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L.J. Patel and Co. Vs. Commissioner of Sales Tax - Court Judgment

LegalCrystal Citation
SubjectCivil;Sales Tax
CourtMadhya Pradesh High Court
Decided On
Case NumberMiscellaneous Civil Case No. 108 of 1963
Judge
Reported in1963MPLJ33; [1964]15STC18(MP)
AppellantL.J. Patel and Co.
RespondentCommissioner of Sales Tax
Appellant AdvocateR.K. Tankha, Adv.
Respondent AdvocateR.J. Bhave, Government Adv.
Cases ReferredGhanshyamdas v. Regional Assistant Commissioner of Sales Tax
Excerpt:
.....a notice in form xii was given to the assessee under section 11(5) of the act in respect of the period from 19th january, 1950, to 26th october, 1953. when the assessee appeared before the sales tax officer on 15th april, 1955, it was informed by an order passed by the sales tax officer on that day that it would be assessed for the period from 19th january, 1950, to 26th november, 1954, the assessee was also directed to produce the account books for the above period. the supreme court observed :section 12(5) enables the assessing authority to make a best judgment assessment for 'all subsequent periods' after giving the dealer a reasonable opportunity of being heard. such an opportunity was given in the present case even in respect of the last three quarters, and we are unable to hold..........all subsequent periods.' here, no doubt, the notice which was issued to the assessee mentioned the period of assessment as from 19th january, 1950, to 26th october, 1953. but this, as pointed out by the board of revenue, was a clerical error and actually on 15th april, 1955, the sales tax officer did pass an order telling the assessee that it would be assessed for the period from 19th january, 1950, to 26th november, 1954, and that it should produce its account books for that period before the next date of hearing, which was 25th april, 1955. it cannot, therefore, be contended that the assessee had no notice for assessment in respect of the period from 26th october, 1953, to 26th november, 1954. rule 32, on which reliance has been placed by the assessee, no doubt says that the notice in.....
Judgment:
ORDER

P.V. Dixit, C.J.

1. In this reference Under Section 44 of the Madhya Pradesh General Sales Tax Act, 1958, at the instance of the assessee' the questions which have been propounded for our decision are-

(1) Whether in the facts and circumstances of the case, there was valid notice on the applicant under the C.P. and Berar Sales Tax Act, 1947, for the assessment for period 19th January, 1950, to 26th November, 1954 ?

(2) Whether the assessment for the period 19th January, 1950, to 26th November, 1954, was barred by limitation, in whole or in part, Under Section 11(5) of the C.P. and Berar Sales Tax Act, 1947 ?

2. The material facts are that the assessee, Messrs L. J. Patel & Co., having failed to apply for registration as a dealer Under Section 8 of the Central Provinces and Berar Sales Tax Act, 1947 (hereinafter referred to as the Act), a notice in Form XII was given to the assessee Under Section 11(5) of the Act in respect of the period from 19th January, 1950, to 26th October, 1953. When the assessee appeared before the Sales Tax Officer on 15th April, 1955, it was informed by an order passed by the Sales Tax Officer on that day that it would be assessed for the period from 19th January, 1950, to 26th November, 1954, The assessee was also directed to produce the account books for the above period. The account books were never produced by the assessee even after obtaining several adjournments for that purpose. Ultimately an order was passed by the Sales Tax Officer, Raipur, on 29th December, 1955, assessing the petitioner to tax for the period from 19th January, 1950, to 26th November, 1954. The assessee contended before the Board of Revenue that the assessment for the period beyond 26th October, 1953, was illegal inasmuch as it was not given any notice, under Rule 32 of the rules made under the Act, in Form XII for assessment for that period. It was also urged that the word 'period' in Section 11(5) of the Act meant a quarter of a year and in any case a year and, therefore, the notice which was issued to it was more than three years after the expiry of that period and was barred by limitation. Both these contentions were overruled by the Board of Revenue.

3. In our opinion, the first question is concluded by the decision of the Supreme Court in State of Orissa v. Chakobhai Ghelabhai & Co. [1960] 11 S.T.C., where it was held in connection with Section 12(5) of the Orissa Sales Tax Act, 1947, that the issue of separate notices for several periods was not necessary and if only one notice was issued for several periods the assessment made for each period separately would be legal. In the case of Chakobhai Ghelabhai & Co. [1960] 11 S.T.C., no separate notice was given Under Section 12(5) for the last three quarters. For these quarters the assessing officer after he made orders of assessment for the first five quarters, had directed the assessee to produce his accounts; but no accounts were produced. The Supreme Court observed :-

Section 12(5) enables the assessing authority to make a best judgment assessment for 'all subsequent periods' after giving the dealer a reasonable opportunity of being heard. Such an opportunity was given in the present case even in respect of the last three quarters, and we are unable to hold that the assessment for the last three quarters was bad.

