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TMI Blog1962 (4) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly assessed to tax on 20th January, 1959, under the Madhya Bharat Sales Tax Act by the Sales Tax Officer, Ratlam. In January, 1959, a firm doing the business of selling sugar under the name and style of "Gajanand Satyanarayan" was assessed to tax and penalty amounting to Rs. 18,573-12-0 for the year 1957-58. On this firm a tax and penalty of Rs. 8,926-14-0 had also been imposed for the previous year 1956-57. These assessments were best judgment assessments. In fact in the assessment proceedings the firm Gajanand Satyanarayan was not found to be registered as a dealer. The notice of assessment proceedings could not be served on the said dealer and, therefore, the service of notice was effected by affixing a copy thereof on a building where the said firm was supposed to be doing its business. In the recovery proceedings the Sales Tax Authorities were unable to trace this firm and recover any amount of tax or penalty imposed on Gajanand Satyanarayan. Subsequently on receiving information that the petitioner Daluram Modi was himself doing the business of importing and selling sugar under the fictitious name of Gajanand Satyanarayan, the Sales Tax Authorities started enquiries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom, the Commissioner may, at any time within five calendar years from the expiry of such year, after giving the dealer a reasonable opportunity of being heard and after making such inquiry as he considers necessary, proceed, in such manner as may be prescribed, to reassess the tax payable on any such sale or purchase and the Commissioner may direct that the dealer shall pay, by way of penalty, in addition to the amount of tax so assessed, a sum not exceeding that amount: Provided that in the case of an assessment, made under any Act, repealed by section 52, the period for reassessment on the ground of under-assessment, escapement or wrong deduction shall be as provided in such Act, notwithstanding the repeal thereof. * * * *" Rule 33 of the Madhya Pradesh General Sales Tax Rules, 1959, inter alia prescribes that where the sale or purchase of goods by a dealer during any period has been under-assessed or has escaped assessment within the meaning of section 19(1) of the Act of 1958, then the assessing authority shall serve on the dealer a notice in Form XVI specifying the default ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aped assessment or had been assessed at a lower rate; that section 19(1) conferred on the Commissioner the power to make an order of reassessment and also imposed on him the duty of being satisfied about the necessity of the order; that while the power of making an order of reassessment under section 19 could be delegated, the function of being satisfied about any turnover escaping assessment was a duty laid on the Commissioner himself and could not be delegated to any officer; that in the present case the notice under section 19 was not issued after the Commissioner had satisfied himself about the necessity of an order under section 19 but was based on the satisfaction of the Assistant Commissioner; and that, therefore, the notice issued under section 19 by the Assistant Commissioner was without jurisdiction. Learned counsel proceeded to say that under section 30 the delegation of the Commissioner's powers and duties was "subject to the provisions of this Act" and to the restrictions and conditions imposed by and under the Act; that section 19(1) did not itself permit the delegation of the duty imposed on the Commissioner by that provision of "satisfying" himself; that this duty c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 19 read with rule 33 was issued to the petitioner on 31st December, 1960, by the Assistant Commissioner of Sales Tax and that notice contained the recital"I am satisfied that your sale during the period from 1-4-1957 to 31-3-1958 has been under-assessed/has escaped assessment..........." This is not disputed. The argument for the petitioner that the notice was not valid inasmuch as it was not founded on the "satisfaction" of the Commissioner himself and the function of being satisfied was a personal duty of the Commissioner which could not be delegated is untenable. As pointed out by the learned Advocate-General appearing for the respondent-State, the striking and cardinal feature of the Act is that all powers under the Act are given primarily to the Commissioner. The other officers appointed under section 3 to assist the Commissioner derive their power to function under the Act only from the Commissioner when it is delegated to them. It is inherently impossible for the Commissioner to function as the assessing authority for all assessees in the State. The Legislature, therefore, thought it necessary to appoint the officers mentioned in section 3 to assist him and to confer on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Sales Tax passed on 1st April, 1959, the delegation of powers and duties is with reference to those specified in column 3 of the table appended to the order. It is true that this column does not specify the duty of the Commissioner under section 19, delegated to the Assistant Commissioner. If that had been done, the argument drawing a distinction between the delegation of powers and duties would not have been even available to the petitioner. However, even without this specification about the delegation of any duty the order of the Commissioner dated the 1st April, 1959, is a valid order inter alia delegating to the Assistant Commissioner the power to make an order of reassessment on satisfying himself about any turnover escaping assessment. 