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TMI Blog2016 (4) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... PPLICATION NO. 120 OF 2005 JUDGMENT ( Per S. C. Dharmadhikari, J. ) 1) In all these applications, the Tribunal has referred the following question of law for opinion and answer of this court:- "Whether on facts and circumstances of the case, the Tribunal was justified in law in holding that the assessment orders were non-est orders even though the person Mrs. Janaki Soman, proprietress of the business has accepted the notices, attended the assessment proceedings as well as the first appeal proceedings and has not challenged the legality of notice on the ground of issuing it in the trade name before the assessing authority, revisional authority as well as the first appellate authority only on the ground that the notices were issued in the 'trade name'?" 2) We take the facts, as they are stated to be common to all the references, from Sales Tax Reference No. 4 of 2009. The applicant sought a reference of the above question because the respondent in this case, though duly served and absent, was a dealer. The respondent was carrying on business in the trade name and style as M/s. Klip Nail Care and manufacturing nail cutters under this name and style. The respondent was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t M/s. Klip Nail Care is a proprietary concern and Ms. Janaki Soman is the sole proprietress thereof. The notice could not have been issued in the trade name M/s. Klip Nail Care, but should have been issued in the name of the proprietress. Such a invalid notice, according to the Tribunal, could not be a foundation of the proceedings. The proceedings, therefore, are not only invalid and illegal, but non-est. That part of the reasoning of the Tribunal reads as under:- "6. We have heard both the counsels. Perused the record. In view of the rival submission, it is felt necessary instead of looking to the merits of the case first to consider the additional plea taken on behalf of the appellant. It is needless to say that there is no impediment to take the new ground in the appeal on the point of law. A perusal of the registration certificate record certainly reveals that the appellant firm M/s. Klip Nail Care is a proprietary concern and Mrs. Janak Soman is a proprietor of the said concern. It may be noted that before proceeding to assess the "dealer" to tax under sub-section (5) and/or (6) of section 33, the Commissioner is required to call upon him by a notice in form 27 to show caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served that even though the appellant has not challenged either the assessment notices, or the assessment orders, the facts remains that the assessment orders having been passed without valid jurisdiction were non-est or nullify and therefore, they were certainly assailable even in the collateral proceedings like revision. That being the position, the Administrative Assistant Commissioner of Sales Tax had no jurisdiction to revise a non-est order. There is therefore, no other alternative but to annual the impugned revision orders for want of jurisdiction. Accordingly, the Tribunal has set aside the revision orders and the first appeal orders in those revision proceedings. Shri Akhade, learned Assistant Commissioner of Sales Tax was not able to convince us to take the different view than the view already taken by this Tribunal in the case of M/s. Parwani Builders (supra)." 6) Ms. Palsuledesai appearing for the Revenue/applicant in this case would submit that the Tribunal's order proceeds on a complete misconception of law. She would submit that the Tribunal has misread the definitions and the substantive provisions of the BST to arrive at the above conclusion. She would submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided that the provisions of this sub-section shall not be deemed to have been contravened if the dealer having applied for such registration as in this section provided within the prescribed time or, as the case may be, within the period specified in subsection (6) of section 19, carries on such business. Now, this provision enables registration and of a dealer. The word "dealer" is defined in section 2(11) in the following manner:- "2 (11) "dealer" means any person who whether for commission, remuneration or otherwise carries on business of buying or selling goods in the State, and includes the Central Government, or any State Government which carries on such business, and also any society, club or other association of persons which buys goods from or sells goods to its members; Exception - (I) - An agriculturist who sells exclusively agricultural produce grown on land cultivated by him personally, shall not be deemed to be a dealer within the meaning of this clause; Exception - (II) - An educational institution carrying on the activity of manufacturing, buying, selling or supplying goods, in the performance of its functions for achieving its objects shall not deemed to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng goods belonging to any principal or principals whether disclosed or not, shall, notwithstanding anything contained in clause (5A) or any other provisions of this Act, be deemed to be a dealer." 9) There is, thus, a definition of this word to mean any person, who whether for commission, remuneration or otherwise carries on business of buying or selling goods in the State, and includes the Central Government, or any State Government which carries on such business, and also any society, club or other association of persons which buys goods from or sells goods to its members. The Explanation, which is an Explanation to the entire clause specifies the persons and bodies as capable of disposing any goods and to be deemed as a dealer for the purpose of such disposal. That again specifies incorporated or unincorporated society, club or other association of persons. 