Case: Anandji Haridas &amp; Co. (P.) Ltd Vs. S. P. Kushare, S. T. O. Nagpur &amp; Ors

to 31-12-53. In the State of Orissa v. M/s. Chakobhai Chelabhai and Co., (1961) 1 SCR 719 = (AIR 1961 SC 284 ) this Court held that the issue of one notice under S. 12 (5) of the Orissa Sales Tax Act 1947 which section is similar to Section 11 (4) (a), for several quarters was not contrary to law as the section makes reference to a period which might consist of more than one quarter.21. From the notice in question it cannot be made out whether the assessing authorities wanted to deal with the appellants under Section 10 (1) or under Sec. 11 (4). The notice says that the appellants "had failed to furnish the return as required by a notice in that behalf served on them under Section 10 (1) of the Act, or that they being registered dealers had failed to furnish return for the periods mentioned therein and thereby rendered themselves liable under Section 11 (4) to be assessed to the best of judgment."Quite clearly, the first alternative mentioned in the notice did not apply to the appellants. They are registered dealers. No notice under Sec. 10 (1) had been given to them. The assessing authority by mistake had failed to strike out the first alternative shown in the printed form. That circumstance could not have prejudiced the appellants. It was held by this Court in Chakobhai Chelabhais case 1961-1 SCR-719 = (AIR 1961 SC 284 ) referred to earlier that such a mistake does not vitiate the notice issued.22. But the more serious mistake pointed out by Mr. Gokhale in that notice is that the assessment year mentioned in that notice is not the assessment year of the appellants. Their assessment years commenced from 1st November. This error according to Mr. Gokhale vitiated the notices issued. Yet another complaint made by Mr. Gokhale was that though Rule 33 provides that ordinarily not less than 30 days notice should be given to the assessee, only 9 days notice was given. But this defect was found only in the notice quoted above and not in the other notices issued in l955. For the reasons to be mentioned presently, we see no merit in either of these contentions.23. We are unable to accept the contention of Mr. Gokhale that a notice under Section 11 (4) (a) or 11A (1) is a condition precedent for initiating proceedings under those provisions or that it is the very foundation for the proceedings to be taken under those provisions. The notice contemplated under Rule 32 is not similar to a notice to be issued under Section 34 (1) (b) of the Income Tax Act, 1922. All that Sections 11 (4) and 11A (1) prescribe is that before taking proceedings against an assessee under those provisions, he should be given a reasonable opportunity of being heard. In fact, those sections do not speak of any notice. But Rule 32 prescribes the manner in which the reasonable opportunity contemplated by those provisions should be afforded to the assessee. The period of 30 days prescribed in Rule 32 is not mandatory. The rule itself says that ordinarily not less than 30 days notice should be given.Therefore, the only question to be decided is whether the defects noticed in those notices had prejudiced the appellants. It may be noted that when the assessees received the notices in question, they appeared before the assessing authority, but they did not object to the validity of those notices. They asked for time for submitting their explanation. The time asked for was given. Therefore, the fact that only nine days were given to them for submitting explanation could not have in any manner prejudiced them. So far as the mistake in the notice as regards the assessment year is concerned, the assessees kept silent about that circumstance till 1958. It was only when they were sure that the period of limitation prescribed by Section 11A had expired, they brought that fact to the notice of the assessing authority. It is clear that the appellants were merely trying to take advantage of the mistakes that had crept into the notices. They cannot be permitted to do so. We fail to see why those notices are not valid in respect of the periods commencing from February 1, l953 till 31-10-55. We are unable to agree with Mr. Gokhales contention that each one of those notices should be read separately and that we should not consider them together. If those notices are read together as we think they should be, then it is clear that those notices give the appellants the reasonable opportunity contemplated by Secs. 11 (4 (a) and 11-A (1). In Chatturam v Commr of Income Tax Bihar, (1947) 15 ITR 302 = (AIR 1947 FC 32), the Federal Court held that any irregularity in issuing a notice under S. 22 of the Income Tax Act, l922 does not vitiate the proceeding, that the income tax assessment proceedings commence with the issue of the notice, but the issue or receipt of the notice is, however, not the foundation of the jurisdiction of the income tax officer to make the assessment or of the liability of the assessee to pay the tax. 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 and others are the machinery sections to determine the amount of tax The ratio of that decision applies to the facts of the present case. In our opinion, the notices issued in the year 1955 are valid notices so far as they relate to the period commencing from February 1, 1953 to October 31, 1955.24. In view of our conclusion that every escapement of assessment coming within the scope of Section 11 (4) (a) is also an escapement of assessment under S. 11A (1) a notice issued under Section 11 (4) (a) would be a valid notice in respect of a proceeding under Section 11A (1).

