Source: http://www.rishabhdara.com/sc/view.php?case=3403
Timestamp: 2020-07-12 07:43:01
Document Index: 29317404

Matched Legal Cases: ['Art. 14', 'Art. 14', 'Art. 14', 'Art. 14', 'Art.\t226', 'Art. 14', 'Art. 14', 'Art. 14', 'Art. 14', 'Art.\t14', 'Art.\n14', 'Art.\t14']

ANANDJI HARIDAS & CO. (P.) LTD. versus S. P. KUSHARE, S. T. O. NAGPUR & ORS
1968 AIR 565	1968 SCR (1) 661
ANANDJI HARIDAS & CO. (P.) LTD. V. S. P. KUSHARE, S. T. O. NAGPUR & ORS [1967] RD-SC 224 (28 September 1967)
28/09/1967 HEGDE, K.S.
CITATION: 1968 AIR 565	1968 SCR (1) 661
R	1974 SC1300	(74) D	1979 SC1098	(12,15,17,18,29) RF	1980 SC1789	(36)
Provinces and Berar Sales Tax Act (21 of 1947) as amended- Bombay Sales Tax Laws (Validating Provisions and Amendment) Act (22 of 1959) ss.	11(4)(a), 11A(1) and	(3)-Section 11(4)(a), if violative of Art. 14 of Constitution.
Notices	under s. 11(4)(a)-One notice for several quarters- Inapplicable portion of printed notice not	struck	off- Assessment year, wrongly mentioned in notice-Notice, if valid.
C.P. and Berar Sales	Tax Rules, r.	32-30	days notice prescribed for submitting explanation-Notice giving shorter period-Validity.
Under s.10(1) of the Central Provinces and Berar Sales	Tax Act 1947 every dealer required so to do by the	Commissioner by notice, and every registered dealer, shall furnish	such returns	by such dates and so such authority	as may be prescribed, and r.19 of the Rules framed under the	Act provides that	every	registered dealer should furnish quarterly returns accompanied by a treasury challan in proof of payment of the tax payable. If the registered dealer does not so furnish his return, the Commissioner	may, after giving the dealer a reasonable opportunity assess	him to the best of his judgment (4)(a). Under s.11(4) (a).	Rule 32 prescribes that ordinarily not less than 30 days notice should	be given to	an assessee for submitting	his explanation before action is taken under s.11(4)(a).
In 1953, s.11A was added to the Act. Under s.11A(1) if in consequence of	any information which has come into	his possession, the other Commissioner is satisfied that	any turnover of	a dealer has	escaped assessment,	the Commissioner may, within three calendar years from	the expiry of such period, after giving the dealer a reasonable opportunity of	being heard, proceed to re-assess the	tax payable	on any such turnover and also direct the dealer to pay a	penalty. In 1959, s.11A(3) was added by which, nothing in s.11A(1) shall apply to any proceeding including any notice under s.11, that is, the period of limitation of 3 years mentioned in	s.11A(1) shall not apply to a proceeding under s.11(4)(a) on best judgment basis.
The appellants were registered dealers. Their assessment year was from 1st November to 31st October. They submitted their quarterly returns upto 30th April 1952. Since no returns	were submitted thereafter, on 13th September 1955, the assessing authority issued a notice with respect to	the period	1st January 1953 to 31st December 1953 calling	upon them to show cause why action should not be taken against them under s.11(4) (a).	A similar notice was issued on 27th October	1955 for the	period 1st January 1954 to	31st December 1954,	and on 7th July 1956, for the	period	1st January	1955	to 31st December 1955. The	appellants repeatedly took time for submitting their explanation.	In 1958, fresh notices were issued for L/P(N) 7SCI-(3)(a) 662 the calendar years1952 to 1955 and the appellants raised the objection, for the first time, that their assessment	year was not the calendar year, but 1st November to 31st October.
In view of that objection, the first respondent issued another set of notices on 8th July 1959 for the periods	1st May 1952 to 31st October 1952, 1st November 1952 to	31st October 1953, 1st November 1953 to 31st October 1954 and 1st November 1954	to 31st October 1955	respectively.	The appellants contended that those notices were barred by	the 3-year	period	of limitation under	s.11A(1), but	the assessing authority assessed the appellants on best judgment basis under s. 11 (4) (a). The appellants thereupon filed writ petitions in the High Court challenging the validity of the notices and the order of assessment, but the petitions were dismissed.
In appeals to this Court, the appellant contended that:	(1) Section 11(4), (a) read with s.11A(3) contravenes Art. 14 of the Constitution, because, a registered dealer who	had failed	to submit his return could be proceeded against either	under s.11(4)(a) or s.11A(1), but, whereas s.11A(1) provides a 3-year period of limitation, a proceeding under s. 11(4)(a) could be initiated at any time	in view of s.11A(3); (2) the notices of 1959 were barred by time;	and (3) the notices of 1955 and 1956 were not valid, because, (a) the issue	of one notice	for several quarters	was contrary to law, (b) that portion of	the printed notice which said that the appellants had failed to	furnish	the return as required by a notice in that behalf served on them under s.10(1) did not apply to the appellants as no notice under s.10(1)	had been given to them, (c) the assessment year mentioned in the notice was the calendar year which was not the assessment year of the appellants, and (d) though r.
32 provides that ordinarily not less than 30	days notice should	be given to	the assessee for submitting	his explanation, the first notice gave to the appellants only 9 days time.
Held:	(Per	Wanchoo	C. J., Mitter and Hegde, JJ.)	(1) Section 11(4) (a) is void as it is violative of Art. 14.
The expression 'dealer' in s.11A(1) includes both registered and unregistered dealers, and it cannot be contended	that dealers are classified into registered and	unregistered dealers, the former coming under s.11(4)(a) and the latter under s.11A(1). To be a valid classification, it must	not only be founded on an intelligible	differential which distinguishes persons and things that are grouped together from others left out of the group, but that differentia must have a	reasonable relation to the object sought to be achieved. In	the present case, both	s.11(4)(a) and s.
11A(1)	are concerned with taxing escaped assessments,	and judged	from this object sought to be achieved by the	Act, the classification of dealers into registered	and unregistered dealers is not reasonable. Therefore,	even registered dealers are covered by s. 11A(1). As	the 'information' contemplated by s.11A(1) need not be	from outside	sources but could be gathered by the assessing authority from his own records, his knowledge of the facts that the appellants had not submitted quarterly returns and treasury challans and that they were notassessed to tax with respect	to the turnovers	in question	constituted 'information' to the assessing authority from which he could be satisfied that the turnovers had escaped assessment.	It would thus be open to the assessing authority	to proceed against the appellants either under s.11(4)(a) or s.11A(1).
But as they were proceeded against under s. 11(4)(a),	they could not get the benefit of the limitation prescribed under S. 11A(1). It follows that s. 11(4)(a) has become a discriminatory	provision in view of s. 11A(3), [672 B;	674 D-E; 675 H; 676 A-G].
