9911796707
TMI Blog1968 (8) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... shed the notice dated March 16, 1963, and the proceedings for assessment to sales tax initiated by the respondent for the year 1955-56. The respondent is a partnership firm which has been carrying on the business of a draper at Indore. The firm was registered as a "dealer" under the Madhya Bharat Sales Tax Act, 1950, hereinafter referred to as "the Act". For the year 1955-56 the respondent failed to submit its return whereupon the Sales Tax Officer, Indore, made an order under section 8(1)(b) of the Act and after determining the turnover of the respondent for the said period to the best of his judgment, made an assessment of the respondent to sales tax on the basis thereof. The respondent took the matter in revision to the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated July 18, 1963, was set aside and the appellant was directed to forbear from proceeding with the assessment to sales tax for the year 1955-56. It is necessary at this stage to set out the relevant provisions of the Act as they stood at the material time. Section 8(1)(a) and (b) is to the following effect: "8. (1)(a) Assessment of taxable turnover and determination of tax due for any year, shall be made after the returns for all the periods of that year have become due: Provided that in the case of Melas the assessment shall be made as soon as the return of turnover has been received. (b) Notwithstanding anything contained in clause (a), if any dealer fails to submit a return under section 7(1) for the prescribed period with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat section 10 provided a period of three years for "escaped turnover" and no turnover could be said to have escaped when once proceedings were properly initiated and were pending, It was contended for the appellant that the sales tax authorities had jurisdiction to assess the respondent to sales tax for the year 1955-56 and the High Court was not right in holding that the assessment for that period was barred by time. In our opinion, the argument put forward on behalf of the appellant is well-founded and must be accepted as correct. It is not disputed in the present case that the respondent was a registered dealer under the Act and on August 13, 1956, the Sales Tax Officer, Indore, made an order of assessment under section 8(1)(b) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (b) it cannot be said that the turnover has escaped assessment unless the proceedings have come to a close. In the present case, the proceedings were initiated after the respondent failed to submit a return and the Sales Tax Officer made an order of assessment under section 8(1)(b) which was set aside by the Commissioner of Sales Tax in revision and the case was remanded back to the Sales Tax Officer for issuing a fresh notice under section 8(1)(b) and making an assessment after giving an opportunity to the respondent to be heard. The proceedings for assessment have remained pending with the Sales Tax Officer and it is therefore not a case of escaped assessment and the provisions contained in section 10 of the Act have no application to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessment proceedings were barred by limitation under section 11-A of the Act. This plea was rejected and his tax liability was determined. The appellant then filed another writ petition for a similar relief for that year. The contention was that whatever may be said in respect of an unregistered dealer, in the case of a registered dealer the proceedings commence from the date of the registration certificate within which he has a statutory obligation to furnish his returns. It was held by this court that assessment proceedings under the Act must be held to be pending from the time they are initiated until they are terminated by a final order of assessment. It was also held that in the case of a registered dealer there would be f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ending till the final assessment is made. The court proceeded to observe that even in a case where no return has been made, but the Commissioner initiates proceedings by issuing the notice either under section 10(3) or under section 11(4), the proceedings would be pending till the final assessment is made. This decision therefore clearly lays down the principle that in the case of a registered dealer the proceedings before the Commissioner start factually when a return is made or a notice is issued and no question of limitation would arise where such proceedings are taken before the expiry of the prescribed period of three years though an assessment order is finalised after the expiry of such period. In other words, the assessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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