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TMI Blog1962 (4) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner was in the normal course assessed to sales tax for three years included in the period from 24th October, 1957, to 19th October, 1960. On 17th October, 1961, three notices in respect of the three accounting years stated above were issued to the petitioner under section 19 of the Act for escaped assessment. The notices directed the petitioner to appear before the Sales Tax Officer with account books for the period. It was mentioned in the notices that they had been issued on the basis of a report made by Shri Ghai, the Sales Tax Inspector. It appears that on 10th October, 1961, the Sales Tax Inspector paid a visit to the shop of the petitioner for checking the account books. During this checking the Inspector discovered that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on 10th October, 1961; and that they had not been issued because of any satisfaction of the assessing authority in consequence of any information coming into his possession with regard to the escaped assessment. It is also contended that the applicant was not given adequate opportunity to meet the case of reassessment and the best judgment assessments made by the assessing authority were arbitrary, capricious and without the exercise of any judgment at all. 4.. Section 19 of the Act was amended by the Madhya Pradesh General Sales Tax (Amendment) Act, 1961. The amendment came into force from the 1st June, 1961. The notices that were issued to the petitioner on 17th October, 1961, were not on the basis of the amended provision but they pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch manner as may be prescribed, to reassess the tax payable by such dealer, 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. It will be noticed that by the amendment the words "the Commissioner, in consequence of any information, which has come into his possession, is satisfied that", which formerly occurred in section 19, have been substituted by the words "if for any reason". As will be shown presently, this amendment is of a very important character. Now, rule 33 of the Madhya Pradesh General Sales Tax Rules, 1959, so far as it is material here, prescribes that "(1) Where (f) the sale or purchase of goods by a dealer during any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amendment effected in section 19(1) has been made. The result is that though section 19(1) has been amended in material particulars, the form reproduced above still continues to be used as the form of notice under section 19(1). 5.. If the matter had to be decided with reference to the unamended section 19, then we would have had no hesitation in rejecting the contention of the petitioner that the notices issued under section 19 were bad and invalid and the reassessments made were without jurisdiction. But the case is now governed by the amended section 19(1) and on that provision and rule 33, as it stands, the notices issued to the petitioner are fundamentally defective and invalid. For the applicability of section 19(1) the requisit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be, the result of the amendment actually effected is that proceedings under section 19(1) cannot now be initiated merely on the chance of underassessment or escaped assessment or assessment at a lower rate or a wrong deduction being established in those proceedings. They can be founded now only on some definite facts showing under-assessment, or escaped assessment, or assessment at a lower rate or a wrong deduction for any reason. 6.. Now, it cannot be disputed that the issue of a notice is a condition precedent to the validity of an assessment under section 19(1). Under section 19(1) the dealer has a right to be heard and of making his submissions against the reassessment. This right implies the issue of a notice to the dealer giving h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it stood before the amendment, is wholly inconsistent with, and altogether outside, the scope of the amended section 19(1). Each of the three notices stated that the Assistant Sales Tax Officer was satisfied that the petitioner's sale or purchase during the material period had been under-assessed/ had escaped assessment and that the applicant had rendered himself liable to assessment and to penalty under section 19(1) of the Act. These notices cannot, therefore, be regarded as valid notices under section 19(1) giving to the petitioner information about the escaped assessment and the reasons leading to the escapement of the assessment. It was absolutely essential for the rule-making authority to amend form XVI so as to bring it in conformity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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