R.S. Nahula, J.
1. This Full Bench is called upon to answer the following question:
'Can penalty be imposed on a dealer under Section 10(7) of the Punjab General Sales Tax Act before the end of the year.'
2. The circumstances which have led to the making of this reference may first be surveyed. The petitioner, a partnership firm of Amritsar, is a registered dealer under the Punjab General Sales Tax Act, 46 of 1948 (hereinafter referred to as the Act). Shri K.K. Opal, Excise and Taxation Officer (Enforcement), hereinafter called the respondent, was appointed the assessing authority under Act for the whole of the State of Punjab by notification dated February 10, 1964 (Annexure B). His authority and jurisdiction to exercise all the powers and to perform all the functions of assessing authority under the Act vis-avis the petitioner have not been questioned before us. Several points originally raised in the writ petition based on the alleged attack on the authority and jurisdiction of the respondent have been specifically given up by shri Bhagirth Dass, learned counsel for the petitioner at the hearing of this case.
3. The petitioner was required to file quarterly returns under the Act. During the year 1964-65 when the petitioner had filed the prescribed returns for the first quarter ending June 30. 1964, but had not yet submitted the returns for the next quarter, for which the Act gave him time till October 30, 1964, the respondent served upon the petitioner the impugned notice dated October 17 1964 (Annexure C) under Sub-section (7) of Section 10 of the Act calling upon the petitioner to appear before the respondent and to show cause to him on October 29, 1964, why penalty, not exceeding one and a half time of the amount of tax to which the petitioner was liable to be assessed, should not be imposed upon the petitioner--
(i) for maintaining false or incorrect account for the period ending 30-9-1964.
(ii) for furnishing false or incorrect returns of turover for the period ending 30-9-1964.
(iii) for furnishing false or incorrect list of sales made to registered dealers or goods ' exported outside Punjab.
4. Instead of showing cause to the respondent, the petitioner chose to invoke the extraordinary original jurisdiction of this Court under Article 226 of the Constitution on October 24, 1964, to quash the above mentioned notice and to restrain the respondent from making any assessment on its basis. The relevant attack on the notice is based on the allegations made in the first sentence of paragraph 9 and in paragraphs 12 and 13 of the writ petition which are quoted below in the language of the petitioner itself:
'9. That no proceedings for the assessment year 1964-65 can take place prior to the expiry of the year, nor can any notice be issued by the respondent under Section 10(7) of the Act.
12. That the notice (Annexure C) is ultra vires on the fact of It. Although no return has been filed at all for the period ending 30-9-1964, and still it has been mentioned that the petitioner has furnished false or incorrect return 'for the period 30-9-1964'.
13. That the declaration forms, which are required to be produced at the time of assessment when the dealer' claims the exemption, cannot be required to be produced at any time earlier to the time of assessment and the respondent has unnecessarily assumed jurisdiction to demand either the furnishing of accounts or of the production of declaration forms'.
5. Petitioner also claimed ex parte stay of further proceedings before the respondent during the pendency of the writ petition. By order dated October 26, 1964, the Motion Bench issued notice of the petition and granted interim stay of further proceedings which interim order was thereafter extended from time to time till it was made absolute by Mahajan J. on December 2, 1964, as no one appeared to oppose the grant of interim relief in spite of service of notice of the stay matter on the respondent. On February 20, 1965, the return of the respondent dated February 5, 1965, was filed. The reply to the only contention of the petitioner, with which we are concerned, is contained in paragraph 12 of the written statement of the respondent in the following words.
'In reply to paragaraph 12 of the petition, it is submitted that as already submitted in the preceding paragraph the respondent is fully competent to frame assessment of the petitioner- firm in accordance with the provisions of law. The notice issued for the production of accounts for the period ending the 30th September, 1964, pertaining to the year 1964-65 is not related only to the filing of quarterly return but is also regarding maintaining of false accounts or submission of incorrect returns or submission of incorrect list of sales made to registered dealer or goods exported outside the Punjab during the year 1964-65, that is, from the 1st April 1964, to the 30th September, 1964. The dealer has been given due opportunity to prove their correctness .
6. An objection to the maintainability of the writ petition was also taken in paragraph 14 of the return on the ground that the petitioner had not availed of the alternative remedies by way of appeal and revision against the order of the assessing authority, which remedy is said to have been available to the petitioner under Sections 20/21 of the Act. The said objection has not, however, been pressed at all on behalf of the respondents before us.
7. When this petition came up for hearing before my learned brother Dua J., on January 21, 1966, it was directed that in view of the importance of the question involved it was desirable that the case should be heard in the very first instance by a Division Bench. In pursuance of the said order the matter was heard by a Division Bench consisting of my learned brother Dua J. and myself. At the hearing before the Division Beach Shri J.N. Kaushal, Advocate General of the State of Punjab (now Mr. Justice Kaushal) pressed for reconsideration of the view expressed by an earlier Division Bench of this Court (Grover and Gurdev Singh JJ.) in Mansa Ram Sushil Kumar v. Assessing Authority, Ludhiana to the effect that there could be no assessment of tax under the Act before the expiry of a financial year. By our order dated March 23, 1966, Dua J. and myself directed reference of the above-quoted question to a still larger Bench as this case appeared to require re-examination of the earlier Division Bench judgment in the case of Mansa Ram Sushil Kumar (supra). This is how the case has come up before us for deciding the aforesaid question of law relating to the scope and interpretation of Sub-section (7) of Section 10 of the Act.
8. It would be appropriate at this stage to take notice of the relevant provisions of the Act and the Rules framed thereunder. The Act replaced the Punjab General Sales Tax Act, 1941, and by virtue of operation of Sub-section (3) of Section 1 came into force on the 1st of May, 1949. 'Turnover' has been defined in Clause (i) of Section 2 of the Act to mean the aggregate of the amounts of sales and purchases and parts of sales and purchases actually made by any dealer during the given period less any ram allowed as Cash discount according to ordinary trade practice, but including any sum charged for anything done by the dealer in respect of the goods at the time of, or before, delivery thereof Clause (i) of Section 2 provides that 'year' means me financial year. Sections 4, 5, 7, 10, 11, 11A, 11B and 12 to 14 of the Act as amended up to 1960, are as follows :--
'4. (1) Subject to the provisions of Sections 5 and 6, every dealer (except one dealing exclusively in goods declared tax-free under Section 8) whose gross turnover during the year immediately preceding the commencement of this Act exceeded the taxable quantum shall be liable to pay tax under this Act on all sales effected after the coming into force of the Act and purchases made alter the commencement of the East Punjab General Sales Tax (Amendment) Act, 1958:
Provided that the tax shall not be payable on sales involved in the execution of a contract which is shown to the satisfaction of the assessing authority to have been entered into before the commencement of this Act.
(2) Every dealer to whom Sub-section (1) does not apply or who does not deal exclusively in goods declared to be tax-free under Section 8 shall be liable to pay tax under this Act on the expiry of 30 days after the date on which his gross turnover during any year first exceeds the taxable quantum:
Provided that in the case of a dealer who imports any goods for sale or use in manufacturing or processing, or who manufactures or processes any goods for sale, the liability to pay tax shall commence with effect from the date on which his gross turnover during any year first exceeds the taxable quantum.
(2-A) Notwithstanding anything contained in Sub-sections (1) and (2), no tax on the sale of any goods shall be levied if a tax on their purchase is payable under this Act.
(3) Every dealer who has become liable to pay tax under this Act shall continue to be so liable until the expiry, of three consecutive years during each of which his gross turnover has failed to exceed the taxable quantum and such further period after the date of such expiry as may be prescribed, and on the expiry of this latter period his liability to pay tax shall cease.
(4) Every dealer, whose liability to pay tax has ceased under the provisions of Sub-section (3) shall again be liable to pay tax under this Act with effect from the date on which his gross turnover first exceeds the taxable quantum.
(5) In this Act the expression 'taxable quantum' means --
(a) in relation to any dealer who imports for sale or use in manufacturing or processing any goods in Punjab, Nil:
Provided that the provisions of this Clause shall not apply to a dealer who had placed orders for import of goods before the 8th August, 1952, but received such goods on or after that date and his gross import for sale or use in manufacturing or processing any goods in Punjab did not exceed Rs. 5,000 during the year and he did not make any other import of goods after the said date.
(b) In relation to any dealer, who himself manufactures or produces any goods for sale. 10,000 rupees;
(bb) in relation to any dealer, who runs a Tandoor, Loh, Dhaba, hotel, restaurant halwai shop, bakery or other similar establishment wherein Indian food preparations, including tea, are served 25,000 rupees, and
(c) in relation to any particular classes of dealers not falling within Clauses (a), (b) and (bb), such sum as may be prescribed; or
(d) in relation to any, other dealer, 40,000 rupees: Provided that the registration of dealers already registered under this Clause shall not be cancelled until their turnover in each of three consecutive years does not entitle them to cancellation under Clause (b) of Sub-section (6) of Section 7.
5. (1) Subject to the provisions of this Act, there shall be levied on the taxable turnover of a dealer a tax at such rates not exceeding four naya Paise in a rupee as the State Government may by notification direct:
Provided that a tax at such rate, not exceeding eight naya Paise in a rupee, as may be so notified may be levied on the sale of luxury goods as specified in Schedule A appended to this Act from such date as the State Government may by notification direct. The State Government after giving by notification not less than three months notice of its intention so to do may by like notification add to or delete from this Schedule, and thereupon this Schedule shall be deemed to have been amended accordingly:
Provided further that the rate of tax shall not exceed two naye paise in a rupee in respect of any declared goods as defined in Clause (c) of Section 2 of the Central Sales Tax Act, 1956, and such tax shall not be levied on the purchase or sale of such goods at more than one tage:
Provided further that Government may by notification in the Official Gazette declare that in respect of any goods or class of goods the dealer may pay such lump sum by way of composition of the tax payable under this Act, as the Government may notify from time to time.
