TMI Blog1975 (5) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... AY. C. J.- These appeals by special leave raise the question of the validity of notices of demand under the Assam Taxation (on Goods carried by Road or on Inland Waterways) Act, 1961 hereinafter referred to as the New Act. The Assam Taxation (on good-, carried by road or Inland Waterways) Act, 1954 hereinafter referred to as the Old Act was passed by the Assam Legislature in 1954. On 26 September, 1960 this (Court declared the Old Act to be ultra vires the Constitution on the ground that prior sanction of the President was not taken. On 6 April, 1961 the New Act was passed by the Assam Legislature. The New Act was published in the Gazette on 15 April, 1961. The New Act Was to remain in force with retrospective effect from 24 April, 1954 up to 1 March, 1962. On 28 July, 1961 the New Act was challenged by about 485 assesses in the Assam High Court. The High Court passed an order staying all proceedings. The order staying proceedings continued till the New Act was held ultra vires the Constitution by the High Court. On 1 August, 1963, the High Court held the New Act to be ultra vires. On 1 August, 1963 the High Court granted certificate of fitness to appeal to this Court. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in section 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. The High Court held that the provisions contained in the Limitation Act do not apply to legislation of the type of the New Act. Section 3 of the New Act is the charging section. Under that section tax is levied on (a) manufactured tea and (b) jute in bales carried by means mentioned therein. The period and the rate for taxes are specified in the Schedule. The tax levied on manufactured tea shall be realised from the producer. The tax levied on jute shall be realised from the dealer. Section 7 of the New Act speaks of return. There are four subsections of section 7. The first sub-section requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such form and to such authority a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade the return, fails to comply with the terms of the notice issued under sub-section (2) (A section 9, the Commissioner shall, by an order in writing, assess so the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the Commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of the notice issued under sub-section (2) of section 9. The Rules under the New Act are framed under section 32 of the New Act. Rule No. 6 states that every dealer or producer shall furnish returns of the total gross weight of jute or tea carried to the Superintendent in Form 1. Rule No. 8 states that the notice referred to in sub-section (2) of section 7 may be issued to dealer or producer who have failed to submit returns within the period mentioned subsection (3) of section 7. The notices shall be in Form 11. Rule No. 9 states that every dealer or producer shall submit to the Superintendent every quarter a return so as to reach that officer on or before the dates therein. 30 April, 30 July, 30 October and 30 January are the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... December, 1961 or for the period 1 January, 1962 to 31 March, 1962 the State could not issue any notice by reason of stay of proceedings granted by the High Court on 10 August, 1961. It was said that when this Court on 28 October, 1964 granted interim stay of operation of the High Court judgment dated 1 August, 1963 it was possible for the State to issue notice. The State issued notice within two years from 28 October, 1964. It was also said that if the period of two years be counted from 13 December, 1963 when this Court pronounced the New Act to be valid in the case of Khyerbari Tea Co. Ltd. (supra) the notices would be within the period of two years from 13 December, 1963. It was, emphasised by the Solicitor General that an act of Court granting stay of the proceedings should not be permitted to act adversely to the interest of the Sate against whom the injunction was granted. The second contention of the Solicitor General was that section 9(4) of the New Act confers power on the Commissioner to assess to the best of his judgment if a producer or dealer fails to furnish a return as required by section 7 or having made the return fails to comply with the terms of the notice is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he period of return is unsound on principle and facts. The maxim lex non cogit ad impossibilia means that the law does not compel a man to do that which he cannot possibly perform. In the present appeals, the applications were moved in the High Court for stay of proceedings. The respondents challenged the validity of the Act, and, therefore, asked for an injunction restraining the State from taking proceedings under the Act. At no stage, did the State ask for variation or modification of, the order of injunction. It is well known that if it is brought to the notice of a court that proceedings are likely to be barred by time by reason of any order of injunction or stay the court passes such suitable or appropriate orders as will protect the interest of the parties and will not prejudice either party. Even when certificate to appeal to this Court was granted on 1 August, 1963, the State did not ask for any order for stay of operation of the judgment. That is quite often done. For the first time, on 10 August, 1964 the State filed an application for stay of operation of