MOHANLAL CHANDRA Vs. COMMR OF COMMERCIAL TAXES

JUDGEMENT

(1.) This is an application under Article 226 of the Constitution for appropriate Writs quashing an assessment order of a Commercial Tax Officer in respect of certain sales tax relating to the business of the petitioner, and directing the opposite parties to forbear from giving effect to the order of assessment and notice of demand in respect of the tax assessed or to take further proceeding in a Certificate case pending for realisation of the amount assessed.

(2.) The case of the petitioner is that on or about 16th January 1950 the petitioner who was a medical student along with his two minor brothers started a partnership business for dealing in medicines and chemical goods under the name & style of Paran Chunder Chunder & Co. at room no. a 14 Bagree market at premises No. 71/1, Canning Street, Calcutta. The said firm was however not registered under the provisions of the Indian Partnership Act. On February 17, 1950, the partnership concerned applied for grant of a registration certificate and on the 9th August, 1950 a registration certificate was granted in terms of the Bengal Finance (Sales Tax) Act, 1941 and the partnership firm was directed to furnish quarterly returns in Form No. 3 as prescribed by the Sales Tax Rules framed under the said Act. On the 28th August 1950, the said partnership firm made an application for allowing it to furnish annual return in place of quarterly returns but this prayer was not granted by the then Commercial Tax Officer. Accordingly, the firm continued to submit quarterly returns. The particulars of the returns submitted in respect of the Bengali years 1357 and of 1358 B. S. and of the assessment made in respect of such years are set out in paragraph 4 of the petition. On 25th August 1952, the petitioner as senior partner of the said partnership concern, filed the return of the sales tax payable for the Quarter ending 30th Ashar 1359 B. S. showing the gross turnover for the said period to be Rs. 18,650/15/- and the taxable turnover to be Rs. 425/5/- and paid the sum of Rs. 19/15/- as the tax which according to the calculation of the petitioner was payable on the taxable turnover in respect of the said period. The return for the second quarter "f the year 1359 B. S. ending 30th Aswin was filed on the 17th November 1952 showing the gross turnover to be Rs. 17,132/10 and the taxable turnover to be Rs. 423/6/- and the tax amounting to Rs. 19/13/6 was duly paid by the said firm. The return for the 3rd quarter of the year 1359 B. S. ending with the last day of Pous and of the 4th quarter ending 30th Chaitra 1359 B. S. were also filed showing a gross turnover of Rs. 15,988/14/- and Rs. 25,700/11/-, respectively the taxable turnover for the said periods being Rs. 588/2/- and Rs. 639/14/-, respectively, and it is alleged that the amount of sales tax due on those returns were also duly paid. On 28th August 1953, the partnership firm also filed returns for the first quarter of the year 1360 B. S. showing a gross turnover of Rs. 27.974/1/- and the taxable turnover of Rs. 636/12/- and the estimated amount of tax was paid in respect of this period. It appears that on 11th of September 1953 the respondent No. 2, the Commercial Tax Officer, visited the place of business of the partnership concern accompanied by a police force and it is alleged that he seized and took away without the petitioner's consent all cash memos, purchase vouchers, stock register, jabeda books, khatians, daily jama kharach books, sales tax register and other books for the years 1359 and 1360 B. S. It is further alleged that the respondent No. 2 forced the petitioner and his brother Hira Mohan Chunder to sign certain papers written up by the said respondent No. 2 without allowing the petitioner and his brother to go through the same. On or about the 8th October 1953 the petitioner firm received a notice dated the 17th September 1953 under Sections 11 and 14 (1) of the Bengal Finance (Sales Tax) Act, 3941, calling upon the said firm to produce bookp of accounts etc., of the firm for the four quarters end-Ing on the last day of Chaitra 1359 B. S. on the 12th October 1953 at the office of the Commercial Tax Officer. The case of the petitioner is that as he fell ill on October 12, an adjournment was asked for by the petitioner's lawyer and on the 13th October 1953 the petitioner filed an affidavit in which it was stated that all the books of the business had been seized and removed on llth September 1953 by reason whereof the petitioner's firm was unable to produce any of the books before the competent authority. On the same day, i. e., 13th October 1953 a letter was written by the office of the Commercial Tax Officer informing the petitioner that the case had been adjourned till the 30th October 1953 but as the petitioner again fell ill on that day he wrote a letter enclosing a medical certificate and asking for further adjournment of the case. It is alleged that the petitioner did not receive any other intimation thereafter regarding the date of hearing of the above case but on or about the 29th of January 1954 the petitioner received a copy of a notice of assessment under Section 17 of the Bengal Finance (Sales Tax) Act in Form No. 7 by post at the petitioner's residence at 10 Pudda-pukur East Lane, Kidderpore. From the said notice the petitioner came to learn for the first time that the Commercial Tax Officer had purported to act under Section 11 of the said Act and the taxable turnover for the 4 quarters ending on the last day of Chaitra 1359 B. S. had been assessed at Rs. 25,0000/- and the sales tax was assessed at Rs. 11,718/12/-. The petitioner made further enquiries in the matter and as a result thereof came to know that the assessment case of the petitioner had been disposed of on the 30th November 1953. On llth February 1954 the petitioner applied for obtaining a copy of the said order of assessment dated the 30th November 1953 but the said application for copy was rejected on the 26th May 1954. It is alleged that no notice of assessment of folios or of the requisite stamp in respect of the said application for copy was ever hung up in the notice board and the petitioner for the first time came to know of the rejection of the application on the 1st June 1954 on enquiry made from a clerk of the office of the Commercial Tax Officer. Thereafter on 4th June 1954 he wrote to the Commissioner of Commercial Taxes, for making an enquiry into the matter and for giving direction for supplying the copy asked for. On 16th June 1954 the petitioner received a reply to the said letter from the Commissioner's office intimating that the application for certified copy had been rejected for failure on the part of the petitioner to supply the requisite folios and the Court-fee stamp within the prescribed time limit but the petitioner was asked to make a fresh application for certified copies, if such certified copies were required by the petitioner. On 19th June 1954 the petitioner made a fresh application for copy of the said order and the same was made ready for delivery on 5th August 1954. in the meantime on 23rd June 1954, the petitioner had written another letter to the Commissioner requesting that the period which had elapsed in the meantime might be taken into consideration by the Commissioner while giving delivery of the certified copy but no reply was given by the Commissioner to this letter. In the meantime a certificate case was started against the petitioner for realisation of a sum of Rs. 11621/6/6 ps. and notice under Section 7 of the Public Demands Recovery Act was served upon the petitioner. The petitioner thereafter moved this Court under Article 226 of the Constitution on the 7th of September 1954 and a Rule Nisi was issued by Sinha J. on that date and certain orders for interim injunction were also made on that date but the Issue of the Rule was however limited to grounds Nos. 1, 3 and 6 as set out in paragraph 24 of the petition.

