Case: Ghanshyam Das Vs. Regional Assistant Commissioner of Sales Tax Nagpur &amp; Others

Officer commences the proceedings for assessment by the issue of a notice under sub-section (1) of s. 10, and, in the case of a registered dealer, the statute has already fixed the date for the furnishing of the return and therefore has set in motion the process for the assessment of the sales tax by the Sales Tax Officer. I do not see any good reason why the statutory notice to the registered dealer be not considered to be at par with the notice issued to the ordinary dealer by the Sales Tax Officer and why it should not be taken to initiate the assessment proceedings just as the issue of a notice by the Sales Tax Officer would have initiated the proceedings against the ordinary dealer. The failure of the registered dealer to furnish the return enables the Sales Tax Officer to assess the tax to the best of his judgment, of course, after giving an opportunity to the registered dealer of being heard. It would be incongruous if the Sales Tax Officer be held not to have initiated the assessment proceedings against the registered dealer and yet, on the failure of such a dealer to furnish the returns, to proceed in the very first instance to assess tax on the dealer to the best of his judgment. Such a power of taxing to the best of his judgment is an indication of the fact that the dealer had defaulted in respect of some proceedings connected with the assessment of tax and thus has made himself liable to tax on the best judgment basis instead of a tax on the computed amount of turnover ac- cording to the records. His default lies in his not submit- ting, the return of turnover and not depositing the tax due on the turnover shown in the return. The payment of tax as a result of the statutory notice under s. 10(1) and r. 19 well points to the conclusion that the statutory notice and rule initiate the assessment proceedings against the registered dealer at least from the date of the close of the quarter for which the turnover is to be furnished and tax is to be paid.The mere fact that the Sales Tax Officer cannot proceed against an unregistered dealer who, though liable to pay a tax, did not get himself registered, after the expiry of three years from the period the -turnover in which was liable to tax, cannot lead to the conclusion that the Sales Tax Officer cannot take necessary steps to assess a registered dealer under sub-section (2) and (4) of s. 11 after the expiry of three years from the period whose turnover he proceeds to assess, for the simple reason that s. 11 or any other provision of the Act does not lay down any such restriction on the Sales Tax Officers powers under these sub-sections.24. Such a power in the Sales Tax Officer does not contravene the provisions of Art. 14 of the Constitution. The registered dealer and the unregistered dealer belong to different classes. The former is one whose liability to tax is admitted. The other has admitted no such liability. The Sales Tax Officer can find out about the liability of the unregistered dealer to tax only by issuing a notice to him under sub-section (1) of s. 10 when he thinks that such a dealer might be liable to tax. It is only when the information in his possession is sufficiently strong and trustworthy as to satisfy him that a certain unregistered dealer is liable to by sales tax and has wilfully failed to apply for registration that he can take action under sub- section (5) of s. 11. The circumstances in which the Sales Tax Officer can take action against the unregistered dealer are different from the circumstances in which lie takes action against the registered dealer. I am therefore of opinion that the Sales Tax Officer does not contravene Art. 14 of the Constitution as contended for the appellant, if he takes action against a registered dealer under sub-section (2) or (4) of s. 11 even after the expiry of three years from the period whose turnover is to beassessed.It is to be noticed that the Act, as originally-enacted, did not have s. 11-A. -That was introduced in 1953 and made retrospective from June 1, 1947. Amendment was made in 1953 in s. 11 (5) and it made the period of limitation for proceeding to assess tax three years. No amendment providing limitation was however made in s. 11(2) and (4) in 1953. This must be deliberate and indicates the intention of the Legislature not to limit the period during which action can be taken under s. 11(2) and (4).25. The Register of Cases in Form XIII of the Rules & Forms is for cases instituted under ss.10(3), 11, 11-A and 22-C of the Act. Its columns do not show when the assessment of tax proceedings commence. Still its column 14 is meant for Amount of penalty imposed, if any, with relevant section under which it is imposed and reference to defaulters list. This shows that the Sales Tax Officer maintains a list of registered dealers who had defaulted in not complying with the notices under s. 10(1) or 11(2) or under any other provision which makes the registered dealer liable to penalty. The maintenance of the defaulters list indicates that the Sales Tax Officer initiates proceedings for tax assessment prior to his issuing notices under s. 10(3) and that this must be after the expiry of the date for furnishing returns referred to in s. 10(1).26. In view of the opinion I have expressed above, it is not necessary to decide what the precise scope of the expression turnover escaping assessment in s. 11-A is.27. It follows that the impugned notices were properly issued by the Assistant Commissioner of Sales Tax to the appellant and that these appeals fail. I would accordingly dismiss these appeals with costs.ORDER BY COURT28.