M. Hidayatullah C.J. and B.K. Choudhury J.
1. This petition is by one Kanhayya-lal, who is carrying on business as a grain merchant in the name and style of Kanhayyalal Hariprasad. He registered himself as a dealer under the C. P. and Berar Sales Tax Act, 1947, on 18-8-1949. The petition arises out of assessment proceedings coupled with proceedings to, impose a penalty for a period from 29-1-1949 to 18-8-1949.
2. It appears that a notice in Form No. V| was issued to the petitioner by the Department asking for returns, but returns were not submitted. The Department, therefore, decided to takes action against him and started proceedings under Section 24(1)(a), as also under Section 1(5) of the 8ale' Tax Act, after taking the assent of the Commissioner of sales Tax, because a notice served on the assessee to produce his documents was not obeyed.
An ex parte order of assessment was passed against him on 25-41-1952 assessing him Rs. 771-2-0 as sales tax for the above period. A penalty of Rs. 50/- was also imposed on him under Section 1(5) of the Act. The order of the Sale' Tax Officer is Annexure 'A'.
3. The assessed deposited a sum of Rs.300/- on 10-1-1953 and appealed to the Assistant Commissioner of Sales Tax. The appeal wag dismissed on 30-9-1954 (Annexure 'B'). A second appeal to the Deputy Commissioner of Sales Tax was dismissed on 20-7-1955 on the short ground that She assesses had not deposited the balance of the tax before filing the appeal.
The present petition asks for writs of certiorari to quash the orders passed by the Department and also for quashing the proceedings pending before the Tahsildar for recovery of the tax. It was filed on 11-10-1956.
4. The petitioner by his petition contends that the assessment made on him was barred bytime for various reasons. According to him the notice in Form XII sent to him was barred, beingsent more than 12 months after the expiryof the period of assessment and also after more than three years from the commencement of the Act.
He also contends that the Amending Act, which came into force on 1-12-1953, was wrongly taken into consideration as determining the period of limitation and that the amended provision of Section 22 of the Sales Tax Act was notattracted to his case and was wrongly relied upon. He, therefore, asks that all the ordersand recovery proceedings against him be quashed.
5. The case was before one of us (Bhutt J.), who referred the case to a larger Bench, because, in his opinion, there was a conflict in the decision given by two Division Benches. They are Firm. Sheonarayan Matadin v. Sales Tax Officer Raipur, 1956-7 STC 623 (Nag) (A), decided by one of us (Bhutt J.) and Tambe J., and Ramdhan Laxminarayan v. Assistant Sales Tax Officer, Akola, Misc. Petn. No. 125 of 1955, D/-29-6-1956 (Nag) (B), decided by one of us (C. J.) and Mangalmurti, J.
Though the learned referring Judge did not specifically refer the entire case for the determination of this Full Bench, he announced to the parties at the hearing that the whole case could be decided by this Full Bench, and on this assurance, the Full Bench proceeded to decide all the controversies in the case.
6. The point of difference between the two reported cases is as to the meaning to be given to Section 11(5) of the Sales Tax Act, which runs as follows:
'It upon information which has come intohis possession, the Commissioner is satisfied that any dealer has been liable to pay tax under this Act in respect of any period and has nevertheless wilfully tailed to apply for registration, the Commissioner shall, at any time within three calender years 'from the commencement of this Act and thereafter within 12 months' from the expiry of such period, after giving the dealer a reasonable opportunity of being heard, proceed in such manner as may be prescribed to assess to the best of his judgment the amount of tax duefrom the dealer in respect of such period and all subsequent periods; and the Commissioner may direct that the dealer shall pay by way of penalty, in addition to the amount of tax so assessed, a sum not exceeding one and a half times that amount.'
7. We may mention that the words underlined there into ' ') from the commencement of this Act and thereafter within 12 months' were omitted by Section 8 (v) of M. P. Act XX of 1953, andthe amendment was given retrospective effect from 1-6-1947: Vide Section 24 of the Amending Act.
