1966 (1) TMI 69 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the return filed by the assessee.
2. Justification of the Commercial Tax Officer in treating the matter as a case of "no return."
3. Validity of the notice issued in Form VI.
4. Impact of the notice on the assessment.

Issue-wise Detailed Analysis:

1. Validity of the Return Filed by the Assessee:
The assessee, a registered dealer under the Bengal Finance (Sales Tax) Act, 1941, filed a return for the period from 1st April 1949 to 31st December 1949. However, at the time of filing, certain tax payments were not made, and challans were not attached. According to Section 10(3) of the said Act, the full amount of tax due must be paid into a Government Treasury or the Reserve Bank of India before furnishing the return, and a receipt showing such payment must be attached. The court held that the prepayment of the admitted amount is a condition precedent to the filing of a valid return. Without such prepayment, the return cannot be considered valid and is treated as "no return" in the eyes of the law.

2. Justification of the Commercial Tax Officer in Treating the Matter as a Case of "No Return":
The Commercial Tax Officer issued a notice under Section 11(1) of the Act, treating the matter as a case where no return was filed. The court analyzed the provisions of Section 10 and Section 11, concluding that the prepayment of the admitted tax amount is essential for a return to be valid. Since the assessee did not fulfill this precondition, the return filed was invalid, and the Commercial Tax Officer was justified in treating the case as one of "no return."

3. Validity of the Notice Issued in Form VI:
The notice in Form VI was issued on the basis that no return was filed. The court noted that Form VI deals with both scenarios: no return filed and incorrect or incomplete returns. Even if the notice was issued under the wrong clause, it does not invalidate the jurisdiction of the Commercial Tax Officer. The court referred to the Supreme Court's decision in L. Hazari Mal Kuthiala v. Income-tax Officer, Special Circle, Ambala, which established that the exercise of power should be referred to the jurisdiction that confers validity upon it. Thus, the notice issued in Form VI was valid in law.

4. Impact of the Notice on the Assessment:
The court held that the Commercial Tax Officer had the power to issue the notice in Form VI, and even if there was a mistake in referring to the wrong clause, it did not affect the validity of the proceedings. The assessee was given a reasonable opportunity to defend and present objections, and the assessment was made after considering all the relevant documents and hearings. Therefore, the notice and subsequent assessment were in accordance with the law.

Conclusion:
The court answered the reference by stating that the Commercial Tax Officer was justified in treating the matter as a case of "no return" and issuing the notice in Form VI on that footing. The notice was valid in law, and the proceedings were conducted in accordance with legal provisions. The assessee was ordered to pay the costs of the revenue, and the reference was answered accordingly.