the judgment of the High Court. The State did not take steps at the appropriate time. This Court on 28 October, 1964 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return under sub-section (1) of section 7 of the New Act is to read new words into the legislation. In order to have the best judgment assessment under section 9 (4) of the New Act, there must be first a failure to furnish a return under section 7(1) of the New Act or a failure, to furnish a return after notice under section 7(2). of the New Act. Further, the contention of the Solicitor General means that there will never be any question of limitation of time with regard to service of notice by the Commissioner to file a return. Section 7 (2) of the New Act is a section conferring power and jurisdiction on the authorities to tax by calling upon the producer or dealer to file a return within the time mentioned therein. H a return under section 7(1) is not made, the service of a notice under section 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under section 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under section 9(4) of the New Act without service of a notice under section 7(2) of the New Act within two years in case where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stated in the section. In the Assam case (supra) the assesses received a notice in 1961 to furnish returns for the years 1949-50 to 1953-54. The assesses did not submit any return. Thereafter they received a IC SC/75-25 It is against principle to suggest that the appellants did anything wrong or they are taking advantage of anything wrong. Jessel, M. R. :in Re. Hallet's. Estate Knatchbtull v. Hallett 13 Ch. D. 696 at page 727 said Now, first upon principle, nothing can be better settled', either in our own law, or, I suppose, the law of all civilised countries, than this, that where a man does an act which may be rightfully performed, he cannot say that act was intentionally and in fact done wrongly . The respondents were entitled to impeach the statute under which they were made liable. The respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the illigation to take directions from the Count to serve notices of demand upon the appellants to keep alive the right of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat waiver is an agreement to release or not to assert a right. There is no such thing as estoppel by waiver . The two decisions an which the Solicitor General relied in support of the application of the principle of waiver in these appeals are Vellayan Chettiar v. Province of Madras, 74 1. A. 223 and Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd. 1971 A.C. 850. In Vellayan Chettiar's ease (supra) it was held where the Secretary of, State took objection to the sufficiency of notice under section 80 of the Code of Civil Procedure in his written statement, but raised no issue on the point when issues were settled, and took no objection during the trial, the Court held that another defendant was not competent to raise this issue at a later stage as the Secretary of State had waived notice. A notice under section 80 of the Code of Civil Procedure is procedural with regard to institution of a suit. A notice under section 80 of the Code of Civil Procedure is not a part of the cause of action. In the notice under section 80 of the Code of Civil Procedure the cause of action has to be stated. In the case of Kammins Balrooms Co. (supra) the tenants made a reques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he returns for the quarters mentioned in the writ petitions. These were the notices that the respondents successfully challenged before the High Court. The question which arose for consideration before the High Court of Assam was, whether, since no notices were issued within the time specified in s.7(2) of the Act, the respondents could be called upon to file returns. Before we proceed to consider the question, it is necessary to set out the relevant provisions of the Act. The Act is an Act to levy a tax on goods carried by vehicles. Section 3(1) is the charging section and it says that subject to the provisions of the Act, there shall be levied a tax on (a) manufactured tea and (b) jute in bales carried by Motor vehicle, cart, trolley, boat, animal and human agency or any other means except railways and airways in such manner and in respect of such period and at such rate as specified in the schedule. Sub-sections (1) and (2) of s.7 read: (1) Every producer and dealer shall furnish returns of manufactured tea carried in tea containers and of jute carried in bales in such form and to such authority as may be prescribed. (2) In the case of any producer or dealer who, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Commissioner to issue the notices within that period by an act of the Court. He submitted that the liability to submit the return was created by s.7(1) and that issue of notice under s.7(2) was only a step in the procedure for making the assessment and therefore if a dealer failed to make the return in accordance with s.7 which, of course, would include the liability created by s. 7(1) to file the return, it would be open to the appropriate officer to assess the dealer to the best of his judgment under s.9(4) and therefore, even if no notice under s.7(2) was issued within the two-year period, that would not in any way disable the officer concerned to make a best-judgment-assessment under s.9(4). He further submitted that by obtaining