TMI Blog1954 (7) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... ay sales tax from 1st June, 1947, as its sales for the year 1945-46 exceeded Rs. 5,000. This notice was served on 3rd November, 1951. On 6th November, 1951, the petitioner moved the Commissioner of Sales Tax under Section 19 for an adjudication that it is not a dealer and the transactions done by it were not sales. On 28th April, 1952, the Commissioner passed the following order: "This is an application under Section 19 for determination whether the applicant is a dealer or not within the meaning of the Sales Tax Act. The applicant has stated that he is not carrying on the business of selling or supplying goods and that he owns a cotton press with which he presses the ginned cotton belonging to his clients and that he recovers only pressing charges. As the applicant does not carry on any business of selling or supplying goods, he is not a dealer as defined by Section 2(c) of the Sales Tax Act". 4.. On 20th November, 1952, the petitioner was served by the respondent No. 1 with a notice dated 17th November, 1952, in Form No. VI under Section 10 read with rule 22 of the rules framed under the Act, requiring it to submit 21 quarterly returns beginning from 1st June, 1947, and ending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been issued by the Sales Tax Commissioner. The case was fixed for hearing on 12th June, 1953. Accordingly on 9th April, 1953, a report was sent to the Commissioner as per his memo. No. 2639, dated 1st April, 1953, and notices were issued to the petitioner on 7th April, 1953, in Forms Nos. VI, XII and XXI. A notice was issued on 11th May, 1953, to show cause why action should not be taken under Section 24(1)(a) of the Act and this matter was fixed for hearing on 2nd May, 1953. 7.. Nothing was done on 2nd May, 1953. On 12th June, 1953, counsel for the assessee appeared and submitted blank returns with written statement for each quarter from 6th April, 1952. Then the notices in Forms Nos. VI and XII issued on 7th April, 1953, were can- celled and a fresh notice in Form No. VI was issued requiring the petitioner to submit returns from 8th September, 1950, to 31st March, 1953. Another notice in Form No. XII was issued. By this notice account books from 8th September, 1950, to 31st March, 1953, were ordered to be produced. A notice was also issued under Section 15(1) requiring the petitioner to produce the books of account from 1st June, 1947, to 7th September, 1950. The case was fixe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1953 that the petitioner's grievance that in view of the decision of the Commis- sioner it was not liable to assessment and the notice issued on 17th November, 1952, was contrary to law was accepted by the authorities by ordering withdrawal of the notice and that had induced the Court to refrain from passing a formal order quashing the proceedings, the peti- tioner has certainly a grievance which cannot be redressed by the Sales Tax Authorities who have proceeded not only to assess the petitioner but also to prosecute it. As appears from the return, the proceedings are likely to result in the assessment of the petitioner to tax which it will have to deposit before preferring an appeal against that order. In order to escape from such serious consequences and infringement of its funda- mental rights, relief by way of mandamus is the appropriate relief. This relief cannot be denied to it merely on the ground that it has not exhaust- ed the remedies available under the Sales Tax Act, which, in the cir- cumstances of this case, cannot be described as an adequate alternative remedy: Himmatlal v. State of Madhya Pradesh(1). 11.. From a perusal of the order passed by this Court on 25th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1952 Mad. 605. the petitioner's position in regard to his liability under the Sales Tax Act and the submission of returns prescribed thereunder." The directions conveyed to respondent No. 1 are not placed on record by the respondents. The return is silent as regards the statement made by the Additional Government Pleader. 13.. The learned Additional Government Pleader does not admit that he made the statement attributed to him. On being asked by the Court why he had not traversed the averments in the petition, he contend- ed that all the allegations in the petition which were not admitted in the return must be deemed to have been denied. He further submitted that the rules of pleadings in the Civil Procedure Code do not apply to pro- ceedings under Article 226. He also stated that he did not understand what a "traverse" was. These contentions cannot be accepted. An express denial of an allegation in a statement of claim is called a "traverse". When the matter is within the knowledge of the defendant, he generally denies any statement which he disputes. When it is not within his own knowledge, he usually "does not admit" it. Bullen and Leake's Precedents of Pleadings, 10th edition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return is required to be submitted. Therefore, the notice could be issued for the periods expiring with 31st December, 1951, and onwards. The notice issued on 17th November, 1952, for earlier periods was contrary to law even if it is assumed that the petitioner is a dealer. The notice in Form No. VI issued for periods ending prior to 31st December, 1951, is manifestly contrary to law. 16.. The order dated 25th February, 1953, refers to 21 returns required to be furnished by the notice dated 17th November, 1952. Since the petitioner's grievances in respect of all the 21 returns were redressed by the department, as conceded by the learned Additional Government Pleader, we hold that respondent No. 1 is not now entitled to issue notice in Form No. VI for any period from 8th September, 1950, to 30th September, 1952. 