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It will be information in his possession within the meaning of section 34. PRE |
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." PRE |
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. vs Commissioner of Income Tax Kerala(1). PRE |
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 '. PRE |
It is transmuted into an item of information in his possession only if and when its existence is realised and its implications recognized. PRE |
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, w... |
In our judgment, the knowledge of the fact that the appellants had not submitted their quarterly returns as well as the treasury challans. Ratio |
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. Ratio |
(1) 675 From the above conclusions it follows that the appellants ' case falls both under section 11(4)(a) and section 11A(1). Ratio |
Therefore, it was open to the assessing authority to proceed against them under any one of those two sections. Ratio |
But as they were proceeded against under section 11(4)(a) they cannot have the benefit of the period of limitation prescribed under section 11 A(1). Ratio |
Hence, it must be held that the present case falls within the rule laid down by this Court in Suraj Mail Mohta and Co. vs A. V. Visvanatha Sastri & another(1). Ratio |
On the facts found it follows that section 1 (4)(a) has become a discriminatory provision in view of section 11 A(3). Ratio |
Hence the same is liable to be struck down under article 14. Ratio |
But for the inclusion of sub section 3 in section 11A, there would have been no discrimination between those dealt with under section 11(4)(a) and those under section 11A(1). Ratio |
The period of limitation prescribed in section 11A(1) would have attracted itself to proceedings under section 11(4)(a) as held by this Court in Ghanshyam Das 's case(2). Ratio |
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. ARG |
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. Ratio |
Both section 11(4)(a) and section 11A(1) concern themselves with escaped assessments. Ratio |
The classification suggested has no nexus with that object. Ratio |
That much is established by the decision of this Court in Ghanshyam Das 's case(1) which is binding on us. Ratio |
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 ... |
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. Ratio |
From this conclusion it follows that section 11(4)(a) is liable to he struck down as being discriminatory in view of section 11A(3). Ratio |
Section 11(4)(a) is separable from the rest of the sub section. Ratio |
Its separation from that sub section does not affect the implementation of the other provisions of the Act. Ratio |
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. Ratio |
The High Court had not considered this question, though it appears that the same was presented to it for decision (1) ; , (2) ; L/P(N)7SCI 4 676 by the parties. Ratio |
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". RLC |
For convenience we shall take up for consideration notice No. 4519/STN dated 13 9 55. Ratio |
Our conclusions in respect of that notice would cover the other notices. Ratio |
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 section 10(3), section 11(4) (a), section 11A and sub section(1) of section 22C of the Act, calling upon the petition... |
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. Ratio |
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. Ratio |
The assessment in respect of that period is clearly barred in view of our earlier conclusion. Ratio |
The period 1 1 1 52 to 31 1 53 forms part of the quarter commencing from 1 11 52. Ratio |
No notice was given in respect of that quarter. Ratio |
A quarter forms a unit by itself. Ratio |
Therefore, it follows that the proceeding in respect of that quarter is also barred by limitation. Ratio |
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. Ratio |
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. FAC |
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. FAC |
Whereas Shri Anandji Haridas and Co., Ltd., Nagpur. FAC |
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. FAC |
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, bein... |
Sd/ Asstt. FAC |
Commissioner of Sales Tax Nagpur Region, Nagpur." FAC |
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. Ratio |
In the State of Orissa and another vs M/s. Chakobhai Chelabhai and Company,(1) this Court held that the issue of one notice under section 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 mi... |
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 section 11(4). Ratio |
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 b... |
They are registered dealers. Ratio |
No notice under section 10(1) had been given to them. Ratio |
The assessing authority by mistake had failed to strike out the first alternative shown in the printed form. Ratio |
That circumstance could not have prejudiced the appellants. Ratio |
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. Ratio |
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. Ratio |
Their assessment Years commenced from 1st November. Ratio |
This error according to Mr. Gokhale vitiated the notices issued. Ratio |
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. ARG |
But this defect was found only in the notice quoted above and not in the other notices issued in,1955. Ratio |
For the reasons to be mentioned presently, we see no merit in either of these contentions. Ratio |
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. Ratio |
The notice contemplated under r. 32 is not similar to a notice to be issued under section 34(1)(b) of the Income Tax Act, 1922. Ratio |
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. Ratio |
In fact, those sections do not speak of any notice. Ratio |
But r. 32 prescribes the manner in which the reasonable opportunity contemplated by those provisions should be afforded to the assessee. Ratio |
The period of 30 days prescribed in r. 32 is not mandatory. Ratio |
The rule itself says that 'ordinarily ' not less than 30 days notice should be given. Ratio |
Therefore, the only question to be decided is whether the defects noticed in those notices had prejudiced the appellants. Ratio |
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. Ratio |
They asked for time for submitting their explanation. Ratio |
The time asked for was given. Ratio |
Therefore, the fact that only nine days were given to them for submitting explanation could not have in any manner prejudiced them far as the mistake in the notice as regards the assessment year is concerned, the assessees kept silent about that circumstance till 1958. Ratio |
It was only when they were sure that the period of limitation prescribed by section 11A had expired hey brought that fact to the notice of the assessing authority. Ratio |
It is clear that the appellants were merely trying to take advantage of the mistakes that had crept into the notices. Ratio |
They cannot be permitted to do so. Ratio |
We fail to see why those notices are not valid in respect of the periods commencing from February 1, 1953 till 31 10 55. Ratio |
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. Ratio |
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 sections 11(4) '(a) and 11A(1). Ratio |
In Chatturain and Others vs Commissioner Pt 'Income Tax, Bihar,(1) the: (1) 679 Federal Court held that any irregularity in issuing a notice under section 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 rec... |
The liability to pay the tax is :founded on sections 3 and 4 of the Income Tax Act which are the charging sections. Ratio |
Section 22 and others are the machinery sections to determine the amount of tax. Ratio |
The ratio of that decision applies to the facts of the present case. Ratio |
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. Ratio |
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 section 11 A(1), a notice issued under section 11 (4)(a) would be a vaild notice in respect of a proceeding under section 11A(1). Ratio |
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 section 11A. Ratio |
We further hold that section 11(4)(a) is void as it is: violative of article 14. Ratio |
We accordingly issue a direction to the respondents to refrain from assessing the appellants in respect of those turn overs. Ratio |
In other respects, the appeals fail and they are dismissed. Ratio |
In the circumstances of these cases, we make no order as to costs. Ratio |
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 subsectio... |
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 pi... |
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 tim... |
(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." STA |
The Bombay Sales Tax Laws, (Validating Provisions and Amendment) Act, 1959 inserted the following sub section (3) in section 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 ... |
(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). Ratio |
" 681 The appellant is a registered dealer. Ratio |
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. Ratio |
The Sales Tax Officer, Non resident Circle, Nagpur issued four notices to the appellant initiating proceedings under sections 10(3), 11(4), 11A(1) and 22C(1) of the Act. Ratio |
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