10) If any clarity was necessary in the view of the Tribunal, then, it should have referred to other definitions. The other definitions are of the term "person" appearing in section 2(19). The word "person" is an inclusive definition, including any company or association or body of individuals whether incorporated or not, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l evidence on which such dealer relies in support of his returns, or to produce such evidence as is specified in the notice. On the date specified in the notice, or as soon as maybe thereafter the Commissioner shall, after considering all the evidence which may be produced, assess the amount of tax due from the dealer. (4) If a Registered dealer fails to comply with the terms of any notice issued under sub-section (3), the Commissioner shall assess, to the best of his judgment, the amount of tax due from him. (4A) Where all the returns are filed by a Registered dealer for any year ending on or after the notified day within six months from the end of the year to which such returns relate,no order of assessment under subsection (3) of (4) in respect of that year shall be made after the expiry of three years from the end of the said year; and if for any reason such order is not made within the period aforesaid, then, the returns so filed shall be deemed to have been accepted as correct and complete for assessing the tax due from such dealer. Explanation I. - In the case of returns pertaining to the years ending prior to the notified day and filed on or before the notified day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate by a judgment of the Tribunal and the State Government or the Commissioner has initiated any proceedings against such judgment before an appropriate forum, then the Commissioner may complete the assessment as if the point was not so decided against the State, but shall stay the recovery of such of the dues including interest and penalty, if any, in so far as they relate to such point, until the decision by the appropriate forum and after such decision modify the assessment order, if found necessary. (5) If a Registered dealer does not furnish returns in respect of any period by the prescribed date, the Commissioner shall, at any time, within eight years from the end of the year in which such period occurs, after giving the dealer a reasonable opportunity of being heard, proceed to assess to the best of his judgment, the amount of tax (if any) due from him. (6) If the Commissioner has reason to believe that a dealer is liable to pay tax in respect of any period, but has failed to apply for registration or failed to apply for registration within time as required by section 22, the Commissioner shall at any time within eight years from the end of the year in which such period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs from the end of the year in which such period occurs, after giving the dealer a reasonable opportunity of being heard, proceed to assess, to the best of his judgment, the amount of tax (if any) due from the dealer in respect of that period, and any period or periods subsequent thereto. 13) We do not see how within the meaning of sub-section (1) of section 33 and in the light of the above clear legal provisions, a sole proprietor/dealer cannot be brought to tax. If he can be brought to tax and his income assessed on the basis of the transactions of sale and purchase of goods undertaken by him/her and that section also enables the Commissioner to carry on best judgment assessment, then, merely because the notice under sub-section (6) addressed and sent to the dealer is in the trade name and not the sole proprietress that would not be fatal. The Tribunal has referred, in this case, to the definitions and which, according to it, are relevant. We have reproduced that paragraph of the Tribunal's order and which requires a registered dealer to furnish returns and if non filing of returns and non registration of a dealer enable the Commissioner to carry out best judgment assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the proceedings can be flawed to such an extent as to term them as incurable. This is not a fundamental flaw or defect going to the root of the case. It will have to be established and proved that there is a prejudice or miscarriage of justice. Merely because the trade name been incorporated or inserted in the notice does not mean that the dealer was prevented from contesting the proceedings or the exercise carried out by the commissioner under sub-sections (5) or (6) of section 33. Eventually, the dealer must be put to notice. The form is not mandatory and the requirement of notice may be such. Therefore, absence of notice by such mis-description would have to be established and proved by the dealer, else it cannot be said that the proceedings suffer from a fundamental or incurable defect and therefore non-est. The proceedings and the orders therein cannot be termed as void ab initio or null from inception. The orders also cannot be termed as null and void given the nature of the defect alleged. In such circumstances, the Tribunal was in error in allowing the Second Appeals on this ground alone. The Tribunal's order overlooks the fact that a sole proprietorship is a bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that part of the later period is after the death of Basantlal on 28th January, 1959. The most salient feature of the case was that the entire process commenced and concluded after the death of Basantlal and orders assessing the business to tax were passed on 5th December, 1960. That is much after the death of Basantlal. It is in these circumstances that the Division Bench concluded that not only the notice is illegal but the entire proceedings have to be quashed and set aside for, what the Commissioner sought to do was to proceed by issuing a notice only in the trade name. It is in this context that the Division Bench held that Laxmi Stores was merely a trade name of an individual and it was not by any means a person within the meaning of the law. The person involved was late Basantlal. M/s. Laxmi Stores cannot be said to be a person. It is that fundamental fact which had not been properly grasped and that is why the Division Bench concluded that the notice in the name of Laxmi Stores cannot be the basis for initiation of the proceedings and therefore, the entire proceedings deserve to be quashed. 17) The Tribunal should have noted the basic facts in this case the context and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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