M SAYANNA AND GARIKAPATI NARASIMHULU Vs. STATE

JUDGEMENT

(1.) THIS is a petition under article 226 of the Constitution of India, seeking the issuance of a writ of mandamus restraining the respondents from proceeding to collect the tax levied for the assessment years 1957-58 and 1958-59 filed in the following circumstances.

(2.) THE petitioner, who is a registered dealer under the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as "the Act"), failed to file the return of his turnover for the assessment years 1957-58 and 1958-59. The third respondent herein issued a preliminary notice on 29th February, 1964, to appear on 2nd March, 1964, and file a detailed statement of accounts. The final notice issued on 6th March, 1964, directed the petitioner to produce his accounts before 13th March, 1964. A provisional assessment was made on 17th March, 1964, and the petitioner was assessed on a turnover of Rs. 50,000 for the year 1957-58 and on Rs. 30,000 for the year 1958-59 and a tax at the rate of 3 per cent thereon was levied. After hearing the objections filed regarding the provisional assessment, the final assessment order was made on 24th March, 1964. Thereafter, on 12th June, 1964, proceedings for the levy of penalty were initiated and the petitioner was directed on 22nd June, 1964, to pay five times the tax by way of penalty.

(3.) A reading of this sub-section clearly indicates that when the whole or any part of the turnover of a business of a dealer escaped assessment at any time within six years of the year of assessment, the assessing authority may, after issuing a notice and after making such enquiry as the assessing authority deems necessary, assess the correct amount of tax payable. The condition precedent for the exercise of this power is that the turnover should have escaped assessment, either wholly or partly, and this must have been noticed and the authority concerned must have issued a notice within six years of the assessment year. Once these two conditions are satisfied, there is no further impediment in the exercise of this power. The turnover may escape assessment either because of the failure of the dealer to file a return, who is under an obligation to file a return or because the assessing authority for any other reason comes to the conclusion that the turnover was under-assessed. Whatever the reason may be, when once the assessing authority finds that the whole or any part of the turnover has escaped assessment, this power can be exercised. Considering a similar provision, viz. , rule 17 of the Madras General Sales Tax Rules, 1939, a Bench of the Madras High Court in State of Madras v. S. Balu Chettiar ([1956] 7 S. T. C. 519), observed :