JAIPURIA BROTHERS LIMITED Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) The appellant- a public limited Company having its registered office at Calcutta, was with effect from October 5, 1946, appointed sole agent for sale of goods manufactured by the Swadeshi Cotton Mills Company Ltd. On March 20, 1952, the Sales Tax Officer, Kanpur, issued a notice under S. 21 of the U. P. Sales Tax Act, 1948 calling upon the appellant Company to file a return of its turnover for the assessment year 1948-49 on the ground that the turnover had escaped assessment. On March 31, 1952, the Sales Tax Officer made a "best judgment" assessment and determined the taxable turnover of the appellant Company at Rs. 50 lakhs for the year 1948-49 and determined the appropriate tax liability.

(2.) In appeal to the Judge (Appeals) Sales Tax the order passed by the Sales Tax Officer was set aside, that authority holding that the appellant Company was not a dealer within the meaning of S. 2 (c) of the Act. But the order of the appellate authority was set aside by the Judge (Revisions) Sales Tax by order dated March 28, 1955 and the case was remanded to the Sales Tax Officer for "fresh assessment". In the view of the Judge (Revisions) Sales Tax it was necessary to determine "the ownership of the goods at the time of their sale".

(3.) The Sales Tax Officer then issued a notice calling upon the appellant Company to produce its books of account and other relevant documents on July 23, 1955 for the purpose of assessment for the year 1948-49. The appellant Company contended that as the original assessment under S. 21 had been set aside by the Judge (Revisions) Sales Tax, no proceeding in connection with that assessment was pending and re-assessment was barred because more than three years had elapsed since the end of the year of assessment. The Sales Tax Officer rejected the contention of the appellant Company and insisted that the books of account and other documents be produced as directed earlier. The appellant Company then petitioned on September 2, 1955 to the High Court of Allahabad under Art. .226 of the Constitution for a writ in the nature of prohibition restraining the Sales Tax Officer, Kanpur, from proceeding with the assessment of the appellant Company for the assessment year 1948-49 and for a writ of certiorari quashing the order dated September 2, 1955 of the Sales Tax Officer, Kanpur, and the proceeding taken for re-assessment in pursuance thereof Chaturvedi, J., held that assessment sought to be made by the Sales Tax Officer pursuant to the order of the Judge (Revisions) Sales Tax "was clearly barred by the law of limitation", prescribed in that behalf by S. 21 of the U. P. Sales lax Act. It was in the view of the learned Judge immaterial whether assessment was being made by the Sales Tax Officer suo motu or under the direction of a superior- authority if at the time of making the re-assessment the period prescribed by S. '21 had expired. The order passed by Chaturvedi, J., was reversed in appeal by a Division Bench of the High Court. The High Court held that the Sales Tax Officer was competent in view of the order of remand which directed "fresh assessment" to commence fresh assessment proceedings against the appellant Company and in commencing and continuing those proceedings he was acting in compliance with the directions given under Ss. 9 and 10 of the Act which he was bound to carry out and to such assessment proceedings the period of limitation prescribed by S. 21 of the Act did not apply. Against the order passed by the High Court reversing the order passed by Chaturvedi, J., this appeal has been preferred with special leave.