663 Ghanshyam Das v. Regional Assistant Commissioner of Sales tax, Nagpur [1964] 4 S.C.R. 436 and Suraj Mall Mohta &	Co.
v. A,	V. Visvanatha Sastri & Anr. [1955] 1	S.C.R.	448, followed.
Maharaj	Kumar	Kamal Singh v. Commissioner of	Income-tax, Bihar & Orissa [1959] Supp. 1 S.C.R. 10, Commissioner of Incometax, Bombay City v. M/s.	Narsee Nagsee & Co. Bombay, [1960]	3 S.C.R. 988. Salem Provident Fund Society Ltd. v.
C. I,	T. Madras, 42 I.T.R. 547 and United Mercantile	Co.
Ltd. v. Commissioner of Income-tax, Kerala, 64	I.T.R.	218 referred to.
(2) But s.11(4)(a) is severable from the rest of the	Act and its severance does not affect the implementation of	the other provisions of the Act. Therefore, the validity of the notices	should	be tested under s.11A(1). So	tested,	the notices	of 1959 are all barred by the 3-year period of limitation. [676 G-H].
(3) Since there was no valid notice for the period 1st	May 1952 to 31st October 1952, there could be no assessment in respect of that period.	As regards the quarter 1st November 1952 to 31st January 1953 also, there was no valid notice.
The notice issued on 13th September 1955, no doubt refers to the period 1st January 1953 to 31st January 1953, but	that is only a part of the quarter.	As a quarter is a unit in itself and there should be a notice for the entire quarter, the proceeding in respect of the quarter from 1st November 1952 to 31st January 1953 is also barred by limitation	[677 E-F].
But the notices issued in 1955 and 1956 are valid notices in so far	as they relate to the period 1st February 1953 to 31st October 1955. Any irregularity in the issue of	the notices	does not vitiate the proceeding, because,	the liability to pay tax is founded on the	charging sections.
[680 B-C].
Chatturam & Ors. v. C.I.T. Bihar, [1947] F.C.R. 116; 15 I.T.R. 302, applied.
Further, (a) The issue of one notice for several quarters is not contrary to law. [678 E].
State of Orissa and Anr. v. M/s. Chakobhai Chelabhai &	Co.
[1961] 1 S.C.R. 719, followed.
(b) The assessing authority, by mistake, had failed to strike	out the portion in the printed form which	was inapplicable to the appellants who were registered dealers and on whom no notice need be served to furnish a return.
But this circumstance could	not have prejudiced	the appellants and such a mistake does not vitiate the notice.
[678 H].
Chakobhai Chelabhai's case, [1961] 1 S.C.R. 719, followed.
(c) The mistake as regards the assessment year in	the notices	does not render the notices invalid. The assesses deliberately kept silent and when they felt that the period of limitation prescribed by s. 11A had expired, brought	the fact to the notice of the authority. The assesses were	not prejudiced and could not be permitted to take advantage of such a mistake. [679 G-H].
(d) Rule 32 prescribes that ordinarily 30 days' notice should	be given. Therefore, the period is not mandatory.
All that ss.11(4) and 11A require is that an assessee should be given a reasonable opportunity before he is proceeded against. Since, in the present 664 A case, the appellants appeared before the assessing authority and did not object to the validity of the notices but asked for sub-mitting their explanation, and as the time asked for was	given,	the appellants had a reasonable opportunity, for submitting their explanation. [679 D-G].
(Per Bachawat and Ramaswami JJ.) (1) Section 11(4) is	not violative of Art. 14.
Construing ss.11(4)(a) and 11A(1) together it must be	held that cases falling within s.11(4)(a) are excluded from	the purview of S.11A(1). Section 11(4)(a)	specially provides for the initiation of	proceedings against a registered dealer.	Having made this	special provision,	the legislature must be taken to have intended that the sales tax authorities must proceed against. a registered dealer under s.11(4)(a) and not under s.11A(1). [683 C-B].
The classification and differential treatment of registered and unregistered dealers are based on substantial difference having a reasonable relation to the object of the Act.	The legislature did not prescribe a period of limitation for a proceeding initiated under s. 11(4)(a) against a registered dealer,	because, (i)	the registered	dealer	is under a statutory obligation to file a return, (ii) no penalty	is leviable under s.11(4) and (iii) the registered dealer is given many advantages under the Act which are denied to an unregistered dealer. Therefore, the bar of limitation in the case of an unregistered dealer and the absence of such a bar in the case of a registered dealer cannot be regarded as unjust or discriminatory.[684 B, G-H].
Ghanshyam Das v. Regional Assistant Commissioner of sales Tax Nagpur, [1964]4 S.C.R. 436, Maharaj Kumar Kamal Sing v.
Commissioner of Income-tax, Bihar & Orissa, [1959] Supp. 1 S.C.R. 10 and Commissioner of Income-tax v. Narsee Nagsee & Co. [1960] 3 S.C.R. 988, explained.
(2) Section 11A(3) expressly provides that nothing in s. 11 A(1) shall apply to any proceeding including	any notice under s. 11 and the section is retrospective.	It follows that the period of limitation provided by s.11A(1) cannot be applied	to a	proceeding or	notice	under	S. 11(4).
Consequently, the impugned notices of 1959, issued under s.11(4)	are not barred by limitation and are	not invalid [682 H; 683 A].
Ghanshyam Das's Case, [1964] 4 S.C.R. 436, referred to (3) Even the	notices issued in 1955	and 1956 initiated proceedings validly under S. 11(4) for the period from	1st February 1953 to 31st October 1955, as the irregularities in the notices did not invalidate them. [685 B-C].
CIVIL APPERLATE JURISDICTION: Civil Appeals Nos. 511-514 of 1966.
Appeals, by special leave from the judgments	and orders dated	August	9, 1961, July 20, 1964, of the	Bombay	High Court, Nagpur Bench in Misc. Civil Applications Nos.	1118 of 1959. 192	of 1961. 1360 of 1959 and 193 of	1961 respectively.
H. R.	Gokhale, M. R. Bhandare, P. C. Bharta, and O. C.
Mathur, for the appellant (in all the appeals).
N. S.	Bindra, P. C. Chatterjee, S. P. Nayar for	R.H.
Dhebar,	the respondents (in all the appeals).
665 The Judgment of WANCHOO C. J., MITTER and HEGDE, JJ.	was delivered by HEGDE, J. The dissenting judgment of BACHAWAT and RAMASWAMI, JJ. was delivered by BACHAWAT, J.