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

Explanation:
0[ds]8. Now we may turn to the questions formulated for decision. As mentioned earlier, the main contention advanced on behalf of the appellants is that sub-sec. (3) of Section 11A has brought about a discrimination between those dealers proceeded against under 11 (4) (a) and those dealt with under Section 11A The contention advanced on behalf of the appellants is that the turnover of a registered dealer who has failed to submit his return and also to deposit the tax due from him has escaped assessment; the case of such a dealer comes both within Section 11 (4) (a) as well as Section 11-A, therefore, he can be dealt with under either of those two provisions. Whereas S 11A prescribes a period of limitation for a proceeding under that provision in view of sub-section (3) of Section 11A a proceeding under Section 11 (4) (a) can be initiated at any time under those circumstances it is open to the authorities to proceed against some of the same class of dealers under Section 11 (4) (a) and others under S. 11-A. It was said on their behalf that it is well settled that in its application to legal proceedings Article 14 assures to every :one the same rules of evidence and modes of procedure. in other words. the same rule must exist for all in similar circumstances On the other hand it was urged on behalf of the revenue that Section 11 (4) (a) deals only with registered dealers who have certain advantages under the Act, whereas section 11 A deals with dealers who do not come either under Section 11 (4) or S. 11 (5), and therefore the classification of dealers made under the various provisions is based on real and substantial distinction bearing a just and reasonable relation to the object sought to heis true that the said decisions were given with reference to either Section 34 (1) of the Income Tax Act or Section 14 of the Business Profit Tax Act, but so far as the present enquiry is concerned the said sections are in part materia with Section 11A of the Act. In construing the meaning of the expression escaped assessment in Section 11A of the Act there is no reason why the said expression should bear a more limited meaning than what it bears under the said two Acts. All the three Acts are taxing statutes and the three relevant sections therein are intended to gather the revenue which has improperly escaped. A division Bench of the Madras High Court in the State of Madras v. Balu Chettiar, (1956) 7 STC 519 = (AIR 1957 Mad 681  ) following the decisions of a Full Bench of that Court, held that where an assessee did not file at any time a return of his turnover for a year and, therefore, there was no assessment made,. the turn over escaped assessment.In our judgment, the knowledge of the fact that the appellants had not submitted their quarterly returns as well as the treasury challans, constituted an information to the assessing authority from which it could be satisfied and in fact it was satisfied that the turnovers with which we are concerned in this case had escapedthose facts, it is seen that no notice had been issued within three years in respect of the turnover relating to the period 1-5-52 to 31-12-52. The assessment in respect of that period is clearly barred in view of our earlier conclusion. The period 1-1152 to 31-12-52 forms part of the quarter commencing from 1-11-52. No notice was given in respect of that quarter. A quarter forms a unit by itself. Therefore, it follows that the proceeding in respect of that quarter is also barred bymay be noted that when the assessees received the notices in question, they appeared before the assessing authority, but they did not object to the validity of those notices. They asked for time for submitting their explanation. The time asked for was given. Therefore, the fact that only nine days were given to them for submitting explanation could not have in any manner prejudiced them. So far as the mistake in the notice as regards the assessment year is concerned, the assessees kept silent about that circumstance till 1958. It was only when they were sure that the period of limitation prescribed by Section 11A had expired, they brought that fact to the notice of the assessing authority. It is clear that the appellants were merely trying to take advantage of the mistakes that had crept into the notices. They cannot be permitted to do so. We fail to see why those notices are not valid in respect of the periods commencing from February 1, l953 till 31-10-55. We are unable to agree with Mr. Gokhales contention that each one of those notices should be read separately and that we should not consider them together. If those notices are read together as we think they should be, then it is clear that those notices give the appellants the reasonable opportunity contemplated by Secs. 11 (4 (a) and 11-A (1). In Chatturam v Commr of Income Tax Bihar, (1947) 15 ITR 302 = (AIR 1947 FC 32), the Federal Court held that any irregularity in issuing a notice under S. 22 of the Income Tax Act, l922 does not vitiate the proceeding, that the income tax assessment proceedings commence with the issue of the notice, but the issue or receipt of the notice is, however, not the foundation of the jurisdiction of the income tax officer to make the assessment or of the liability of the assessee to pay the tax. 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 and others are the machinery sections to determine the amount of tax The ratio of that decision applies to the facts of the present case. In our opinion, the notices issued in the year 1955 are valid notices so far as they relate to the period commencing from February 1, 1953 to October 31, 1955.24. In view of our conclusion that every escapement of assessment coming within the scope of Section 11 (4) (a) is also an escapement of assessment under S. 11A (1) a notice issued under Section 11 (4) (a) would be a valid notice in respect of a proceeding under Section 11A (1).