RAMJI SOMAN CHOUDHARY Vs. STATE OF BIHAR

JUDGEMENT

(1.) IN this case the petitioner was assessed to sales tax under Section 10(5) of the Bihar Sales Tax Act by the Sales Tax Officer of Darbhanga on a taxable turnover of Rs. 3,78,084 for the period from 1st July, 1946, to 31st March, 1947. The tax assessed was Rs. 5,907 and odd and a penalty equal to the amount assessed was also imposed on the petitioner. The assessment order is dated 29th September, 1948. The assessee filed an appeal before the Commissioner of Sales Tax. The appeal was allowed and the case was remanded to the Sales Tax Officer for further action. An application in revision was filed before the Board of Revenue on 2nd June, 1949, on behalf of the petitioner. The application was rejected by the Board by its order dated 5th September, 1949. The petitioner then filed an application on 3rd December, 1949, requiring the Board of Revenue to refer certain questions of law for the determination of the High Court. The Board of Revenue heard the parties on 22nd July, 1950, and rejected the application for reference on the same date. Being dissatisfied with the order of the Board the petitioner filed an application to the High Court who asked the Board of Revenue to state a case on the following question of law : "Whether on the facts and circumstances of the case the applicant is a dealer within the meaning of the Bihar Sales Tax Act VI of 1944 and is liable to be taxed as such ?"

(2.) WHEN the hearing commenced Mr. Gopal Prasad on behalf of the State of Bihar raised a preliminary objection that the petitioner applied to the Board of Revenue for making reference to the High Court more than sixty days after the revision application was dismissed by the Board of Revenue. It was submitted by the learned counsel that the Board of Revenue rightly refused to make reference and the High Court ought not to have called for a statement of the case under Section 21(3) of the Bihar Sales Tax Act of 1944. The argument of the learned counsel is founded upon Sections 21(1) and 21(2) of the Bihar Sales Tax Act of 1944. Section 21(1) states : "Within sixty days from the passing by Board of Revenue of any order under sub-section (3) of Section 20 affecting any liability of any dealer to pay tax under this Act, such dealer may, by application in writing accompanied by a fee of one hundred rupees, require the Board to refer to the High Court any question of law arising out of such order". Section 21(2) provided : "If, for reasons to be recorded in writing, the Board of Revenue refuses to make such reference, the applicant may, within thirty days of such refusal, either (a) withdraw his application (and if he does so, the fee paid shall be refunded), or (b) apply to the High Court against such refusal". Section 21(3) is also important; it states : "If upon the receipt of an application under clause (b) of sub-section (2), the High Court is not satisfied that such refusal was justified, it may require the Board of Revenue to state a case and refer it to the High Court and on receipt of such requisition the Board shall state and refer the case accordingly".

(3.) THE present case falls within the principle of the decision in Doma Sao Kishan Lal v. State of Bihar ([1952] 3 S.T.C. 167; A.I.R. 1952 Pat. 357) in which it was held that if the Board of Revenue improperly made reference beyond the period of limitation prescribed by Section 21 of the Sales Tax Act the High Court was certainly capable of entertaining objection to the statement of the case and if it came to the conclusion that the case should never have been stated the High Court was not compelled to express its opinion upon the questions referred. A similar principle has been enunciated in an earlier case of this Court in Hukmi Chand v. Commissioner of Income-tax ((1925) 2 I.T.C. 140). In that case an application was made by the assessee under Section 66(2) of the Income-tax Act to the Commissioner of Income-tax for a reference to the High Court more than a month after the passing of the order under Section 31. The application was rejected by the Commissioner of Income-tax on the ground that no question of law arose. But on an application under Section 66(3) the High Court without their attention being drawn to the dates in the case directed the Commissioner to state a case. A preliminary objection was raised to the hearing of the reference. It was held by Sir Dawson Miller, C.J., that the assessee was not entitled to apply to the High Court under Section 66(3) of the Act and the assessment must therefore be confirmed. In this connection the decision of the Special Bench of five Judges of the Madras High Court in Subbiah Aiyar v. Commissioner of Income-tax, Madras ((1930) I.L.R. 53 Mad. 510), is also relevant. In that case the assessee did not make an application to the Income-tax Commissioner under Section 66(2) of the Income-tax Act to refer a point of law to the High Court within one month of the passing of an order under Section 31 or 32 of the Act. It was held by the Special Bench that the assessee cannot ask the High Court to direct the Commissioner to refer such a question to the High Court and that neither Section 66(1) of the Indian Income-tax Act nor Section 45 of the Specific Relief Act empowered the High Court to direct the Commissioner to refer such a question under such circumstances.