1960 (8) TMI 78 - HC - VAT and Sales Tax

Issues Involved:
1. Jurisdiction of the Sales Tax Officer under Section 11-A of the Central Provinces and Berar Sales Tax Act, 1947.
2. Requirement and nature of "information" under Section 11-A.
3. Overlapping provisions of Sections 11-A, 22-A, and 22-B.
4. Right of the assessee to know the information prompting reassessment.
5. Analogy between Section 11-A of the Sales Tax Act and Section 34(1)(b) of the Income-tax Act.

Detailed Analysis:

1. Jurisdiction of the Sales Tax Officer under Section 11-A:
The appellant contended that the Sales Tax Officer had no jurisdiction to reassess under Section 11-A as he did not possess the requisite "information." The court accepted this argument, emphasizing that jurisdiction under Section 11-A could only be invoked if the officer was satisfied "in consequence of any information which has come into his possession" after the original assessment.

2. Requirement and Nature of "Information" under Section 11-A:
The court highlighted that the information must be new and must have come into the possession of the Sales Tax Officer subsequent to the original assessment. The court noted, "The expression 'any information which has come into his possession' means, in the context, information which has come into his possession subsequent to the making of the assessment order in question." The information must lead to the satisfaction that there was an under-assessment or wrong deduction. The court found that no such information was disclosed by the Sales Tax Officer, thereby invalidating the reassessment notice.

3. Overlapping Provisions of Sections 11-A, 22-A, and 22-B:
The single judge had opined that Sections 11-A, 22-A, and 22-B were enabling and overlapping provisions. However, the appellate court disagreed, stating that Sections 22-A and 22-B deal with the revision of assessments based on existing facts and law, whereas Section 11-A pertains to reassessment based on new information. The court clarified, "Sections 22-A and 22-B deal with revision of assessments determined on a certain state of facts, figures and the prevailing law... There is no question under these provisions of assessment or re-assessment consequent to any new information received after the original assessment by the Sales Tax Officer."

4. Right of the Assessee to Know the Information Prompting Reassessment:
The court held that the assessee is entitled to know the information prompting the reassessment to effectively exercise the right to be heard. The court stated, "Under section 11-A the dealer has a right to be heard and of making his submissions against the assessment and re-assessment. This right implies that he should have such information as will enable him to show cause against the assessment or re-assessment."

5. Analogy between Section 11-A of the Sales Tax Act and Section 34(1)(b) of the Income-tax Act:
While the single judge found an analogy between Section 11-A and Section 34(1)(b) of the Income-tax Act, the appellate court noted that although similar in parts, the provisions differ materially. The court referenced the Supreme Court's interpretation in Maharaj Kumar v. Income-tax Commissioner, emphasizing that information must come into possession after the original assessment. The court concluded that Section 11-A is more explicit, requiring new information for reassessment.

Conclusion:
The appeal was allowed, and the notice issued under Section 11-A was quashed. The court restrained the opponents from proceeding under Section 11-A against the appellant, emphasizing the necessity of new information for invoking reassessment jurisdiction. The appellant was awarded costs, and the security deposit was ordered to be refunded.

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