TMI Blog1984 (4) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said assessment periods to the dealer. These notices were served on one Purshottam Darshi who was then an employee of the dealer, but was not an agent of the dealer as provided in rule 2(i) of the Bombay Sales Tax (Procedure) Rules, 1954. In pursuance to these notices the dealer's Advocate Mr. P.S. Agarwal attended before the Sales Tax Officer and filed objections to the proposed reassessment of the dealer under section 15 of the Act. He also sought adjournment of the proceedings. In the said letter of objections the validity of service of notices of reassessment in form No. XIV was not challenged. In due course on March 16, 1963, the Sales Tax Officer passed orders of reassessment under section 15 of the Act bringing to tax the turnover of purchases and sales which according to the Sales Tax Officer had escaped assessment. The dealer challenged these orders of the reassessment by filing appeal before the Assistant Commissioner of Sales Tax. The point regarding the validity of service of notices of reassessment in form No. XIV was not canvassed in this appeal and the challenge was restricted to the merits of the case. The Assistant Commissioner, however, upheld the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was bad in law as there was no proper service of notice under section 15 of the Act read with rule 47(1)(i) of the Bombay Sales Tax (Procedure) Rules, 1954, governing the service of notices. It was held in that case that service of notice was neither on the dealer nor on the agent as defined in rule 2(i) of the said Rules. Thereafter, the revision applications of the dealer were heard by the Tribunal and it was then for the first time that the dealer raised the contention that the reassessment proceedings were invalid as the service of the notice on Purshottam Darshi was bad in law because he was not an agent of the dealer as defined in rule 2(i) and as per rule 47(1)(i) of the Bombay Sales Tax (Procedure) Rules, 1954, notice can be served on the dealer or his agent. In support of the contention, the dealer relied on the decision in Ravani's case. It was contended on behalf of the dealer that the mere fact that his Advocate had appeared and filed objections to the reassessment would not cure the defect in the service of notice. In other words, it was contended that the proper service of notice as required by the rules was a condition precedent for initiating reassessment proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rassessed or assessed at a lower rate or any deductions have been wrongly made therefrom, the Collector may in any case where such turnover has escaped assessment or has been under-assessed or assessed at a lower rate for the reason that the provisions of sub-section (1) of section 2 of the Bombay Sales Tax (Validating Provisions) Act, 1957, were not then enacted, at any time, within eight years, and in any case where he has reason to believe that the dealer has concealed the particulars of such sales or purchases or has knowingly furnished incorrect returns, at any time within eight years, and in any other case, at any other time within five years of the end of that year, serve on the dealer liable to pay the tax in respect of such turnover a notice containing all or any of the requirements which may be included in a notice under sub-section (3) of section 14 and may proceed to assess or reassess the amount of the tax due from such dealer and the provisions of the Act shall apply accordingly as if the notice were a notice served under that sub-section. Sub-section (3) of section 14 which is referred to in section 15 relates to the issue of a notice in regular assessment proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n before any sales tax authority. Section 43 of the Act provides for appearance before any authority in the proceedings under the Act and as per clauses (a) and (c) thereof any person who is entitled to attend before any authority in connection with any proceedings under this Act may attend before the authority (a) by a person authorised by him in this behalf being his relative or a person regularly employed by him or (c) subject to such conditions as may be prescribed, by an accountant or sales tax practitioner who possesses the prescribed qualifications. Now, it is not disputed that in this case the notice has not been served on the dealer. It is also not disputed that the person on whom the notice is served is not a person authorised in writing under clause (a) or (c) of section 43 to appear on behalf of the dealer before the sales tax authority which means that the notice has not been served on the agent as defined by section 2(i) of the Rules. It is well-settled that the service of a valid notice is the foundation of jurisdiction of the Sales Tax Officer in making the reassessment order. We may only refer in this connection the decision of this Court in S.K. Manekia v. Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by rule 47 of the Bombay Sales Tax (Procedure) Rules, 1954. (5) In the case of proceedings which have already started and where for the purposes of such proceedings the dealer has appointed an agent under clause (a) or (c) of section 43 of the Bombay Sales Tax Act, 1953, personal service can either be upon the dealer or his said agent. (6) Appearing before the sales tax authorities in order to contest the service of the notice and in the alternative to plead to the merits does not amount to waiver of or acquiescence in the invalidity or invalid service of a notice." The above conclusions would leave no room to doubt that on the interpretation of the relevant provisions of the Act and the Rules this Court has held that a Sales Tax Officer assumes jurisdiction to initiate proceedings of the assessment and make an order of reassessment only on the two conditions of a valid notice are satisfied, viz., (1) that it must be proved that a valid notice with the necessary particulars is issued and also (2) that the notice is duly served on the assessee. It is also clear that the notice gets invalidated not only by a defect in the notice itself, but also by wrong service of the notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no jurisdiction upon the reassessing authority to initiate proceedings in pursuance of such notice and to pass an order of reassessment. In a decision of a Division Bench of this Court in Commissioner of Sales Tax v. Paramount Industrial Stores [1976] 38 STC 555, the facts were that the Sales Tax Officer served on the assessee a notice under section 15(1) of the Bombay Sales Tax Act, 1953, stating inter alia that his sales and purchases for the period in question had escaped assessment and that he should attend the office on 19th April, 1956, to show cause against being reassessed in respect of the escaped turnover. 19th April, 1956, happened to be a public holiday, and therefore the Sales Tax Officer by his letter dated 18th April, 1956, requested the assessee to attend his office on 24th April, 1956, instead of 19th April, 1956. The Sales Tax Officer rejected the contention of the assessee that the notice served on him was defective and made a reassessment in respect of the escaped turnover. The Tribunal, however, took the view that the notice was defective because 19th April, 1956, was a public holiday and that the defect could not be cured after the expiry of five years from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce prescribed by section 34 cannot be regarded as a mere procedural requirement; it is only if the said notice is served on the assessee as required that the Income-tax Officer would be justified in taking proceedings against him. If no notice is issued or if the notice issued is shown to be invalid then the validity of the proceedings taken by the Income-tax Officer without a notice or in pursuance of an invalid notice would be illegal and void. That is the view taken by the Bombay and Calcutta High Courts in Commissioner of Income-tax v. Ramsukh Motilal [1955] 27 ITR 54 and R.K. Das Co. v. Commissioner of Income-tax [1956] 30 ITR 439 and we think that that view is right." Again in Commissioner of Income-tax, Kerala v. Thayaballi Mulla Jeevaji Kapasi [1967] 66 ITR 147 (SC), the Supreme Court held that the service of the notice prescribed by section 34 of the Indian Income-tax Act, 1922, for the purpose of commencing proceedings for reassessment is not a mere procedural requirement, but it is a condition precedent to the initiation of proceedings for assessment under section 34. A reference may also be made to the decision of a Full Bench of the Allahabad High Court in Laxmi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1962] 46 ITR 236. This decision of the Gujarat High Court has been elaborately considered by this Court in Manekia's case [1977] 39 STC 426 and the discussion of the Gujarat case in Manekia's case [1977] 39 STC 426 shows that the view taken by the Gujarat High Court has not been agreed with. We feel ourselves bound by the view taken by this Court in Manekia's case [1977] 39 STC 426 with which we respectfully agree. "Provided that he shall not so assess him in respect of the default specified in clause (a) unless the dealer has been first given a reasonable opportunity of being heard." Sub-section (1) of section 11A which deals with assessment on turnovers escaping assessment runs thus: "If in consequence of any information which has come into his possession, the Commissioner is satisfied that any turnover of a dealer during any period has been under-assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom, the Commissioner may, at any time within three calendar years from the expiry of such period, after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he considers necessary, pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. All that sections 11(4) and 11A(1) prescribe is that before taking proceedings against an assessee under those provisions, he should be given a reasonable opportunity of being heard. In fact, those sections do not speak of any notice. But rule 32 prescribes the manner in which the reasonable opportunity contemplated by those provisions should be afforded to the assessee. The period of 30 days prescribed in rule 32 is not mandatory. The rule itself says that ordinarily not less than 30 days' notice should be given. Therefore, the only question to be decided is whether the defects noticed in those notices had prejudiced the appellants." We have already pointed out above that the provisions of 34(1) of the Incometax Act, 1922, are in pari materia with those of section 15 of the Sales Tax Act, 1953, and those of section 22(2) of the Income-tax Act, 1922, are in pari materia with those of section 14(3) of the Sales Tax Act, 1953. It is further to be noted that unlike the provisions of section 15 of the Bombay Act with which we are concerned, section 11A of the C.P. and Berar Act merely refers to the dealer being given a reasonable opportunity of being heard before making an order ..... 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