1. This is an application under Article 226 of the Constitution to call for the records pertaining to the assessment to sales tax of the petitioner by the 3rd respondent by his order dated 16th March, 1954, for the period from 1--1--1125 to 15--10--1125 and confirmed by the 1st and 2nd respondents and to quash those orders by the issue of a writ of certiorari or other appropriate directions and also to pass orders for refund of sales tax illegally levied and collected from the petitioner.
2. In the affidavit filed in support of this application it is stated that the firm of the Malabar Hides and Skins, Ernakulam, deals in hides and skins and it has been assessed to sales tax for the period 1--1--1125 to 15--10--1125 by the 3rd respondent herein who has fixed the turnover at Rs. 3,09,829-1-9 and has levied a tax of Rs. 4,841-1-0 as due from the firm. Though the demand is for the year 1125, actually the assessment has been made by the officer on 16th March, 1954, i.e., after the lapse of about 3 years and 91/2 months 0from the date of the coming into force of the Travancore-Cochin General Sales Tax Act--Travancore-Cochin Act, XI of 1125. The assessment also has been made after the repeal by the said Act of the Cochin Sales Tax Act--Cochin Act, XV of 1121. After the repeal of the latter Act, the 3rd respondent has no more jurisdiction to make any assessment under that Act. In fact, no proceedings were commenced nor were pending the assessment at the time when the Cochin Act was repealed.
3. It is also stated that the 3rd respondent has not made it clear as to whether assessment is under Section 11 of the Cochin Act, XV of 1121, or under Section 19 of the said Act.
4. The assessment in question is one made without jurisdiction by the Sales Tax Officer and the same is also vitiated for want of the necessary notice as per Section 11 or Section 19 of the Cochin Act. If the assessment is to be considered as one under the Travancore-Cochin General Sales Tax Act--Travancore-Cochin Act, XT of 1125--then it is barred by limitation. There are also certain other allegations that some exemptions claimed by the assessees have not been allowed. The appellate and the revisional orders are also vitiated by the same infirmity that attaches to the order of the 3rd respondent.
5. The 3rd respondent has filed a counter-affidavit challenging the several contentions of the applicant. It is stated that the petitioner's firm was assessed provisionally under the Cochin Sales Tax Act, XV of 1121, for the year 1125 to a tax of Rs. 3,750. Notice of provisional assessment and demand for payment of tax was issued to the firm on 10th December, 1949. The firm paid towards the said assessment a sum of Rs. 1,638. The firm did not submit a return of the turnover as required by Section 9 of the Act. Therefore, the 3rd respondent made the assessment under Section 11(5) of the Act to the best of his judgment without issuing notice to the assessee. The assessee's auditor represented the assessee and produced the books of account and after hearing the said representative, the assessment was made on 16th March, 1954. The notice of final assessment and demand under the Act to pay the balance was issued to the petitioner along with a copy of the assessment order. The period of 4 years as per Section 11(6) of the Cochin Act expired only on 16th August, 1954, and as such, the assessment has been made within the time. It is also contended that the repeal of the Cochin Act does not in any way affect the jurisdiction of the 3rd respondent to make the assessment which is challenged.
6. The claim for exemption has been rightly negatived by the department. Further, the said point was not also argued before the 3rd respondent. The order of assessment passed by the 3rd respondent is one passed with jurisdiction and valid in law. Equally, the appellate and revisional orders of the other two respondents are also valid in law. It will be seen that the short point that arises for consideration is whether after the repeal of the Cochin Act, XV of 1121, the 3rd respondent has got jurisdiction to assess for the period 1--1--1125 to 15--10--1125. It may also be stated that the learned Counsel for the petitioner, Mr. C. T. Peter, frankly conceded that if the assessment is held to be under the Cochin Act, there is no question of any bar of limitation and that it will arise only if the assessment is one under the Travancore-Cochin Act, XI of 1125.