Section 12(5) of the Orissa Sales Tax Act, 1947, is similar to Section 11(5) of the local Act which also says that 'the Commissioner shall, at any time within three calendar years 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 due from the dealer in respect of such period and all subsequent periods.' Here, no doubt, the notice which was issued to the assessee mentioned the period of assessment as from 19th January, 1950, to 26th October, 1953. But this, as pointed out by the Board of Revenue, was a clerical error and actually on 15th April, 1955, the Sales Tax Officer did pass an order telling the assessee that it would be assessed for the period from 19th January, 1950, to 26th November, 1954, and that it should produce its account books for that period before the next date of hearing, which was 25th April, 1955. It cannot, therefore, be contended that the assessee had no notice for assessment in respect of the period from 26th October, 1953, to 26th November, 1954. Rule 32, on which reliance has been placed by the assessee, no doubt says that the notice in Form XII to the assessee to show cause should give to the assessee time 'ordinarily not less than thirty days after the date of issue of such notice.' But the word 'ordinarily' itself indicates that the giving of thirty days' time is not a mandatory provision. That being so, it cannot be held that the giving of notice to the assessee in respect of the period beyond 26th October, 1953, by an order made by the Sales Tax Officer on 15th April, 1955, and directing the assessee to produce its account books on 25th April, 1955, was illegal inasmuch as it did not give thirty days' time to the assessee. The first question, therefore, must be answered by saying that the notice given to the assessee for assessment for the period from 19th January, 1950, to 26th November, 1954, was valid.

4. The second question is answered by our decision in Battulal v. Commissioner of Sales Tax 1962 M.P.L.J. 915. In that case, it has been ruled by us that the word 'period' occurring in Section 11(5) of the Act covers the whole period during which a dealer being liable to pay tax had wilfully failed to apply for registration and it does not mean the quarter for which return is to be filed under Rule 19. It was on this view that the Board of Revenue said that the assessment for the period from 19th January, 1950, to 26th November, 1954, was not barred by limitation. This statement of case does not unfortunately give the date of issue of the notice to the assessee in Form XII. This should have been stated by the Board of Revenue. However, Shri Tankha, learned counsel appearing for the assessee, did not dispute before us that on the view expressed in Battulal's case 1962 M.P.L.J. 915, the assessment was not barred by limitation. The submission which the learned counsel put before us was that the authority of the decision in Battulal's case 1962 M.P.L.J. 915, was destroyed by the recent decision of the Supreme Court in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax (Civil Appeal Nos. 101 and 102 of 1961 decided on the August, 1963; 1963] 14 S.T.C. 976. We do not think so. In Ghanshyamdas' case (Civil Appeal Nos. 101 and 102 of 1961 decided on the August, 1963; 1963] 14 S.T.C. 976, it was in connection with Section 11-A of the Act that the Supreme Court held that 'period' in Section 11-A could only mean a quarter and that it could not be further split up into months, weeks and days and the question of 'escaped assessment' under that Section had to be considered on the ground that each quarter was a separate period of assessment. The question as to the meaning of the word 'period' for the purpose of Section 11(5) did not arise for consideration in Ghanshyamdas' case (Civil Appeal Nos. 101 and 102 of 1961 decided on the August, 1963; [1963] 14 S.T.C. 976. On the other hand, while contrasting the provisions of Section 11(5) and Section 11-A, the Supreme Court pointed out that Under Section 11(5) the position is different and that there is no statutory obligation cast on a dealer, who does not get himself registered under the Act, to submit a return and the case of such a dealer is 'really a case of evasion from his obligation to get himself registered under the Act', and that in the case of such a dealer, the assessment can be made only within three calendar years from the expiry of the period in respect whereof he is liable to pay tax. That the word 'period' as used in Section 11(5) cannot be construed in the same sense in which it has been used in Section 11 -A is obvious enough. Whereas in Section 11-A the meaning of the word has to be taken with reference to the unit of assessment, that is 'quarter' as held by the Supreme Court in Ghanshyamdas' case (Civil Appeal Nos. 101 and 102 of 1961 decided on the August, 1963; [1963] 14 S.T.C. 976), in Section 11(5) it must be understood with reference to the period during which a dealer being liable to pay tax has wilfully failed to apply for registration. In our opinion, the decision in Battulal's case 1962 M.P.L.J. 915 does not run counter to the pronouncement of the Supreme Court in the recent case of Ghanshyamdas (Civil Appeal Nos. 101 and 102 of 1961 decided on the August, 1963; [1963] 14 S.T.C. 976).

5. For these reasons, our answer to the first question is in the affirmative. The second question is answered in the negative. The assessee shall pay costs of this reference. Counsel's fee is fixed at Rs. 100.


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