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TMI Blog1974 (4) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 5,000 was imposed as penalty for failing to apply for registration. The petitioner filed appeals against the order of assessment which were dismissed in limine, because tax was not deposited as required by the Rules. Thereafter, the present petition was filed for challenging the assessment. 2.. Before 1st November, 1956, Balaghat and Nagpur Districts were both in the erstwhile State of Madhya Pradesh. The new States of Madhya Pradesh and Bombay (now Maharashtra) were constituted by the States Reorganisation Act, 1956, which came into force on 1st November, 1956. Nagpur District is now included in the State of Maharashtra, whereas Balaghat District is in the State of Madhya Pradesh. The relevant sales tax law for the entire period of assessment is the Central Provinces and Berar Sales Tax Act, 1947. The petitioner did not register himself as a dealer before 1958. He was not assessed to any tax before the coming into force of the States Reorganisation Act. The petitioner applied for registration as a dealer sometime in 1958 and was registered as a dealer on 27th December, 1958, by the Sales Tax Officer, Chhindwara, exercising jurisdiction over Balaghat and Chhindwara Districts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act by another Division Bench (Dixit, C.J., and Pandey, J.) in Battulal v. Commissioner of Sales Tax[1962] 13 S.T.C. 893; 1962 M.P.L.J. 915. This is how the petition came up before us. 5.. The first contention raised by the learned counsel for the petitioner before us is that the Sales Tax Officer, Chhindwara, had no jurisdiction to assess the tax for a period prior to the coming into force of the States Reorganisation Act, i.e., 1st November, 1956. It is argued that the right to recover arrears for a period prior to 1st November, 1956, is given under section 78 of this Act to the successor State in whose territories the place of assessment of tax is included. Reference in this connection was made to rule 2(c) of the Central Provinces and Berar Sales Tax Rules, 1947, which defines "appropriate Sales Tax Officer" to mean the Sales Tax Officer of the circle in which the dealer's place of business is situated, or if the dealer has more than one place of business in the State, the Sales Tax Officer of the circle in which his head office or principal place of business is situated. It is further argued that the petitioner's principal place of business before 1st November, 1956, was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness was situated at Nagpur. The petitioner did not challenge the jurisdiction of the Sales Tax Officer, Chhindwara, in the assessment proceedings and, therefore, no inquiry was made and no finding was recorded by the Sales Tax Officer on the question of location of the principal place of business of the petitioner on 31st October, 1956. Even in the petition filed before us there is only a general statement that the principal place of business of the petitioner is situated at Nagpur in the State of Maharashtra and there is no specific allegation that this was the position on 31st October, 1956. No material has been placed before us to show that the petitioner's head office or principal place of business before 1st November, 1956, was at Nagpur. As the petitioner did not challenge the jurisdiction of the Sales Tax Officer, Chhindwara, in the proceedings for assessment and as the objection to jurisdiction depends upon an inquiry regarding the question of fact as to where the petitioner's principal place of business was located at the relevant time, the burden in these proceedings under article 226 must be on him to allege and prove the necessary facts which will lead us to hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This section reads as follows: "Power to adapt laws.-For the purpose of facilitating the application of any law in relation to any of the States or Union territories formed or territorially altered by the provisions of Part II, the appropriate Government may, before the expiration of one year from the appointed day, by order make such adaptations and modifications of the law, whether by way of repeal or amendment, as may be necessary or expedient, and thereupon every such law shall have effect subject to the adaptations and modifications so made until altered, repealed or amended by a competent legislature or other competent authority. Explanation.--.............................................................................." In exercise of the power conferred by this section, the Government of Madhya Pradesh inserted in the Central Provinces Sales Tax Act a new section 11-C as follows: "Power of Commissioner to assess tax due prior to 1st November, 1956.Where the amount of the tax due from a dealer for any period prior to the 1st day of November, 1956, has not been assessed or any turnover has escaped assessment then notwithstanding the reorganisation of States under the Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Nagpur District, even though it be the successor State under section 78 of the States Reorganisation Act, must be rejected. 