhya Pradesh General Sales Tax Rules, 1959. Sub-rule (3) of that rule reads as follows :
In making an assessment to the best of his judgment under Sub-section (4), (6) or (7) of Section 18, the assessing authority shall, as far as practicable, have due regard to the extent of the business carried on by the dealer, the surrounding circumstances and all other matters which may be of assistance in arriving at a fair and proper estimate of the taxable turnover of the dealer.
This rule clearly contemplates that the assessing authority has to pass an order of assessment after considering the surrounding circumstances and other matters that may be of assistance in order to arrive at a fair and proper estimate of the taxable turnover. Of course, if the default of the assessee be in respect of furnishing evidence, then also it may be open to the assessing authority to pass an ex parte best judgment assessment. But the necessary condition is that the assessee himself must be in default of furnishing the requisite evidence. In the instant case the default has not been on the part of the petitioner, but has been on account of facts which are not within his control and he cannot furnish the necessary evidence unless the power of the assessing authority under Section 35(1)(a)(ii) of the Act is invoked. It is also true that as pointed out by the learned Government Advocate, the petitioner should specify the particular documents, registers or account books which he would like to be summoned for the purpose of helping the assessing authority to arrive at a fair conclusion. The petitioner shall, therefore, specify those documents etc. before the assessing authority and the assessing authority shall summon them or such of them as may be relevant and thereafter he shall pass a fresh order of assessment.
7. As a result of the discussion aforesaid, this petition succeeds and is accordingly allowed. The impugned order of assessment (petitioner's annexure 'C') is quashed with a direction that the assessing authority shall pass a fresh order in accordance with the provisions of law. As the case is being remanded, we direct that there shall be no order as to costs. The amount of security deposited by the petitioner shall be refunded to him.