8. The question that has arisen for our consideration and which had arisen in the other two cases was the meaning of the expression 'within three calendar years'. In the case reported in the Sales Tax Cases the learned Judges who formed the Division Bench held that 'three calendar years' denoted 36 calendar months. In the other Division Bench case it was held that calendar year meant a year according to the Gregorian calendar, commencing on the 1st January of the year immediately succeeding the year in which the assessment period expired. We have to decide which of these two meanings is correct.
9. After the calendar was revised in England, Acts were passed to show when the calendar year commenced, and it was then decided that the calendar year would commence from the 1st of January and expire on 31st December. There is no definition of the expression 'calendar year' either in the General Clauses Act or in the Act with which we are concerned.
In the General Clauses Act the term 'year' has been defined as denoting a period of a year according to the Gregorian calendar. It was, therefore, contended by the learned counsel for the petitioner that 'calendar year' means no more than a period of 365 days calculated from any day within the calendar. Our attention was drawn to Stroud's Judicial Dictionary, where the expression 'calendar month' has been given two distinct meanings as denoting (1) a month according to the calendar, like February or March, and (2) a period of one month calculated from a date in any one month to the same date in the next succeeding calendar month.
We consulted the Oxford Dictionary, the Webster's Dictionary, the New Standard Dictionary, and the Chamber's Twentieth Century Dictionary, in all these dictionaries the phrase 'calendar year', which is also called a legal year or a civil year, is described as a period of a year according to the Gregorian calendar, commencing from the 1st January and ending on the 31st December.
In the New Standard Dictionary the expression 'calendar year' is said to mean a period from the midnight of the 31st December to the midnight of the succeeding 31st December.
10. In Cathcart Clerk v. Hardy, (1814) 2 M & S 534: 105 ER 480 (C), Lord Ellenborough, C. J., drew a distinction between the expression 'year', which represents 365 or 2S8 days calculated from any date within the calendar to a corresponding date in the succeeding calendar, and a 'calendar year', which runs from the 1st of January to the 31st December.
11. The learned counsel for the petitioner drew our attention to Corpus Juris Secundum, Vol. 83, pages 334, 835 in which in addition to this meaning it is said that a year can be calculable from an intermediate date in a calendar to a corresponding date in the succeeding calendar. We do not know under what circumstances that case was decided, because we have had no opportunity of reading the decision, which is not available here.
But the observations show how a period of one year is to be calculated and not what the term 'calendar year means. That is defined on the same page in another place. In Halsbury's Laws of England, Vol. 32, page 114, HailshamEdition, the same meaning which we have noticed in the dictionary is assigned to the expression 'calendar year'.
We are of the opinion that the expression 'calendar month' stands for two different things but the expression 'calendar year' has not yet received two meanings in the dictionary and does not include the meaning now ascribed to it by the learned counsel for the petitioner or by the Division Bench in Firm Sheonarayan Matadin's case (A), (Supra).
12. Having considered all the material that was placed before us, including dictionaries, we are of the opinion that 'three calendar years' must be taken to mean three calendar years calculated from the 1st of January immediately succeeding the calendar year in which the assessment period expired. If this is taken into account, then the notice which was served upon the petitioner in Form No. XII on 29-10-1952 was within three 'calendar years' from the date of the expiry of the assessment order.
It is also to be noticed that in the present case the assessment was being made for a part of a year, viz., 'for a period from 29-1-1949 to 18-8-1949. In the petition we found no reference to the date on which the assessment year expired. In view of what we have said above we are of the opinion that the decision of the Division Bench, with all due respect, in Firm Sheonarayan Matadin's case (A), cannot be accepted, and we affirm the decision of the other Division case in Misc. Petn. No. 125 of 1955, D/- 29-6-1956 (Nag) (B).
