KANHAIYALAL BAHADURSINGH Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) THIS is a Letters Patent Appeal from an order of Bhutt, J. (as he then was) whereby he dismissed the appellant's petition under Article 226 of the Constitution of India for the issue of a writ of prohibition restraining the opponents from proceeding to make any assessment under Section 11-A of the Central Provinces and Berar Sales Tax Act, 1947.

(2.) THE matter arises in this way. The appellant is a dealer in manganese ore. In respect of sales of manganese ore during the period from 1st April, 1953, to 31st March, 1954, the Sales Tax Officer, Gondia, by his order on 26th July, 1955, found the gross turnover to be Rs. 6,55,044-3-4 and held that the appellant was entitled to a deduction to the extent of this amount of turnover under Section 27-A (1) (b) of the Act. What the Sales Tax Officer really meant was that under the aforesaid provision the sales being in the course of inter-State trade or commerce were not liable to be taxed. Thereafter, the successor of the Sales Tax Officer who made the assessment order on 26th July, 1955, sought the sanction of the Commissioner of Sales Tax sometime in April, 1956, for a review of the assessment order dated 26th July, 1955. On 19th June, 1956, the Deputy Commissioner of Sales Tax addressed a letter to the Sales Tax Officer communicating the refusal of the sanction and at the same time suggesting that the assessment could be reopened under Section 11-A of the Act. He also added in the letter that the assessment of sales tax on the appellant for the year from 1st April, 1952, to 31st March, 1953, was under revision by the Commissioner under Section 22-B. Pursuant to this suggestion the Sales Tax Officer issued a notice to the assessee under Section-A. The notice called upon the appellant to show cause why he should not be re-assessed. It stated that the Sales Tax Officer was satisfied that the appellant's turnover during the period from 1st April, 1953, to 31st March, 1954, had been under-assessed and that the deduction had been wrongly made from the turnover. The appellant then filed a petition under Article 226 of the Constitution contending that the Sales Tax Officer had no jurisdiction to make any assessment under Section 11-A as he had no "information" on which he could satisfy himself as to any of the matters mentioned in Section 11-A and that in fact he did not satisfy himself as to these matters. In the return which was filed on behalf of the opponents the date of the receipt of the information and its nature were not disclosed. It was merely averred that it came to the knowledge of the Sales Tax Officer that the deduction made from the turnover under Section 27-A of the Act was wrongly made.

(3.) THE learned single Judge thought it unnecessary to determine the scope of Section 11-A as in his opinion Sections 11-A, 22-A and 22-B were all enabling sections and overlapping to a certain extent and that the Sales Tax Officer could reopen the assessment under any of these provisions. He further held that Section 11-A (1) of the C. P. and Berar Sales Tax Act was analogous to Section 34 (1) (b) of the Income-tax Act; that the assessee was not entitled to know the information on which the Sales Tax Officer satisfied himself that the turnover had been underassessed or a wrong deduction had been made therefrom ; that it was not necessary to state in the notice issued to the assessee under Section 11-A the reasons persuading the Sales Tax Officer to issue the notice; and that the reasons were only for the "subjective satisfaction" of the Sales Tax Officer. On this view, the petition under Article 226 was dismissed by the learned single Judge.