AVTAR SINGH RANJIT SINGH Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THIS order will dispose of General Sales Tax References Nos. 25 and 26 of 1973. Briefly, the facts are that the petitioner is dealing in gur, shakkar, sugar, vegetable ghee, etc. It was directed by the Assessing Authority on 27th December, 1956, to file monthly returns. It filed quarterly returns for the first three quarters of the assessment year 1956-57 and monthly returns thereafter till the end of the assessment year 1957-58. For the year 1956-57, it showed a gross turnover of Rs. 16,41,997-4-3. Deductions were claimed by it in respect of sales in favour of registered dealers for an amount of Rs. 11,06,842-14-3 for that accounting year. Gross turnover for the year 1957-58 was indicated by the petitioner to be Rs. 19,74,483. 17. Deductions were claimed in respect of sales valued at Rs. 8,97,301. 83 in favour of registered dealers. The Assessing Authority issued notices in form S. T. XIV on 27th August, 1958, for both the assessment years. The petitioner was duly served with notices. The appearance was put in on behalf of the assessee before the Assessing Authority for the first time on 4th September, 1958. Thereafter the cases were adjourned on the request on behalf of the petitioner on a number of occasions. Finally, the case came up for hearing on 15th July, 1961. On that date nobody appeared on behalf of the petitioner. The Assessing Authority after observing that various adjournments had been given to the petitioner, proceeded to make ex parte assessments. The gross turnovers indicated by the petitioner were taken to be correct. The Assessing Authority disallowed deductions under Section 5 (2) (a) (ii) of the Punjab General Sales Tax Act, 1948 (hereinafter referred to as the "act") in respect of the sales amounting to Rs. 7,69,400-14-6 regarding the assessment year 1956-57 on the ground that they had not been made in favour of registered dealers and that the declarations furnished by the petitioner were not genuine. Similarly, the deductions were disallowed in respect of sales valued at Rs. 4,25,657-13-6 for the assessment year 1957-58. The petitioner filed two appeals before the Deputy Excise and Taxation Commissioner which were rejected by him on 11th January, 1965. It went up in revisions against both the orders to the Joint Excise and Taxation Commissioner, who accepted the same on 23rd March, 1965. The department filed revision petitions before the Financial Commissioner, Taxation, Punjab. He, vide his orders dated 21st April, 1966, set aside the orders of the Joint Excise and Taxation Commissioner, Punjab, dated 23rd March, 1965, and restored those of the Depuy Excise and Taxation Commissioner dated 11th January, 1965. The petitioner filed applications under Section 22 (1) of the Act for referring five questions of law arising out of the order of the Financial Commissioner dated 21st April, 1966, to this court. The applications were rejected on 29th February, 1968, by the Financial Commissioner, Taxation. Subsequently, the petitioner filed two applications under Section 22 (2) of the Act before the High Court praying that the Financial Commissioner be directed to refer the questions of law to this court. The High Court directed the Financial Commissioner to refer the following question of law to this court: Whether, on the facts and in the circumstances of the case, the order of assessment dated 24th July, 1961, was not an order under Section 11 (4) of the Punjab General Sales Tax Act?

(2.) IT is contended by the learned counsel for the petitioner that the order of the Assessing Authority is under Section 11 (4 ). On the other hand, it is contended by the learned counsel for the respondent that it is under Section 11 (3) of the Act. In order to determine the question, it is necessary to read the provisions of Section 11 of the Act. Sub-section (1) provides that if the Assessing Authority is satisfied without requiring the presence of dealer or the production by him of any evidence that the returns are correct and complete, he shall make assessment on the basis of such returns. Sub-section (2) says that if the Assessing Authority is not so satisfied, he shall serve on the dealer a notice in the prescribed manner requiring him on a date and at a place specified therein, either to attend in person or to produce or to cause to be produced any evidence on which such dealer may rely in support of such returns.

(3.) UNDER Sub-section (4), the Assessing Authority is entitled to assess the dealer to the best of his judgment within a period of five years. A plain reading of the said section shows that if the dealer fails to comply with the terms of the notice issued to him under Subsection (2) the order will be passed by the Assessing Authority under Subsection (4 ). Thus in order to determine whether the order has been passed under Sub-section (3) or Sub-section (4), one of the facts to be determined is, whether the dealer has complied with the terms of the notice issued to him under Sub-section (2) or not. The Tribunal has not given any finding to this effect in the reference. The Financial Commissioner has also not given the finding in its order dated 21st April, 1966. The notice which was issued to the petitioner by the Assessing Authority under Section 11 (2) of the Act as given in the reference order is as follows : You are hereby directed to attend in person or by an agent on 4th September, 1958, at 10 A. M. and there to produce or cause there to be produced at the said time and place the accounts and documents specified together with any objection you may wish to prefer and any evidence you may wish to adduce in support thereof.