HEGDE, J. The principal question canvassed in this group of appeals	by special leave is whether s. 11(4)(a) of	the Central Provinces and	Berar Sales Tax Act 1947, to be referred to as the Act hereinafter, is ultra vires Article 14 of the Constitution and consequently the notices impugned in the	writ petitions from which these appeals arise	are liable to be struck down and the respondents restrained from levying	sales tax on the appellants for the period May 1, 1952 to October 31, 1955.
The appellants	are a private limited company	carrying on business inter alia as dealers in iron and steel materials in Vidharba region of the Maharashtra State. In that region they have more than one place of business. They registered themselves as dealers under s. 8A of the Act and obtained a certificate of	registration on August, 17, 1947. Their assessment year as shown in their registration	certificate is from November 1 to October 31. They were	required to submit	quarterly returns of their turnovers. They did so till April 30, 1952. Thereafter no returns were submitted.
On September 13, 1955, the Assistant Commissioner of Sales Tax, the assessing authority at that time, issued a notice calling upon the appellants to show cause why action should not be taken against them under ss. 10(3) and 11(4)(a), on account	of their failure to furnish the return for	the period	1.1.53 to 31.12.53. Similar notices were issued to them on October 27, 1955 for the period 1.1.54 to 31.12.54 and on July 7, 1956 for the period 1.1.55 to 31.12.55. It appears	that the appellants	repeatedly took time	for submitting their explanation. The first respondent to	whom the appellants' case stood transferred issued in 1958 fresh notices	to the appellants similar to those issued in 1955.
At that stage the appellants objected to the	validity of those notices	both orally as well as in writing on	the ground that their assessment year was not the calendar	year as mentioned in those notices but the year ending October
31. Evidently in view of that objection, the first respon- dent issued another-set of notices on July 8,	'1959.	The appellants contended that those notices were barred by time.
Thereafter the	appellants challenged the validity of	the notices issued in 1959 in the petitions under Art.	226 from which these appeals arise.
In these apneals the questions arising for decision	are whether s. 11 (4)(a) or s. 11 A(3) or any parts thereof contravene the guarantee of equal protection of the laws or equality before the law or whether those provisions	are based on a valid classification which is reasonable in	view of the	object	with which they were	enacted. Mr.	H.R.
Gokhale learned counsel for the appellants, urged that	both these provisions deal with the same class of persons having common characteristics and Properties and hence there is no just 666 basis for the classification made. According to him	the classification	complained of has	brought about a discrimination.	Further he asserted	that the Act	had conferred arbitrary power on the assessing authority to pick and choose from the persons belonging to the same class to be dealt with either under S. 11(4)(a) or under 11A(1). He urged that as a case coming under s. 11(4)(a)	also falls under S. 11 A, as the law now stands, the persons proceeded against under s. 11A(1) will have the benefit of the period of limitation prescribed therein; while the said benefit is not available for those proceeded under S. 11(4)(a).
According to the learned counsel for the revenue,	ss.
11(4)(a) and 11A deal with different classes of persons; the classification	made under those provisions is a reasonable classification having	nexus with the object sought to be achieved.
Before	adverting to the points at issue, it would be convenient to	set out the circumstances under which s.
11A(3)	which	is said to	have brought	about	the discrimination complained of came to be enacted. The Act is in force ever since 1947. Section 11A as it originally stood was inserted into the Act in 1953. In Bisesar House v. State of Bombay(1) the question arose whether a notice under s. 11(2) initiates a fresh proceeding and if that is so, whether the limitation prescribed under	s.11A(1) is attracted to that proceeding.	A Full Bench of	the Bombay High Court speaking through Chagla, C. J. held that a notice under S. 11(2) initiates a fresh proceeding and to such a proceeding the limitation prescribed in s. 11A is attracted.
From the ratio of that decision it	followed that	the limitation prescribed	under	S. 11	A also governed proceedings under s.11(4)(a). Evidently, to get over	the effect of that decision, the Bombay Legislature enacted	the Bombay Sales Tax Laws (Validating Provisions and Amendment) Act 1959 (No. 22 of 1959) which came into force on April 18, 1959. Section 6 of that Act inserted the new subsection (3) into S.11A and the reason for that amendment, as stated in the statement of objects and reasons, is as follows:
"In its	judgment in	Bisesar	House	v.
Commissioner of Sales Tax, Nagpur, the Bombay High Court has	held that the	period	of limitation laid down in S.IIA of the Central Provinces	and Berar Sales Tax Act, 1947,	for reassessment of the turnover which has escaped assessment applies to original	assessment also. It has also been found that the	said limitation applies to suo motu revisions also.
The said decision affects the original assess- ments and suo motu revisions, which have	been made after the expiry	of the	period	of limitation laid down for the reassessment of turnover	escaping assessment	under	the different	sales	tax laws in force in	this State. It has, (1) 60 B.L.R. 1395 667 therefore, become necessary to establish	the validity	of all	such assessments and	to provide	that the period of	limitation prescribed for reassessment of escaped turn- overs does not apply to	original assessment and suo motu revisions." In Ghanshyam Das v. Regional Assistant Commissioner of Sales Tax, Nagpur(1) this Court did not agree with that decision so far as the scope of s.11(2) is concerned. Therein it was held that a notice under s. 11(2) does not initiate a fresh proceeding and to that proceeding the limitation prescribed in s. 11A does not apply. Though in view of that decision, s.11A(3) became superfluous in respect of a proceeding in which a notice under s. 11 (2) is given, it	undoubtedly changed the law in respect of proceedings under s.11(4)(a).
Before	we proceed to consider the aforementioned complaint of discrimination, it is necessary to have a survey of	the relevant provisions of the Act. 'Dealer' is defined in s.
2(c) as meaning a person who whether as principal or agent carries on in the State the business of selling or supplying goods whether for commission, remuneration or otherwise	and includes a firm, a partnership, a Hindu undivided family or a State government or any of their departments and includes also a	society, club or association selling or supplying goods to its members.	A 'registered dealer' is defined in s. 2(f) as meaning a dealer	registered under the	Act.
Section 2(j) defines 'turnover' as meaning the aggregate of the amounts of sale prices and parts of sale prices received or receivable by a dealer in respect of the sale or supply of goods or in respect of the sale or supply of goods in the carrying out of any contract effected or made	during	the prescribed period; and the expression	'taxable turnover' means that part 'of a dealer's turnover during such period which remains after deducting therefrom his turnover during that period in respect of the sale of goods declared	tax free under s.	6 The definition of the term 'year' as provided in s. 2(1) to the extent necessary for our present purpose reads:- "year' means the 12 months ending on 31st	day of March, or if the accounts of the assessee are made up to any other day in respect of a year ending on any date other than the	31st day of March, than at	the option of	the assessee	the year ending on the day to which his accounts	have	been	so	made up................." Section 8 says:
"(1) No dealer shall, while being liable to pay tax under this Act, carry on business as a dealer unless he has been registered as	such and possesses a registration certificate." (1) [1964] 4 S.C.R 436.