7. Before the question of jurisdiction is considered, it is better to dispose of the question as to whether the assessment in this case is under the Cochin Act, Act XV of 1121, or under the Travancore-Cochin Act, XI of 11.25. The assessment order of the 3rd respondent is marked as Ext. P in these proceedings. No doubt, it is headed as under Rule 18 of the Travancore-Cochin General Sales Tax Act and Rules, 1950. But the notice of final assessment and demand which is marked as Ext. I in this case shows that the assessee has been assessed under the Cochin Sales Tax Act, XV of 1121. Further, it is also stated in the said notice that if the amount is not paid within 20 days from the date of service of the notice, the amount will be recovered as if it were an arrear of land revenue and that the assessee will be liable to a fine as provided in Section 31 of the Cochin Sales Tax Act, XV of 1121. Therefore, to my mind, it is very clear that the assessment is not under the Travancore-Cochin Act, Act XI of 1125, but really under the Cochin Sales Tax Act, Act XV of 1121.
8. That the assessee understood that it is an assessment under the Cochin Act is also evident from the appellate order of the 2nd respondent, Ext. P-2. The 2nd respondent, after setting out the contentions of the assessee states that the assessment is under the repealed Cochin Sales Tax Act. Then the officer further considers the contention regarding the jurisdiction of the 3rd respondent to assess under the repealed Act. The plea of limitation is also met by the 2nd respondent that the assessment is within the 4 years permitted under the repealed Cochin enactment.
9. It is also seen from the revisional order of the 1st respondent, as evidenced by Ext. P4, that the main contention raised before the Tribunal by the assessee was that the assessment was without jurisdiction under the provisions of the Cochin Sales Tax Act. It is also stated that the assessment in this case was under section n of the Cochin Sales Tax Act and not under Section 19 of the said Act. The substantial contention in these writ proceedings is also to the effect that the order of the 3rd respondent is without jurisdiction, as the Cochin Sales Tax Act has been repealed.
10. The 3rd respondent in his counter-affidavit has definitely stated that the assessment is under the Cochin Sales Tax Act, XV of 1121.
11. For all the reasons mentioned above, I hold that the assessment in this case is not under the Travancore-Cochin Act, XI of 1125, but under the Cochin Sales Tax Act, XV of 1121. Therefore, in this view there is no question of any bar of limitation in this case provided the 3rd respondent has jurisdiction to make the assessment under the repealed Cochin Act.
12. Turning now to the question as to whether the 3rd respondent has jurisdiction to make the assessment for the period in question under the Cochin Act, XV of 1121, the learned Counsel for the petitioner Mr. C. T. Peter contends that the assessment is one made without jurisdiction, The Cochin Sales Tax Act, XV of 1121, has been repealed by Section 26 of the Travancore-Cochin General Sales Tax Act, XI of 1125. The repeal took effect from 30th May, 1950, whereas the assessment is on 16th March, 1954, i.e., more than 3 years and 91/2 months after the coming into force of the Travancore-Cochin Act. In view of the repeal of the Cochin Sales Tax Act, it has ceased to have any effect and no authority has got any power to act by virtue of the provisions of such a repealed enactment. Therefore the present assessment is void. There were no proceedings by way of assessment or otherwise pending under the Cochin Act at the time when it was repealed. The Travancore-Cochin Act does not make any provision for keeping alive the rights or obligations under the repealed enactment. So ran the argument of Mr. Peter.
13. On the other hand, Mr. Shenoi, learned Government Pleader appearing for the respondents, contended that the repeal of the Cochin Act does not take away the jurisdiction of the 3rd respondent to assess under the Cochin Act. This is a liability already incurred under the Cochin Act and there is no provision in the Travancore-Cochin General Sales Tax Act which will in any way destroy the rights of the Department to act under the Cochin Act. The learned Government Pleader further relied upon the provision of the General Clauses Act and certain decisions in support of his contention. They will be referred to at the appropriate place later in the judgment.
14. The learned Government Pleader further contended that this question of jurisdiction was not taken before the 3rd respondent at the time when the assessment was made and, therefore, it is not open to the petitioner to raise this contention in this writ proceedings.