(IA) The State Government may by notification direct that, in respect of such goods and with effect from such date as may be specified in the notification, the tax under Sub-section (1) shall be levied at the first stage of sale thereof; and on the issue of such notification the tax on such goods shall be levied accordingly;
Provided that no sale of such goods at a subsequent stage shall be exempt from tax under this Act unless the dealer effecting the sale at such subsequent stage furnishes to the assessing authority in the prescribed form and manner a certificate duly filled in and signed by the registered dealer from whom the goods were purchased. Explanation:-- For the purposes of this Sub-section the first stage of sale in, respect of any goods and in relation to any class of dealers shall be such AS may be specified by the State Government in the notification.
(2) In this Act the expression 'taxable turnover' means that part of a dealer's gross turnover during any period which remains after deducting therefrom --
(a) his turnover during that period on--
(i) the sale of goods declared tax-free under Section 6;
(ii) sales to a registered dealer of goods other than sales of goods liable to tax at the first stage under Sub-section (1-A) declared by him in a prescribed form as being intended for resale in the State of Punjab or sale in the course of inter-State trade or commerce or sale in the course of export of goods out of the territory of India or of goods specified in his certificate of registration for the use by him in the manufacture in Punjab of any goods other than goods declared tax free under Section 6, for sale in Punjab and on sales to a registered dealer of containers or other material for the packing of such goods:
Provided that in case of such sales, a declaration duly filled up and signed by the registered dealer to whom the goods are sold and containing prescribed particulars on a prescribed form obtained from a prescribed authority is furnished by the dealer who sells the goods:
Provided further that when such goods are used by the dealer to whom these are sold for purposes other than those for which these were sold to him, he shall be liable to pay tax on the purchase thereof at such rate, not exceeding the rate of tax leviable on the sale pf such goods, as the State Government may by notification direct in respect of a class of dealers specified in such notification, notwithstanding that such purchase is not covered by Clause (ff) of Section 2.
(iii) * * * * *
(iv) sales to any undertaking supplying electrial energy to the public under a licence or sanction granted or deemed to have been granted under the Indian Electricity Act, 1910, Of goods for use by it in the generation or distribution of such energy;
(v) sales or purchases of goods falling under Section 29;
(vi) the purchase of goods which are sold not later than six months after the close of the year to a registered dealer, or in the course or inter-State trade or commerce, or in the course of export out of the territory of India:
Provided that in the case of such a sale to a registered dealer, a declaration in the prescribed form and duly filled and signed by the registered dealer to whom the goods are fold, is furnished by the dealer claiming deduction.
(vii) such other sales as may be prescribed;
(b) the amount of sales tax included in the gross turnover.
7. (1) No dealer shall, while being liable to pay tax under this Act, carry on business as a dealer unless he has been registered and possesses a registration certificate.
(2) Every dealer required by Sub-section (1) to be registered snail make application in this behalf in the prescribed manner to the prescribed authority.
(3) If the said authority is satisfied that an application for registration is in order, he shall, in accordance with such rules and on payment of such fees as may be prescribed register the applicant and grant him a certificate of registration in the prescribed form which may specify the class or classes of goods for the purposes of Sub-clauses (ii) of Clause (a) of Sub-section (2) of Section 5.
(4) The Commissioner may from time to time, by order, amend or cancel any certificate of registration on---
(a) information furnished under Section 18; or
(b) information received that the dealer has violated any provision of this Act or the rules made thereunder; or
(c) any other sufficient cause including misuse of the certificate or cessation of liability to payment of tax under this Act:
Provided that no order affecting any person adversely shall be made under this subsection without affording him a reasonable opportunity of being heard.
(5) When any dealer has been convicted or has paid composition money under Section 24 in respect of any contravention pf Sub-section (1) of this section, the Commissioner shall register such dealer and grant him a certificate of registration and such registration shall take effect as if it had been made under Sub-section (3) of this Section on the dealer's application.
(6) When --
(a) any business in respect of which a certificate has been granted upon application made under Sub-section (2) has been discontinued or transferred; or
(b) the gross turnover of any such business has during each of three consecutive years failed to exceed the taxable quantum: or
(c) the certificate of registration granted under the Central Sales Tax Act, 1956, to a dealer liable to pay tax by virtue of the provisions of Section 4A but who is not otherwise liable to pay tax under Section 4. has been cancelled,
the commissioner shall cancel the registeration and the cancellation shall come into force after the expiry of such period as may be prescribed.
10. (1) Tax payable under this Act shall be paid in the manner hereinafter provided at such intervals as may be prescribed.
(2) The Commissioner may, in such circumstances and subject to such conditions as may be prescribed, accept from any dealer, in lieu or the amount of the general tax payable during any period, a lump sum by way of composition determined in the prescribed manner.
(3) Such dealers as may be required so to do by the assessing authority by notice served in the prescribed manner and every registered dealer shall furnish such returns by such dates and to such authority as may be prescribed;
Provided that if any dealer establishes to the satisfaction of the the assessing authority that his average taxable turnover does not exceed ten per centum of his average gross turnover, the returns to be furnished by such dealer under this Sub-section shall be annual returns.
(4) Before any registered dealer furnishes the returns required by Sub-section (3), he shall, in the prescribed manner, pay into a Government Treasury or the Reserve Bank of India the Full amount of tax due from him under this Act according to such returns and shall furnish along with the returns receipt from such Treasury or Bank showing the payment of such amount.
(5) If any dealer discovers any omission or other error in any return furnished by him, he may at any time before the date prescribed for the furnishing of the next return by him furnish a revised return, and if the revised return shows a greater amount of tax to be due than was shown in the original return, it shall be accompanied by a receipt showing payment in the manner provided in Sub-section (4) of the extra amount.
(6) If a dealer fails without sufficient cause to comply with the requirements of the provisions of Sub-section (3) or Sub-section (4), the Commissioner or any person appointed to assist him under Sub-section (1) of Section 3 may, after giving such dealer a reasonable opportunity of being heard, direct him to pay, by way of penalty, a sum not exceeding one and a half time of the amount of tax to which he is assessed or is liable to be assessed under Section 11 in addition to the amount of tax to which he is assessed or is liable to be assessed and where no tax is payable, a sum not exceeding one hundred rupees.
(7) If a dealer has maintained false or incorrect accounts with a view to suppressing his sales, purchases or stacks of goods, or has concealed any particulars of his sales or purchases, or has furnished to, or produced before, any authority under this Act or the rules made thereunder any account; return or information which is false or incorrect in any material particular, the Commissioner or any person appointed to assist him under Sub-section (1) of Section 3 may, after affording such dealer a reasonable opportunity of being heard, direct him to pay, by way of penalty in addition to the tax to which he is assessed or is liable to be assessed, an amount which shall not be less than ten per centum, but which shall not exceed one and a half times. of the amount of tax to which he is assessed or is liable to be assessed'.
11. (1) If the Assessing authority is satisfied without requiring the presence of registered dealer or the production by him of any evidence that the returns furnished in respect of any period are correct and complete, he shall assess the amount of tax due from the dealer on the basis of such returns.
(2) If the Assessing Authority is not satisfied without requiring the presence of registered dealer who furnished the returns or production of evidence that the returns furnished in respect of any period are correct and complete, he shall serve on such dealer a notice in the prescribed manner requiring him, on a date and at place specified therein, either to attend in person or to produce or to cause to be produced any evidence on which such dealer may rely in support of such returns.
(3) On the day specified in the notice or as soon afterwards as may be, the Assessing Authority shall, after hearing such evidence as the dealer may produce, and such other evidence as the Assessing Authority may require on specified points, assess the amount of tax due from the dealer.
(4) If a registered dealer, having furnished returns in respect of a period, fails to comply with the terms of a notice issued under Sub-section (2), the Assessing Authority shall within four years after the expiry or such period, proceed to assess to the best of his judgment the amount of the tax due from the dealer.
(5) If a registered dealer does not furnish returns in respect of any period by the prescribed date, the Assessing Authority shall within four years after the expiry of such period after giving the dealer a reasonable opportunity of being heard, proceed to assess to the best of his judgment the amount of tax, if any, due from the dealer.
(6) If upon information which has come into his possession, the Assessing Authority Is satisfied that any dealer has been liable to pay tax under this Act in respect of any period but has failed to apply for registration, the Assessing Authority shall, within four years after the expiry of such period, after giving the dealer a reasonable opportunity of 'being heard, proceed to assess, to the best of his judgment, the amount of tax, if any, clue from the dealer in respect of such period and all subsequent periods and in cases where such dealer has wilfully failed to apply for registration, the Assessing Authority may direct that the dealer shall pay by way of penalty, in addition to the amount so assessed, a sum not exceeding one and a half times that amount.
(7) The amount of tax -----
(a) due where the returns are furnished without receipt showing full payment thereof or
(b) assessed under Sub-sections (1), (3), (4) and (5), less the sum, if any, already paid toy tike dealer in respect of the said period, or
(c) assessed under Sub-section (6) together with the penalty directed to be paid under that sub-section, shall be paid by the dealer into a Government treasury or the Reserve Bank of India by such date as may be specified in a notice issued by the Assessing Authority for this purpose and the date to be so specified shall be not less than thirty days from the date of service of such notice :
Provided that the Assessing Authority may, in respect of any particular dealer and for reasons to be recorded in writing, extend the date of such payment or allow such dealer to pay the tax due and the penalty, if any, by instalments.
