SUWA LAL POORAN MAL Vs. COMMISSIONER SALES TAX

JUDGEMENT

(1.) This is a reference under Section 11 of the U.P. Sales Tax Act at the instance of the assessee, M/s. Suwa Lal Pooran Mal who carry on commission agency business in Bareilly. For the year 1948-49 in respect of some forward transactions in silver in which actual deliveries were made they were assessed to sales tax on a turnover of Rs. 3,20,000 under Section 21 of the Act. That assessment order was passed by the Sales Tax Officer on 7th September, 1951. The assessee went up in appeal against the said order and the learned Judge (Appeals) remanded the case for fresh assessment. The assessee did not appear before the Sales Tax Officer and they were assessed again on a turnover of Rs. 3,20,000 by the Sales Tax Officer by his order dated 31st March, 1954. On appeal against this order the learned Judge (Appeals) allowed the appeal partly and having held that the forward transactions in which the delivery had been made amounted to Rs. 1,10,000 upheld the assessment in respect of that turnover. The assessee then filed a revision against the order of the learned Judge (Appeals). In the revision the finding of the learned Judge (Appeals) as to the turnover of Rs. 1,10,000 was not questioned but the assessee raised the pleas that the assessment could not be made under Section 21 of the Act because it was not a case of escaped assessment; (2) that fresh assessment was barred by limitation; (3) that the fresh assessment could not be made without any fresh information. The learned Judge (Revisions) rejected the pleas raised by the assessee and upheld the order of the learned Judge (Appeals). Thereupon the assessee applied for reference to the High Court and the learned Judge (Revisions) has referred the following questions for decision by the High Court:

(2.) As regards the first question, the learned counsel for the assessee submitted that inasmuch as in its return the assessee had disclosed the turnover of Rs. 1,10,000 on forward sales of silver delivery and the Sales Tax Officer did not assess on that turnover, it could not be said that it was a case of "escaped assessment" within the meaning of Section 21 of the Act. However, the learned counsel did not seriously press this submission of his. It is obvious that the language of Section 21 of the Act is wide enough to cover a case of this nature. Under Section 21 of the Act, a Sales Tax Officer is empowered to make an assessment if for any reason the whole or any part of the turnover has escaped assessment. This implies that even if on account of an inadvertent mistake the assessing authority does not assess a dealer on a turnover or a part of it, it would be a case of "escaped assessment" within the meaning of that section. There is nothing in the language of Section 21 of the Act which limits the power of the assessing authority to assess a dealer only when the dealer conceals a turnover of sales liable to be taxed in his return. We, therefore, answer the question No. (1) in the negative and hold that on the facts and in the circumstances of the case the assessee was liable to assessment under Section 21 of the Act as its case was one of escaped assessment.

(3.) The answer to question No. (2) does not offer any difficulty. In view of the second proviso to Sub-section (2) of Section 21 which has been substituted by Section 15 of the U.P. Sales Tax (Amendment) Act (U.P. Act No. 19 of 1956) with retrospective effect, the limitation of the period for assessment before the expiry of four years from the end of the assessment year will not apply to an assessment or reassessment made in consequence of, or to give effect to, any finding or direction contained in an order under Section 9, 10 or 11. The proviso above referred to according to Section 15 of the Amending Act of 1956 shall be and be always deemed to have been substituted in the U.P. Sales Tax Act 15 of 1948 from its very inception. The assessment in question dated 31st March, 1954, was admittedly made at the direction of the Judge (Appeals) when remanding the case lor fresh assessment in due exercise of his powers under Clause (b) of Sub-section (3) of Section 9 of the Act. The assessment, therefore, so made under Section 21 of the Act will not be affected by the period of limitation prescribed in Sub-section (2) of Section 21.