15. The learned Government Pleader further contended that the liability to pay the tax has already arisen and that has nothing to do when the final order of assessment is made after the date of the repeal of the Cochin Act.
16. I have discussed this question of submission to jurisdiction and as to whether the question of jurisdiction can be permitted to be raised for the first time in writ proceedings has been very elaborately considered by me in O. P. 434 of 1957 and I think it is unnecessary to reiterate the same. But I do not propose to non-suit the applicant on this short ground because the question that is raised here is as to whether the authority has got the power to make an assessment under a repealed enactment. I further find that the petitioner has raised this point about jurisdiction both before the appellate and the revisional authorities in this matter. Therefore, in my view, it is open to the petitioner to raise the question of lack of jurisdiction, if any, of the Tribunal in the proceedings before me.
17. To appreciate the contentions of both sides it is desirable to have a general idea about the scheme of the Act. The Cochin Act of 1121 has been to some extent amended by the Cochin Sales Tax (Amendment) Act, V of 1124. Therefore, at the time when the assessment order was passed, the authority was acting under the Cochin Act of 1121 as amended by Act V of 1124. Therefore, reference will be made in this judgment to the various sections of the 1121 Act as amended by the Act of 1124.
18. Section 4 of the Cochin Act is the charging section. Under that section, every dealer shall pay for each year a tax on his total turnover for such year.
19. Under Section 4 (5), the taxes under Sub-sections (1) and (2) shall be assessed, levied and collected in such a manner and in such instalments, if any, as may be prescribed.
20. Section 9 makes it obligatory on the dealer whose turnover is Rs. 10,000 or more in a year, to submit to the Sales Tax Officer such returns of his turnover in such manner and within such dates as may be prescribed. Rule 7 of the Sales Tax Rules provided for submission of return, but it will be seen therefrom that there is nothing which requires the issue of a notice for the submission of the return. There is only a period prescribed for sending the returns.
21. Section 10 provides for the Sales Tax Officer making a provisional assessment determining the tax payable for the current year. There are provisions in the said section for the Sales Tax Officer either accepting the returns submitted as correct and complete and provisionally make the assessment or for the Sales Tax Officer determining the turnover to the best of his judgment when no return is submitted or if the return submitted is found to be incorrect or incomplete. Clause (4) of Section 10 provides for an assessee continuing to pay tax as in the previous year until the receipt of a notice of provisional assessment and for the tax paid to be adjusted towards the tax payable under the provisional assessment or the final assessment. Clause (7) of Section 10 provides for the dealer paying each month 1/12 of the tax provisionally fixed under the scheme.
22. Section 11 provides for the final assessment being made by the Sales Tax Officer determining the tax payable by the dealer in the preceding year. It also provides for the officer either accepting the return and making the assessment or calling upon the assessee to produce evidence in support of his return and for the officer making assessment thereafter. Clause (4) of Section 11 provides for the officer assessing to the best of his judgment the amount of tax in cases where the dealer fails to comply with the terms of the notice after having furnished a return. It is the case of the Department here that there has been no voluntary return by the party and as such, he is not entitled to the notice prescribed under Section 11, Sub-Section 3(a). There is nothing on record placed before me by the petitioner to show that any voluntary return was made by the petitioner. Therefore, his grievance that he has not been served with a notice under Section 11 (3) (a) does not have any substance.
23. It will be seen that Section 4 is the charging section making every dealer liable to pay a tax on his total turnover.
24. Sections 9, 10 and n are sections providing for the machinery to quantify the tax to be paid by the dealer. They also provide for the dealer paying the tax as in the preceding year till he receives notice of provisional assessment.
25. Section 14 provides for the service upon the dealer by the Sales Tax Officer when any tax is due in consequence of an order passed under or in pursuance of this Act. Therefore, the section contemplates a tax being due even apart from any order passed by the Sales Tax Officer.
26. Section 15 provides for a right of appeal to the assessee objecting to an assessment made under Section 10 or Section 11 etc.
27. Section 18 provides for a revision against the appellate order. There is also a right given under Section 24 of the Act to the assessee to apply to the Commissioner to refer to the High Court any question of law or to apply to the High Court itself to direct the Commissioner to refer a case. In this matter the assessee has not availed himself of this right.
