COMMISSIONER OF SALES TAX Vs. BABUBHAI VALJI MEHTA

JUDGEMENT

(1.) This is a reference under section 34(1) of the Bombay Sales Tax Act, 1953 (referred to hereinafter as "the said Act"). The questions referred to us for determination in this reference are as follows :

(2.) The relevant facts giving rise to this reference are as follows : The respondent had his place of business at 34, Dashrathlal Joshi Road, Vile Parle, Bombay-56. The officers of the Enforcement Branch of the Sales Tax Department paid, what is euphemistically called a visit and which is really in the nature of a raid, to that place of business. After perusing the books of account available, the Sales Tax Officer concerned found the dealer liable to be registered under the said Act and to pay tax under the said Act. Consequently, a notice in form XIII was issued to the respondent under section 14(6) of the said Act for assessment for the period from 1st April, 1958, to 31st December, 1959, and served on the respondent on 26th February, 1966. The dealer was assessed in respect of the aforesaid period of 1st April, 1958, to 31st December, 1959, under the said Act on the footing that he was an unregistered dealer. This assessment order was passed by the Sales Tax Officer (XVIII), Enforcement Branch, Bombay, and dated 30th March, 1966. A penalty of Rs. 650 under section 14(7) of the said Act for wilful failure of the dealer to get himself registered under the said Act was also imposed on the respondent. The total amount demanded including tax and penalty was of Rs. 4,076.78. An appeal preferred by the respondent to the Assistant Commissioner was dismissed. The respondent then preferred a revision application to the Deputy Commissioner of Sales Tax who confirmed the order under section 14(6) of the said Act passed by the Sales Tax Officer but gave a partial relief in the quantum of tax and of penalty. However, as pointed out earlier, the assessment made by the Sales Tax Officer under section 14(6) of said Act was upheld by the Deputy Commissioner. Upon a second revision application to the Sales Tax Tribunal, the Sales Tax Tribunal held that the entire order of assessment for the said period of 1st April, 1958, to 31st December, 1959, was bad in law as it was time-barred, the notice in form XIII having been served beyond the period of five years as prescribed in section 15 of the said Act. The Tribunal held that the case fell within the scope of section 15 of the said Act, and hence the aforesaid time-limit of 5 years was applicable. It is from this decision of the Tribunal that the questions set out earlier have been referred to us.

(3.) We find that the questions referred are concluded against the respondent by the decision of the Supreme Court in State of Gujarat v. Patel Ramjibhai Danabhai [1979] 44 STC 137 (SC). Before considering that case, it would be useful to point out that section 14(6) of the said Act corresponds to section 33(6) of the Bombay Sales Tax Act, 1959, and section 15 of the said Act corresponds to section 35 of the Bombay Sales Tax Act, 1959. In the aforesaid case the controversy related to the constitutional validity of section 33(6) of the Bombay Sales Tax Act, 1959, and section 14(6) of the said Act, viz., Bombay Sales Tax Act, 1953. It was held that these sections did not violate article 14 of the Constitution of India and were valid. It was held that section 33(6) of the Bombay Sales Tax Act, 1959, is, in terms, restricted in its application to the case of an unregistered dealer whose modus operandi to evade tax involves ab initio disregard of the law. It does not apply to a registered dealer who has escaped assessment or has been under-assessed or assessed at a lower rate of has been wrongly allowed any deductions or has concealed any material particulars relating to sales or purchases or has knowingly furnished incorrect returns. The case of such a registered dealer will fall under section 35 and not under section 33(6). While section 33(6) is a special provision confined to a particular class of tax evaders, namely, unregistered dealers, section 35 is a general provision to deal with cases of escaped assessment or under-assessment. Construed in accordance with the fundamental principle that the general provisions must always yield to the special provisions, the special class of unregistered dealers covered by section 33(6) must be taken to have been excluded from the purview of the general provisions in section 35.