(8) If the tax assessed under this Act or any instalment thereof is not paid by any dealer within the time specified therefor in the notice of assessment or in the order permitting payment in instalments, the Commissioner or any person appointed to assist him under Sub-section (1) of Section 3 may, after giving such dealer an opportunity of being heard, impose on him a penalty not exceeding in amount the sum due from him.
(9) Any assessment made under this Section shall be without prejudice to any prosecution instituted for an offence under this Act.
11A. (1) If in consequence of definite information which has come into his possession, the Assessing Authority discovers that the turnover of the business of a dealer has been under-assessed, or escaped assessment in any year, the Assessing Authority may, at any time within five years following the close of the year for which the turnover is proposed to be reassessed, and after giving the dealer a reasonable opportunity, in the prescribed manner of being heard, proceed to reassess the tax payable on the turnover which has been underassessed or has escaped assessment.
(2) An Assessing Authority or any such authority as may be prescribed, may, at any time, within one year from the date of any order passed by him and subject to such conditions as may be prescribed, rectify any clerical or arithmetical mistake apparent from the record.
11B. The amount of any tax and penalty imposed under this Act, which remains unpaid after the due date, shall be recoverable as arrears of land revenue.
(12) The assessing authority shall in the prescribed manner, refund to a registered dealer applying in this behalf, any amount of tax paid by such dealer under this Act.
(a) if the amount of tax so paid is in excess of the amount due from him under this Act; or
(b) if the amount of tax so paid is in respect of the sale or purchase of any declared goods and such goods are sold in the course of inter-State trade or commerce; either by a refund voucher or, at the option of the dealer by deduction of the tax so paid from the amount of tax due from him in respect of any other period :
Provided that the refund under Clause (b) shall be subject to such conditions as may be prescribed.
Provided further that no refund under this Section shall be allowed unless the claim for refund is made within a period of three years from the date on which such claim accrues.
'Explanation :-- For the purposes o this section, the expressions 'declared goods' and
'in the course of inter-State trade or commerce' shall have the meaning assigned to them by Clause (c) of Section 2 and Section 3 respectively of the Central Sales Tax Act, 1956.
13. (1) Every registered dealer or other dealer on whom a notice has been served to furnish returns under Sub-section (3) of Section 10. shall keep a true account of the value of goods bought and sold by him, and if the Assessing Authority considers that such account is not sufficiently clear and intelligible to enable him to make a proper check of the returns referred to in that sub-section, he may require such dealer by notice in writing to keep such accounts including records of sale as he may subject to anything that may be prescribed in that behalf in writing direct
(2) Every registered dealer shall,
(a) in respect of goods, exceeding ten rupees in value in any one transaction, sold by him or on his behalf, issue to the person to whom they are sold, a cash memorandum or bill serially numbered, bearing the name and address of the dealer, the date of sale and the signature of such dealer or his servant, manager or agent and showing the particulars of goods so sold and the price thereof; and
(b) preserve a carbon copy of such cash memorandum or bill for a period of not less than five years from the date of issue thereof;
provided that the State Government may by notification exempt any class of registered dealers from the provisions of this sub-section.
(3) Where any dealer contravenes the provisions of Sub-section (1) or Sub-section (2), the Commissioner or any person appointed to assist him under Sub-section (1) of Section 3 may, after affording such dealer a reasonable opportunity of being heard, impose upon him a penalty which may extend to five hundred rupees.
14. (1) The Commissioner or any person appointed to assist him under Sub-section (1) of Section 3 not below the rank of an Assistant Excise and Taxation Officer may, for the par-poses of this Act, require any dealer referred to in Section 10 to produce before him any book, document or account relating to his business and may inspect, examine and copy the same and make such enquiries from such dealer relating to his business, as may be necessary:
Provided that books, documents and accounts of a period more than five years prior to the year in which assessment is made shall not be so required.
(2) Every registered dealer shall --
(a) maintain day to day accounts of his business;
(b) maintain a list of his account books, display it along with his registration certificate and furnish a copy of such list to the Assessing Authority;
(c) produce, if so required, account books of his business before the Assessing Authority for authentication in the prescribed manner;
(d) retain his account books at the place of his business, unless removed therefrom by an officiall for inspection, by any official agency or by auditors, or for any other reason which may be considered to be satisfactory by the assessing authority.
(3) if any officer referred to in Sub-section (1) has reasonable grounds for believing that any dealer is trying to evade liability for tax or other dues under this Act, and that anything necessary for the purpose of an investigation into his liability may be found in any book account register or document, he may seize such book, account, register or document as may be necessary. The officer seizing the book, account, register or document shall forthwith grant a receipt for the same and shall,
(a) in the case of book, account, register or document which was being used at the time of seizing, within a period of ten days from the date of seizure; and
(b) in any other case, within a period of sixty days from the date of seizure; return it to the dealer the person from whose custody it was seized after examination or after having such copies or extracts taken therefrom as may be considered necessary provided the dealer or the aforesaid person gives a receipt in writing for the book, account, register or document returned to him. The officer may, before returning the book, account, register or document, affix his signatures and his official seal at on more placed thereon, and in such case the dealer or the aforesaid person will be required to mention in the receipt given by him the number of places where the signatures and seal of such officers have been affixed on each book, account, register or document.
(4) For the purposes of Sub-section (2) or Sub-section (3) an officer referred to in subsection (1) may enter and search any office, shop, godown, vessel, vehicle or any other place of business of the dealer or any building or place except residential houses were such officer has reason to believe that the dealer keeps or is, for the time being keeping any book, account, register, document or goods relating to his business;
(5) The power conferred by Sub-section (4) shall include the power to open and search any box or receptacle in which any books, accounts, registers of other relevant documents of the dealer may be contained.
(6) Any officer empowered to act under Sub-section (3) or Sub-section (4) shall have power to seize any goods which are found in any office, shop, godown, vessel, vehicle or any other place of business or any building or place of the dealer, but not accounted for by the dealer in his books, accounts registers, records and other documents'.
9. Sub-section (7) of Section 10, with which we are directly concered, was introduced into the Act by Section 4 of the Punjab Sales Tax (Amendment) Ordinance of 1963, which was subsequently replaced by the General Sales Tax (Amendment) Act 2 of 1963 on January 10, 1963. By a subsequent amending introduced by Section 3(1) of Punjab General Sales Tax (Amendment) Act 28 of 1965 the words 'every year' originally occurring in Sub-section (1) of Section 5 of the Act have been deleted. There have been various other amendments to the Act from time to time but we are not concerned with the same.
10. In exercise of the powers conferred by Section 27 of the Act the State Government has framed Punjab General Sales Tax Rules, 1949, to which I will refer as 'the Punjab Rules' in this judgment. Reference has been made at the hearing of this case before us to Rules 17 to 21 and 32 to 37 only. These rules are, therefore, copied below :--
'17. During the first three years after the commencement of the Act, every registered dealer, whose taxable turnover, in the opinion of the appropriate Assessing Authority, is not likely to exceed 10 per cent of his gross turnover, shall furnish a return in Form S. T. VIII annually within thirty days from the expiry of each year.
18. After the expiry of three years from the commencement of the Act, every registered dealer whose, taxable turnover does not exceed 10 per cent of his gross turnover calculated over the latest three years may, after intimation in writing to the appropriate Assessing Authority, furnish returns in form S. T. VIII or S. T. VIII-A or S. T. XXIII, as the case may be annually within 30 days from the expiry of each year.
19. When the taxable turnover of any registered dealer referred to in Rule 18 exceeds in any year 10 per cent of the average gross turnover calculated in the manner provided in the said rule, the appropriate Assessing Authority may fix fresh return periods for such dealer, but ordinarily the authority shall not reduce the return period unless he is satisfied that the excess over 10 per cent is likely to continue.
20. Every registered dealer, other than those referred to in Rules 17, 18 and 19, shall furnish returns in Form S. T. VIII or S. T. VIII-A or S. T. XXIII, as the case may be quarterly within thirty days from the expiry of each quarter.
21. Subject to the provisions of Rule 23. the return periods fixed for any dealer shall remain in force for not less than three years and thereafter shall continue to remain in force until the appropriate Assessing Authority fixes a different return period in accordance with these rules.
22. Every order of assessment shall be recorded in writing and, where the Assessing Authority determines the turnover of a dealer at a figure different from that shown in the return submitted under the provisions if these rules, the order shall state briefly the reasons therefor but a failure to state reasons shall not affect the validity of the assessment order.
33. When it appears to the appropriate Assessing Authority to be necessary to make an assessment under Section 11 in respect of a dealer, he shall serve a notice in Form S. T. XIV upon him --
(a) calling upon him .to produce his books of accounts and other documents, which such authority wishes to examine, together with any objection which the dealer may wish to prefer and any evidence which he may wish to produce in support thereof; and
(b) stating the period or the return period or periods in respect of which assessment in proposed;
and he shall fix a date, ordinarily not less than 10 days after the date of the service of the notice for producing such accounts and documents and for considering any objection which the dealer may prefer.
34. The Assessing Authority may depute an Inspector, who has been authorised in this behalf, to hear the dealer's objection and to record any evidence brought in support thereof.
35. Every Assessing Authority shall maintain a register in Form S. T. XV, in which he shall enter the details of each case instituted under Rule 33.
