SITARAM KAMAL PRASAD Vs. COLLECTOR OF SALES TAX

JUDGEMENT

(1.) This is an application under Sub-section (3) of Section 24 of the Orissa Sales Tax Act of 1947, asking us to direct the Revenue Commissioner to state a case and make a reference to the High Court in the following circumstances. The applicant is a dealer in betel-leaves. He registered himself under Section 9 of the Act in January, 1949, and submitted his return for the quarter ending 31st March, 1949. The Sales-tax Officer accepted that return and assessed him to tax for that quarter; but simultaneously with it, that is, on 4-10-49, he also assessed him for the three quarters ending 30th June, 1948, 30th September, 1948, and 31st December, 1948, on the basis of the return of sales for the quarter ending 31st March, 1949 already filed. It is to be noticed that the assessee had not registered himself during those quarters nor did he submit any return in respect thereof. On receiving notices of demand in respect of these three quarters, the assessee made an application on 26-11-49 to the Sales-tax Officer stating that ha started business in betel- leaves only on the 17th of April, 1948, and that he was not accordingly liable under the Act to pay tax for those three quarters. Not having received any orders in respect of his review application to the Sales-tax Officer, he applied also to the Collector of Sales-tax by way of review. The Collector held that the review was not competent; but took up the matter in revision, 'suo motu', under Section 23(3) read with Rule 54 of the rules under the Act, but on consideration thereof rejected the application. Thereupon, the assessee went up in revision to the Revenue Commissioner, who also rejected the same. The assessee consequently made an application to the Revenue Commissioner under Section 24(1) requiring him to refer certain questions of law to the High Court for its decision. The Revenue Commissioner rejected that application also. Hence the assessee has come up to this Court for a direction to the Revenue Commissioner under Sub-section (3) of Section 24 of the Act.

(2.) The substantial point raised by the assessee is as follows: Admittedly he was a person who did not register himself during the year 1948. If in the opinion of the Sales-tax Officer, he was liable to pay the tax in respect of the three quarters, in 1948, and nevertheless failed to apply for registration action could have been taken against him only under Sub-section (5) of Section 12. Under that sub-section it was mandatory for the Sales-tax Officer to give the assessee a reasonable opportunity of being heard. The assessee's case is that as a fact he was not liable to assessment during the quarters in question, since he started business only on the 17th April, 1948. Thus, the assessment made on the assumption that he was liable to assessment during the quarters above-mentioned and without giving him an opportunity of being heard against the correctness of that assumption, is illegal. It may be mentioned that if it is a fact as the assessee now states that he commenced his business as a betel-leaf-dealer only on the 17th April, 1948, he would not be liable to pay tax for the three quarters in question by virtue of Sub-section (2) of Section 4 of the Act; and if it is a fact that the assessee was doing business during the year ending 31st March, 1948, or earlier, he would be liable to pay tax for the quarters in question. The contention that he started Ms business only on the 17th April, 1948, and that he should have been given an opportunity to prove his non-liability to tax, in respect of these three quarters were specifically raised in the petition filed before the Collector of Sales-tax and also the application for Revision made to the Revenue Commissioner dealt with the grievance of the applicant that he was given no opportunity to prove that he was not in fact liable to assessment for the three quarters in question. The learned Collector though he did not deal with the contention as to want of opportunity, curiously enough says that there is no evidence in support of the assessee's statement that he commenced business only on the 17th April, 1948, Of course, if the assessee's contention that he was not given any opportunity is valid, it is clear that he cannot be found fault with, for not having given evidence. Both the Collector and the Revenue Commissioner however in confirming the assessment made by the Sales-Tax Officer and in rejecting the applications by the assessee in the application which he made to the authorities concerned for his registration as a dealer in the month of January, 1949, had stated categorically that he had a gross turnover of Rs. 30,000/- for the year ending 31st March, 1949. The assessee's objection to the use of this material against him by the Collector and the Revenue Commissioner is two-fold; firstly that that was not the material on which the Sales-tax Officer proceeded to assess him for the quarters in question, because a reference to the assessment order shows that he was assessed "as directed by the Government Order" which has not been reproduced either in the assessment order or in any of the orders of the Collector or Revenue Commissioner in these proceedings. Secondly the application for registration relied upon could not be used as evidence against him, without his being given an opportunity to show that the statements in that application were inaccurate and that in fact the truth was that he started his business only in April, 1948.

(3.) It is not disputed before us by learned counsel for the Sales-tax authorities that the assessee did not receive any notice under Section 12 (5) of the Act; but it is stated by him that even apart from his admission in the application for registration of a gross turnover of Rs. 30,000/- during the year ending 31st March, 1949, the very fact of his having applied for registration in January 1949, would show that his statement that he commenced business in April, 1948, must be false in view of Sub-section (2) of Section 4. The question therefore that arises in these proceedings is whether in the absence of such a notice the assessment was legal and whether the statements contained in the application for registration or the fact of such application itself could be used as evidence against the assessee to make out his liability for assessment during the three quarters in question, when he had no opportunity given to him of showing the contrary and when that was not the material relied on by the Sales-tax Officer in his order of assessment. Learned counsel for the taxing authority contends that the question of the liability to assessment in this case depends merely on the fact whether the assessee was not carrying on business prior to April, 1948, as he now contends and that on this matter there are clear and categorical findings which bind us. Learned counsel has also stated to us that the Government Order referred to in the. Sales-lax Officer's assessment order contains a statement to the effect that in view of certain previous history and negotiations between the Government and the betel-leaf-dealers it was agreed that though they are to register themselves and submit return for the first time only in January, 1949, i.e., in the last quarter of 1948-49 and that they should all be liable to be assessed in respect also of the 1st three quarters of the year 1948-49 on the basis of the return for the said last quarter. So far as this last contention is concerned, the necessary material does not find any mention in the orders of the sales-tax authorities, nor is it before us at this stage,