RAMNATH JAGANNATH Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) These two references arise on a common statement of the case made by the Sales Tax Tribunal under section 34(1) of the Bombay Sales Tax Act, 1953 (referred to hereinafter as "the said Act"). The facts in both the cases are, for all practical purposes, similar except that the periods under assessment are different. The period under assessment in Sales Tax Reference No. 8 of 1971 is from 1st April, 1955, to 31st March, 1956, and the period under assessment in Sales Tax Reference No. 9 of 1971 is 1st April, 1956, to 31st March, 1957. The question referred to us in both the references is identical. It is, in these circumstances, that both these references are being disposed of by this common judgment.

(2.) The question referred to us for determination in these references is as follows :

(3.) The facts giving rise to these references are as follows : The applicants are a partnership firm which carried on the business of buying and selling provision at Nasik Road. The applicants are registered dealers under the said Act. In respect of the assessment period 1st April, 1954, to 31st March, 1955, with which we are not concerned in these references, the assessees were assessed as registered dealers under the said Act, by an order of assessment passed by the Sales Tax Officer concerned on 9th October, 1956. In this assessment order, the claim made by the assessees for the deduction of certain sales from the taxable turnover of the assessees under the provisions of the first proviso to section 9 of the said Act was allowed to the extent of sales of Rs. 18,54,531. On 6th July, 1959, the Sales Tax Officer concerned issued a notice to the assessees under section 15 of the said Act to show cause as to why the the assessees should not be reassessed on the ground that the aforesaid claim of the assessees under the first proviso to section 9 of the said Act had been shown to have been wrongly allowed as the deductions had been claimed and allowed on the basis of the declarations in K forms which were later, according to the Sales Tax Officer, found to be bogus; and as a result of this, taxable turnover had escaped the assessment. The Sales Tax Officer, by his order dated 31st December, 1959, reassessed the assessees in respect of the aforesaid period 1st April, 1954, to 31st March, 1955, and disallowed the aforesaid claim of the assessees on the ground that the assessees had produced bogus K form and obtained deductions on the footing of such bogus forms. On the same date, the Sales Tax Officer also passed an assessment order under section 14 of the said Act in respect of the aforesaid assessment periods, namely, 1st April, 1955, to 31st March, 1956, and 1st April, 1956, to 31st March, 1957, respectively, whereby he disallowed similar claims made by the assessees on the footing of certain declarations in K forms. These claims were made as aforesaid under the first proviso to section 9 of the said Act. The assessees preferred appeals against the said assessment orders to the Assistant Commissioner of Sales Tax. The Assistant Commissioner dismissed the said appeals and levied penalty for late payment in respect of the assessment period 1st April, 1956, to 31st March, 1957. This penalty was levied under the provisions of sub-section (4) of section 16 of the said Act. The assessees then preferred revisional applications against the orders of the Assistant Commissioner to the Deputy Commissioner of Sales Tax. As far as the revision application in respect of the order pertaining to the assessment period 1st April, 1954, to 31st March, 1955, is concerned, it is clear from the statement of the case and it is common ground that the same was fully argued and it was dismissed by the Deputy Commissioner. We are not concerned with the order of the Deputy Commissioner dismissing that revision application, because the references arising from the decision and the decision of the Sales Tax Tribunal thereon are Sales Tax Reference No. 6 of 1971 and Sales Tax Reference No. 7 of 1971 which have both been disposed of by separate judgments. As far as revision applications to the Deputy Commissioner in respect of of the assessment periods 1st April, 1955, to 31st March, 1956, and 1st April, 1956, to 31st March, 1957, respectively are concerned, it appears that the said applications were heard by the Deputy Commissioner on 26th July, 1965. At that time, Mr. Surte, learned counsel who appeared on behalf of the assessee-dealers, made an oral offer that if the post-assessment penalty which was levied by the Assistant Commissioner was remitted in full, in order to put an end to the proceedings, the assessees were agreeable to pay the entire amount of tax to which they were assessed. One partner of the assesses-firm was also present at that time. It appears that the Deputy Commissioner asked Mr. Surte to put down the dealers' offer in writing and accordingly the letter dated 28th July, 1965, was addressed by Mr. Surte on behalf of the assessee-dealers to the Deputy Commissioner the relevant portions of which read as follows :