36. A dealer, who has been served with a notice under Rule 33. may prefer an objection in 'writing personally or through an agent. No fee shall be payable in respect of any such objection.
37. After considering any objection made by the dealer and any evidence produced in support thereof, the Assessing Authority after giving the dealer an opportunity of being heard, shall assess the amount of tax (if any) and impose penalty (if any) to be paid by the dealer'.
Rules 48 to 52 prescribe the procedure for obtaining refunds of tax admissible under Section 12 of the Act.
11. I shall now proceed to deal with the rival contentions of the learned counsel for the parties.
12. Mr. Bhagirath Dass first pressed into service certain general principles for interpretation of charging Sections in fiscal laws with which principles there neither is nor can be any quarrel. He referred to the judgment of the Supreme Court in Commr. of Income Tax, Patiala v. Shahzada and Sons : 60ITR392(SC) , wherein it was held that in a taxing statute one has to look merely at what is clearly said and that neither there is any room for any intendment nor is there any equity about a tax. Nothing is to be read into a taxing law and nothing has to be implied therein. One must only look fairly at the language used subject to the only rider that in case of reasonable doubt the construction most beneficial to the subject should be adopted.
13. On the merits of the question to be answered by us, counsel argued that penalty is related to the amount of tax assessed or liable to be assessed, the tax under the Act Is a 'yearly one' and, therefore, there could be no assessment before the expiry of the whole year (year as defined in the Act). Consequently, it was argued, respondent could not initiate penalty proceedings under Section 10(7) of the Act prior to the assessment proceedings or otherwise than simultaneously with the quantification of the yearly tax. He submitted that on the authority of the earlier Division Bench judgment of this Court in the case of Mansa Ram Sushil Kumar (supra) it is clear that assessment under the Act has to be made only at the end of the year and cannot be made during the course of the year as and when a return may be filed by a registered dealer. There is no doubt that the Division Bench in the earlier case had held that assessment of tax for the quarters ending 30th of June and 30th of September made before the expiry of the assessment year on the 31st of March next was illegal on that short ground. Counsel further emphasised that in respect of the quarter ending 30th September, 1964, even the prescribed returns had not yet been filed by the petitioner, and, therefore, the respondent could not assume jurisdiction in respect of anything alleged to have been done or omitted to have been done during that period before the expiry of the statutory period allowed by the Act.
In support of the proposition that tax under the Act is 'yearly', Mr. Bhagirath Dass relied on the judgment of the Supreme Court in Mathra Parshad and Sons v. State of Punjab : AIR1962SC745 . It was argued that the earlier Division Bench judgment of this Court was unassailable as it was based exclusively on the relevant observations of the Supreme Court in Mathra Parshad and Son's case : AIR1962SC745 . Mr. Bhagirath Dass most vehemently urged that since we are concerned in this case with Section 5 of the Act prior to its amendment in 1965, it would be doing violence to that provision of law if we were to hold that despite the clear phraseology of that section, tax could be assessed at any time before the expiry of the relevant year. He then referred us to the authority conferred on a dealer by Sub-section (5) of Section 10 to furnish a revised return before the date prescribed for the furnishing of the next return by him if the dealer discovers any omission or other error in any return already furnished by him and argued that this statutory right of a dealer would be abrogated and nullified without any authority of law if the quarterly returns were allowed to be assessed before the expiry of the whole year. If the assessment could not be made before the expiry of the period allowed for filing returns for the entire financial year, argued counsel, penalty cannot possibly be imposed before completing the assessment. For determining whether and, if so, to what extent an account, a return or evidence produced before an authority under the Act is false, the authority has necessarily to determine the correct turnover of the dealer and this determination, it was submitted, is only another name for what is known as assessment.
Counsel for the petitioner relied on the judgment of the Supreme Court in C. A. Abraham v. Income-tax Officer, Kottayam : 41ITR425(SC) , for asserting that proceedings for imposition of penalty are a part of the assessment proceedings; In the case of Commr. of Income-tax, Andhra Pradesh v. Bhikaji Dadabhai and Co. : 42ITR123(SC) their Lordships of the Supreme Court had relied on the dictum of the Privy Council in Commr. of Income-tax, Bombay Presidency and Aden v. Khemchand Ramdas , to the effect that one of the peculiarities of most Income-tax Acts is that the word 'assessment' is used as meaning sometimes the computation of income, sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the tax payer. Relying on their earlier judgment in : 41ITR425(SC) , the Supreme Court reversed the view of the Hyderabad High Court to the effect that penalty not being tax, provisions relating to imposition of and collection of penalty did not survive the repeal of the Hyderabad Income-tax Act and held that the expression 'assessment' as used in Section 44 of the Indian Income-Tax Act included the procedure for imposition of penalty. Reliance was also placed on the judgment of the Supreme Court in Commr. of Income Tax, Madras v. S.V. Angidi Chettiar : 44ITR739(SC) wherein it was held that the penalty provisions under Section 28 of the Income-tax Act would, in the event of the default contemplated by Clauses (a), (b) or (c) of that provision, be applicable in the course of assessment of a registered firm.
Mr. Bhagirath Dass also emphasised implications of the 1965 amendment of Section 5 and argued that the Legislature adopted that course to take away from the tax its original yearly colour. He then referred to Rule 37 of the Punjab Rules and submitted that imposition of penalty and assessment of tax had to be simultaneous and that in any case the imposition of penalty could not precede the final assessment for the year in question. Mr. Bhagirath Dass admitted that quarterly assessment could be made under the Act but reiterated that whether the assessment are made for a quarter or a month or for any particular period, they should not be made before the expiry of the year. Relying on the judgment of the Orissa High Court in Chakko Bhai Ghelabhai v. State of Orissa (1956) 7 STC 36 : AIR 1956 Ori 7, it was urged that a liability under Section 4 of the Act is not incurred on the mere exceeding of the turnover of a dealer beyond the figure mentioned in the Act as liability means no more than 'to be under an obligation' and does not necessarily cannot an existing liability. The charging Section was referred to in that judgment as merely declaratory and it was held that the prospective and contingent liability to pay tax did not actually arise until an assessment had been made according to the directions laid down in the Sales Tax Act.
Reference was also made to the judgment of the Supreme Court in State of Rajasthan v. Ghasilal : 2SCR805 wherein it was held that there may be no non-compliance with Section 16 of the Rajasthan Sales Tax Act 29 of 1954 (which provision authorised the imposition of a penalty on a dealer who had without reasonable cause failed to pay the tax dug within time allowed) merely on the filing or the i quarterly return Ss no tax was due till assessment had been made under Section 10 of the Rajasthan Act. The reference to the Orissa case AIR 1956 Ori 7 (supra) and to the Supreme Court judgment under the Rajasthan Act case appears to be misconceived. No question has arisen in the instant case about the stage at which payment of the tax can be enforced. Nor are the provisions of Sub-section (7) of Section 10 of the Act analogous to the provisions of Section 1.6 (1) (b)' of the Rajasthan Sales Tax Act.
14. On the other hand, it was urged by Shri L.D. Kaushal, learned Senior Deputy Advocate General, that the provisions of the Act were clear about the stage at which assessment of tax thereunder can be made. He submitted that not only is there no bar against making periodical assessment of tax under the Act on the basis of quarterly or monthly returns as the case may be, but the Act and the statutory Rules framed thereunder clearly provide for such a course to be adopted and further that the Supreme Court has also given indication in the same direction in several cases. On this basis he argued that the earlier Division Bench judgment of this Court needs re-consideration. He also contended that penalty proceedings under Sub-section (7) of Section 10 can be initiated even independently of and prior or subsequent to assessment proceedings besides being resorted to simultaneously with those proceedings. Mr. Kaushal relied on the well-known observations of Lord Dunedin in Whitney v. Commrs. of Inland Revenue 1926 AC 37 relating to three stages in the imposition of tax viz. (1) the declaration of liability, (2) the assessment and (3) recovery proceedings, and argued that liability, which is created and fixed by Sections 4 and 5 of the Act, does not depend upon actual assessment under Sections 10 and 11; which latter proceedings are resorted to for quantification of the tax due.
In the same connection, learned counsel cited the Supreme Court judgment in Chatturam Horiram Ltd v. Commr. of Income-tax, Bihar and Orissa : 27ITR709(SC) , wherein it was observed by Jagannadhadas J., as he then was, (who delivered the judgment of the Court) as below:--
'The contention of the learned counsel for the appellant is that during the relevant year 1939-40 the income was not chargeable to tax as a fact and that the retrospective operation of the Finance Act for that relevant year by virtue of a latter legislation does not make a difference for this purpose. To decide this question it is necessary to have a clear idea of the scheme of the Income-tax; Act and its corelation to the Finance Act of each year. The Income-tax Act is a standing piece of legislation which provides the entire machinery for the levy of income-tax. The Finance Act of each year impose the obligation for the payment of a determinate sum for each such year calculated with reference to that machinery. As has been pointed out by the Federal Court in Chatturam v. Commr. of Income-tax, Bihar 1947 FCR 116 : AIR 1947 FC 32, quoting from the judgment of Lord Dunedin in 1926 AC 37. there are three stages in the imposition of a tax: There is the declaration of liability, that is the part of the statute which determines what persons in respect of what property are liable. Next, there is the assessment. Liability does not depend on assessment That, ex hypothesi, has already been fixed. But assessment particularizes the exact sum which a person liable has to pay. Lastly, come the methods of recovery, if the person taxed does not voluntarily pay. The same idea has been expressed in slightly different language by Lord Romer in the judgment of the Privy Counsel reported in , Chapter III of the Income-tax Act headed 'Taxable Income' contains the various provisions with reference to which taxable income is determined.'