13. The next question is which of the two Acts could be relied upon by the appellate authorities of the Department. The contention of the petitioner is that on the date on which the assessment was made it was patently beyond time because the Act came into force on 23-5-1947, and even three calendar years calculated from that date would expire in 1950 and not in 1952.
He contends that since the assessment was without the authority of law it was void under Article 265 of the Constitution, and that short of its being validated by legislation it could not be revived otherwise.
14. He also submitted, on the analogy of a right of appeal being substantive, that the right to immunity from assessment after the expiry of taree years from the date of the passing of the Act was a substantive right. We do not accept the contention that there can be any substantive right not to pay a tax. The liability to pay the tax is created by the charging section, and the liability remains.
All that the rule of limitation which is introduced in a taxing statute does is to take away the right of the Department to claim the tax. If the law is at any time amended, then the rule of limitation disappears, more so, when the law itself makes the new rule of limitation applicable from the commencement of the parent Act. The law which the appellate authorities had to comply with contained no provision for calculating the period of three calendar years from the commencement of the Act.
It contained a provision for calculating three calendar years from the expiry of the assessment year. In the present case the assessment year must be deemed to expire on 18-8-1949, and three calendar years calculated from 1-1-1950 render all the proceedings in the casewithin time. We accordingly hold, that the assessment upon the petitioner was within the competence of the Department and that even if it was not so at the time when it was made the assessment became valid once the bar of limitation was removed by the retrospective legislation. We do not accede to the argument of learned counsel for the petitioner that we can view the exemption from liability as a substantive right or that the immunity from taxation by a bar of limitation could not be removed by the retrospective legislation, by a competent legislature. (15) This brings us to the question whether the penalty provisions could be applied to the petitioner. The penalty has to be justified with reference to Sub-section (5) of Section 1 of the Sales Tax Act, as amended by Act XX of 1953 under the assessment has been made. The proviso to Section 24 of the Act XX of 1953, which makes new sub-section retrospective with effect from 1-6-1947, is as below:
'Provided that no person shall be liable to pay any penalty or to a prosecution under the said Act for any act done or omitted to be before the commencement of this Act for no penalty could be levied or no could be lodged prior to the commencement of this Act.'
AS no penalty could be imposed before the commencement of Act XX of 1953 because the notice was issued after the period of limitation then, prescribed, the order Imposing it cannot be maintained.
16. The result is that petition is partly allowed. The order of assessment of sales is maintained, and that of penalty is In the circumstances of the case, there shall be no order as to costs. The security deposit shall be refunded to the petitioner.
17. Ths order proposed to bs delivered by my Lord and Choudhuri J., has my respectful concurrences. T agree that the notice was issued within the time prescribed by Section 11(5) of the Sales Tax Act as amended by Act XX of 1953, I also agree that the order imposing penalty was without due authority of law.
18. In 1E5S-7 ETC 6?3 (Nag) (A), to which I was a party it was not disputed that a calender year only meant 13 calendar months. As the term 'calender year' has not been defined either in the Sales Tax Act or the General Clauses Act, it is to be understood in its ordinary dictionary meaning. It is, therefore, a period of 365 or S56 days, as the case may be, which begins from the 1st day of January and and end on the 31st day of December.
The question, however, is how a calendar year should be computed from a day other than the 1st day of January. There is no prescribed method of calculating it in such a ease. Therefore, the dictionary meaning has to be wholly incorporated in Section 1(5) of the Sales Tax Act to determine the date when the three calendar years would expire. In this manner, the in question would be found to be within under the amended section.
19. It is not without considerable hesitation that I have been driven to this conclusion. What was really intended by the Legislature may not toe clear, but it is not for the Courts of law to speculate as to its intention. It wouldhave been better if the Legislature had defined the term 'calendar year' for purposes of the Sales tax Act, and specified how it is to be computed, and not left it to the Courts of law to define its meaning and the method of its computation with reference to an ordinary dictionary.