668 Section 8A provides for voluntary registration of a dealer.
Sub s.(3) thereof provides that every dealer who has	been registered upon an application made under this section so long as his registration remains in force, be liable to	pay tax under that Act. Sub-s. (4) of that	section stipulates that the registration of a dealer upon an application	made under that section shall be in force for a period not	less than three complete years and shall remain in force thereafter unless cancelled under the provisions of the Act.
Section 10 provides for returns by dealers. It reads:
"(1) Every such dealer as may be required so to do to by the Commissioner by notice served in the prescribe manner and every registered dealer shall furnish such returns by	such dates and to such authority	as may be prescribed." Sub-s. (2) of that section is not necessary for our present purpose.	Sub-s. (3) of	that section reads:
"(3) it	a dealer fails to comply with	the requirement of a notice	issued	under	sub- section (1) or a registrate dealer fails to furnish his return for	any period within prescribed time to the prescribed authority without any sufficient cause, the Commissioner may, after giving such dealer a reasonable opportunity of being heard, direct him to pay, by way of penalty, a sum not exceeding one-fourth of the amount of the tax which	may be assesses on him under s. 11 ".
Sections	11 and 11A are	important for	our present purpose.	They deal with assessment and assessment on	turnover escaping assessment. They, to the extent necessary for our present purpose read:
"11(1). If the Commissioner is satisfied that the returns furnished by a dealer in respect of any period are correct and complete, he shall assess the dealer on them.
(2) If the Commissioner is not so satisfied he shall	serve	the dealer with a notice appointing a place and day and directing	him (i) to appear in person or by an agent entitled	to appear in accordance with the provision	of section 11B, (ii)	to produce evidence or have it produced in support of the returns or (iii) to produce or cause to be produced	any accounts, registers,	cash memoranda	or other document, as may	be considered necessary by the Commissioner	for the purpose, (3) After hearing the dealer or his agent and examining the evidence produced	in compliance with	the requirements of clause (ii) or clause (iii) of	sub-section(2)	and such further evidence as the Commissioner	may be require, the Commissioner shall assess	him to tax.
669 (4) If	a registered dealer (a) does	not furnish returns in respect of any period by the prescribed date. or (b) having furnished such returns fails to comply with any of	the terms of	a notice issued under	sub-section (2), or	(c) has not regularly employed	any method of accounting or if the method employed is such	that,	in the opinion of	the Commissioner, assessment cannot	properly be made on the basis thereof, the Commissioner	shall	in the	prescribed manner assess the dealer to the best of	his judgment:
Provided	that he shall not so assess him in respect of the default specified in clause (a) unless the dealer has been first given a reasonable opportunity of being heard." (Sub- ss. 5 and (6) are not	necessary for our present purpose).
Section 11A provides:
"(1). If in consequence of any	information which has come into	possession,	the Commissioner is satisfied that any turnover of a	dealer	during any period has	been under- assessed or has escaped assessment or assessed at a lower rate or any	deduction has	been wrongly made therefrom, the Commissioner	may, at any time within three calendar years	from the expiry of such period, after	giving	the dealer a reasonable opportunity of being heard and after making such enquiry as he considers necessary, proceed in such manner as may be prescribed to reassess or assess, as the	case may be, the tax payable on any such turnover;
and the	Commissioner may direct that	the dealer shall pay, by way of	penalty	in addition	to the amount of tax so assessed, a sum not exceeding that amount.
(2). The	assessment or	reassessment	made under sub- s. (1)	shall	be at the rate at which it would have been made, had there been no under- assessment or escapement.
(3) (a). Nothing in sub-sections (1)	and (2) (i)	shall	apply to any	proceeding (including any notice issued) under Sections
11. or 22A or 22B, and (ii) notwithstanding any judgment, decree or order 'of a Court or Tribunal,	shall be deemed ever to have	been applicable to such proceeding or notice.
(b) The	validity of any such proceeding or notice shall not be called in question merely on the ground that such proceeding or notice was inconsistent with the provisions of	sub- sections (1) and (2)." Rule 19 of the rules framed under the	Act provides	that every registered dealer should furnish to the	appropriate sales tax 670 officer	his quarterly return in the prescribed form within one calendar month from the expiry of the quarter to which the return relates. Each of such returns submitted should be accompanied by a treasury challan in the form prescribed in proof of the fact that he had paid the tax payable on the basis of his return, The only other rule relevant for	Our present	purpose is r. 32 in Part VII of the Rules, which deals with assessment of tax and/ or penalty.	That	rule provides that where a registered dealer has rendered himself to a best judgment assessment as well as penalty by reason of his default in furnishing the prescribed return or	re- turns in respect of any period by the prescribed date,	the assessing authority shall serve on him a notice in form 12 specifying the	default, escapement or concealment as	the case may be and calling upon him to show cause by such	date ordinarily not less than 30 days, from the date of issue of the notice, as may be fixed in that behalf, why he should not be assessed or reassessed to tax, or a penalty should not be imposed upon him and directing him lo produce on	the said date his books of account and other documents which the assessing authority may require or which he may wish to produce in support of his objection. That rule further pro- vides that no	such notice shall be necessary where	the dealer,	having	appeared before the assessing authority, waives such notice.
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-s. (3) of s. 11A has brought about a discrimination between those dealers proceeded against under s. 11(4)(a) and those dealt with under s. 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	s. 1 1 (4) (a) as well as s. 11A; therefore, he	can be dealt with under either of those two provisions. Where s. 11A prescribes a period of limitation for a proceeding under that provision,	in view of sub-s. 3 of s. 11A a proceeding under s. 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 s.
11(4)(a) and others under s. 11A. It was said on their behalf	that it is well-settled that in its application to legal proceedings, Art. 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 s. 11(4)(a) deals only with registered dealers who have certain advantages under the Act, whereas s. 11A deals	with dealers	who do not come either under s. 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 be attained.
671 We have now to see whether the dealers who come within	the mischief of s. 11(4)(a) can also be dealt with under s. 11A.
Before	a person can be dealt with under s. 11A, it must be shown that in consequence of any information which has	come into his possession, the Commissioner is satisfied that	any turnover of that dealer during any period has	been under- assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom.