15. Mr. L. D. Kaushal, who argued this case on behalf of the State with great ability and remarkable clarity, added that even independently of the powers of the authority under the Act to assess tax before the expiry of the whole year in cases where quarterly or monthly returns are submitted, penalty proceedings under Section 10(7) of the Act can be taken against a dealer at any time. The first point relevant for deciding the question referred to us, which appears to emerge from the rival contention of the learned counsel, is whether tax can be assessed under Section 11 of the Act on the basis of quarterly returns submitted by a dealer in pursuance of a notice served on him under Section 10(3) of the Act before the expiry of the relevant financial year. For the reasons here-in-after stated, I propese to answer this question is the affirmative. In the first place, the scheme of the Act ':and its various provisions appear to leave no doubt about assessability of a dealer on the returns submitted by him during the course of a year. Under Sub-section (1) of Section 10, tax is not required to be paid annually but 'at such intervals as may be prescribed'. Where as lump sum acceptance of tax is provided by Sub-section (2) of Section 10, the determination of amount by way of composition is related to 'any period' as distinguished from 'any year' in the face of the statutory definition of 'year' given in the Act. There is no doubt that monthly or quarterly returns are required to be furnished in the cases referred to in Sub-section (3) of Section 10 to provide an appropriate machinery for collection of the tax due. But in addition to the payment of tax monthly or quarterly the law also requires furnishing of the prescribed returns at the same interval. If the Authority was no intended to be given the power of assessment, on the basis of those '(SIC) it could have been left to the dealer to deposit the tax at such intervals according to their books but to file only annual returns.
Great emphasis was laid by Mr. Bhagirath Dass on the provision of Sub-section (5) of Section 10, which entitles a dealer to file revised return before the date prescribed for the furnishing of the next return by him so as to correct any omission or error, in the original return furnished by him, which omission or error might have been subsequently discovered by the dealer. It was argued by Mr. Bhagirath Dass that no assessment could be made so long as a dealer had not exhausted his statutory right to correct any possible error or omission. The argument appears to me to be misconceived. In case of a dealer required to submit annual returns, the period within which he can exercise his right of correction of error under Sub-section (5) of Section 10 would expire 30 days after another year has gone by. Still counsel for the petitioner could not argue that in case of such a dealer assessment proceedings cannot be taken in hand till 13 or 14 months after the expiry of the year in respect of which assessment is sought to be made. Rest of the argument of Mr. Bhagirath Dass based on Section 10(5) of the Act is directly related to the interpretation of Section 10(7) and will be dealt with at its appropriate stage.
Section 11(1) clearly states that if the Assessing Authority is satisfied even without calling the dealer or asking him to produce any evidence 'that the returns furnished in respect of any period' are correct and complete, the assessing authority shall assess the amount of tax due from the dealer 'on the basis of such returns'. This shows that the unit of assessment has to be the period covered by one set of prescribed returns which may be either a year or any lesser part of a year which might be fixed in a given case by notice under Sub-section (3) of Section 10. If undisputed assessment can be made under Sub-section (1) of Section 11, there is nothing to show that in case of a contested assessment envisaged by Sub-sections (2) and (3) of that Section further period must elapse till the end of the relevant financial year. The provisions of Section 11A do not appear to help the petitioner.. When the said Section allows five years for reopening a case, it must necessarily specify the point of time from which the permitted period of five years has to commence. Since any escaped assessment in the course of a year is entitled to be re-assessed, the prescribed point of time has been fixed as the closing day of the year in which the turnover is proposed to be re-assessed. This does not conclusively show that there could be no separate assessment for periods of less than a year. In fact. Mr. Bhagirath Dass conceded that he does not question the jurisdiction of the authorities to make quarterly or monthly assessments but really insisted on arguing that even such assessment could not be taken in hand before the expiry of the financial year.
16. Rules 17 to 25 deal with the returns of taxable turnover required to be submitted by dealers. Rules 21 provides that 'the return periods' fixed for any dealer have to remain in force for not less than three years. In my opinion, the Act does not distinguish between return periods and assessment periods though the basis of the tax is no doubt yearly.
17. Great emphasis was laid by the counsel for the petitioner on the expression 'every year' qualifying the phrase ' taxable turnover' in Sub-section (1) of Section 5 of the Act. The tax under the Act, to which a registered dealer would be liable, would, it is admitted, not vary in quantum by assessment being taken in hand either at the end of the year or on the basis of the quarterly returns if any. From this point of view there could be three types of dealers. Firstly those who were registered dealers under the Punjab General Sales Tax Act of 1941. From the date of coming into force of the Act such a dealer becomes and continues to be liable to gale tax till his registration is cancelled or until his case falls within Sub-section (3) of Section 4 of the Act. The second category of dealers consists of those who were not registered under the previous Act. A dealer falling in this category could not get himself registered unless his gross turnover during the year immediately preceding the<( commencement of the Act exceeded the 'taxable quantum'. Taxable quantum (defined in subsection (5) of Section 4 varies from one kind of a dealer to another. The third category Is of dealers who were not registered under the previous Act and who were either not carrying on business before the Act came into force or whose gross turnover during the year previous to the coming into force of the Act did not exceed the taxable quantum. Their case is covered by Sub-section (2) of Section 4. The liability of a dealer falling in this third category to pay sales tax and his entitlement to get himself registered under the Act accrues on the expiry of 30 days after the date on which his gross turnover first exceeds the taxable quantum during any year.
The sum total of this analysis read with Sub-section (3) of Section 4 is that once a dealer becomes entitled to be registered under the Act and becomes liable to pay sales tax under any of the three categories mentioned above, his liability is not affected by the quantum of sales at least for a period of three years after the expiry of which period, except in the contingency provided in Sub-section (3) of Section 4, the liability would still continue. The rate of tax varies with different commodities but has nothing to do with the quantum of sales.
18. To support his argument in this connection, Mr. Bhagirath Dass relied on certain judgments based on the interpretation of lection 28 of the Indian Income Tax Act 11 of 1922, which corresponds to Section 271 of the Income Tax Act 43 of 1961. Section 28 of the 1922 Act provides for imposition of penalty for concealment of income or for improper distribution of profit. The opening part of the section, which alone is relevant for our purpose, is in the following terms:--
'If the Income-tax officer, the Appellate Assistant Commissioner or the Appellate Tribunal 'in the course of any proceeding under this Act,' is satisfied that any person has * * * * * * * * * he or it may direct that such person shall pay by way of penalty * * * * * * * * * (under-lining (here in') by me).
The phraseology of the opening part of Sub-section (1) of Section 271 of 1961 Act is the same.
19. I have not been able to find any support for the proposition canvassed by Mr. Bhagirath Dass in the judgment of Lord Romer in wherein it was held that the relevant provisions of the In-come-tax Act were exhaustive and prescribe the only circumstances in which and the only time in which fresh assessments could be made and fresh notices of demand could be issued. There is no doubt that if any provision is made in the relevant statute to limit the time within which an assessment has to be made, no assessment proceedings can be taken after the expiry of such time.
20. In : 44ITR739(SC) it was held that the power to impose penalty under Section 28 of the 1922 Act depended upon the satisfaction of the Income-tax Officer 'in the course of the proceedings under the Act 'and the said power could not, therefore, be exercised before the completion of the assessment proceedings by the Income-tax Officer. It is apparent that the ratio of the Supreme Court judgment in that case was based on the statutory requirement of imposition of penalty only 'in the course of any proceedings' under the 1922 Act. No such expression occurs in Section 10(7) of the Act. The dictum of the Supreme Court in the above mentioned case does not, therefore, help the petitioner at all.
21. Mr. Bhagirath Dass then relied on the judgment of the Supreme Court in Ghanshyamdas v. Regional Asst. Commr. of Sales Tax, Nagpur : 51ITR557(SC) . Counsel referred to the following observations of the Supreme Court in that judgment:--
'It is manifest that in the case of a registered dealer the proceedings before the Commissioner starts factually when a return is made or when a notice is issued to him either under Section 10(3) or under Section 11(2) of the Act. The acceptance of the contention that the statutory obligation to file a return initiates the proceedings is to invoke a fiction not sanctioned by the Act. The obligation can be enforced by taking a suitable action under the Act. Taking of such an action may have the effect of initiating proceedings against the defaulter. The default may be the occasion for initiating the proceedings, but the default itself proprio vigore cannot initiate proceedings. Proceedings in respect of the assessment of the turnover for the relevant period cannot, therefore, be said to be pending before the Commissioner. Learned Counsel for the respondent contends that the certificate of registration is itself a notice to the registered dealer to furnish his returns within the prescribed time. Reliance is placed upon Form II wherein under the appropriate column the particulars In regard to a dealer's return and the date within which he should submit it are given. The main purpose of the registration certificate is to localize dealers with taxable turnovers and to facilitate the collection of taxes. The registration certificate enables the dealer to carry on the business. Neither Section 8 which enjoins such registration on every dealer with taxable turnover nor Rule 8 which prescribes the particulars to be incorporated in a certificate suggests that the certificate itself is a statutory notice to a dealer. The objects of the certificate and the statutory notices under the Act are different and the former cannot be equated with the latter.
