G.K. Misra, C.J.
1. Though a number of grounds had been taken in the writ application, ultimately Mr. Rath filed a typed statement showing that he would press only the following two grounds :
(1) In the absence of an assessment proceeding or escaped assessment proceeding under Section 12(8) of the Orissa Sales Tax Act or penalty proceedings or proceeding for realisation of tax, notice issued under Section 16(1) of the Orissa Sales Tax Act is illegal and without jurisdiction.
(2) In the absence of rules prescribing the conditions for the exercise of power under Section 16(1) of the Act, the power remains in abeyance and no action could be taken in exercise of the said power.
2. Facts relevant to the aforesaid contentions, shorn of details, may only be stated. For the assessment years 1964-65 and 1965-66 the assessments were made on 13th January, 1966, and 22nd March, 1967, respectively. On 9th January, 1968, an order (annexure A) was recorded by the Sales Tax Officer which runs thus :
Issue notice under Section 16(1) for production of accounts for the years 1964-65 and 1965-66 for examination with reference to the seized accounts to check up if the figures relating to milling of paddy measuring 21807-57 bags as found from the seized ledger exhibit 31 for the year 1964-65 have been posted in the books of accounts maintained regularly by the dealer. Similarly exhibit 31 reveals that the dealer has some timber counting 7143-1 cft. during the above year. It is necessary to confirm if these timbers have actually been posted in the books of accounts and if so ascertain how those have been disposed of. In case it is found that the dealer has suppressed any transaction, necessary notice under Section 12(8) will be issued for the above year after establishing suppression.
2. Besides milling of paddy and sawing of timber it is also found that the dealer has disposed of 267 bags of cement during the year 1964. The dealer has also to be examined on this point.
3. The seized records show that during the year 1965-66 the dealer has disposed of 196 bags of cement. Besides, the seized record exhibit 21 reveals payment of money amounting to Rs. 600 and sale of 60 bags of cement, 30 bags of wheat and 20 bags of maida during the period 19th March, 1965, to 28th March, 1966. These transactions have to be verified with reference to seized books of account and the dealer has to be examined with reference to the entry made in the books of account. In case it is found that the dealer has not posted some transactions regularly, notice under Section 12(8) is to be also issued for the year 1965-66.
Hence examination of accounts for this year is also necessary.
Hence issue notice fixing date to 17th January, 1968.
On the very same day, notice (annexure I) under Section 16(1) of the Orissa Sales Tax Act, 1947 (hereinafter to be referred to as the Act) by the Sales Tax Officer, Vigilance, for production of accounts of 1964-65 and 1965-66 was issued. On receipt of the notice the petitioner which is a partnership firm carrying on business and is a registered dealer under the Act filed a revision before the Commissioner of Commercial Taxes under Section 23(4) of the Act. The revision was dismissed by an order of the Commissioner (annexure II) on 5th February, 1968. The writ application was filed on 8th February, 1968. According to the department, notice under Section 12(8) of the Act for the year 1964-65 was issued on 25th March, 1968. A counter-affidavit was filed on behalf of the petitioner in the course of hearing that no notice under Section 12(8) had been served on the petitioner. The learned Standing Counsel showed us the record of the proceeding under Section 12(8) that the proceeding had been initiated and that not only notice had been issued but it was served. At any rate it is not disputed that the notice under Section 16(1) was issued on 9th January, 1968, before a proceeding under Section 12(8) was initiated on 25th March 1968.
3. To examine the correctness of the two contentions raised by Mr. Rath before us, Section 16(1) of the Act may be extracted :
16. Production and inspection of accounts and documents, and search of premises.--(1) The Commissioner may, subject to such conditions as may be prescribed, require any dealer to produce before him any accounts or documents, or to furnish any information, relating to the stocks of goods of, or purchases, sales and deliveries of goods by, the dealer as may be necessary for the purposes of this Act.
The second contention may be examined first. Mr. Rath contends that the sub-section cannot be given effect to unless the conditions referred to in the parenthetic clause have been prescribed. There is no dispute that no such conditions have been prescribed by framing rules. The question is whether the sub-section can be effectively worked out even if the parenthetic clause is excluded out of consideration.
After exclusion of the said clause the sub-section would stand thus:
The Commissioner may require any dealer to produce before him any accounts or documents, or to furnish any information, relating to the stocks of goods of, or purchases, sales and deliveries of goods by, the dealer as may be necessary for the purposes of this Act.
The sub-section, as thus expressed after the exclusion of the parenthetic clause, can fully operate proprio vigore. The power that is conferred by the sub-section is to require the dealer to do various things mentioned therein as may be necessary for the purposes of the Act. The clause does not impose any limitation that until conditions are prescribed, the subsection would not operate. On a plain construction, it is clear that the power under the sub-section can be effectively exercised even without any condition being prescribed. There is no merit in this contention.
