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TMI Blog1972 (5) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee had no systematic accounts to produce. So the department held him liable from 1st April, 1960, and assessed him to tax for 14 quarters, i.e., from 6/60 to 9/63. The total tax comes to Rs. 1,292 which includes penalty under section 12(5) at the rate of Rs. 10 per quarter excepting the first. These assessments were based on the report of the Sales Tax Inspector, who visited the business premises of the assessee on 1st November, 1963, and seized some purchase invoices (34), slips (109) and a pocket note-book that disclosed the extent of business of the assessee. The assessee asserted that his daily sales ranged from Rs. 7 to Rs. 10 and, as such, he was not liable to tax. The assessee preferred first appeals against the assessments but without success. In second appeal before the Tribunal he contended that he was not dealing in paddy, oil-cakes, ready-made garments and there were no materials to determine his turnover to fix his liability to pay tax; that when he had been noticed indicating that his turnover exceeded Rs. 10,000 preceding 30th June, 1963, the assessments for quarters preceding were not valid and that he could be, if at all, only liable to pay tax from 1st Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st April, 1963. 5.. Mr. A. B. Misra, appearing for the assessee, endeavoured to support the findings of the Tribunal contending that the notice is mandatory; that the notice is so defective that it had prejudiced the assessee; that there was no material to fix the liability of the assessee from 1st April, 1960, or 1st April, 1963; that though the Tribunal has not properly expressed itself yet has taken into consideration the materials placed on record regarding the extent of business of the assessee, and, therefore, no question of law arises out of its order. 6.. We would deal with the question of issue of notice and its validity first. Section 12(5) of the Act runs thus: "If upon information which has come into his possession, the Commissioner is satisfied that any dealer has been liable to pay tax under this Act in respect of any period and has nevertheless without sufficient cause failed to apply for registration, the Commissioner shall, after giving the dealer 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 all subsequent periods and the Commissioner may direct that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is said in the same line as follows: "Jurisdiction to assess and the liability to pay tax are not conditional on the validity of a notice. Section 13, though a part of the Act, imposes no charge on the subject and it is merely a part of the machinery of assessment. The liability to pay sales tax is founded upon sections 4 and 5 of the Sales Tax Act which are the charging sections. It cannot be held on principle that the jurisdiction to assess and the liability to pay tax depend on the issue or non-issue of the notice under section 13 ...... But where the failure to issue notice under section 13(2) has caused prejudice to the assessee, the assessment made by the Sales Tax Officer is invalid." In the case of Anandji Haridas Co. (P.) Ltd. v. S. P. Kushare, Sales Tax Officer, Nagpur[1968] 21 S.T.C. 326 (339) (S.C.). , their Lordships of the Supreme Court said as follows: "It is true that it is not a notice in respect of any particular quarter: it is a notice in respect of the period 1st January, 1953, to 31st December, 1953. In The State of Orissa and Another v. M/s. Chakobhai Ghelabhai and Company', this court held that the issue of one notice under section 12(5) of the Ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue of notice under section 12(5) of the Act does not affect the jurisdiction of the assessing authority, if otherwise reasonable opportunity of being heard has been given; (ii) Issue of notice as prescribed in rule 22 constitutes a part of reasonable opportunity of being heard; and (iii) If, however, prejudice has been caused by non-issue of notice or mistakes in the notice, the proceeding would be vitiated. 8.. Mr. Misra, on the other hand, relied on the case of Narayana Chetty v. Income-tax Officer', where their Lordships observed thus: "The notice prescribed by section 34 cannot be regarded as a mere procedural requirement; it is only if the said notice is served on the assessee as required that the Income-tax Officer would be justified in taking proceedings against him. If no notice is issued or if the notice issued is shown to be invalid then the validity of the proceedings taken by the Income-tax Officer without a notice or in pursuance of an invalid notice would be illegal and void." The aforesaid view is based on the express language used in section 34 of the Income-tax Act, 1922. This aspect of the matter has been specifically dealt with by the Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The officer himself has determined the annual gross turnover at Rs. 12,000 but he has not given any satisfactory data for it." 12.. It was contended by Mr. Mohapatra that this finding of the Tribunal is not a finding of fact binding on this court, for it overlooked the various materials referred to in the order of the first appellate authority. Mr. Misra, on the other hand, contended that the Tribunal is the final court of fact and its finding of fact that the business of the assessee did not attract liability is not open to challenge in the High Court. The true legal position is given in the following passage: "It is not open to the court to discard the Tribunal's finding of fact, if there is some evidence to support the finding of the Tribunal on a question of fact, even if on a review of the evidence the court might have arrived at a different conclusion. It must, however, appear that the Tribunal had considered evidence covering all the essential matters before arriving at its conclusion. If the conclusion of the Tribunal is based upon some evidence ignoring other essential matters, it cannot be regarded as a finding not giving rise to a question liable to be referred to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntext, its observation is: "The selling dealer has given a wrong statement as I find copy of credit memo. dated 22nd April, 1959. So the figures given by the dealer cannot be relied upon." In bunch 3 and slip No. 22, it found a transaction of purchase of goods from one Shyamsundar Patra of Sarankul and towards arrears the assessee paid Rs. 70 as per direction of the selling dealer. But in the bunch of invoices recovered, no such invoice during 1961 from Shyamsundar Patra was found. Thereafter it refers to bunch 2, slip 20, and bunch 3, slip 20, the first valuing Rs. 36-10-1 and the second Rs. 373-13-3, which do not indicate from whom they have been purchased. Referring to these specific items, it observed thus: "The detail examination of the slips and the pocket note-book shows in various places the purchase transactions of the appellant and it will be voluminous to mention all these details. From what has been said above it is clear that the appellant has enough purchases in cash and in other names and as per had chits in support of which he has not even cared to keep bills in his own name." 14.. Regarding the dealing of the assessee in ready-made garments, it has referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is made to slip 32 of bunch 4 indicating the arrears outstanding to the credit of the assessee from customers as on 1st June, 1959, and the total amount of such credit works out to Rs. 1,150. 19.. Summarising the evidence, the first appellate authority says thus: "The detail analysis as given above clearly conveys that the appellant has dealings in various items of goods and as such the business was there long since. A dealer having a daily sale below Rs. 30 or Rs. 40 cannot stock various miscellaneous items in his business place. The appellant has dealings in paddy, ready-made garments, cloth of all types, oil-cakes, motichur, vegetables like potato and onion, etc., and so on. He has kept no accounts and has tried to suppress purchases in various ways. Taking these into consideration and the various enquiries made by both the enquiring officer as well as the assessing officer, I am rather inclined to think that the estimate of daily sales made by the learned assessing officer is a bit liberal. The appellant has told all falsehood about his dealings which I have discussed in the previous paragraph." 20.. The Tribunal has not applied its mind to these various instances refer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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