Case: Superintendent of Taxes, Tezpur and Others Vs. Messrs Bormahajan Tea Company Limited

The respondent is M/s. Bormahajan Tea Co. Ltd., who is assessee under the Assam Taxation (On Goods Carried by Road or on Inland Water-ways) Act, 1961. The Assam Taxation (On Goods Carried by Road or on Inland Water-ways) Act was passed in 19 5 4. The validity of the Act was challenged by various parties before the Assam High Court and this Court. This Court on September 26, 1960 held that-the Act was ultra vires of the Constitution as the previous sanction of the President was not taken as required under Art. 304 of the Constitution. The present Act, The Assam Taxation (On Goods Carried by Road or Inland Water-ways) Act, 1961 (hereinafter called as "the Act"), was passed by the Assam Legislature with the sanction of the President for the purpose of validating the tax that had been imposed under the 1954 Act The Act received the assent of the President.., on April 6, 1961 and was published in the Assam Gazette on April, 15, 1961 and was to be in force only up to March. 31, 1962. The Validity of this Act was also challenged and the High Court of Assam by its order dated August 1, 1963 held that this Act was also ultra vires. The State Government appealed to this Court against this judgment. While the appeal w as pending before this Court two writ petitions filed by different assessees under Art. 32 of the Constitution before this Court were disposed of on December 13, 1963 holding that the Act was valid. On an application made by the Government of Assam pending the appeal against the order dated August 1, 1963 of the Assam High Court this Court granted stay of the operation of the judgment of the High Court and on January 29, 1965 made the stay absolute subject to the condition that the assessment proceedings, could continue but no levy should be made. On April 1, 1968 this Court reversed the judgment dated August 1, 1963 of the Assam High Court and held the present Act to be valid. Though the present Act was passed in 1961 as the matter was pending before the Courts the assessment proceedings could not be taken up till January 29, 1965 when this Court allowed the assessment proceedings to be continued.The two appeals before us relate to the assessment quarter ending September 30, 1960 and December 31, 1960.

Reasoning: It may be noted that while in Civil Appeal, No. 602 of 1974 the return was filed within time but without payment of tax, in Civil Appeal No. 603 of 1974 the return was filed out of time and without payment of the tax. Orders of assessments were passed in both the cases on June 19, 1969 in pursuance of the provisions of section 9(4) of the Act. It is the common case that no notice either under section 7(2) or Section 11 of the Act was served on the respondent for the submission of the return for the periods in question. In the High Court the respondent-submitted that order of assessment made by the Revenue on June 19, 1969 is not valid in law on two grounds. Firstly, it was contended that as the return in Civil Rule No. 1000 of 1969 was filed without the necessary deposit of the tax the return is not a return within the meaning of section 7(1) and no assessment proceedings can be taken on that, It was further submitted that as no notice as contemplated under section 7(2) and section 11 of the Act directing the assessee to show cause why assessment proceedings should not be initiated within 2 years from the date of the expiry of the return period was issued, no assessment proceedings could be validly initiated as. it became time-barred under section 7(2) of the Act. The plea on behalf of the Government was that the demand by the taxing officer under section 9(3) of the Act is in pursuance of the return filed voluntarily by the assessee though without payment of the tax and out of time and that it can be taken as a return and assessment made under section 9 of the Act. In this view the submission was that it is not necessary for the tax authorities to issue any notice under section 7(2) within 2 years from the date, on which the return ought to have been submitted. The High Court held that as under section 7(1) the return must be submitted within a period of 30 days after the completion of the return quarter, the return submitted after the statutory period must be held to be non-est for the purpose of initiating assessment proceedings based thereon and as no action had been taken, either under section 7 (2) or section 11 of the Act, in the present case, the assessment order dated June 19, 1969 is be yond the competence of the authorities. With regard to Civil Rule No. 1000 of 1969 the High Court came to the same conclusion on the ground that though the return was admittedly submitted within the prescribed time, the tax due on that re turn was not paid and as payment of tax before, furnishing a return under section 7 (1) of the Act is mandatory such failure would result in making the return non-est and therefore no further proceedings can be taken or such a defective return. In the result the High Court held that the return submitted in Civil Rule No. 1000 of 1969 although within the, prescribed period is not a return within the meaning of section 7(1) and that the return in Civil Rule No. 1001 of 1969 as it was beyond the prescribed period and Without payment of tax cannot be treated as a return under section 7(1) of the Act and as admittedly no proceedings were taken under section 7(2) of the Act the tax authorities were not competent to proceed with thehas to be seen that the ground that was urged by the respondent was that the returns were non-est which was accepted by the High Court. We do not think we will be justified in these appeals under Art. 136of the Constitution to permit the State to contend that it can proceed on the basis that the returns were valid, especially when the plea before the High Court was that the returns were invalid. this Court has repeatedly held that the exercise of power under Art. 1.36 is discretionary. (vide Trivedi vs. Nagrashra ([1961] S.C.R. 113, 117.) In State of Gujarat & Ors vs. Gujarat Revenue Tribunal & Ors. ([1976] 3 S.C.R. 565, 578.) this Court held that ever though there may be substance in the argument Pat forward on behalf of the appellant the Court taking the totality of the circumstances may decline to interfere in an appeal filed by special leave of the Court under Art. 136 of the Constitution.