TMI Blog1957 (12) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... t-firm was required to submit its return of turnover to the Sales Tax Officer. For the year 1949-50 the respondent-firm submitted return on 30th September, 1950, but only for one quarter, instead of for all the four quarters of the year. In respect of the year 1950-51 the respondent-firm did not submit a return at all. A notice was issued to the respondent-firm on 13th August, 1954, in Form XI under section 11, sub-sections (1) and (2), of the Act in respect of the year 1949-50; and in respect of the other year a notice in Form XII under section 11(4) of the Act was issued on 15th October, 1954. The respondent-firm thereupon filed the two petitions for getting the notices declared void and for getting them quashed. The learned single Judge (Kotval, J.) by his order quashed the two notices and declared the assessment made by the Assistant Commissioner of Sales Tax illegal and also set it aside. These appeals have therefore been filed by the department against that order. 4.. The question that has arisen and which appealed to the learned single Judge is whether sections 11-A and 11(5) of the Sales Tax Act control the present cases. According to the learned single Judge, there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d once they register themselves certain consequences ensure. From this point onwards the law applicable to a dealer and that applicable to a registered dealer is different, and it is necessary to quote certain sections. 8.. The return which dealers and registered dealers have to make are provided for in section 10. It reads as follows: "10. (1) Every such dealer as may be required so to do by the Commissioner by notice served in the prescribed manner and every registered dealer shall furnish such returns by such dates and to such authority as may be prescribed. (2) * * * * (3) If a dealer fails to comply with the requirements of a notice issued under sub-section (1) or a registered dealer fails to furnish his return for any period within the prescribed time to the prescribed authority without any sufficient cause, the Commissioner may, after giving such dealer a reasonable opportunity of being heard, direct him to pay, by way of penalty, a sum not exceeding one-fourth of the amount of the tax which may be assessed on him under section 11. (4) * * * *" 9.. Section 11 deals with the assessment of tax. If the Commissioner is satisfied with the returns furnished by a dealer he as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "11-A. (1) If in consequence of any information which has come into his possession, the Commissioner is satisfied that any turnover of a dealer during any period has been under-assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom, the Commissioner may, at any time within three calendar years from the expiry of such period, after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he considers necessary, proceed in such manner as may be prescribed to re-assess or assess, as the case may be, the tax payable on any such turnover; and the Commissioner may direct that the dealer shall pay, by way of penalty in addition to the amount of tax so assessed, a sum not exceeding that amount." The learned single Judge has relied on this section also and has held that it is applicable to these cases. 11.. It will, therefore, appear from the above that in so far as a registered dealer is concerned no notice has to be issued to him, because a duty has been laid upon him of submitting a return within the prescribed time and to the prescribed authority, as provided in the Rules. The rule in this conn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sections and whether there is any limitation for sending the kind of notices which were actually sent. 14.. Section 11(5) is wholly inappropriate. Section 11-A deals with four matters. It lays down that if in consequence of any information the Commissioner is satisfied that any turnover of a dealer (a) has been under-assessed or (b) has escaped assessment or (c) has been assessed at a lower rate or (d) that any deduction has been wrongly made therefore, the Commissioner may within three calendar years from the expiry of such period re-assess or assess, as the case may be, the tax payable on that turnover. It is clear enough that in neither of these two cases are (a), (c) and (d) material. At no stage was the respondent-firm either under-assessed or assessed at a lower rate or any deduction from its turnover had been wrongly made. The argument, therefore, is that the present is a case where the turnover has escaped assessment and therefore the period of limitation prescribed by the section applies to these cases. 15.. The meaning of the term "escaped assessment" was given by their Lordships of the Privy Council in connexion with the Income-tax Act in Rajendranath v. Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rue that after a final assessment under those sections has been made, the Income-tax Officer can go on making fresh computation and issuing fresh notices of demand to the end of all time. It is possible that the final assessment may not be made until some years after the close of the fiscal year. Questions of difficulty may arise and cause considerable delay. Proceedings may be taken by way of appeal and cause further delay. Until all such questions are determined and all such proceedings have come to an end there can be no final assessment. But when once a final assessment is arrived at, it cannot, in their Lordships' opinion, be reopened except in the circumstances detailed in section 34 and 35 of the Act (to which reference is made hereafter) and within the time limited by those sections." 16.. From these two cases it is quite clear that there has to be a final assessment before recourse can be had to the provisions analogous to the first sub-section of section 11-A. Where a return is pending for consideration or where no return has been filed there cannot be said to be a final assessment, and the stage for the application of section 11-A is not reached. 17.. In the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver and rule 19 begins to operate. When the registered dealer has filed his return the assessment proceedings are on the way, and if they are not attended to due to want of time or leisureliness on the part of the Department it cannot be said that the process of first assessment is over. It is after the first assessment has been made and there is something which needs to be corrected or some assessment to be added to the assessment already made that section 11-A comes into the picture. Whenever such a contingency arises the rectification of the assessment for any of the four reasons detailed by us above has to be made within three calendar years as stated in the section. This limitation cannot be read backwards into section 11. As their Lordships themselves observed, following the dictum of Ramkin, C.J., there is no action for escaped assessment when the assessment proceedings themselves are pending. Their Lordships in the two cases to which we have referred stated that there was no other period of limitation prescribed in the Income-tax Act. We feel that we should say the same of the present Act as well. Assessment proceedings are not limited by time in this Act and can be carried ..... X X X X Extracts X X X X X X X X Extracts X X X X
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