Quite plainly the expression 'dealer' in s. IIA(1) includes both registered and unregistered dealers. In this case we are concerned with the escapement of assessment. Therefore the first question that arises for decision is	whether it can be said that the appellants' turnovers for the period 1- 5-52 to 30-10-55 had escaped	assessment. There is no dispute	that those turnovers had not been assessed.	From the fact that those turnovers had not been assessed, can it be said that they had escaped assessment? In Maharaj Kumar Kamal Singh v. Commissioner	of Income Tax, Bihar	and Orissa,(1), this Court laid down that the expression "has escaped assessment" in s. 34(1)(b) of the Indian Income	Tax Act, 1922 is applicable not only where the income has	not been assessed owing to inadvertence or oversight or owing to the fact that no return has been submitted, but also where a return	has been submitted but the	income	tax officer erroneously failed to tax a part of assessable income.	In Commissioner of Income Tax, Bombay City v. M/s. Narsee Nagsee	and Co., Bombay(2) interpreting the words "profits escaping assessment" in s. 14 of the Business	Profits	Tax Act, 1947, this Court held that those words apply equally to cases where a	notice was received by the assessee	but resulted in no assessment, under-assessment or excessive relief	and to cases where due to any reason no	notice was issued	to the assessee and there was no assessment of	his income.	Kapur, J. speaking for the majority of Judges in that case, observed (at p. 993 of the report) that it is well-settled that an income escapes assessment when	the process	of assessment has not been initiated as also in a case where it	has resulted in no assessment after	the completion of the process of assessment. The true scope of the expression "escaped assessment" in s. 11A came up	for consideration before this Court in Ghanshyam Das v. Regional Assistant Commissioner	of Sales Tax, Nagpur(3). This is what Subba Rao, J. (as he then was)	who delivered	the judgment of the majority of the Judges, observed in	that regard:
"In Commissioner	of Income Tax, Bombay v.
Pirojbai	N. Contractor (5 I.T.R. 338)	the words 'escaped assessment' in	the Indian Income-tax Act were defined. It was	held therein that the said words were wide enough to include cases where no notice under s.22(2) of the Income tax Act had been issued to	the assessee and therefore his income had not been assessed at all under s. 23 thereof.
(1) [1959] Supp.1 S.C,R. 10.
(2) [1960] 3 S.C.R. 988.
(3) [1964] 4 S.C.R. 436.
672 The said view has been assumed to be correct by this Court in Maharaj Kumar Kamal Singh v. Commissioner of Income	Tax, Bihar and Orissa [1959] Supp. 1 S.C.R. 10	and Maharajadhiraj Sir Kameshwar Singh v. State of Bihar ([1960] 1 S.C.R. 322) and extended to cover a, case where the first assessment was made in due course but a part of the income escaped	therefrom. This Court, in Commissioner of Income tax, Bombay v. Narsee Nagsee and Co. ([1960] 3 S.C.R. 988), construing the provisions of s. 14 of the Business Profits Tax Act, 1947, reviewed the law on the subject and came to the following conclusion:
All these cases show that the words "escaping	assessment" apply equally to cases where a notice was received by	the assessee but resulted in no assessment at all and to cases where due to	any reason no	notice	was issued to	the assessee, and,	therefore, there was no assessment of	his income.' It is true that the said decisions were given with reference to either s. 34(1) of the Income Tax Act or s. 14 of	the Business Profits Tax Act. but so far as the present enquiry is concerned the said sections are in pari materia with s.
11A of the Act.	In construing the meaning of the expression 'escaped assessment' in s. 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 relevent 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 (7 S.T.C. 519) following the decision of a Full Bench of that Court,	held that where an assessee did not tile at any time a return of his turnover for a year and, therefore, there was no assessment made, the turnover escaped assessment. It	was observed therein:
'Whether it was a case of	omission or of deliberate concealment on the part of the assessee, he did not submit any return. It was his default that led to the escape of the turnover for 1951-52 from assessment to the tax lawfully due. It was the whole of the turnover for that year	that escaped assessment.' It is not necessary to multiply citations. We, therefore, hold that the expression 'escaped assessment' in s. 11A of the Act includes that of a turnover which has not	been assessed at all, because for one reason or other no assess- ment proceedings were initiated and therefore no assessment was made in respect thereof." In one of the appeals dealt with in that judgment, i.e. C.A.
No. 102 of 1901, this Court had to consider whether a	case under 673 (a) also comes under	s. 11A. The Court answered	that question in the affirmative.
seen earlier it was the duty of the appellants not only to submit	their quarterly returns but send along	with those returns the treasury challans in proof of the payment of the tax admittedly due from	them.	As they have failed to do so within the prescribed period, it follows that the turnovers in question had escaped assessment.
This takes us to, the next question whether in the instant case the assessing authority can be	said to have	been satisfied about the escapement of the assessment as a consequence of	any information which had come into	his possession. From the notices issued in 1955	as well as later on, it is clear that the assessing authorities	were satisfied about the escapement of the assessment due	from the appellants.	But the real question is whether they	were so satisfied "in consequence of any information which	had come into their possession". The assessing authorities knew that the appellants had neither submitted their returns nor treasury challans in proof of the payment of the tax	due from them. From that circumstance it is reasonable to, hold that in consequence of the information that the appellants had not submitted their returns as well as the treasury challans the assessing authority should have been stisfied about the escapement of the assessment. It was urged on behalf	of the revenue that 'information' contemplated by s.11A should be from some outside source and not something that could be gathered by the assessing authority from	his own records. According to the revenue in the instant	case there was no information from any outside source, therefore, it cannot be said that the assessing authority was satisfied about	the escapement	of tax in consequence of	any information which has come into its possession. In our view, this contention is untenable. In Maharaj Kumar Kamal Singh v. Commissioner of Income Tax, Bihar and Orissa, this Court held that the	word 'information' in s. 34(1)(b) of	the Income Tax Act, 1922, includes information as to the	true and correct state of the law and so would cover	information as to	the relevant judicial decisions. It was laid	down therein that that information need not be about any fact; it may be even as to the legal position.	In other words,	the term 'information' in s. 34(1)(b) of the Income Tax Act 1922 really	means knowledge. In Salem Provident Fund Society Ltd. v. Commissioner of Income Tax madras(1)	a division bench of the Madras High Court interpreting the scope of the words 'information which has come into his possession' found in s. 34 of the Indian Income Tax Act, observed thus:
"We are	unable to accept the extreme proposition that nothing that can be found in the record of the (1) 42 I.T.R. 547.
674 assessment which itself would show escape of assessment or under-assessment, can be viewed as information which led to the	belief	that there has been	escape	from assessment or under-assessment.	Suppose a mistake in	the original order of assessment is not discovered by the Income Tax Officer- himself on further scrutiny	but it is brought to his notice by another assessee or even by a subordinate or a superior	officer, that would appear to be information disclosed to the	Income	Tax Officer.	If the mistake itself is	not extraneous to the record and the informant gathered the information from the record,	the immediate source of information to the Income, Tax Officer in such circumstances is in	one sense extraneous to the record. It	is difficult	to accept the position	that while what is	seen by another in the record is 'information' what is seen by the Income	Tax officer himself is not information to him. In the latter case he just informs himself. It will be information in his possession within the meaning of section 34. In such cases of obvious mistakes apparent on the face of	the record of assessment, that record itself	can be a source of information, if that informa- tion leads to a discovery or belief that there has been	an escape of assessment or under- assessment." The meaning of the word 'information' came up again	for consideration before a division bench of the	Kerala High Court in United Mercantile Co. Ltd.	v. Commissioner of Income Tax Kerala(1). Their Lordships held that to 'inform' means to 'impart knowledge' and a detail available to	the Income	Tax Officer in the papers filed before him does	not by its mere availability become an item of 'information'.