(3.) In the affidavit in opposition which has been affirmed by Respondent No. 2 being the Commercial Tax Officer, it is stated that on 11th September 1953 the deponent along with certain other persons visited the petitioner's shop at premises No. 71 Canning Street and there he met the petitioner. On being asked to produce the books of accounts, registration certificate, the declaration form and other relevant papers relating to the business the petitioner stated that the books of accounts, and the relevant papers were not kept at the shop but all such books and papers were at the residence of the petitioner or of his accountant, but one cash memo book written upto 25th August 1953 was found in the shop and this was signed by the deponent in the presence of the petitioner. A stock book which wad also found in the shop was also signed by the deponent and a jama-kharach book which was found in the shop but which, according to the petitioner belonged to one Amarendra Mohan Chandra, Commission Agent, was seized by the deponent in the presence of the petitioner as the said book did not bear any names. A seizure list in respect of the said Jama-kharach book was prepared and a copy of the list was handed- over to the petitioner. A copy of this seizure list is annexed to this affidavit in opposition and it appears therefrom that the petitioner also signed the said list. It is further stated in the affidavit that except this jama-kharach book no other books or documents were seized by the deponent. A report of the visit of the deponent to the petitioner's shop was prepared by the deponent in the presence of the petitioner and the petitioner also signed such report after carefully going through its context. A copy of the report is annexed to this affidavit and marked B. It is further stated that the seizure was effected in terms of Section 14 (3) of the Bengal Sales Tax Act. Later on the petitioner was asked to produce the books of account of the business and to explain the entries in the jamakharach Book which had been seized by the deponent but the petitioner failed to explain the entries in the jamakharach book and also failed to produce the hooks of account and relevant papers relating to the business. A notice in Form No. 6 under Sections 11 and 14 (1) of the Act for the production of books of accounts and other papers was issued on the 6th of August 1953 fixing the 12th of October 1953 as the date of hearing but this notice was received back in the office of the deponent, with the postal mark "shop closed left". The same was re-issued by the process-server on the 18th September 1953 fixing 12th of October 1953 as the date of hearing and this notice was duly served on the 8th October 1953. When the matter came up for hearing on the 12th October 1953 the authorised pleader of the petitioner asked for further time whereuoon the case was adjourned till 30th October 1953. But on the 30th October 1953 the petitioner wrote a letter asking for further adjournment of the case on the ground of illness of the petitioner and the case was thereupon adjourned till 2Rth November 1953 and intimation was sent; about this adjourn-ed date by Memo No. 94, dated the 9th of November 1953. It is alleged that a copy of this memo was also sffixert at the dealer's place of business but as the petitioner or anybody on his behalf did not appear oh the 28th of November 1953 the deponent made an assessment according to the best of his judgment under Section 11 of the Act on the 30th of November 1953 and a notice of demand in Form No. 7 was issued on the 4th, December 1953 calling upon the petitioner's firm to pay the sum of Rs. 11621/6/6 ps. as the assessed tax.