TMI Blog1970 (3) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... nwar, Assistant Sales Tax Officer, New Delhi, the Commissioner of Sales Tax, Delhi, Union of India, and the Delhi Administration have been made respondents Nos. 2 to 5 respectively. The petitioner-company is a dealer in Delhi, registered under the Act. In the assessment year 1964-65 the petitioner filed returns of its turnover and deposited the advance tax, as required under the Act for the first and third quarters. For the second quarter, its return was not traceable in the sales tax office and was treated as not having been filed; nor was any tax deposited for the said quarter. The return for the fourth quarter was filed late and the advance tax was not paid in full. On August 5, 1965, respondent No. 2 purporting to act as Assistant Sales Tax Officer, the appropriate assessing authority under sub-section (1) of section 11 of the Act read with rule 32 of the Rules, issued a notice in form ST XIV to the petitioner for the purpose of making an assessment under the Act, for the year 1964-65. In response thereto, the petitioner put in appearance before the Sales Tax Officer. Ultimately, on May 25, 1968, respondent No. 1, in exercise of the powers under sub-section (1) of section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble basis for differentiating between persons similarly situated in the matter of application of these parallel provisions which aim at the same objective in clear violation of article 14 of the Constitution of India. The petitioner has accordingly filed this petition praying for the reliefs stated above. The contentions of Shri Saharya, the learned counsel for the petitioner, thus, are twofold: (a) that the assessment order dated May 25, 1968, which has since merged in the orders in appeal and revision respectively, is bad and ineffective, as the required notice under sub-section (1) of section 11 of the Act was not issued. The notice dated August 5, 1965, issued by respondent No. 2 is no notice in the eyes of law as respondent No. 2 was not competent to issue the same; and (b) that the assessment made under section 11 is bad as article 14 of the Constitution of India is violated inasmuch as section 11(1) of the Act gives arbitrary, uncanalised and unguided discretion to the assessing authority to proceed in a summary manner against the dealer under the said section rather than under a similar provision contained in section 22 of the Act, which envisages a judicial prosecution i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, he could not make the appointment retrospectively. Such being the case, respondent No. 2 clearly had no competence to issue notice in form ST XIV dated August 5, 1965, as the assessing authority. The said notice, therefore, is invalid and non-existent in the eyes of law. The question then arises whether the subsequent assessment initiated by the said notice is bad. According to Shri Saharya, in the absence of such notice, subsequent proceedings would be of no avail and futile. The liability of the dealer to be assessed commences, according to him, only when a notice in form ST XIV is issued by the assessing authority, such notice being a condition precedent to the validity of the assessment. In order to decide whether such notice is a condition precedent, the language used in the provisions of the Act has to be examined. The relevant provisions are contained in sections 10 and 11 (1) of the Act, which are in the following terms: "10. Payment of tax and returns.-(1) Tax payable under this Act shall be paid in the manner hereinafter provided at such intervals as may be prescribed. (2) Such dealers as may be required so to do by the Commissioner by notice served in the presc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to make the assessment in such manner as may be prescribed. Now the manner in which the Commissioner is required to proceed for the purpose of making the assessment has been prescribed in rules 32 to 38, the relevant rules being rules 32 and 36. It is under rule 32 that the notice in form ST XIV calling upon the dealer, inter alia, to produce the books and other documents together with any objections which the dealer may wish to prefer, is required to be served by the appropriate authority on the dealer. The assessing authority, under rule 36, after considering the objections of the dealer and evidence produced by him and after giving him an opportunity of being heard, assess the amount of tax, if any. The service of the notice is, thus, a part of the manner or the procedure, which is required to be followed by the assessing authority for the assessment of the tax due from the dealer. The Act, thus, does not make the service of a notice a condition precedent for the assessment of tax as was contended by Shri Saharya. The case of B. C. Samathanmath v. Commercial Tax Officer, I Circle, Hubli[1969] 24 S.T.C. 252., on which reliance was placed by Shri Saharya, and where it was held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act and the sending of the notice has been made there a condition precedent. But an entirely different language has been used in section 11(1), where notice has not been mentioned at all. The sending of the notice, therefore, is not a condition precedent to the making of a best judgment assessment under the said section. It has not been lifted out of the realm of procedure; on the other hand, it has been left to form a part of the procedure or the manner which has been prescribed by the rules as required under section 11 (1). The disregard of this procedure may amount to an irregularity. It cannot be regarded as a case of lack of jurisdiction. The only requirement is that the dealer concerned has to be given a reasonable opportunity of being heard. Although the notice dated August 5, 1965, issued by respondent No. 2 in this case has to be disregarded, the petitioner did put in appearance before respondent No. 1, and had the assessment made only after it had full opportunity of being heard and of placing its account books and objections before the authority concerned. The requirements of section 11(1) was, therefore, satisfied. The want of notice may be an irregularity in the assu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lenged. The assessee cannot complain of want of notice in regard to a matter which he did not dispute. The petitioner in the present case was duty bound under section 10(3) of the Act to pay the amount of tax on his turnover. If, therefore, as a result of the assessment, he has been asked to pay the said amount, no illegality can be said to have been committed. While making the assessment, the assessing authority was satisfied that the default, in furnishing the return and in paying the full amount of the tax due, was made without any reasonable cause. He had, therefore, the power under section 11(1) to direct that the dealer should pay by way of penalty in addition to the amount of the tax a sum not exceeding one and a half times that amount. The absence of the notice did not result in the violation of the principles of natural justice, inasmuch as the petitioner in this case had the opportunity of being heard and making its objections, even to the levy of penalty. This is clear from the assessment order itself, where it is mentioned that "the dealer explained that it was due to shortage of finance as the payments were held up, that the amount was not deposited in full." The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rent Recovery) Act, conferring an additional remedy over and above the ordinary remedy by way of a suit, was considered and it was held that by providing two alternative remedies to the Government and leaving it to the unguided discretion of the Collector to resort to one or the other and to pick and choose some of those in occupation of the public properties and premises for the application of the more drastic procedure under section 5, that section has lent itself open to charge of discrimination and as being violative of article 14. Section 5 under these circumstances was declared to be void. But, the present case is entirely different. The impugned provisions of the Act, as discussed hereinafter, are intended to serve an entirely different purpose. The learned counsel also cited Grand Cinema, Mansa v. Entertainment Tax Officer, BhatindaA.I.R. 1969 Punj. Har. 98., where the court examined section 14 of the Punjab Entertainments Duty Act. The offences and penalties in section 14-A are the same as in section 15(1) with only one difference that a prescribed authority imposes the penalty under section 14-A while a trial before a Magistrate is held under section 15. For the same o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficient safeguards and we do not consider that there is any violation of the guarantee under article 14 of the Constitution." This true character of the penalty provisions in section 11(1) which are thus designed to provide safeguards against an otherwise inelastic provision for launching a criminal prosecution cannot be lost sight of. The two provisions, one for imposing a penalty and the other for launching a prosecution, in substance are not alternate to each other; but are separate and independent. Section 11(1) deals with the case of the registered dealer, while section 22(1)(b) deals with dealers in general, both registered as well as unregistered. Section 11(1) is designed to tackle cases where the emphasis is more on the non-payment of tax by a registered dealer under section 10(3), while section 22(1)(b) is designed to tackle cases of non-submission of returns only as required by section 10(2). The learned counsel contends that the default under section 10(2) is included in the default under section 10(3) referred to in section 11(1) as the return, if not accompanied by a receipt as required by subsection (3) of section 10 may be no return in the eyes of law. There may ..... X X X X Extracts X X X X X X X X Extracts X X X X
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