and enjoying the benefit of the orders of injunction, the respondents must be deemed to have waived their right to insist upon the notices within the period specified in s.7(2). He contended that after having successfully prevented the Commissioner from issuing the notices within the period by obtaining the orders of injunction, the respondents should not be heard to say that they were entitled to notices within the period specified in s.7(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature as it ultimately turned out to be by the decision of this Court. The Court issued the orders of injunction on the basis of its view that the respondents had a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the injunction orders operated or within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the' period by obtaining the orders of injunction. When the orders of injunction were passed by the Court restraining the appellants from taking any proceedings under the Act, could the Commissioner have issued the notices? Clearly not. If it was impossible for the Commissioner to issue the notices to the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suing the notices. Let us assume that the provision for issue of notice within the period specified in s.7(2) was mandatory and was a condition precedent for the liability to file the returns. Even so, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. In other words, even if the issue of notices within the period provided in s.7(2) was mandatory and no liability to file the returns arose until the notices were issued, the respondents could have waived the benefit of the notices as the issue of notices was only for the benefit of the respondents and did not subserve any principle of public policy. In Vellavan Chettiar v. Province of Madras (1) the question arose whether notice under the provision of s. 80 of the Civil Procedure Code was mandatory and could be waived by the party entitled to it. The Privy Council said that although the provision for issue of notice was mandatory, the party which was entitled to the benefit of notice could waive it. The language of s. 7(2) is, no doubt, mandatory, but the sub-section was not enacted on the basis of Any public policy. Its purpose is only to give a dealer notice of his duty to su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place, the event of which was a verdict in favour of the defendant, upon which judgment was entered up, could the whole proceedings have been set aside because there was no affidavit? It is clear that they could not. The question then is, what is the meaning of the statute of Anne ? In my opinion, that Act had not any-public policy for its object, but solely the protection of plaintiffs against the delivery and effect of dilatory pleas. It enacts, that no such plea shall be received, unless verified by affidavit. If a plaintiff chooses to waive that provision, which is introduced for his benefit, he cannot afterwards sign judgment for want of such affidavit....... Parke B. said I concur in opinion with the Lord Chief Baron. The present affidavit is equivalent to no affidavit. The question then is, what is the meaning of the statute of Anne, which requires an affidavit of verification as a condition precedent to a valid plea in abatement ? If that enactment be intended for the sole benefit of plaintiffs, then the maxim applies 'Quilebet potest renunciare juri pro se introducto . It is evident that the requirements of that statute are solely for the benefit of plaintiffs, and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9; so as to prevent him from 'reprobating'-in English terms, whether he has elected to get some advantage to which he would not otherwise have been entitled, so as to deny to him a later election to the contrary (see per Lord Shaw in Pitman v. Crum Ewing, (1911) A. C. 217, at p. 239. His knowledge is necessary, or he cannot be said to have approbated or elected. In Corporation of Torounto v. Russell the Judicial Committee held that where a notice in writing of intention to purchase compulsorily was required to be given to the owner of lands, the provision being entirely for his benefit, he might waive it. The High Court granted the orders of injunction on the basis that there was a prima facie case for the respondents. The High Court held that the Act was invalid on the basis of its view that it was ultra vires the powers ofthe State Legislature. But when this Court declared that the High Court was wrong and that the Act was valid, justice requires that neither the order of injunction nor the order of the High Court declaring the Act invalid should prejudice the rights of the parties as ultimately declared. No act of a court should prejudice a party. That is the firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nor is there any substance in the argument of the respondents that the appellants should have approached this Court when this Court by its judgment in Khyerbari Tea Co. Ltd. case (supra) declared the Act to be intra vires and moved the Court for stay of the operation of the judgment of the High Court. We think that the appellants were bound to appeal to this Court against the order of the High Court declaring the Act as invalid in order to get rid of the effect of that judgment as that judgment was binding between the parties to it notwithstanding the decision in Khyerbari Tea Co. Ltd. case (supra) that the Act was valid. The appellants were, therefore, entitled to