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TMI Blog1979 (5) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent No. 1 in C.A. No. 2529 of 1972. M.N. Shroff, Advocate, for the intervener in C.A. Nos. 2450-2451 of 1972. I.N. Shroff, Advocate, for the respondents in C.A. Nos. 287-290 of 1972. R.P. Bhatt, Senior Advocate (B.R. Agarwala, Advocate, with him), for the respondents in C.A. Nos. 2450-2451 of 1972. -------------------------------------------------- The judgment of the Court was delivered by SARKARIA, J. -This judgment will dispose of' two batches of appeals. The first batch includes Civil Appeals Nos. 287 to 290 and 2529 of 1972 and Civil Appeal No. 303 of 1974 preferred by the State of Gujarat/Sales Tax Officer on the basis of a certificate granted by the High Court. Of this batch, Civil Appeals Nos. 287 to 290 of 1972 are directed against a common judgment dated July 8, 1970, of the High Court of Gujarat; while Civil Appeal No. 303 of 1974 is preferred against a judgment dated July 4, 1973, of the Gujarat High Court, which follows its earlier decision in Patel Ramjibhai Danabhai v. A. S. Tambe, Sales Tax Officer, Anand. The second batch comprises of Civil Appeals Nos. 2450 and 2451 of 1972 and Civil Appeals Nos. 1206 and 1213 of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there being no machinery under the 1953 Act to assess a dissolved firm. A further objection was raised that the assessment proposed was time-barred. At this stage, the respondents moved the High Court by a petition (S. C. A. No. 191 of 1968) under article 226 of the Constitution, alleging that the turnover of the business, during the relevant period, never exceeded the limit of Rs. 9,000 in the past and, therefore, the question of their incurring liability to get the firm registered as a dealer and to file sales tax returns under the 1959 Act did not arise. During the pendency of this writ petition, on September 9, 1968, the Sales Tax Officer assessed the writ petitioners under section 33(6) of the 1959 Act on "best judgment" basis and an amount of Rs. 9,771.45 was determined as tax arrears and a further amount of Rs. 10,000 was imposed as penalty. A notice making demand of both these amounts was also issued on September 12, 1968. Facts in C.A. No. 289 of 1972 The writ petitioner, the respondent herein, is carrying on the business of manufacturing and selling wooden boxes, bamboos, timber, etc., under the name of M/s. Manilal Ranchoddas at Kalol. On June 1, 1965, he was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been provided and the choice of one procedure in preference to the other, is left to the arbitrary whim of the assessing authority. On this reasoning, the High Court held that section 33(6) offends article 14 of the Constitution and, as such, is void. In reaching this conclusion, the High Court relied mainly upon this Court's decision in Anandji Haridas Co. v. S. P. Kushare [1968] 21 S.T.C. 326 (S.C.); A.I.R. 1968 S C. 565. It also drew support from this Court's decision in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax, Nagpur [1963] 14 S.T.C. 976 (S.C.); [1964] 51 I.T.R. 557 (S.C.); A.I.R. 1964 S.C. 766. Facts in C.A. No. 2529 of 1972 This appeal is directed against a judgment dated March 13, 1972, of the Gujarat High Court, whereby it, following its earlier decision dated July 8, 1970, in Writ Petition No. 1378 of 1968, quashed the assessment of the respondents herein, for the period January 1, 1960, to April 5, 1964, on the ground that section 33(6) under which it was made, was violative of the equality clause contained in article 14 of the Constitution and, as such, void. SECOND BATCH Facts in C.A. Nos. 2450-2451 of 1972 In these two cases, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd section 33(6) of the aforesaid Acts of 1953 and 1959, being violative of article 14 of the Constitution, were void. Following the ratio of this Court's decision in Anandji's case [1968] 21 S.T.C. 326 (S.C.); A.I.R. 1968 S.C. 565., the High Court accepted the respondent's contention and quashed the impugned assessments. Learned counsel for the appellants submits that the Gujarat High Court was in error in holding that the provisions of sections 33(6) and 35 of the Act of 1959 overlap each other; that it overlooked the fact that upon its very language, section 33(6) is a special provision confined to an unregistered dealer who is guilty of committing the twofold violation of law indicated in that provision; that this special provision, by inevitable implication, excludes the application of the general provision in section 35(1) to the case of an unregistered dealer who escapes assessment on account of his failure to get himself registered and failure to file a return. Counsel has further submitted that Anandji Haridas [1968] 21 S.T.C. 326 (S.C.); A.I.R. 1968 S.C. 565., is distinguishable inasmuch as that was a case of a registered dealer, while all the instant cases, out of whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity within the prescribed time. Sections 33(6) and 35 of the 1959 Act read as follows: "Section 33. (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 within time as required by section 22, the Commissioner shall, after giving him a reasonable opportunity of being heard, assess, to the best of his judgment, the amount of tax, if any, due from the dealer in respect of such period, and any period subsequent thereto." "Section 35. (1) If the Commissioner has reason to believe that any turnover of sales or turnover of purchases of any goods chargeable to tax under this Act has in respect of any year escaped assessment, or has been under-assessed or assessed at a lower rate, or that any deductions have been wrongly made, then the Commissioner may,- (a) where such turnover has escaped assessment or has been under-assessed or assessed at a lower rate by reason of the fact that the provisions of sub- section (1) of section 2 of the Bombay Sales Tax (Validating Provisions) Act, 1957, were not then enacted, at any time within eight years, (b) where he has reason to believe that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the particulars of such sales or purchases or has knowingly furnished incorrect returns, at any time within five years, and, in any other case, at any time within three years, of the end of that year, serve on the dealer liable to pay the tax in respect of such turnover a notice containing all or any of the requirements which may be included in a notice under sub-section (3) of section 14 and may proceed to assess or reassess the amount of the tax due from such dealer and the provisions of this Act shall apply accordingly as if the notice were a notice served under that sub-section: Provided that the amount of the tax shall be assessed after making the deductions permitted from time to time under the Bombay Sales Tax Act, 1946, the Bombay Sales Tax (No. 2) Ordinance, 1952, and this Act, as the case may be, at the rates at which it would have been assessed had the turnover not escaped assessment or full assessment, as the case may be: Provided further that where in respect of such turnover or deduction, as the case may be, an order has already been passed under section 30 or section 31, the Collector shall make a report to the appropriate appellate or revising authority, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection of public revenue, and more difficult to detect than tax evasion by a registered dealer. When a dealer applies for and obtains a registration certificate under the Act, he thereby admits his liability to pay tax. In his case, the sales tax authorities, have basic information, in pursuance of which, they can, by the exercise of due vigilance, check and detect any tax evasion by him within a reasonable time. This reasonable time is the period of limitation fixed by the legislature, in its wisdom, in section 35. But the case of a tax evading unregistered dealer is different. In his case, the authorities have on their record no such basic information such as the registration record which would supply them a "lead" to work upon. For lack of information or want of adequate staff, resources and time at the disposal of the department, and the secretive nature of the modus operandi, tax evading activities of an unregistered dealer may go on undetected for years on end. That is why for taking action under section 33(6) against a tax evading unregistered dealer, the legislature has not fixed any period of limitation. Thus, putting the unregistered dealer, who, though liable to pay tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53 Act do not violate article 14 of the Constitution and are valid. We may mention in passing that the question raised with regard to the constitutional validity of the aforesaid provisions has become largely academic because mostly the impugned notices or assessments were within the period of limitation prescribed for taking action under section 35 of the 1959 Act. In such cases, the question of subjecting the respondents to a more onerous procedure than the one envisaged in section 35 in the matter of limitation does not arise. In the result, we allow these appeals, set aside the judgments of the High Courts/Maharashtra Sales Tax Tribunal and send the cases back to the High Court or the Tribunal concerned, with these directions. In matters in which assessment orders have been passed, it will be open to the respondents to file or refile appeals against the assessment orders or if the respondents have withdrawn any appeal filed by them, they will be at liberty to file fresh appeals. In that case, if there is delay in filing or refiling the appeals, the delay will hopefully be condoned as it is attributed to these proceedings. The matters remitted to the High Court will be fur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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