28. Section 22 provides for payment of tax due in consequence of an order under the Act and for recovery of the amount if not paid, as an arrear of land revenue.
29. Section 31 provides for prosecution in respect of the matters mentioned therein.
30. Mr. Peter, learned Counsel contended that the tax is payable only when it is determined under Section 11 of the Act and, in this case, the determination is only on 16th March, 1954, long after the Cochin Act has been repealed. Learned Counsel relied upon the decision of the Orissa High Court reported in Chakoo Bhai Ghelabhai v. State of Orissa  7 S.T.C.36. In that case it will be seen from the reports at page 51 that it was contended by the learned Advocate-General that the liability is incurred under Section 4 of the Orissa Sales Tax Act, the moment the turnover of a dealer exceeds the figures mentioned in the Act. In dealing with this contention, the learned Judges at page 52 observed :
This argument proceeds on a wrong assumption that chargeability to tax is the same thing as liability to pay. 'Liability' means no more than 'to be under an obligation' and does not necessarily connote an existing liability....It is clear, therefore, that the expression liability occurring in Section 4 refers to a contingent liability which may continue or cease upon the happening of a certain event and this liability is expressly stated to be 'subject to the provisions of sections 5, 6, 7 and 8'. ...These provisions indicate that the liability to pay does not arise until an assessment has been made according to the directions laid down in the Act....The dealer is required to furnish a return, and if the Collector is satisfied that the return furnished is correct and complete, he shall assess the amount of tax due from the dealer on the basis of such returns. Until the tax has been determined--and it cannot be determined unless the Collector is satisfied with the return furnished by the dealer--the tax does not become payable nor is the liability to pay 'incurred' under the Act....To read into the language of Section 4 a past and defined liability would be an undue stretch of the language not justified by the context or the scheme of the taxing provisions.
31. On this reasoning the learned Judges held that the effect of Section 4 of that Act was only to declare that a dealer whose turnover for a particular year exceeds Rs. 5,000 incurs in gremio the liability for tax in respect of the year which is to commence after the passing of the Act.
32. Learned Counsel very strongly relied upon these observations that there is no liability to pay the tax unless the assessment has been made and that the assessment must be made when the Act under which it is made is in force. The learned Counsel for the petitioner has also relied upon the observations of the Privy Council in Doorga Prosad v. Secretary of State  13 I.T.R. 285 at p. 289 to the following effect:
In their Lordships' opinion, although income tax may be popularly described as due for a certain year, it is not in law so due. It is calculated and assessed by reference to the income of the assessee for a given year, but it is due when demand is made under Section 29 and Section 45.
33. The learned Government Pleader has contended that the liability to pay tax does not depend upon the actual assessment. He relied upon the leading case of the House of Lords reported in Whitney v. Inland Revenue Commissioners  A.C. 37. At page 52 of the reports, Lord Dunedin observed :
Now, 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-hypo-thesi, has already been fixed. But assessment particularises the exact sum which a person liable has to pay. Lastly, come the methods of recovery, if the person taxed does not voluntarily pay.
34. Therefore, it is clear from these observations that a statute declares the liability and then makes provision for assessment and collection. It is also clear that liability does not depend on assessment. Assessment only quantifies the exact amount which a person already liable has to pay. In dealing with the Income-tax Act, their Lordships of the Privy Council in the case reported in Wallace Bros. v. Income-tax Commissioner, Bombay  16 I.T.R. 240 : A.I.R. 1948 P.C. 118 observed at page 119 as follows :
The rate of tax for the year of assessment may be fixed after the close of the previous year and the assessment will necessarily be made after the close of that year. But the liability to tax arises by virtue of the charging section alone, and it arises not later than the close of the previous year though quantification of the amount payable is postponed.
35. These observations also show that the liability to pay tax arises in view of the section charging the liability and that the assessment which quantifies the tax is not for the first time imposing a liability.