Rule 83 provides that the assessing authority shall maintain a register in Form XIII in which he shall enter the details of each case initiated under Rules 31 and 82. Rule 31 says that on receipt of a return or returns required under Rules 19, 20 or 22 from any dealer, the assessing authority shall serve on him a notice in Form XI. Rule 32 prescribes, inter alia, the manner of assessment under Sub-section (3) of Section 10, Clause (a) of Sub-section (4) of Section 11, and under Sub-section (5) of Section 11. Form XIII gives the serial number, name of the dealer, nature of the business, gross turnover, taxable turnover as determined for the relevant years and the date of issue of notice in Form XI or Form XII. A perusal of the said rules and the forms discloses that the proceedings in the case of a registered dealer start only on the receipt of a return or returns required to be furnished under the rules. Under Rule 33 a register is maintained giving the details of each case 'instituted' under Rules 31 and 32. Rule 34 enacts that a case instituted would be pending till an order of assessment was made. No doubt it would be pending till a final order of assessment was made by the highest tribunal or Court under the Act.
At this stage some of the decisions cited at the Bar may conveniently be noticed. A Full Bench of the Bombay High Court in Bisesar House v. State of Bombay : AIR1959Bom130 , held that a notice under Sub-section (2) of Section 11 of the C. P. and Berar Sales Tax Act, 1947, could not be issued more than three years after the expiry of the period for which it was proposed to make the assessment but an assessment under Sub-section (1) of Section 1] could be made more than three years after the expiry of such period. There t dealer made his return and paid the tax, which according to him was due for three chargeable accounting years. The Commissioner of sales-tax .served notices on him under Section 11(2) in respect of the first two years more than three years after the end of the chargeable accounting years. The Court drew a distinction between Sub-sections (1) and (2) of Section 11 and came to the conclusion that in the former case it was only a formal appropriation of the amounts paid towards the tax due and therefore it could be done even after three years, but in the latter case the issue of notice under Section 11(2) was in a substantial sense an initiation of proceedings by the Commissioner and his failure to tax these turnovers would constitute 'escaped assessment' within the meaning of Section 11A of the Act and therefore it could be reopened only within 3 years prescribed thereunder. The learned Judges, if we may say with respect, did not consider the question, in what circumstances assessment proceedings could be held pending? As we have held that the submission of a statutory return would initiate the proceedings and that the proceedings would be pending till a final order of assessment was made on the said return, no question of limitation would arise. A division Bench of the same High Court, in Ramkrishna Ramnath v. Sales Tax Officer, Nagpur : (1960)62BOMLR172 , made a distinction between proceedings under Section 11(4)(a) and those under Section 11(2) of the Apt in that proceedings under Section 11(2) are for the purpose of assessment whereas those under Section 11(4)(a) are taken in terrorem and the dealer is penalised by a best judgment assessment in default of compliance. On that reasoning they held that the period of limitation prescribed under Section 11A might apply to a proceedings under Section 11(4), but no such period of limitation was laid down in the Act in respect of a proceedings under Section 10(a) or Section 11(4)(a) of the Act. We find It rather difficult to appreciate the reasoning on which the learned judges distinguished the Full Bench decision. But the question of pendency of proceedings was not raised before the Division Bench and was not considered by it. For the foregiong reasons we hold that a statutory obligation to make a return within a prescribed time does not proprio vigore initiate the assessment proceedings before the Commissioner; but the proceedings would commence after the return was submitted and would continue till a final order of assessment was made in regard to the said return.
Now let us apply the said legal position to the facts of Civil Appeal No. 101 of 1961. The appellant has to submit quarterly returns and assessments are made on the basis of the said returns that is to say, he has to be assessed for his turnover separately in respect of each quarter. Therefore, the question of escape of assessment has to be considered on the ground that each quarter is a separate period for the assessment. For the year 1949-50. that is, for the period from October 22, 1949, to November 8, 1950, he had to submit 4 returns for the four quarters. But he had submitted only one return on October 5, 1950, for one quarter. No assessment was made in respect of any of the four quarters. So the assessment proceedings must be held to be pending before the Commissioner only in respect of the quarter for which the appellant had made the return. In respect of the other quarters no proceedings could be said to be pending before the Commissioner'
22. So far as I have been able to see the above passages in the majority judgment of the Supreme Court in the case of Ghanshyamdas : 51ITR557(SC) (supra) clearly Indicate that in case of a dealer, who has to submit quarterly returns, assessments are made on the basis or such returns and he has to be assessed for his turnover 'separately in respect of each quarter'.
23. Mr. L. D. Kaushal pointed out that similar indication is also available in the judgment of the Supreme Court in Madan Lal Arora v. Excise and Taxation Officer, Amritsar : 1SCR823 wherein it was held that when Sub-section (4) of Section 11 of the Act talks of 'returns in respect of a period', that refers, in the case of the assessee who has filed the returns, to the quarters in respect of which he submitted the returns and that the three years within which the authority could proceed to make the best judgment assessment have, therefore, to be counted from the end of each quarter in respect of which returns had been filed. The clear dictum of their Lordships of the Supreme Court in the case of Ghanshyamdas : 51ITR557(SC) , and in the case of Madan Lal : 1SCR823 , are wholly inconsistent with the petitioner's version of the authorities under the Act- having no jurisdiction to make assessment at the end of each quarter in case of a dealer who is required to submit quarterly returns.
24. In Faridabad Industrial and Quarrying Co. v. Excise and Taxation Officer (Assessing Authority) I had held that the three years referred to in Sub-section (5) of Section 11 of the Act within which the assessing authority can proceed to make a best judgment assessment have to be counted from the end of each quarter in respect of which the return had to be filed.
25. Though a perusal of the relevant provisions of the Act, the Rules framed thereunder and the abovesaid judgments of the Supreme Court does not appear to support the petitioner, his mainstay is the Division Bench judgment of this Court in the case of Mansa Ram Sushil Kumar (Supra), the correctness of which judgment was most respectfully questioned by Mr. Kaushal. It had been contended in that case on behalf of the dealer that though he had to submit quarterly returns and to pay quarterly tax, the full amount of tax due from him under the Act according to such returns could not be assessed before the expiry of the financial year and the assessing authority could not proceed to make an assessment order with regard to each quarterly return furnished by the dealer- After referring to the rival contentions of the parties, the Division Bench accepted the dealer's contention with the following observations :--
'There is a good deal of force in the submission of Mr. Bhagirath Dass that in view of the majority decision in Mathra Parshad's case : AIR1962SC745 , the Assessing Authority has to make the assessment for a whole year and has to take into account any exemptions or deductions to which the assessee becomes entitled at any time during that year. If that be so, it is not possible to see how the Assessing Authority could make any final orders before the expiry of the year in question and proceed to make assessment with regard to each quarter as was done in the present case. Section 11A further indicates that according to the provisions of the Act it was never contemplated that an assessment order could be made with regard to a return for each period. This Section provides for an eventuality when it is discovered that the turnover of the business of a dealer has been under-assessed, or escaped assessment in any year. The Assessing Authority is empowered within three years following the close of the year for which the turnover is proposed to be reassessed to proceed to reassess the tax payable on the turnover which has been under-assessed or has escaped assessment after giving the dealer a reasonable opportunity, in the prescribed manner of being heard. If an assessment can be made under Section 11 for each period, e. g., on the quarterly return as in the present case, it is not possible to see from which point of time the period of limitation prescribed in Section 11A will be calculated. It is also noteworthy that there is no provision in the Act similar to Section 22-B of Income-tax Act, 1922 and Section 141 of the Income-tax Act, 1961, empowering the making of a provisional assessment before the, end of the year. According to the majority judgment in Mathra Parshad's case : AIR1962SC745 (supra), the filing of periodical returns and the payment of tax according to those returns is only a method of collecting the tax, be it quarterly or monthly. It appears, therefore, that there is no machinery in the Act by which the assessment can be made every time a return for a period is filed.
'It is true that Section 11 contains language which may lend support to the view that the Assessing Authority can make an assessment with regard to each period for which the return is furnished. Similarly, Rule 33 of the Rules 'seems to indicate that a notice can be served in Form S. T. XIV upon a dealer for assessing him for a period or periods but the language of this rule is only consistent with the provisions of Section 11. It has been pointed out by the learned counsel for the respondent that if full effect is to be given to the plain language employed in Section 11, no serious difficulty will arise even if during the assessment year the dealer becomes entitled to any exemption or deduction, the benefit of which has to be given to him in respect of the whole year. He can in that eventuality claim a refund under Section 12 of the Act, read with Rules 48 to 55. It cannot, however, be forgotten that all the provisions contained in the Act have to be read together and, so read, it would seem that what is truly contemplated is that while making the assessment after the expiry of the assessment year the Assessing Authority shall proceed to assess the amount of tax due from a dealer on the basis of the periodical returns which have been filed. If the other view commended by the learned counsel for the respondent is to be adopted, it will mean following the minority decision of Kapur J., in Mathra Parshad's case : AIR1962SC745 (supra), who relied on the language of Section 11 a good deal for holding that sales tax was not a yearly tax like the income-tax, which course is not permissible.
If the matter were res integra, it may have been arguable that owing to the provisions of Section 11, read with the relevant rules, the Assessing Authority can make the assessment for each period for which the return is furnished but the majority Judgment of the Supreme Court settles the matter so far as the nature of the tax and its incidence is concerned. If sales tax is a yearly tax, then the assessment has to be made at the end of the year and cannot be made during the pendency of the year as and when a return is filed in the absence of any clear and explicit provisions to that effect.
For the reasons given above, the petition is allowed and the order of assessment made by the respondent on 22nd January, 1983, if hereby quashed, it being open to that authority to make a proper order of assessment on the expiry of the assessment year'.