It is	transmuted into an item of	information in	his possession only if and when its existence is realised	and its implications recognized.	Applying that test to	the facts of the	case before them. the Court held that	the awareness of the Income Tax Officer for the first time after the assessment order of November 19, 1957, that the bonus shares were issued not out of Premiums received in cash	and the consequent result in the light of the Finance Act. 1957, was information within the meaning of that expression as used in s. 34(1) of,the Indian Income Tax Act, 1922,	and consequently. the reopening of the assessment under that provision was not illegal.
In our	judgment, the	knowledge of	the fact that	the appellants had not submitted their quarterly returns as well as the treasury challans. constituted In 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 bad escaped assessment.
(1) 64 I.T.R. 218.
675 From the above conclusions it follows that the	appellants' case falls both under s. 11(4)(a) and s. 11A(1). Therefore, it was open to the assessing authority to proceed against them under any one of those two sections. But as they	were proceeded against under s. 11(4)(a) they cannot have	the benefit	of the period of limitation prescribed under s. 11 A(1).	Hence, it must be held that the present	case falls within the rule laid down by this Court in Suraj Mail Mohta and Co. v. A. V. Visvanatha Sastri & another(1). On	the facts found it follows that s. 1 (4)(a) has become a discriminatory	provision in view of s. 11 A(3). Hence	the same is liable to be struck down under Art. 14.	But for the inclusion of sub-s. 3 in s. 11A, there would have been no discrimination	between those dealt with under	s. 11(4)(a) and those under s. 11A(1).	The period of limitation prescribed in	s. 11A(1) would have attracted itself to proceedings under s.	11(4)(a) as held by this Court in Ghanshyam Das's case(2).
Mr. Bindra, learned counsel for the revenue, contended	that a registered	dealer	has certain advantages over	an unregistered dealer; therefore the classification made under the Act is a reasonable classification. To	be a valid classification,	the same must not only be founded on an intelligible differentia which distinguishes	persons	and things that are grouped together from others left out of the group but that differentia must have a reasonable relation to the object sought to he achieved. Both s. 11(4)(a)	and s. 11A(1) concern themselves with escaped assessments.	The classification	suggested has no nexus	with that object.
That much is established by the decision of this Court in Ghanshyam Das's case(1) which is binding on us.	It is	true the State can by classification determine who should be regarded as a class for the purpose of legislation and in relation to a law enacted on a particular subject, but	the classification	must be based on some real and	substantial distinction bearing a just and reasonable relation to	the object sought to be attained and cannot be made	arbitrarily and without any substantial basis. Judged from the object sought to be achieved by the Act, we are of the opinion that the classification made between the registered	and unregistered dealers is not a	reasonable classification.
From this conclusion it follows that s. 11(4)(a) is liable to he	struck down as being discriminatory in	view of s.
11A(3).
Section	11(4)(a) is separable from the rest of the	sub- section. Its	separation from that sub-section does	not affect	the implementation of the other provisions of	the Act.
This takes us to the question which was debated at our	in- stance whether the notices issued by the assessing authority in 1955 were	valid notices.	The High Court had	not considered this question, though it appears that the	same was presented to it for decision (1) [1955] 1 S.C.R, 448, (2) [1964] 4 S.C.R. 436.
L/P(N)7SCI-4 676 by the	parties. In the course of its judgment, the	High Court observed:
"In this view	(in view of its earlier findings) of the matter it is not necessary to consider	whether the earlier notices of	the year 1955 are good and valid	notices or whether they stood superseded by subsequent notices of 1958 and 1959".
For convenience	we shall take up	for consideration notice No. 4519/STN dated 13-9-
55. Our conclusions in respect of that notice would cover the other notices. The material facts as	set out by the High	Court,	the correctness of which was not disputed before us, are these:
"On the	3rd September, 1955, the Assistant Commissioner, Sales Tax, issued a notice under s. 10(3), s. 11(4) (a), s. 11A and sub-s.	(1) of s. 22C of the Act, calling upon	the petitioners to show cause why action should not be taken against them under s. 10(3)	and S. 11(4)	of the Act on account of their failure to furnish the returns for the period 1-1-53 to 31-12-53. Similar notices	were given on	27th October, 1955 for	the period 1-1-54 to 31-12-54 and on 7th July 1956.	for the period 1-1-55 to 31-12-55." From those facts, it is seen that no notice had been issued within	three years in respect of the turnover	relating to the period from 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 1-1 1-52 to 31-1-53 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 by limitation.
Now we shall take up the question whether the notices issued in 1955 in respect of the turnovers	relating to other quarters were	in accordance with law. The	notice	No.
4519/STN dated 13-9-55 reads.
"Notice	(for 1-1-53 to 31-12-53) dated 13-9-55. No. 4519/ STN. D/13-9-55.
Form XII (See rule 32) Notice under sub-section (3) of section 10, sub-section	(4) (a) and (5) of section 11, sub-section (1) of section 11 (A) and sub-section (1) of section 22 of the Central Provinces and B erar Sales Tax Act, 1947.
Whereas Shri Anandji Haridas and	Co., Ltd., Nagpur.
You have failed to furnish a return as required by a 677 notice in that behalf served on you under section 10(1) of the Central Provinces	and Berar Sales Tax Act, 1947.
OR You being a registered dealer have failed to furnish a return for the periods 1-1-53 to 31- 12-53 and have	thereby	rendered yourself liable under section 11 (4) to be assessed to the best of judgment;
Further, you are hereby directed to attend in person or by a person authorised by you in writing in that behalf, being a person specified	in section 11B(1) before me and to produce or cause to be produced your books of accounts	and the documents specified in	the schedule	hereunder and any evidence on which you rely	in support of	your objection at Jabalpur at 11-00 A.M. on 22-9-55.
Sd/- Asstt. Commissioner of Sales Tax Nagpur Region, Nagpur." It is	true that it is not a notice	in respect of	any particular quarter, it is a notice in respect of the period 1-1-53	to 31-12-53. In the State of Orissa and another v.
M/s. Chakobhai Chelabhai and Company,(1) 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 s. 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.
From the notice in question it cannot be made	out whether the assessing authorities wanted to deal with the appellants under s. 10(1) or under s. 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 s. 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 s. 11(4) to be assessed to the best of judgments Quite dearly, the first	alternative mentioned in the notice did not apply to the	appellants.
They are registered dealers. No notice under s. 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 Chakobai Chelabhai's case(1) referred to earlier that such a mistake does not vitiate the notice issued.
(1) [1961] 1 S.C.R. 719.