36. The decision of the Federal Court in Chatturam and Ors. v. Commissioner of Income-tax, Bihar  15 I.T.R. 302, is also to the same effect. At page 307 of the reports their Lordships observed as follows :
It was next contended that in the present case notices under Section 22(1) and (2) of the Income-tax Act were already issued before the notification of 26th May, 1940. The notices were the foundation of the jurisdiction of the Income-tax Officer. At. that time the Finance Act of 1940 was not operative in the area in question and the Governor, by his notification, cannot give jurisdiction to the Income-tax Officer in respect of his ultra vires notices. This contention is founded on a misunderstanding of the jurisdiction of the Income-tax Officer and the operation of the Income-tax Act. The income-tax assessment proceedings commence with the issue of a notice. The issue or receipt of a notice is not, however, the foundation of the jurisdiction of the Income-tax Officer-to make the assessment or of the liability of the assessees to pay the tax. It may be urged that the issue and service of a notice under Section 22(1) or (2) may affect the liability under the penal clauses which provide for failure to act as required by the notice. The jurisdiction to assess and the liability to pay the tax, however, are not conditional on the validity of the notice. Suppose a person, even before a notice is published in the papers under Section 22 (1), or before he receives a notice under Section 22 (2) of the Income-tax Act, gets a form of return from the Income-tax Office and submits his return, it will be futile to contend that the Income-tax Officer is not entitled to assess the party or that the party is not liable to pay any tax because a notice had not been issued to him. The liability to pay the tax is founded on sections 3 and 4 of the Income-tax Act, which are the charging sections. Section 22 etc., are the machinery sections to determine the amount of tax.
37. After stating that the liability to pay the tax is founded on sections 3 and 4 of the Indian Income-tax Act which are the charging sections, their Lordships refer with approval to the observations of Lord Dunedin already referred to in Whitney v. Inland Revenue Commissioners  A.C. 37. Their Lordships also referred to certain other English decisions with approval to the effect that the charge or liability to pay the tax is made in consequence of the Act upon the subject and the assessment is only for the purpose of quantifying it. The liability is imposed by the charging section and the provisions as to assessment are only a machinery by which the liability is sought to be quantified. But the liability is definitely and finally created by the charging sections.
38. In view of the decisions quoted above, it follows that the liability to pay tax is by the charging section, in this case by Section 4 of the Cochin Act. The other provisions regarding the issue of notice and of making the assessment are all only with a view to quantify the actual amount of tax payable by a party. Therefore, it is not possible for me to accept the contention of the learned Counsel for the petitioner that the liability to pay tax is imposed for the first time only when the order of assessment was passed on 16th March, 1954. No doubt, the decision of the Orissa High Court in Chakoo Bhai Ghelabhai v. State of Orissa  7 S.T.C. 36 relied upon by the learned Counsel for the petitioner appears prima facie to support his contentions. But the decisions of the House of Lords, the Privy Council and our Federal Court do not appear to have been brought to the notice of the learned Judges of the Orissa High Court. With great respect, the reasoning of the learned Judges of the Orissa High Court that a liability for payment of tax can be said to be complete only when the order of assessment is made, does not appear to be correct, in view of the decision of the House of Lords which has been approved by the Privy Council and by our Federal Court. Therefore, it follows that the petitioner is liable to pay the tax for the period in question by virtue of Section 4 of the Cochin Act of 1121 as amended subsequently. The observation of the Privy Council in Doorga Prosad v. Secretary of State  13 I.T.R. 285 at 289 does not also help the petitioner. It is more in the nature of an obiter by their Lordships and it is more based on the certificate issued in that matter.
39. Then the question arises what is the effect of the repeal of the Cochin Act by the Travancore-Cochin General Sales Tax Act, XI of 1125. According to the learned Counsel for the petitioner, the new Act does not in any way provide for keeping alive the liabilities under the Cochin Act of 1121 and, therefore, it is not open to the department to enforce the liability as against the assessee after the Cochin Act has been repealed.