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]It is not necessary to multiply citations. We, there- fore, hold that the expression "escaped assessment" in s. 11-A of the Act includes that of a turnover which has not been assessed at all, because for one reason or other no assessment proceedings were initiated and therefore, no assessment was made in respectdecision is a clear authority for the position that if a return was duly made, the assessment could be made at any time unless the statute prescribed a time limit. This can only be for the reason that the proceedings duly initiated in time will be pending and can, therefore, be completed without time limit. A proceeding is said to be pending as soon as it is commenced and until it is concluded. On the said analogy, the assessment proceedings under the Sales-tax Act must be held to be pending from the time the said proceedings were initiated until they were terminated by a final order of assessment.Before the final order of assessment, it could not be said that the entire turnover or a part thereof of a dealer had escaped assessment, for the assessment was not completed and if, completed, it might be that the entire turnover would be caught in theis, therefore, clear that under sub-section (1) of s. 10, the Commissioner need not issue a notice to a registered dealer for furnishing the relevant returns, but a statutory obligation is imposed on the said dealer to do so by such dates and to such authority as may be prescribed.Now coming to the case of a dealer who did not register himself under the Act, the position is different. There is no statutory obligation cast on him by any section to submit a return. His is really a case of evasion from his obligation to get himself registered under theare concerned in this case with the last contingency.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 s. 10(3) or under s. 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 de- fault may be the occasion for initiating the proceedings, but the default itself proprio vigore cannot initiate pro- ceedings. 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 11 wherein under the appropriate column the particulars in regard to a dealers return and the date 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 thefind 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 foregoing 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 eachthe 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 i.e., for the period from October 22, 1949 to November 9, 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. The Tribunal has no jurisdiction to issue a notice under s. 11-A with respect to the quarters other than that covered by the return made by thefar as Civil Appeal No. 102 of 1961 is concerned, the appellant had not submitted any returns for the year 1950-51 i.e., for the period from November 10, 1950 to October 31, 1951. The Assistant Commissioner of Sales-tax issued a notice to him on October 15, 1954 in Form XII purporting to be under s. 11 (4) of the Act. The said notice was within 3 years from October 16, 1951 which fell within the 4th quarter of the concerned year. Under s. 11-A of the Act the period of 3 years has to be calculated from the expiry of the period in regard whereto any turnover has escaped assessment. As the unit of assessment is a quarter, the period in s. 11-A can only mean a quarter and it cannot be further split up into months, weeks and days. The said period is the fourth quarter and it expired on October 31, 1951. If so, it follows that the Commissioner has jurisdiction to assess the turnover in respect of the entire fourth quarter as the notice was issued within three years from the expiry of the said quarter.But in this case the Commissioner assessed, the appellant in respect of the turnover of the entire year without showing separately the assessment of tax payable in respect of each quarter. We, cannot, therefore, confine the relief to be given to the appellant in these appeals to the period barred under s. 11-A of the Act. We would, therefore set aside the assessments in, both the appeals giving liberty to the respondent to make the assessment separately for the periods not barred under s. 11-A of the Act either because a return was filed, as in the first case or because the last quarter was within the period of three years, as in the second case.Iam therefore of opinion that the Sales Tax Officer does not contravene Art. 14 of the Constitution as contended for the appellant, if he takes action against a registered dealer under sub-section (2) or (4) of s. 11 even after the expiry of three years from the period whose turnover is to beassessed.It is to be noticed that the Act, as originally-enacted, did not have s. 11-A. -That was introduced in 1953 and made retrospective from June 1, 1947. Amendment was made in 1953 in s. 11 (5) and it made the period of limitation for proceeding to assess tax three years. No amendment providing limitation was however made in s. 11(2) and (4) in 1953. This must be deliberate and indicates the intention of the Legislature not to limit the period during which action can be taken under s. 11(2) andRegister of Cases in Form XIII of the Rules & Forms is for cases instituted under ss.10(3), 11, 11-A and 22-C of the Act. Its columns do not show when the assessment of tax proceedings commence. Still its column 14 is meant for Amount of penalty imposed, if any, with relevant section under which it is imposed and reference to defaulters list. This shows that the Sales Tax Officer maintains a list of registered dealers who had defaulted in not complying with the notices under s. 10(1) or 11(2) or under any other provision which makes the registered dealer liable to penalty. The maintenance of the defaulters list indicates that the Sales Tax Officer initiates proceedings for tax assessment prior to his issuing notices under s. 10(3) and that this must be after the expiry of the date for furnishing returns referred to in s.view of the opinion I have expressed above, it is not necessary to decide what the precise scope of the expression turnover escaping assessment in s. 11-A is.