L/P(N)7SCI-4 (a) 678 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 r. 32 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,1955. For the reasons to be mentioned presently, we see no merit in either of these contentions.
We are unable to accept the contention of Mr. Gokhale that a notice under s. 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 r. 32 is not similar to a notice to be issued under S.	34(1)(b) of the Income Tax Act, 1922. All that ss. 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 r. 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 r. 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. St) 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 S. 11A had expired hey 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, 1953 till 31 10-55. We	are unable to	agree	with Mr. Gokhale's 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 ss.	11(4)	'(a) and 11A(1). In Chatturain and Others v. Commissioner Pt 'Income Tax, Bihar,(1) the:
(1) 15 I. T. R. 302 679 Federal Court held that any irregularity in issuing a notice under s. 22 of the Income Tax Act, 1922 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 ss. 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 31-10-55.
In view of our conclusion	that every escapement	of assessment coming within the scope of s. 11(4)(a)- is	also an escapement of assessment under s. 11 A(1), a notice issued under s. 11 (4)(a) would be a vaild notice in respect of a proceeding under s. 11A(1).
In the result, we hold that the assessing authority has no competence to	assess the turnovers of	the appellants in respect of the quarters commencing from 1-5-52	and ending with January 31, 1953 as the same is barred by time under s.
11A. We further hold that s. 11(4)(a) is void as it	is:
violative of Art. 14.	We accordingly issue a direction to the respondents to refrain from assessing the appellants in respect of those turn overs. In other respects, the appeals fail and they are dismissed. In the circumstances of these cases, we make no order as to costs.
Bachawat, J. Sections, 11(4), 11(5) and 11-A of the C.P. and Berar Sales Tax Act, 1947 are as follows:
"11(4) If a registered dealer- (a) does not furnish returns in respect of any period by the prescribed date, or (b) having furnished such ;return fails to comply with any	of the terms of a notice issued under subsection (2), or (c) has not regularly employed any method of accounting, or if the method employed is	such that, in	the opinion of the Commissioner, assessment cannot properly be made on	the basis thereof, the Commissioner shall in the, prescribed manner assess the dealer to the best of	his judgment:
Provided	that he shall not so assess him in respect of the default specified in clause (a) unless the dealer has been first given a reasonable opportunity of being beard.
680 (5) If upon information which has come	into his possession, the Commissioner is satisfied that any	dealer has been liable to pay	tax under this Act in respect of any	period	and has nevertheless wailfully failed to apply for registration, the Commissioner shall, at	any time within three calendar years from the	ex- piry of such period, after giving the dealer a reasonable opportunity of being heard, proceed in such manner as may he prescribed to assess to the best of his judgment the amount of	tax due from the dealer in respect of such period and all subsequent	periods:and	the Commissioner may direct that the dealer shall pay by way of penalty in addition to	the amount of tax so assessed a sum not exceeding one and a half times that amount.
11-A. (1) If in consequence of any information which has come	into his possession,	the Commissioner is satisfied that any turnover of a	dealer	during any period has	been under- assessed or has escaped assessment or assessed at a lower rate or any	deduction has	been wrongly made therefrom the. Commissioner may, at any time within three calendar years	from the expiry of such period, after	giving	the dealer a reasonable opportunity of being heard and after making such inquiry as he considers necessary, proceed in such manner as may be prescribed to re-assess or. assess, as	the case may	be, the tax payable on any	such turnover; and the Commissioner may direct that the dealer shall pay, by way of penalty in ad- dition to the amount of tax so assessed, a sum not exceeding that amount.
(2) The	assessment or	reassessment	made under subsection (1) shall be at the rate at which it would have been made, had there	been no under-assessment or escapement." The Bombay Sales Tax	Laws,	(Validating Provisions and Amendment) Act, 1959 inserted the following sub-section (3) in s. 11A:
"(3)(a) Nothing in sub-sections (1) and (2)- (i) shall apply to any proceeding (including any notice issued) under section 11, or 22A or 22B, and (ii) notwithstanding any judgment, decree or order of a court or Tribunal, shall be deemed ever to	have	been applicable to	such proceeding or notice.
(b) The	validity of any such proceeding or notice shall not be called in question merely on the ground that such proceeding or notice was inconsistent with	the provisions	of subsections (1) and (2)." 681 The appellant is a registered dealer.	It failed to	file returns for the periods 1-5-1952 to 31-10-1952, 1-11-1952 to 31-10-1953, 1-11-1953 to 31-10-1954 and 1-11-1954 to 31-10- 1955.	The Sales Tax Officer, Non-resident Circle, Nagpur issued four notices to the appellant initiating	proceedings under ss. 10(3), 11(4), 11A(1) and 22C(1) of the Act.	The appellant filed a writ petition in the High Court challenging the notices and asking for an order	restraining the respondents from taking steps under the	notices and making	assessments or levying penalties in respect of	the aforesaid periods.	The High Court dismissed	the application. From this order, the appellant has preferred the present appeals.
Notices under s. 22C(1) can be issued only in course of	any proceedings under the Act. As no proceedings were pending against the appellant, no notice under s. 22C(1) could be issued to it. We shall presently show that no notice can be issued to a registered dealer under s. 11A(1) for assessing the turnover which has escaped assessment by reason of	his not filing a return. The impugned notices so far as	they were issued under ss. 22C(1) and 11A(1) may be	treated as surplusage and rejected.
Under s. 10(3), if a registered dealer fails to furnish	his return for any period within the prescribed time without any sufficient cause, the Commissioner may after	giving	him reasonable opportunity of being heard direct him to pay by way of penalty a sum not exceeding one-fourth of the amount which may be assessed on him under s. 11. If no assessment can be made under s. 11, no penalty can be levied under s.
10(3).	Therefore, the point for determination	is whether the impugned notices so far as they were issued under s.
11(4) are valid.
The contention of the appellant is that the notices under s.
11 (4)	are invalid as they were not issued within three years from the expiry of the aforesaid periods. We see no force in this contention. Section 11(4) does not prescribe a period of limitation for the issue of a notice under	it.
In Ghanshyam Das v. Regional Assistant Commissioner of Sales Tax, Nagpur(1), the Court by a majority decided	with reference to s. 11.(4) and s. 11A, as it stood before	its- amendment by	the Bombay Sales Tax	Laws	(Validating Provisions and Amendment) Act, 1959, that a notice under s.
11(4) initiates new proceedings and it also decided or to be more accurate,	assumed that	the period of	limitation prescribed by s. 11A(1) should be imported into s. 11(4).