40. On the other hand, the learned Government Pleader contends that the petitioner has already incurred a liability to pay tax under the Cochin Act and by virtue of Section 4 of the Travancore-Cochin Interpretation and General Clauses Act, Act VII of 1125, the repeal of the Cochin Act does not in any way take away the liability of the petitioner. The learned Government Pleader relies in particular on Clauses (c) and (e) of Section 4 of the Travancore-Cochin General Clauses Act. Clause (c) states that the repeal of an enactment, unless a different intention appears, shall not 'affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed' and Clause (e) is to the effect that unless a different intention appears the repeal shall not affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the repealing Act had not been passed.
41. Therefore, according to the learned Government Pleader the question is whether there is any contrary intention expressed in the Travancore-Cochin General Sales Tax Act, XI of 1125, which repealed the Cochin Act. Mr. Peter has not been able to point out to any provision in the Travancore-Cochin General Sales Tax Act which will indicate an intention to the contrary as required under Section 4 of the General Clauses Act. His contention, as already stated, is that the Travancore Cochin Act, XI of 1125, does not preserve the rights or liabilities under the Cochin Act.
42. That it is not necessary to so preserve when an Act is repealed is clear from the two decisions of the Supreme Court, the one reported in State of Punjab v. Mohar Singh A.I.R. 1955 S.C. 84 and the other in Indira Sohanlal v. Custodian of E.P. A.I.R. 1956 S.C. 77. In State of Punjab v. Mohar Singh A.I.R. 1955 S.C. 84 their Lordships were considering Clauses (c), (d) and (e) of Section 6 of the General Clauses Act which corresponded to Clauses (c), (d) and (e) of Section 4 of the Travancore-Cochin General Clauses Act. Their Lordships in considering the effect of a repeal observed at page 88 :
In our opinion the approach of the High Court to the question is not quite correct. Whenever there is a repeal of an enactment, the consequences laid down in Section 6 of the General Clauses Act will follow unless, as the section itself says, different intention appears. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention.
The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them. We cannot therefore subscribe to the broad proposition that Section 6 of the General Clauses Act is ruled out when there is repeal of an enactment followed by a fresh legislation. Section 6 would be applicable in such cases also unless the new legislation manifests an intention incompatible with or contrary to the provisions of the section. Such incompatibility would have to be ascertained from a consideration of all the relevant provisions of the new law and the mere absence of a saving clause is by itself not material.
43. This principle has been reiterated by their Lordships in their later judgment in Indira Sohanlal v. Custodian of E.P. A.I.R. 1956.S.C. 77.
44. Applying the tests laid down by their Lordships, the question for consideration is not as to whether the new Act namely, the Travancore-Cochin Act, XI of 1125, expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them. As already stated, Mr. Peter has not been able to point out to any section in the new Act from which an intention to destroy the old rights and liabilities could be seen. Therefore, in the absence of any such provision in the new Act the principles mentioned in Section 4 of the Travancore-Cochin General Clauses Act will apply and the reasoning of their Lordships of the Supreme Court will also apply with equal force. In view of the decisions of the Supreme Court about the effect of a repeal and the scope of the applicability of the General Clauses Act it is unnecessary for me to consider the two English cases cited by the Government Pleader namely, Heston and Isleworth Urban Council v. Grout  2 Ch. D. 306 and in Hamilton Gell v. White  .2 K.B. 442. Therefore, it follows that there was already a liability under the Cochin Act and that liability has not been destroyed by the Travancore-Cochin Act, XI of 1125, and the principles enunciated in Section 4 of the General Clauses Act applied and the liability of the asses-see can be enforced by the Sales Tax Department notwithstanding the repeal of the Cochin Act. It further follows that the order of assessment of the 3rd respondent dated 16th March, 1954, Ext. P, and the appellate and revisional orders, Exts. P1 and P2, are all passed with jurisdiction and they cannot be quashed as prayed for. When the order of assessment stands, it cannot be said that any tax has been illegally levied and collected from the petitioner to justify an order for refund and, therefore, that prayer also cannot be granted.
45. In the result, the application fails and is dismissed with costs fixed at Rs. 250.