a reasonable period for filing appeals and for applying for stay of the judgment of the High Court declaring the Act to be ultra vires. It may be recalled that the judgment in Khyerbari Tea Co. Ltd. case (supra) was rendered on 13-12-1963 and the appellants preferred the appeals to this Court on 4-3-1964. How is it possible to say that the appellants were guilty of laches when it is seen that they filed the appeals within the period of limitation prescribed by law ? We have to judge the rights of the parties on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt with Mylord the Chief Justice, I do not think that taxing authorities of the State were faced with a situation which could approximate to one where an Act of God had robbed them of the power to act or that they could not possibly have done anything at all within the time fixed by Section 7, sub. s. (2) of the Act. I fully share the view that the taxing authorities were inexcusably nonchalant or unconcerned about the possible consequences of their neglect or inactivity upon the revenues of the State. It was at least the duty of the party adversely affected to have brought the relevant provisions of the law to the notice of the Court before it issued the injunctions, or, at any rate, even afterwards but within the time prescribed for the notice under Section 7(2) of the Act. A party affected cannot go to sleep over its rights and then attempt to shift the blame on to the Court for the consequences which flow from the orders passed so that it may be able to plead : Actus Curiae Neminem Gravabit (An act of the Court shall prejudice no man ). Such a plea appears to me to be disingenuous. it cannot apply to a case where the damage done to the powers of the taxing authorities was at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 7(2) of the Act is not a condition precedent to the exercise of jurisdiction to make a best judgment assessment-and, that seems to me to be the crux of the matter on this question-it does not appear to me to be necessary to resort at all to a doctrine of a dubious or deemed waiver. In that case, waiver or no waiver, the power to assess would subsist. And, as that power has to be exercised quasi-judicially, the taxing authorities could issue a notice to show cause why they should not assess on such materials as they have, even if their power to issue a notice asking for a return under Section 7(2) may have been lost by lapse of time. The power to issue a suitable notice to show cause according to rules of natural justice when a quasi-judicial function has to be exercised, can be, as we have repeatedly held, implied and read into the nature of the function to be performed even if it is not expressly mentioned. Again, I do not see what representations the petitionersrespondents had either made or could be deemed to have made by any silence of theirs so as to mislead the taxing authorities. The presumption is that everybody knows the law whether this be so or not in fact. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he best judgment assessment. On a reading of Section 9 (4), it appears that the two conditions for an exercise of jurisdiction under it are alternative conditions linked with the disjunctive 'or'. A failure to comply with the terms of the notice issued under Section 7(2) is only one of these two alternative sets of conditions. And, this set of (1) [1921]I K.B. 64,71. conditions comes into existence only after the issue of the notice under Section 7(2) which initiates the proceedings. It is, however, difficult to see how a mere failure to make a return by itself amounts to initiation of proceedings. Even if the first part of Section 9(4) could conceivably apply to a party after the expiry of two years, during which period a dealer or producer may get a notice under Section 7(2) of the Act to make return, yet, the proceedings will have to be commenced by some kind of notice that could, as indicated above, be a notice in exercise of an implied power to observe rules of natural justice although it could not, after the lapse of the prescribed time, be technically a notice under Section 7(2) of the Act. Assuming that the power to issue notice under Section 7(2) is not mandat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon% by this Court to hold that there is a bar against the proceedings for escaped assessment. Section 30 of the Act reads as follows If for any reason any agricultural income chargeable to agricultural income-tax has escaped assessment for any financial year, or has been assessed at too low a rate or has been the subject of undue relief under this Act, the Agricultural Income tax Officer may, at any time within three years of the end of that financial year, serve on the person liable to pay agricultural income-tax on such agricultural income or, in the case of a company on the principal officer thereof, a notice containing all or any of the requirements which may be, included in a notice under sub-section (2) of section 19, and may proceed to assess or reassess such income, and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that subsection : Provided........................... If we compare Section 11 of the Act before us with Section 30 of the Assam Agricultural Income tax Act, we find that, although, the language of Section 1 1 of the Act before us is somewhat different from that of Section 30 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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