COMMISSIONER OF SALES TAX Vs. PARAMOUNT INDUSTRIAL STORES

JUDGEMENT

(1.) This is a reference under section 34(1) of the Bombay Sales Tax Act, 1953 (hereinafter referred to as "the said Act"), made at the instance of the Commissioner of Sales tax. The facts giving rise to this reference are as follows :

(2.) The respondent-assessees were registered as a dealer under the Bombay Sales Tax Act, 1946, as well as under the said Act. In respect of the assessment periods from 1st April, 1950, to 31st March, 1951, and 1st April, 1951, to 31st March, 1952, respectively the assessees were assessed by the Sales Tax Officer, A Ward, on 9th July, 1952. On 29th March, 1956, the assessees were served by the Sales Tax Officer (I), Enforcement Branch, Bombay, with a notice under section 15(1) of the said Act in form XIV stating, inter alia, that the Sales Tax Officer was satisfied that the assessees' turnover in respect of sales and purchases amounting to Rs. 12,75,000 had escaped assessment for the period from 1st April, 1950, to 31st March, 1952, and directing the assessees to attend in person or by a legal practitioner or by an agent authorised in writing at 11 a.m. on 19th April, 1956, at the place and address mentioned therein to show cause against being reassessed in respect of the escaped turnover in the aforesaid amount. The Sales Tax Officer by his letter dated 18th April, 1956, served on the assessees and purporting to be in continuation of the said notice requested the assessees to attend his office on 24th April, 1956, at 11 a.m. instead of 19th April, 1956, in terms of the said notice. From the assessment order it is clear that this was done as the day on which the assessees were required to attend, 19th April, 1956, happened to be a public holiday. From the said order it also appears that a separate notice, in form XIV, for the period from 1st April, 1951, to 31st March, 1952, was served on the assessees on 14th July, 1956, requiring the assessees to attend on 30th July, 1956. Separate proceedings have been taken pursuant to the notice served on 14th July, 1956, and we are not concerned with those proceedings or with the assessment relating to that period in this reference. The dispute in this reference relates only to the assessment period from 1st April, 1950, to 31st March, 1951. We propose to refer to this period as "the said period". On 21st February, 1957, a show cause notice in respect of the said period along with a letter was sent by the Sales Tax Officer to the assessees wherein it is clarified that it was proposed to assess the assessees after hearing in respect of the turnover escaping assessment and in respect of certain deductions wrongly allowed. According to the Sales Tax Officer, the hearing was held on 5th August, 1957. The assessees, inter alia, contended that the aforesaid notice served on 29th March, 1956, which we propose to refer as "the said notice" was defective, as 19th April, 1956, was a public holiday. The Sales Tax Officer observed (hat as 19th April, 1956, was a public holiday, the case was fixed on 24th April, 1956, by his letter dated 18th April, 1956, and hence the notice was properly served. He rejected the contention of the assessees that the said notice was defective merely because the date fixed originally was a public holiday. The Sales Tax Officer reassessed the assessees in respect of escaped turnover of sales amounting to Rs. 3,69,244, but dropped the claim regarding deductions allegedly wrongly allowed. The assessees preferred an appeal against the decision of the Sales Tax Officer but the same was dismissed by the Assistant Collector of Sales Tax, and a revision application preferred by the assessees was dismissed by the Deputy Commissioner of Sales Tax. The assessees then went by way of further revision to the Sales Tax Tribunal. The Tribunal took the view that the said notice was defective because 19th April, 1956, which was the date fixed for hearing in the said notice, was a public holiday and the assessees had been wrongly asked by the Sales Tax Officer to appear before him on a holiday. The Tribunal held that the defect could not be cured after the expiry of a period of five years from the end of the assessment period on 31st March, 1951, and hence the action taken to correct the same by way of the letter dated 18th April, 1956, was clearly beyond limitation. The Tribunal held that a valid notice under section 15 of the said Act is a condition precedent to the assumption of jurisdiction by the Sales Tax Officer under section 15, this condition precedent was not complied with and, therefore, the Sales Tax Officer had no jurisdiction to proceed under section 15 of the said Act. On the basis of these conclusions the Tribunal set aside the assessment order passed by the Sales Tax Officer and confirmed by the sales tax authorities as set out earlier.

(3.) Arising from the aforesaid judgment and order of the Tribunal, the following questions have been referred to us for our determination :