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TMI Blog1964 (1) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... had been filed. No returns were filed for the subsequent quarters. In this situation, the Assessing Authority proceeded to assess the petitioner to tax on the basis of the best judgment assessment. The tax assessed was paid. The matter was, however, suo motu, taken up by the Commissioner in exercise of his powers of revision under section 21 of the Act. The Assistant Additional Excise and Taxation Commissioner, on behalf of the Commissioner, passed the following order: "I have heard both the parties and have also perused the impugned assessment order dated 16th February, 1960. The order passed by the Assessing Authority in this case is improper and is set aside. The Assessing Authority should have scrutinized necessary declaration forms before giving deductions under rule 26 on account of sale to registered dealers. Since the case was being decided on best judgment basis, deductions on account of sale to registered dealers should not have been allowed. Moreover, suo motu powers are not confined by any time limit. The case is, therefore, sent down to the Assessing Authority, Amritsar, for a fresh assessment according to law." It may also be mentioned, at this stage, that at the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6th December, 1960, and that they did not propose to take advantage of that assessment order and that it might be deemed to have been quashed as a necessary consequence of the order in revision passed by the Commissioner. In this view of the matter, it is not necessary to go further into this question. It also appears that when the notice was issued by the Commissioner under section 21, the same was with regard to both the orders of February and December, 1960, and it appears that by inadvertence no reference was made to the order of December, 1960, in the revisional order that was passed. That being so, there is no merit in this contention. It is the second contention which has been debated at a considerable length and which is not free from difficulty. The stand taken up by the Department is that by reason of the revisional order, no fresh proceedings for assessment were initiated. The best judgment assessment had initiated the assessment proceedings and those proceedings had been set aside in revision with a direction to make a fresh assessment according to law. Thus it is urged that the proceedings are the continuation of the best judgment assessment proceedings, and are not n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be reopened only within the period prescribed in section 11-A. In the case where a return has been made, but the Commissioner has not accepted it, and has issued a notice for enquiry, the assessment proceedings will certainly be pending till the final assessment is made. Even in a case where no return has been made, but the Commissioner initiated proceedings by issuing a relevant notice either under section 10(3) or under section 11(4), the proceedings will be pending thereafter before the Commissioner till the final assessment is made. But where no return has been made and the Commissioner has not issued any notice under the Act, how can it be held that some proceedings are pending before the Commissioner when none existed as a matter of fact? We are concerned in this case with the last contingency. It is manifest that in the case of a registered dealer the proceedings before the Commissioner starts factually when a return is made or when a notice is issued to him either under section 10(3) or under section 11(2) of the Act. The acceptance of the contention that the statutory obligation to file a return initiates the proceedings is to invoke a fiction not sanctioned by the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 34 enacts that a case instituted would be pending till an order of assessment was made. No doubt it would be pending till a final order of assessment was made by the highest tribunal or court under the Act." In the present case, return was filed by the petitioner for the first two quarters. There was no return filed for the subsequent quarters. The Assessing Authority proceeded to assess the petitioner on the basis of the best judgment assessment and the assessment was completed and tax was paid. The petitioner was satisfied by this assessment because he preferred no appeal under section 20 of the Act. The matter was, however, taken up suo motu by the Commissioner, Excise and Taxation, under section 21 of the Act. Section 21 is in these terms: "21. (1) The Commissioner may, of his own motion or on application made to him, call for the record of any proceedings which are pending before, or have been disposed of by, any assessing or appellate authority appointed under this Act, for the purpose of satisfying himself as to the legality or propriety of such proceedings or of any order made therein and may pass such orders in relation thereto as he may think fit: * * * * *" The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (2) of that section is 'subject to the provisions of this Act'. Therefore, in express terms section 24 is made subject to the provisions of sections 26 and 27. The position is the same with regard to the Indian Income-tax Act. Sub-section (2) of section 33 of the Indian Income-tax Act (before the amendments of 1939 and thereafter) stated in express terms that the power of review given to the Commissioner was 'subject to the provisions of this Act'. Therefore, section 33 was subject to the provisions of sections 34 and 35. The Bihar Sales Tax Act, 1944, however, contains no provisions similar to the provisions of sections 26 and 27 of the Bihar Agricultural Income-tax Act, 1938 ; nor does it contain provisions similar to the provisions of sections 34 and 35 of the Indian Income-tax Act. Moreover, sub-section (4) of section 20 of the Bihar Sales Tax Act states that the power of review is 'subject to such rules as may be prescribed'. The power is not subject to the 'other provisions of the Act' so as to attract the operation of the proviso to sub-section (6) of section 10. Then there is another very important distinction. The general rule is that the operation of a proviso should b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6) of section 10 will render nugatory the powers given to the appellate authority under clause (b) of sub-section (2) of section 20. I do not think that could have been the intention of the Legislature. Such a construction will result in an absurdity; and after the period mentioned in the proviso to subsection (6) of section 10 is over, it would not be possible for the appellate authority or revisional authority to pass the orders which under section 20 it would be competent to pass. I think that a distinction must be drawn between an original order of assessment under section 10, which is subject to the proviso to sub-section (6) of that section, and a fresh order of assessment directed by an appellate or revisional authority as mentioned in sub-sections (2) and (3) of section 20 of the Bihar Sales Tax Act, 1944. I am aware that the only section dealing with assessment of tax is section 10 of the Bihar Sales Tax Act, 1944, and a fresh order of assessment will also proceed on the principles laid down in section 10. That does not, however, mean that a distinction between an original order of assessment under section 10 and a fresh order of assessment directed by the appellate or rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived. Therefore, it must be held that at the stage when the Commissioner interfered with the assessment order in revision he interfered with a final order of assessment and the order was none the less final even if the Commissioner had the right to examine its legality or propriety. Once it is held that the assessment order had become final and its finality did not depend on the revisional powers of the Commissioner, the rule laid down in Ghanshyamdas' case[1963] 14 S.T.C. 976. fully applies to the facts of the present case. The fresh proceedings which the Assessing Authority started after the lapse of four years would necessarily be proceedings under section 11-A and thus would be without jurisdiction as they were initiated after the prescribed period for the purpose had elapsed. In this view of the matter, it is not necessary to examine the third contention though in a way I have already dealt with the same while dealing with the second contention. For the reasons given above, this petition is allowed, and the order of the Assessing Authority dated 4th November, 1963, is quashed. In the circumstances of the case there will be no order as to costs.
Petition allowed. X X X X Extracts X X X X X X X X Extracts X X X X
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