Case: Madan Lal Arora Vs. Excise &amp; Taxation Officer, Amritsar

1. The petitioner is a dealer registered under the Punjab General Sales Tax Act. He filed returns of his sale turnovers for the four quarters of the financial year ending on March 31, 1955, and likewise, for the four quarters of the financial year ending on March 31, 1956. In respect of each year the Sales Tax Assessing Officer served three successive notices on him on March, 7, 1958, April 4, 1958, and August 18, 1959, requiring him to attend with the documents and other evidence in support of his returns. In the last of the notices mentioned above it was stated that on failure to produce the documents and other evidence mentioned, the case would be decided "on best judgment assessment basis." The petitioner did not comply with any of the notices, but after the receipt of the last notice he presented this petition under Art. 32 of the Constitution challenging the right of the authorities to make a best judgment assessment.

Court's reasoning:
The period referred, therefore, is the period mentioned earlier in the sub-section, and that is the period in respect of which returns had been furnished by the dealer. This is also made clear by sub-sec. (1) of S. 11. That deals with a case where the returns are accepted. Both sub-secs. (1) and (4) deal with returns for the same period. Now S. 10(3) provides that "every registered dealer shall furnish such returns by such dates and to such authority as may be prescribed." "Prescribed" means prescribed by rules framed under the Act. Under R. 20 of these rules, a registered dealer like the petitioner, had to furnish returns quarterly. The rules define "return period" as "the period for which returns are prescribed to be furnished by a dealer."It would, therefore, appear that when sub-sec. (4) of S. 11 talks of "returns in respect of a period," that refers in the case of the petitioner to the quarters in respect of which he submitted the returns. We then come to this that the three years within which the authority could proceed to make the best judgment assessment had to be counted from the end of each quarter in respect of which returns had been filed.5. Now the last of the quarters in respect of which the petitioner filed his returns ended on March 31, 1956. So the assessing authority could not proceed to make a best judgment assessment in respect of this quarter after March 31, 1959. In the case of the earlier quarters, of course, the three years had expired even prior to this date. It is not in dispute, that the assessing officer had not proceeded to make any assessment on the petitioner at the date of any of the notices. In the present case therefore the notices given on August 18, 1959, that best judgment assessments would be made in respect of the quarters constituting the financial years 1955 and 1956, the last of which expired on March 31, 1956, were futile. No such assessments could be made in respect of any of these quarters after March 31, 1959.