7.. The argument of the learned counsel for the petitioner that under section 19(1), the satisfaction must be of the Commissioner himself and, that whereas the Commissioner could delegate the power to make an order of reassessment, he could not delegate his duty of "satisfying" himself, has no basis in the language of section 19(1). There are no words in section 19(1) saying that where the Commissioner himself is satisfied that any sale or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 19. There was in fact delegation of that power by the Commissioner to the Assistant Commissioner in conformity with the provisions of the Act and the restrictions placed by rule 68. The delegation to the Assistant Commissioner of the power under section 19 "to make an assessment or reassessment of tax or penalty............... and to exercise all other powers under section 19" fully and validly conferred on the Assistant Commissioner the power to make an order of reassessment under section 19 after satisfying himself about the escapement of any turnover. 8.. Learned Advocate-General appearing for the State referred us to Mungoni v. Attorney-General, in support of his contention that the power and duty under section 19 not being separate and severable the Commissioner could not delegate that power retaining in himself the function of being satisfied and the delegation of that power also involved the delegation of the condition precedent, namely, the duty of being satisfied, to the exercise of that power. In that case, the Privy Council considered the validity of the delegation by the Governor of Northern Rhodesia of the power to make an order of detention under regulation 16 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply. It was on this principle that the Full Bench in J.N.B. Jaiswal v. Collector, Damoh1962 M.P.L.J. 363., held that the delegation to the Collector, under section 14 of the C.P, and Berar Accommodation (Requisition) Act, 1948, of the power to requisition any property included the delegation of the power to form an opinion as to the necessity for the requisition. The applicability of the principle is also illustrated by the decisions in B. Colliery Co. v. Commercial Tax Officer[1957] 8 S.T.C. 194; A.I.R. 1957 , Shri Shew Sakti Oil Mills v. Member, Board of Revenue, West BengalI.L.R. [1949] 2 Cal. 347., H.C. Gupta v. Mackertich JohnI.L.R. [1945] 2 Cal. 604., Kewalram v. The Collector of Madras I.L.R. [1944] Mad. 826., and Jagwant Kaur v. The State of BombayI.L.R. [1953] Bom. 44. The question that was considered in B. Colliery Co. v. Commercial Tax Officer[1957] 8 S.T.C. 194; A.I.R. 1957, related to the validity of delegation by the Commissioner to the Commercial Tax Officer of all the powers under section 11(2) of the Bengal Finance (Sales Tax) Act, 1941. That provision gave to the Commissioner the power to make an assessment to the best of his judgment on a dealer if on information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer must be satisfied, and the condition precedent is that in the opinion of the State Government it is necessary or expedient to requisition the property. Therefore, a duty is cast upon the State to satisfy the condition precedent before it exercises the power conferred upon it, and not only the power can be delegated but also the duty which is attached to the exercise of the power, and therefore when the Collector forms an opinion under section 5, he is discharging a duty and is carrying out the condition precedent laid down in section 5." 9.. The petitioner's further submission about the inapplicability of section 19 is also difficult of acceptance. It was said that the sale transactions in respect of which the applicant has now been assessed had already been included in the assessment of Gajanand Sathyanarayan and consequently there was no "escaped assessment". The argument ignores the true nature of an assessment under the Act and of the meaning of "escaped assessment" for the purposes of section 19. Under section 4, every dealer is liable to pay tax under the Act on his turnover in respect of the sales or supplies of goods during the prescribed period of twelve months if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be revoked. The short answer to this contention is that section 19 expressly permits reopening of an assessment and of making a fresh assessment in the circumstances detailed in that section. 10.. The point about the notice actually issued to the petitioner by the Assistant Commissioner on 31st December, 1960, being defective and not in accordance with law can be disposed of briefly. The notice began by stating "whereas I am satisfied that your sale during the period from 1-4-1957 to 31-3-1958 has been under-assessed/has escaped assessment and thereby rendered yourself liable to be reassessed ........." It was said that unnecessary words in the notice were not scored out and the notice did not give any indication to the application as to whether the sales mentioned in the notice had been under-assessed or had escaped assessment. There is no substance in this contention. It is abundantly clear from the record that the applicant gave a reply to this notice and had no difficulty in understanding the case he had to meet. That being so, the omission to score out unnecessary words in the notice does not render it invalid. In this connection it would be pertinent to refer to the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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