The case was decided without reference to s. 11A(3) inserted by the Amending Act and is no	authority on	the interpretation of that sub-section.	Section	11A(3)	now expressly provides that nothing in s. 11A(1) shall apply to any proceeding including any notice issued under s. 11.	The section is retrospective in operation.	It follows that	the period of (1) [1964] S.C.R. 436, 682 limitation prescribed by s. 11A(1) cannot be applied to a proceeding or a notice issued under s. 11(4).	There is no period of limitation prescribed for a notice or a proceeding initiated under s. 11(4). Consequently, the impugned notices issued under s. 11 (4) are not barred by limitation and are not invalid.
The argument then is that s. 11(4)(a) offends Art. 14 of the Constitution in two ways. Firstly, it is said that it is open to the sales tax authorities to proceed at their sweet will either under s. 11(4)(a) or under s. IIA(1) against a registered dealer for his failure to file returns and	the principle of Shree Meenakshi	Mills Ltd. v.	Sri A. V.
Viswanatha Sastri and Another(1) is invoked.	We find no merit in this contention. Section 11(4)(a) specially	pro- vides for the initiation of proceedings against a registered dealer	who has not furnished returns in respect of	any period	by the prescribed date. Having made this special provision, the legislature must be taken to have intended that in a case falling under s. 11(4)(a) the sales	tax authorities must proceed against the registered dealer under S. 11(4)(a) and not under s. IIA(1). The special provision must be taken silently to exclude all cases failing within it from the	purview	of the more	general	provision.
Moreover. if a statute is capable of two constructions, that construction should be given which will uphold it rather than the one	which will invalidate it. Construing	ss.
11(4)(a) and 11A(1) together we should, therefore, hold that the cases falling within s. 11(4)(a) are excluded from	the purview of s. 11 A(1). The point that there is no over- lapping	of ss. 11(4)(a) and 11A(1) is made	clearer by s.11A(3). The decisions under s. 34(1)(b) of	the Indian Income-tax Act, 1922 such as Maharaj Kumar Kamai Singh v.
Commissioner of Incometax, Bihar and Orissa(2) and under s.
14 of	the Business	Profits	Tax Act, 1947 such	as Commissioner of Income Tax v. Narsee Nagsee &	Co.(2)	are distinguishable. In those Acts, there was	no special provision corresponding to s. 11(4) for proceeding against registered dealers who have not filed returns, and	the question how far the special provisions would exclude cases within it from the purview of the more general provision could not arise. In Ghanshyam	Das's case(3), none of the notices in question was issued under s. 11A, and the Court did not	say that a registered dealer could be proceeded against under s. 11 A for not filing a return.
Nor did the Court consider the effect of s. 11 A(3). It is true that the	majority decision held that	the phrase "escaped assessment" in s. 11A includes that of a turnover which has not been assessed at all because no assessment proceedings were initiated.	But having regard to	the special	provisions of s. 11(4) read with S.	11A(3),	the power under s. 11 A(1) as interpreted in Ghanshyam Das's case(4)	to assess turnover which escaped assessment by reason of non-filing of returns must be confined to cases of (1) [1955] 1 S.C.R. 787. (2) [1959] Supp. 1 S.C.R. 10.
(3) [1960] 3 S.C.R. 988, (4) [1964] 4 S.C.R. 436.
683 unregistered dealers.	As pointed out	already, cases of registered dealers falling within s. 11(4) are excluded from the purview of s. 11A(1).
It is	next said that s. 11 (4) offends Art.	14 of	the Constitution because no period of limitation is prescribed for a	notice under it, whereas periods of limitation	are prescribed for notices under ss. IIA(L) and 11(5). We	see no merit in-	this contention. The Act 'deals	with registered and	unregistered dealers differently in	many ways. The classification and differential treatment of	re- gistered and unregistered dealers are based on	substantial differences having reasonable relation to the object of	the Act. A registered dealer unlike an unregistered dealer is under a statutory obligation to file returns	without	any notice	being served upon him and to pay the full amount of tax due from him before furnishing the return (ss. 10	and 12). A dealer who has registered himself under the	Act admits his liability to furnish returns whereas a dealer who has not registered himself makes no	such admission. A registered dealer has certain advantages under the Act which are denied to an unregistered dealer.	Section	2(1)(a)(ii) exempts	from tax sales of a registered dealer of goods specified in his certificate	of registration as being intended for use by him as raw materials in the	manufacture of goods for	sale by actual delivery	in the State	for consumption therein. An unregistered dealer cannot get	the benefit	of this exemption.	Moreover, s. 2(j) (a)(ii) exempts	from tax sales to a registered dealer of goods	de- clared	by him in the prescribed form as being intended	for resale	by him by actual delivery-in the	State	for consumption therein. The sales to an	unregistered dealer are not so exempt. Consequently, a registered dealer	call buy his goods	from the producer or the wholesaler at a cheaper	price and has thus ail economic advantage over an unregistered dealer. In the matter of penalties, ss. 10(3) and 22C(1) treat the two classes of dealers on the	same footing, but ss. 11 (4), 11(5) and 11 A(1)	treat	them differently. No penalty can be levied on a registered dealer	under s. 11(4) but heavy penalties may be levied on an unregistered dealer under ss. 11(5) and 11A(1). While prescribing periods of limitation for proceedings against an unregistered dealer under ss. 11(5) and 11A(1),	the legislature has wisely not prescribed a period of limitation for a	proceeding initiated under s.	11(4)(a) against a registered dealer considering that (1) the registered dealer is under a statutory obligation to file the return, (2) no penalty	is leviable under s. 11(4). and (3) the registered dealer	is given many advantages under the Act which	are denied to an unregistered dealer. The bar of limitation in the case (if an unregistered dealer and the absence of	such a bar in the case of a registered dealer cannot be regarded as unjust or discriminatory. Questions of policy are not to be debated in this Court. There is no compulsion on	the legislature to	prescribe a period of limitation in every case.	In taxing statutes the legislature has a large measure of discretion.	We cannot strike 684 down s. 11(4)(a) because of some preconceived	notion	that the same period of limitation should	be prescribed	for proceedings against both registered	and	unregistered dealers. In Ghanshyam Das's case(1), Raghubar Dayal, J. at p. 459 clearly held that s. 11(4) is not violative of	Art.
14. The majority did not dissent from this opinion.	We hold that s.	11 (4) is not violative of Art.	14 and we uphold it.
It follows that the notices issued on July 8, 1959 under s.
11(4) are valid in respect of the entire period from	1-11 1952 to 31-10-1955. As regards the alternative contention of the respondent, that the notices issued in 1955 validly initiated, proceedings under s. 11(4) for the period from 1- 2-1953	to 31-10-1955 we are glad to find that the majority has accepted this contention.	The irregularities, if	any, in the	notices do not invalidate them. However, for	the reasons	already mentioned, we are of opinion that	the impugned notices issued on July 8, 1959 are valid.
ORDER In accordance with the opinion of the majority these appeals are partly allowed with respect to turn-over from 1-5-1952 to 31-1-1953. In other respects the appeals are dismissed.
(1) [1964] 4 S.C.R. 436.