TMI Blog1993 (11) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... s of manufacture and sale of cotton cloth, niwar, etc. For the assessment year 1981-82, the assessee was assessed under the U.P. Sales Tax Act by the Sales Tax Officer, Sector IX, Kanpur, on January 30, 1984. It has been alleged that the entire turnover was disclosed by the assessee and after assessment proceedings the entire turnover was taxed by the assessment order mentioned above by the Sales Tax Officer. It has been alleged by the assessee that though no part of the turnover has escaped assessment yet the Deputy Commissioner (Executive), Sales Tax, Kanpur Range, Kanpur, respondent No. 2, issued the impugned notice on the ground that the petitioner has made supply of cotton rope to D.G.S. D., Kanpur, regarding which the sale has escaped assessment, hence assessment proceedings were initiated against the petitioner under section 10-B of the Act. A perusal of the impugned notice dated December 8, 1987, copy of which has been filed as annexure 2 to the writ petition, clearly reveals that the action has been initiated against the petitioner only on the ground that the turnover of supply made to D.G.S. D., Kanpur, has escaped assessment and no tax has been levied on the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereto as he thinks fit. In the instant case, there is no manner of doubt that the respondent No. 2 has not invoked the jurisdiction conferred on it under section 10-B of the Act for satisfying itself about the propriety or legality of the assessment order dated January 30, 1984, relating to the assessment year 1981-82. On the contrary, the power conferred under section 10-B has been pressed into service by the respondent for levying tax on the escaped turnover of the assessee during the assessment year 1981-82. Counsel for the assessee has frankly conceded before us that if any part of the turnover of the assessee has escaped assessment during the assessment year in question, the only provision under which the proceedings could be initiated against the petitioner for reassessment on the escaped turnover is section 21 of the Act. We, therefore, propose to refer to the provision of section 21 also before recording our findings on the controversy involved in so far as it is relevant for the purposes of the present case which is as under: "Section 21: Assessment of tax on the turnover not assessed during the year.-(1) If the assessing authority has reason to believe that the whole ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the assessee escaped assessment, then the only provision under which proceedings can be initiated for assessment is section 21, of course, sub-clause (2), of the Act. Counsel for the parties have stated before us that there is no authority on the point either in favour or against proposition canvassed before us. Learned counsel for the petitioner has submitted before us that a similar controversy arose before the Calcutta High Court under the Income-tax Act. He contended that section 10-B of the Act was in pari materia to the provision in section 263 of the Income-tax Act, 1961 and in that case, it was held that the proceedings under section 263 of the Income-tax Act, 1961 which is in pari materia to the provisions of section 10-B of the Act could not have been initiated against the petitioner. In order to appreciate the arguments of the counsel for the petitioner and also for arriving at the conclusion whether the ratio laid down in the case of Ganga Properties v. Income-tax Officer reported in [1979] 118 ITR 447 (Cal) is applicable or not we would like to refer to the provisions of section 263 of the Income-tax Act, 1961, which reads as under: "263(1) The Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment on which no impost has been levied. The facts of the case of Ganga Properties [1979] 118 ITR 447 (Cal) in short were that the petitioner-company sold lands to different persons for a total sum of Rs. 7,51,512 and in its return of income declared the same as the full value of the consideration received by it for purposes of computation of capital gains. The Income-tax Officer in the assessment proceedings referred the valuation of lands to the Valuation Officer under section 55-A of the Income-tax Act, 1961, and in his assessment order dated March 22, 1974, recorded that as there was no possibility of getting the valuation report by March 31, 1974, he would accept the value of the consideration as declared by the petitioner for the present till such time as the Valuation Officer gave his report, and action, if necessary, would then be taken according to the provisions of the Act. The petitioner paid the tax as demanded by the Income-tax Officer. Thereafter, the Commissioner issued under section 263 of the Act a notice to the petitioner on the ground that the Valuation Officer had valued the fair market value of the asset at Rs. 10,85,250 in place of Rs. 7,51,512 declared b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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