17.. The next question for consideration is whether the respondent No. 1 is otherwise entitled to issue notice in Form No. VI for the period from 8th September, 1950, to 31st March, 1953. As already pointed out, the notice in this form must be served within 12 months from the expiry of the period for which a return is required to be furnished. The notice was served on 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceeds five lakhs but does not exceed ten lakhs, or where the taxable turnover of the previous year exceeds one lakh but does not exceed two lakhs. In respect of dealers whose gross turnover and taxable turnover are less than these figures, the power may be delegated to an Assistant Sales Tax Officer. However, as the question of jurisdiction was not raised by the petitioner, we will assume for the purpose of this case that the Sales Tax Officer had jurisdiction to issue a notice in Form No. XII. The power under Section 10 to require an unregistered dealer to furnish returns is delegated to the Sales Tax Officer and not to the Assistant Sales Tax Officer. The conditions precedent for the commencement of proceedings under this sub-section are the satisfac- tion of the Sales Tax Officer that the dealer was liable to pay tax under the Act in respect of any period for which it is intended to commence proceedings and the satisfaction that the assessee has nevertheless wilfully failed to apply for registration. On satisfaction on both these grounds, the Sales Tax Officer is required to proceed to assess the amount of tax due from the dealer in respect of such period and all subsequent p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be mentioned in paragraphs 1 and 2 of the printed form, but those paragraphs were struck out in the particular notice. This notice by itself is therefore invalid for commencement of proceedings under Section 11(5). 21.. The submission of the learned Additional Government Pleader that notice under Section 10, sub-section (1), in Form No. VI is not obligatory is not well founded. Unregistered dealers may be classified into those: (a) Who have not submitted returns under a bona fide belief that they are not 'dealers' within the Act or their taxable turnover did not exceed the taxable quantum provided by Section 4 of the Act; and those (b) Who, believing that they were dealers and were liable to regis- tration, wilfully failed to apply for registration. The proceedings against dealers of class (a) cannot be commenced under Section 11, sub-section (5). They are to be commenced by a notice in Form No. VI under Section 10. The provisions dealing with assess- ments of registered dealers on their returns are Sections 11(1) to 11(3). No doubt, there is no provision for assessment of unregistered dealers who have filed the returns in response to such notice. This lacuna was removed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner for any period from 8th September, 1950, to 30th September, 1952. 23.. Now remains the question as regards the effect of the order of the Commissioner under Section 19. There is no ground to hold that the order is hypothetical and does not amount to a determination. This is not the plea in the return. It is not pleaded that the order was passed without any enquiry. The books of the petitioner were examined by respondent No. 1 before the former applied to the Commissioner for ad- judication under that section. All that is pleaded in the return is that the order is not conclusive and the Sales Tax Officer has jurisdiction to determine the matter on the evidence produced before him. There is no averment that any fresh evidence was before the respondent No. 1 when he issued the impugned notice. The alleged report of the Sales Tax Inspector, on which he purports to act, is prior to the date of examina- tion of the books of the petitioner. 24.. Section 19 which was omitted by the Amending Act, XX of 1953, which came into force 14th November, 1953, runs as follows: "If any question arises otherwise than in a proceeding before a Court whether for the purposes of this Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refers to both Civil and Criminal Courts. Section 20 invests the authorities men- tioned in the section with powers of a Court of Civil Jurisdiction under the Code of Civil Procedure for the purposes specified in that section. Section 21 bars the jurisdiction of a "Civil Court" over matters specified in that section. Section 23 provides for the power of the High Court under the Act. Section 24 provides for the jurisdiction of a Criminal Court over offences specified in that section. Section 27 requires that the documents specified in the section shall be kept confidential and provides that no Court shall require them to be produced. Neither the Commissioner nor any of the persons appointed to assist him to exercise the powers and perform the duties under the Act are anywhere described as Court. It is not suggested that the word "Court" in the sections referred to above includes any of these officers. 26.. The Board of Revenue seems to have based its interpretation on the definition of "Court" in the Indian Evidence Act. It is: "'Court' includes all Judges and Magistrates and all persons, except arbitrators, legally authorised to take evidence. " This definition is not exhaustive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not "Courts of original civil jurisdiction". It is therefore clear that an authority charged with the assessment and levy of a tax is not a Court of law merely because it has to determine the liability of the assessee according to the statute and not arbitrarily. The authority has to act quasi-judicially. It is therefore incorrect to say that the proceedings under Section 19 of the Act are not even quasi-judicial proceedings and the determination of the Commissioner is not of a binding nature. In our view, the Board of Revenue is in error in holding that the jurisdiction of the Commissioner under Section 19 is merely consultative and advisory. Therefore the Sales Tax Officer was bound by the determination of the Commissioner under Section 19 and he could not issue a notice either in Form No. VI or in Form No. XII to the petitioner who is held not to be a dealer. (1) I.L.R. 1941 Nag. 588. 28. At this stage it would be convenient to examine the precise decision of the Commissioner. The Commissioner accepted the conten- tion of the petitioner that it owned a godown press with which it pressed ginned cotton belonging to his clients and that it recovered only pressing charges. If th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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