TMI Blog1980 (1) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... dge of proceedings had the effect of vitiating the procedure, it was held that the assessee was estopped. The Division Bench distinguished the decision of Sri Krishna Chandra v. State of Uttar Pradesh[1972] 29 S.T.C. 635; 1971 U.P.T.C. 13. It need not be emphasised that notice under section 21 of the U.P. Sales Tax Act is jurisdictional. It is a condition precedent. The power to make inquiry arises only after service of notice. If the statutory condition is not complied the jurisdiction to make inquiry is non-existent. In proceedings which are without jurisdiction principle of estoppel cannot apply. In Commissioner of Sales Tax v. Haji Allah, BandaSales Tax Reference No. 538 of 1966 decided on 2-1-1969 (Allahabad High Court)., a Division Bench of this Court held there is no waiver or estoppel of notice under section 21. Similar is the view taken in Sikri Brothers and Co., Ganeshganj v. Commissioner of Sales TaxS.T. Case No. 35 of 1977 decided on 2-5-1979 (Allahabad High Court-Lucknow Bench). Brother Prem Prakash, J., has dealt with this question and after noticing authorities under the Income-tax Act held the proceedings to be invalid. In view of these decisions, it is difficult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or part thereof, has escaped assessment to tax or has been under-assessed or has been assessed to tax at a rate lower than that at which it is assessable under this Act, or any deductions or exemptions have been wrongly allowed in respect thereof, the assessing authority may, after issuing notice to the dealer and making such inquiry as it may consider necessary, assess or reassess the dealer or tax according to law: Provided that the tax shall be charged at the rate at which it would have been charged had the turnover not escaped assessment, or full assessment, as the case may be. (2) No order of assessment under sub-section (1) or under any other provision of this Act shall be made for any assessment year after the expiry of four years from the end of such year: Provided that where the notice under sub-section (1) has been served within such four years the assessment or reassessment to be made in pursuance of such notice may be made within one year of the date of the service of the notice even if the period of four years is thereby exceeded: Provided further that nothing contained in this section limiting the time within which any assessment or reassessment may be mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceedings is not a mere procedural requirement: the service of a prescribed notice on the assessee is a condition precedent to the validity of any reassessment made under section 34. If no notice is issued or if the notice issued is shown to be invalid then the proceedings taken by the Income-tax Officer without a notice or in pursuance of an invalid notice would be illegal and void." In view of these authorities it cannot be disputed that no proceedings could be initiated without issue and service of notice. Service of a notice for purpose of initiating proceedings under section 21 is not a mere procedural requirement but is a condition precedent. If no notice is issued or the notice issued is shown to be invalid or no notice has been served on the dealer the proceedings and the consequential order under section 21 will be illegal and void irrespective of the fact that the dealer gets knowledge of the proceedings under section 21. The words "after issuing" also do not make any difference as it has been held to mean the entire process of sending the notice and serving it. In Banarsi Debi v. Income-tax Officer[1964] 53 I.T.R. 100 at 108 (S.C.). , at page 108, it was observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to him." In Mahabir Singh v. Narain Tewari A.I.R. 1931 All. 490 (F.B.). , a Full Bench of this Court held: "By estoppel a jurisdiction cannot be conferred on a court where it has none." Reliance was placed by the 'learned standing counsel on section 6 of the Act, which is analogous to section 21 of the Civil Procedure Code and debars an assessee from raising question of jurisdiction in appeal or revision. From this it was argued that once an assessee participates he cannot turn round and challenge the jurisdiction. This, according to the learned counsel, was the legislative recognition of the principle of estoppel even in taxation proceedings. The argument is correct but partially. The bar created by section 6 is in respect of territorial and pecuniary jurisdiction only. The jurisdiction exercised under section 21 without service of notice is neither territorial nor pecuniary. It is a jurisdiction which pertains to the subject-matter and if no proceedings could be taken without issue and service of notice then the assessing authority could not assume jurisdiction only because the assessee consented or participated in the proceedings. In Commissioner of Income-tax v. Thayaballi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Maharaja Pratap Singh Bahadur[1956] 30 I.T.R. 484., the following principle has been reiterated: "Issue of a notice is a condition precedent to the exercise of jurisdiction under section 34 and there can be no waiver of it." In Mir Iqbal Hussain v. State of U.P.[1964] 52 I.T.R. 625., it has been held by this Court: "Even though an assessee filed the return in pursuance of a notice yet he can challenge the validity." In Bhagwan Devi v. Income-tax Officer[1979] 118 I.T.R. 906., it has been held that: "If the authority concerned does not acquire jurisdiction in the absence of a valid notice being served, the entire proceeding will be without jurisdiction and void and even consent on the part of the assessee would confer no jurisdiction on the Income-tax Officer." These decisions under the Income-tax Act and the Sales Tax Act hardly leave any scope for argument that proceedings for escaped assessment being invalid for want of notice do not become valid by participation of the assessee. It has vehemently been argued by the learned standing counsel that proceedings may not have been validated but the assessee is debarred on principle of estoppel from raising such question. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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