MANORDAS KALIDAS Vs. V V TATKE

JUDGEMENT

(1.) -

(2.) MESSRS Manordas Kalidas, who will hereafter be referred to as "the assessees", carry on business in cloth in Bombay, and are registered dealers under the Bombay Sales Tax Act. For the assessment years 1948-49 and 1949-50, corresponding to the assessment period from 7th October, 1948, to 31st March, 1950, the Sales Tax Officer, C-I-J Ward, Bombay, assessed the assessees on 4th May, 1951, under section 11 of the Bombay Sales Tax Act, 1946. The Sales Tax Officer accepted the gross turnover returned by the assessees at Rs. 1,15,50,858-10-3 and determined the sales tax payable thereon. On 13th June, 1958, the Assistant Collector of Sales Tax issued a notice to the assessees informing them that they had suppressed sales of Rs. 20,00,000 from their regular books of account for the year 1948-49 and it was proposed to revise the order passed by the Sales Tax Officer for the said year by incorporating and adding sales of Rs. 20,00,000 to the turnover, and subject the same to sales tax at the rate of one anna in a rupee. A similar notice was also issued on the same day in respect of the year 1949-50. The assessees then applied under Article 226 of the Constitution of Indian claiming a writ in the nature of certiorari or other writ, direction or order against the Assistant Collector of Sales Tax calling for the records relating to the assessment, re-assessment or revision of assessment of the assessees for the assessment, years 1947-48, 1948-49 and 1949-50, and, after making enquiries and looking into the matter, setting aside the notices issued by the Assistant Collector of Sales Tax. The assessees also claimed a writ in the nature of prohibition or mandamus or other writ or direction prohibiting or restraining the Assistant Collector of Sales Tax and his successors in office from taking any action or proceeding for assessment, re-assessment or revision of assessment of the assessees in respect of the assessment years 1947-48, 1948-49 and 1949-50 and from enforcing the notices. The Assistant Collector of Sales Tax, who was appeared before us in pursuance of the notice, has challenged the right of the assessees to obtain the writs or writ claimed by them.

(3.) BY sub-section (1) of section 48 of the Bombay Sales Tax Act, 1953, the Bombay Sales Tax Act, 1946, was repealed. BY sub-section (2) it is provided that the repeal does not affect or will not be deemed to affect any right, title, obligation or liability already acquired, accrued or incurred, and also the recovery of any tax or penalty which may have become payable under the Act of 1946; and that such taxes or penalties or arrears thereof shall be assessed, imposed and recovered so far as they may be, in accordance with the provisions of the Act of 1913. Evidently by virtue of the provisions contained in the Sales Tax Act, 1946, the assessees, for any evasion of tax, incurred an obligation to pay that tax, liability to pay which had arisen by reason of the sales effected but of which the particulars were concealed. The repeal of that Act does not, by virtue of the provision contained in section 48(2), affect that obligation; and the recovery of that tax which was payable under the Act of 1946 is, by the express provision made in section 48(2), not affected by the repeal of the Act of 1946, and all such taxes are to be assessed, imposed and recovered in accordance with the provisions of the Act of 1953. The Assistant Collector of Sales Tax had, therefore, authority to issue the notices and conduct the proceedings for re-assessment of the liability, if any, of the assessees under the Act of 1953. To appreciate the second contention, it is necessary to set out certain provisions of the Sales Tax Acts of 1946 and 1953. BY section 10 of the Act of 1946 it was provided that every dealer who may be required so to do by the Commissioner by notice served in the prescribed manner and every registered dealer shall furnish such returns by such dates and to such authority as may be prescribed. BY section 11 the procedure for assessment of taxes was prescribed. Authority was given under that section to the Commissioner to make "best judgment assessment" in certain specified cases. There was no provision enacted by the Sales Tax Act, 1946, about the period within which the notice requiring a dealer or a registered dealer to make a return was to be issued. BY section 11A, which was added by Act I of 1949, authority was given to the Collector to issue a notice within the period prescribed, where that officer was satisfied that any turnover in respect of sales or supplies of any goods chargeable to tax under the Act had escaped assessment in any year or had been under-assessed or assessed at a lower rate or any deductions had been made wrongly therefrom and in any case where the Collector had reason to believe that the dealer had concealed the particulars of such sales or supplies or deliberately furnished incorrect returns. BY that section authority was also conferred upon the Collector to proceed to assess or re-assess the tax due by such dealer and the provisions of the Act were to apply as if the notice were one served under section 11. Even though no period was prescribed for issue of a notice under section 11, re-assessment under section 11A could be made within the period of five years or three years as prescribed. BY section 22 power was conferred upon the Collector, subject to the rules which may be prescribed and for reasons to be recorded in writing, either upon application or of his own motion, to revise any order passed under the Act or the rules made thereunder by a person appointed under section 3 to assist him. BY this provision authority was evidently conferred upon the Collector to revise the orders of his subordinates who were authorised to act as Sales Tax Officers, but the Legislature did not prescribe any period for revising the orders of the subordinate authorities when the Collector proceeded suo motu. Under the Bombay Sales Tax Act, 1953, the corresponding provision relating to the making of returns was section 13; the provision relating to the assessment of taxes was section 14 and the provision relating to the issue of notice and re-assessment of dealers in respect of turnover escaping assessment was section 15. BY section 31 authority was conferred upon the Collector, subject to the rules prescribed and for reasons to be recorded in writing, to revise the orders passed under the Act or the rules made thereunder by a person appointed under section 3 to assist him.