4. The first contention is that the assessment proceeding was already over by 13th January, 1966, and 22nd March, 1967, and the proceeding relating to escaped assessment under Section 12(8) of the Act had not been initiated when the notice under Section 16(1) was issued on 9th January, 1968, and that there being no pendency of any proceeding for reassessment or escaped assessment, a notice under Section 16(1) is without jurisdiction. The contention is untenable in view of the wide language used in Section 16(1). The notice to the dealer to produce before the Commissioner any accounts or documents, or to furnish any information, relating to the stocks of goods or purchases, sales and deliveries of goods is to be given as may be necessary for the purposes of the Act. There is nothing in the language to restrict the purpose to a period when the assessment or reassessment proceeding is pending. It was observed in Commissioner of Commercial Taxes, Board of Revenue, Madras, and Anr. v. Ramkishan Shrikishan Jhaver A.I.R. 1968 S.C. 59 on Section 41 of the Madras General Sales Tax Act (1 of 1959) which is in pari materia with Section 16 of the Act that the power has to be exercised for the purpose of the Act which means 'with reference to assessment proceedings at all stages including recovery of tax and prosecution for offences'. The expression 'with reference to assessment proceedings at all stages' as used by their Lordships does not mean during the pendency of the proceedings. Their Lordships also emphasised that that power is to be exercised relating to the business of the dealer and not that of anybody else. The meaning of the expression 'purposes of the Act' was construed as being for the 'purposes of seeing that there is no evasion of tax'. That the purpose of the Act is to see that there is no evasion of tax was emphasised in paragraphs 6 and 17 of the judgment.
5. On a plain reading of Section 16(1) of the Act it is clear that wide power has been conferred on the taxing authorities to call for accounts and the information as mentioned in Section 16(1). Even before assessment or reassessment proceeding starts and also with a view to see if a proceeding for assessment or escaped assessment would at all be resorted to under the other sub-sections of Section 16, power has been conferred for inspection, search and seizure. Though in the other sub-sections there is no reference to the use of the power for the purposes of the Act, yet their Lordships construed the analogous provision in the Madras Act as meaning that the power would be exercised only for the purposes of the Act. In the entire section there is no indication that the power would be exercised only when a quasi judicial proceeding in the shape of assessment, reassessment or escaped assessment is pending. The object of the Legislature seems to be clear. There may be dealers who have got the necessary taxable turnover but yet do not submit any return. Similarly, there may be other dealers who file returns but not in respect of the real taxable turnover. Power has been conferred by Section 16 on the taxing authorities to exhaust all avenues to get the real information regarding the taxable turnover of a dealer. After getting into the accounts of the dealer the Commissioner may be satisfied that the return furnished represented the true taxable turnover. In such a case no further action would be taken. This power is purely one of administrative character and is not to be confined in its operation to the pendency of a quasi judicial proceeding. The power can appropriately be exercised before any proceeding for assessment or escaped assessment is initiated.
6. Coming to the facts of this case, it is clear that the Commissioner had information that there was suppression of the real taxable turnover. To verify whether the information given to the Commissioner is correct or not, the dealer was called upon under Section 16(1) to produce the accounts. The exercise of the power under Section 16(1) by the impugned notice cannot be questioned.
7. If Mr. Rath had confined his argument only to these two contentions before the Division Bench there would have been no necessity to make a reference to the Full Bench. The reference arose on account of the fact that in the writ application a ground was taken in paragraph 10 that the impugned notice did not give reasons and as such was illegal and without jurisdiction. Reliance was placed on a Division Bench decision of this Court in B. Patnaik Mines (P.) Ltd. v. N.K. Mohanty, Sales Tax Officer, Assessment Unit, Government of Orissa, Calcutta, and Ors. I.L.R. 1967 Cutt. 446. This decision has been subsequently followed in Uttareswari Rice Mills, Berhampur v. Sales Tax Officer, Intelligence Wing, Vigilance, Berhampur, and Anr. A.I.R. 1969 Orissa 1. Both the decisions fully support the contention of Mr. Rath that unless reasons are given in the notice under Section 12(8), the proceeding is without jurisdiction and by analogy the decisions were relied upon in respect of a notice under Section 16(1). Mr. Mohapatra, learned Standing Counsel, contended before the Division Bench that those two cases were wrongly decided and were contrary to Commissioner of Income-tax, Bengal v. Mahaliram Ramjidas  8 I.T.R. 442 (P.C.), Epari Chinnakrishna Murty v. Sales Tax Officer Ganjam Circle I I.L.R. 1957 Cutt. 601, Calcutta Discount Co. Ltd. v. Income-tax Officer Companies District I, Calcutta, and Anr.  41 I.T.R. 191 (S.C.), S. Narayanappa and Ors. v. The Commissioner of Income-tax, Bangalore  63 I.T.R. 219 (S.C.) and M/s. Kantamani Venkata Narayana & Sons v. First Additional Income-tax Officer, Rajahmundry  63 I.T.R. 638 (S.C.). The Division Bench was impressed with the contention of Mr. Mohapatra and as such a reference was made to the Full Bench to decide the correctness of B. Patnaik Mines (P.) Ltd. v. N.K. Mohanty, Sales Tax Officer, Assessment Unit, Government of Orissa, Calcutta, and Ors. I.L.R. 1967 Cutt. 446 and Uttareswari Rice Mills, Berhampur v. Sales Tax Officer, Intelligence Wing, Vigilance, Berhampur, and Anr. A.I.R. 1969 Orissa 1. Before the Full Bench, however, Mr. Rath did not press that contention and as such the necessity of examining the correctness of B. Patnaik Mines (P.) Ltd. v. N.K. Mohanty, Sales Tax Officer, Assessment Unit, Government of Orissa, Calcutta, and Ors. I.L.R. 1967 Cutt 446. and Uttareswari Rice Mills, Berhampur v. Sales Tax Officer, Intelligence Wing, Vigilance, Berhampur, and Anr. A.I.R. 1969 Orissa 1, did not arise.
8. As both the contentions of Mr. Rath fail, the writ application is dismissed with costs. Hearing fee Rs. 100.
A. Misra, J.
B.K. Patra, J.