26. The learned Senior Deputy Advocate General argued that the Division Bench Judgment is erroneous because :--
(1) The learned Judges were under an erroneous impression about the Supreme Court having impliedly held that there can be no assessment under the Act before the expiry of a financial year;
(2) The period referred to in Section 11A of the Act would in the absence of statutory indication to the contrary, commence from the date on which the relevant assessment period ended, which would be the end of a quarter in case of quarterly assessment and the end of a year in case where yearly returns were to be submitted:
(3) No doubt, there was no provision in the Act for making provisional assessments on the analogy of Section 141 of the Income-Tax Act, 1961 (or Section 22-B of the Income-Tax Act, 1922) but the assessment which had to be made on quarterly basis was not provisional for any periods but was to be final in every respect and that in case any tax was levied or paid, which would subsequently be found to be not payable, the dealer could claim its refund under Section 12 of the Act and that the mere fact that refund could be ordered in certain contingencies made the quarterly assessments no less final or no more provisional than annual assessments which would also be similarly subject to relief being granted under Section 12; and
(4) The Act and the Rules framed thereunder did provide for machinery for quarterly assessments and Section 11 of the Act was clear in that respect.
27. A perusal of this Court's judgment in Mansa Ram Sushil Kumar's case (supra) shows that though the Division Bench thought that if the matter was res integra, it might have been arguable on the basis of Section 11 of the Act, read with relevant Rules, that the Assessing Authority could make assessment for each period for which returns were furnished but the majority judgment of the Supreme Court in the case of Mathra Parshad : AIR1962SC745 , stood in their way from examining any such proposition. This really takes us to examine the Supreme Court's judgment in : AIR1962SC745 (supra). Mr. Kaushal argued, if the Supreme Court has held that there can be no assessment under the Act before the expiry of the financial year, the matter stands concluded and the question is no more open for argument. If, now ever, it Is found that this was not so held by the Supreme Court even by implication, the very foundation of the Division Bench Judgment falls and the matter has then to be decided afresh.
28. What happened in the Supreme Court case was this. The registered dealer who dealt, amongst other things, in the sale of manufactured tobacco, was required to submit quarterly returns and had paid out the tax due from him for the period ending 31st of March, 1954. On April, 1954, the Punjab Tobacco Vend Fees Act, 1954, (hereinafter called the Tobacco Act) came into force. On May 7, 1954, the State Government gave notice of its intention to add manufactured tobacco as an item in the schedule of exemptions under Section 6 of the Act. In June 1954 the State Government issued a press note by which the dealers were informed that it was not intended to levy both a tax on sales under the Act as well as fee under the Tobacco Vend Fees Act for the same period. On August 2, 1954, came still another press note whereto the dealers were informed that levy of sales tax of manufactured tobacco would continue till the Vend Fee Licences under Tobacco Act came into operation and that the vend fee under the latter Act would be proportionately reduced for the financial year then current in respect of the period for which sales tax would have to be charged. To avoid double taxation, provided the press note, any sales tax which had already been charged from the dealer In respect of manufactured tobacco would b* refunded arid no sales tax would be charged during the remaining year in respect of sale of such tobacco which fell under the Tobacco Act and that instead of sales tax, tobacoo vend fees would be recovered at full rate for the whole year as and when rules under the Tobacco Act were finalised. But it so happened that rules under the Tobacco Act were not finalised till after the expiry of the financial year. In those circumstances, notification dated September 27, 1954, was issued by the Punjab Government under Section 6 of the Act by which item 51 was added to the schedule of exemptions relating to manufactured tobacco as defined in the Tobacco Act. Though the notification was issued on the 27th September, 1954, it did not specify any point of time with effect from which the exemption entry would operate The question which arose for decision by the Supreme Court was whether in such circumstances the exemption was to operate from the 27th of September, 1954, or from the very beginning of the financial year with effect from 31st March, 1954. This question had arisen because the Excise and Taxation Officer had by his notice issued in January 1956 declined to grant to the dealer exemption even under the press note of 2nd August, 1954. The Supreme Court formulated the question which it was called upon to answer in the case of Mathra Prashad and Sons : AIR1962SC745 in the following words:--
'Did the exemption in the notification issued on September 27, 1954, have effect from that date or from the beginning of the financial year'.
In their judgment their Lordships of the Supreme Court laid emphasis on the fact that they were dealing only with the case of exemption in the following:--
'If sales tax was not payable, it would be because of the exemption, and the only question thus is when toe exemption began to operate. The notification does not say from what date the exemption operates'. Dealing with the above question, it was held in the majority judgment as follows:--
'There is no doubt that the tax is a yearly tax. It was payable, in the first instance, by a dealer whose gross turnover during the financial year immediately preceding May 1, 1949, was above the taxable quantum. The tax is to be levied on the taxable turnover of a dealer every year. The difference between gross turnover and taxable turnover is this, that to arrive at the taxable turnover of any period some deductions have to be made for the same period. This clearly shows that the tax is for a year. The method of collection allows collection of tax at intervals; in some cases, the tax is collected at the end of the year; in some others, the tax is collected quarterly and in still other cases, even monthly. If the exemption can be said to , operate for that period for which the tax is payable according as it is annually, quarterly or monthly, the tax would he different for different persons. Those who are paying the tax annually would get exemption for the whole year but those who are paying it quarterly or monthly would get benefit in the quarter or the month of the notification but not for earlier quarters or months. It could not have been intended that the exemption was to operate differently in the case of dealers with different intervals of assessment'.
The exemption thus must operate either from the date of the notification or from the commencement of the financial year. Here, the nature of the tax, as disclosed in Sections 4 and 5, is decisive. In Section 5 the tax is made leviable 'on the taxable turnover every year of a dealer'. The divisions of the year and the taxable turnover into different parts are to make easy the collection of tax, and from part of the machinery sections. If the tax is yearly and is to be paid on the taxable turnover of a dealer, then the exemption, whenever it comes in, in the year for which the tax is payable, would exempt sales of those goods (SIC) the year, unless the Act said that the notification was not to have this effect, or the notification fixed the date for the commencement of the exemption. In the present case, the notification did not fix the date from which the exemption was to operate, probably because the Act omitted to make such provision, enabling the State to do so, and the exemption must, therefore, operate for the whole year, during which it was granted'.
29. All that appears to me to have been held in the above mentioned judgment of the Supreme Court was that if a notification under Section 6 of the Act issued during the course of a year does not specify the date with effect from which the article in question is to be exempted from tax, the exemption must be deemed to operate from the first day of the financial year in which the notification is issued. The crucial finding of the Supreme Court to the effect that the exemption can be made to operate only for a part of the year if the notification so specifies, is inconsistent with the case set up by the petitioner to the effect that the whole year must in all circumstances be treated at the same level and even assessment cannot be made before the expiry of the year. So far as the jurisdiction of the authorities under the Act to make assessment before the expiry of the year is concerned, the Supreme Court does not appear to have differed from its earlier pronouncements in : 1SCR823 and : 51ITR557(SC) . On the contrary their Lordships again stated specifically that 'it could not have been intended that the exemption was to operate differently in the case of dealers with different intervals of assessment'. Different intervals referred to in an earlier part of the Supreme Court judgment referred to in the intervals at which prescribed returns under the Act have to be filed. Those intervals for filing returns have been clearly equated by the Supreme Court with intervals of assessment.
30. While considering the same question D. K. Mahajan J. held on 31st of October, 1963, in Civil Writ No. 1123 of 1962 (Punj), Tara Chand Lajpat Rai v. Excise and Taxation Officer, Ludhiana, after quoting in extenso from the judgment of the Supreme Court in the case Mathra Prashad and Sons : AIR1962SC745 (supra), as follows:
'The case before their Lordships related to the question of exemption and not to the question of assessment. Moreover, if the argument of Mr. Sibal that the assessment can only be made yearly and not quarterly is correct, then their Lordships observations that the exemption notification can limit the period of exemption for less than a year would be erroneous. Therefore, it follows that the contention of Mr. Sibal is incorrect. Sections 10 and 11, if read together, leave no manner of doubt that the Department can call upon the assessee to file quarterly or monthly returns and the assessment can be made on the returns filed; and once the assessment is made, the tax can be recovered. The Supreme Court decision relied upon has no applicability to the facts of the present case and, therefore, the first contention is rejected'.
31. This view also appears to be consistent with the scheme of the Act, to which a detailed reference has already been made. Mr. L. D. Kaushal also referred' us to Rule 33(b) of the Punjab Rules which provides for the assessing authority staling in the notice under Form S. T. XIV 'the period or the return period or periods in respect of which assessment is proposed'. This also clearly shows that assessment of tax under the Act can be made for a return period which may be less than the whole year. T find great force in the argument of the learned Senior Deputy Advocate General to the effect that this statutory ride substantially clinches the matter.
32. An act of a Legislature is intended to be fairly workable and in the absence of a statutory provision or a compelling reason Court should always lean to interpret a statute in such a manner as to achieve and secure its object. When the assessment of periodical returns cannot admittedly result in any difference in the incidence of taxation and in the quantification of the tax and when the statute requires monthly or quarterly payments of the amount of the tax in accordance with the period prescribed for submitting returns, quarterly assessments cannot possibly affect the assessee prejudicially. On the other hand, there seems to be no reason why assessment proceedings must wait till the expiry of the year after the submission of periodical returns. There does not appear to be any reason for treating quarterly assessments as provisional and, therefore, there is no necessity of searching in the Act for any provision like Section 22-B of the Income Tax Act, 1922, J. L. Kapur J. (as he then was) differed from the majority view in Mathra Parshad's case : AIR1962SC745 , to the effect that the exemption notification must effect the entire financial, year. This does not appear to necessarily imply that every legal aspect, on which the minority view was based (including the fact that quarterly assessments could be made under the Act) would have been disapproved by the majority of their Lordships of the Supreme Court if they had written the judgment subsequent to the note of dissent. Still, this appears to be the impression under which the learned Judges of this Court felt compelled to give the earlier Division Bench judgment contrary to the view of Mahajan, J. Supreme Court, no doubt referred to the provisions for quarterly or monthly or yearly returns and payments as machinery sections. But as hereinafter discussed, the entire quantification proceedings from the stage of filing the returns till the pronouncement of the final assessment order constitute the machinery part of the Act.
33. For the foregoing reasons but with the greatest respect to the learned Judges of this Court who decided the case of Mansa Ram Sushil Kumar (supra), both of which learned Judges I have always held in the highest esteem, I find myself more inclined to agree with the view adopted by D. K. Mahajan J. as to the application of the ratio of the Supreme Court judgment in the case of Mathra Parshad and Sons : AIR1962SC745 , to the question of legality of assessment of tax under the Act for a period of less than a year and at periodical intervals during the course of a financial year.
34. My above-mentioned finding veally appears to take away the entire ground from under the feet of the petitioner's case. But even independently of my said finding, I would have answered the question referred to us in the affirmative on a proper interpretation of Section 10(7) of the Act itself. This Sub-section was introduced for the first time by paragraph 4 of the Punjab General Sales Tax (Amendment) Ordinance No. 2 of 1963, on and with effect from January 10, 1963 (date of its publication in the Punjab Gazette Extraordinary). When the Ordinance was replaced on March 23, 1963, by the Punjab General Sales Tax (Amendment) Act No- 2 of 1963 the first object of presenting the bill of the amending Act to the Legislature was described in the following words :--
'With a view to prevent the evasion of tax by unscrupulous persons, through misuse of registration certificates; maintenance of false . and incorrect accounts; or through dissolution or delay in assessment, the Punjab General Sales Tax Act was amended by issuing the Punjab Sales Tax (Amendment) Ordinance, 1963. The bill is now designed to replace the said Ordinance and thereby remove the loopholes in the existing law'.
35. The very object of introducing the provision in question in the principal Act was to prevent maintenance of false and incorrect accounts by delay in assessment. A perusal of Sub-section (7) of Section 10 shows that action under it can be taken in three contingencies, namely :--
(1) Where a dealer has maintained false or inaccurate accounts with a view to suppressing his sales etc.;
(2) Where a dealer has concealed any particulars of his sales or purchases etc., from the returns submitted by him; and
(3) Where a dealer has produced before any authority under the Act any account, return or information which is false or incorrect in any material particular.
36. The scheme of the Sub-section shows that proceedings under it can be initiated even before a return is submitted and even before the alleged false account is produced before the authority under the Act. Such a contingency may arise in various circumstances. To argue that in spite of false accounts or false information coming to the knowledge of the authorities under the Act they must sit with folded hands till the expiry of the year to allow the dealer to create or destroy evidence appears to me to ask for defeating the very object of the provision. I do not find any force in the argument, which was vehemently pressed before us by Mr. Bhagirath Dass, to the effect that the interpretation which I am placing on Sub-section (7) of Section 10 of the Act would come into conflict with Sub-section (5) of that section. His argument, to which a reference has already been made in another connection, was that it is the statutory right of a dealer to correct any error or omission in his account or return already furnished by him howsoever dishonest may be such an error or omission, at any time by the date prescribed for the furnishing of the next return by the dealer. This argument of the learned counsel appears to ignore the fundamental difference between the scope of Sub-section and Sub-section (7) of Section 10 of the Act. The use of the word 'discover' in Sub-section (5) appears to me to be conclusive to establish that the only omission or error which a dealer is entitled to rectify within the time allowed by that provision is an accidental and honest error or omission in contra-distinction to the deliberately inaccurate or false entries or material for which a dealer is liable to be penalised under Sub-section (7). The inaccurate accounts which can form the basis of action under Sub-section (7) must be proved to the satisfaction of the authorities under the Act to have been inaccurately maintained or posted 'with a view to suppressing his (dealer's) sales' etc. The use of the words 'false' 'suppressing', 'concealed' etc. clearly shows that penalty is not intended to be imposed under Sub-section (7) of Section 10 of the Act for honest mistakes or clerical errors or omissions, but only for deliberate false entries or false evidence involving something like mens rea.
37. Nor have I been able to find any force in the contention of Mr. Bhagirath Dass to the effect that if proceedings under Section 10(7) of the Act could be taken and finalised before the expiry of a financial year, it would come into conflict with the Supreme Court judgment in the case of Mathra Parshad and Sons : AIR1962SC745 (supra) as penalty may possibly be imposed on a dealer for maintaining false 'accounts in connection with the sale of an article which may in a later quarter of the same year be exempted from the operation of the Act by a notification under Section 6. The eventuality envisaged by the counsel for the petitioner can conceivably occur even in case of assessment at the end of the financial year. According to the learned State counsel, Section 12 of the Act immediately provides for the remedy. In a case of the type referred to by counsel, an application would, said Mr. Kaushal, lie under Section 12(a) of the Act for refund of the amount of tax including the penalty, if any, paid by him which was not due from him under the Act.
38. Mr. Bhagirath Dass referred us to the judgment of the Supreme Court in the State of Madhya Pradesh (now Maharashtra) v. Haji Hasan Dada : 2SCR854 , wherein it was held that an assessee, who had paid the amount of tax assessed on him by the Assistant Commissioner of Sales Tax under the C. P. and Berar Sales Tax Act, 21 of 1947, for the period ending November 1 1948 could not maintain an application under Section 18 of that Act for an order for refund of the amount paid by him on the plea that in the turnover he had included dyeing charges, which were not taxable. Shah J., who delivered the judgment of the Supreme Court, held that Section 13 implied for refund being granted of only such amount which was not lawfully due and whether a certain amount is lawfully due or not, must be determined by the Assistant Commissioner in making the order of assessment or reassessment. Upon that basis it was held that so long as the order of assessment passed by the Assistant Commissioner was not so set aside or modified, a dealer could not call upon the authorities to ignore the previous order and to grant refund contrary to the plain direction of the order.
Reference was also made by the counsel for the petitioner to the judgment of my learned brother Pandit J. in Karam Chand Thapar and Bros. Coal Sales Ltd. v. State of Punjab (1965) 67 PLR 1185, wherein it was laid down that all previous assessments which had become final under the Act did not become without jurisdiction merely by the decision of the Supreme Court. There is no quarrel with the proposition of law referred to by Mr. Bhagirath Dass in this connection. But a difficulty of this type can as much arise on account of a retrospective exemption being granted or a new deduction being allowing as in respect of penalty imposed under Section 10(7) of the Act. A complication of this type is as much possible in case of an assessment at the end of a financial year as in case of quarterly assessment. Normally the obtaining of refund under Section 12 of the Act would have to be based on an order of the competent authority in appeal or revision against the original assessment proceedings. The powers of revision conferred on the Commissioner by Sub-section (1) of Section 21 of the Act are wide and plenary. If the Commissioner illegally refuses relief on the basis of which a dealer may be entitled to obtain refund, further recourse can be had to proceedings under Sub-section (3) of Section 21 to the Financial Commissioner. In case of refusal of the Financial Commissioner to make a reference to this Court on any question of law arising out of such a situation, the High Court may even require the Financial Commissioner under Sub-section (3) of Section 22 to state the case and to refer the question. A dealer is, therefore, not without adequate remedy under the Act for a contingency of the type envisaged by Mr. Bhagirath Dass.
39. The body of Sub-section (7) of Section 10 also shows that the stage at which penalty can be imposed under that provision is not only the stage of final assessment as the quantum of tax is related not only to the amount of tax 'to which a dealer is assessed' but also to the amount of tax to which he 'Is liable to be assessed' This clearly shows that proceedings under Section 10(7) of the Act can be taken even before arriving at a definite finding as to the quantification of the tax by merely working out the amount to which he may be liable to be assessed. Liability to tax is fixed by Sections 4 and 5 and by the Schedule to the Act. The maximum and minimum amount of penalty, which can be imposed under the relevant provision, must, in the circumstances, have relation to the quantum of tax, which is assessed or is liable to be assessed for the return period to which the fault or default has reference. To illustrate this, it may be said that in a case where proceedings under Section 10(7) of the Act are taken in respect of a quarterly return, the penalty which is liable to be imposed on the dealer would not be less than 10 per cent and not more than one and a half times the amount of tax to which the dealer is liable to be assessed for that particular quarter. The matter of actual quantification and imposition of penalty is, however, not before us in the present reference and all that we have been called upon to answer is the question whether the penalty can or cannot be imposed before the end of the year. One possible way of imposition of penalty under Section 10(7) of the Act may be to take proceedings under that provision, to coma to a definite finding about the alleged fault or default of the dealer and to impose the penalty in certain permissible proportion to the quantum of tax liable to be assessed and to leave out the working of the amount to the proceedings of the assessment of the tax if the same have not yet taken place. That, however, is not the precise question with which we are faced at present.
40. For the aforesaid reasons, the question referred to us is answered in the affirmative and it is held that penalty could be imposed by an appropriate authority under the Punjab General Sales Tax Act on a dealer under Section 10(7) of the Act before the end of the 'year'. Costs of the reference will be included in the- costs of the writ petition.
Inder Dev Dua, J.
41. I agree.
Prem Chand Pandit, J.
42. I also agree.