11.. Lastly, it is contended that assessment of tax for a part of the period was barred by limitation under section 11(5) of the Central Provinces Sales Tax Act, and that as the assessment was a composite assessment, the entire assessment must be quashed. The notice calling upon the petitioner to show cause as to why he should not be assessed for the period from 1st October, 1953, to 26th December, 1958, was issued on 18th July, 1959. The argument of the learned counsel is that power under section 11(5) can be invoked only for the quarter or quarters which are within three years from the date of the notice issued to the petitioner and that limitation is to be reckoned for each quarter separately. The learned counsel challenged the correctness of the contrary view taken in Battulal v. Commissioner of Sales Tax(1). 12.. Under the scheme of the Central Provinces Sales Tax Act incidence of tax falls on all sales effected after the commencement of the Act by a dealer whose turnover during the year or period specified in subsections (1) and (2) of section 4 ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the returns; or (iii) to produce or cause to be produced any accounts, registers, cash memoranda or other documents as may be considered necessary by the Commissioner for the purpose. (3) After hearing the dealer or his agent and examining the evidence produced in compliance with the requirements of clause (ii) or clause (iii) of sub-section (2) and such further evidence as the Commissioner may require, the Commissioner shall assess him to tax. (4) If a registered dealer- (a) does not furnish returns in respect of any period by the prescribed date, or (b) having furnished such returns fails to comply with any of the terms of a notice issued under sub-section (2), or (c) has not regularly employed any method of accounting, or if the method employed is such that, in the opinion of the Commissioner, assessment cannot properly be made on the basis thereof, the Commissioner shall in the prescribed manner assess the dealer to the best of his judgment: Provided that he shall not so assess him in respect of the default specified in clause (a) unless the dealer has been first given a reasonable opportunity of being heard. (5) If upon information which has come into his posse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or quarters specified in the notice. Rule 32 then deals with assessment, reassessment and imposition of penalty. It provides that when a dealer being liable to tax has wilfully failed to apply for registration or where the turnover of a dealer during any period has escaped assessment, a notice in form XII will be issued by the assessing authority. A look at form XII shows that this notice has to specify the period or periods for which default has been made. Rule 34 requires that an assessment order shall be in form XIV. 14.. A perusal of the relevant rules shows that they do not in terms provide as to what is "the prescribed period" for the definition of turnover. However, the provisions made in the rules that a registered dealer has to furnish returns of the turnover for each quarter and an unregistered dealer can be similarly called upon to furnish returns for a quarter or quarters go to show that quarter is the period prescribed by the rules by necessary implication for the definition of "turnover" in the Act. The words "prescribed period" and "such period" occurring in the definitions of "turnover" and "taxable turnover" respectively thus mean a quarter. As tax is levied by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree years prescribed by section 11(5) for assessing a dealer who, though liable to pay tax in respect of any period, has failed to apply for registration, has, therefore, to be computed for each quarter separately and not for the entire period for which he has been liable to pay tax taken as a whole. 17.. The above construction of section 11(5) is strongly supported by the case of Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax[1963] 14 S.T.C. 976 (S.C.); [1964] 51 I.T.R. 557 (S.C.); A.I.R. 1964 S.C. 760., where the Supreme Court construed similar words in section 11-A. This section authorises the Commissioner, if he is satisfied that any turnover of a dealer during "any period" has been under-assessed or has escaped assessment, etc., to proceed to reassess or assess the dealer at any time "within three calendar years from the expiry of such period". In construing this section in Ghanshyamdas's case(1) the Supreme Court said: "As the unit of assessment is a quarter, the period in section 11-A can only mean a quarter." Ghanshyamdas's case(1) was no doubt a case of a registered dealer, but section 11-A makes no distinction between a registered dealer and an unregiste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occurring in these sections must be given the same meaning so that the same period of limitation may be available for assessment, whether the action be taken under section 10(5) or under section 11-A. As already seen, the meaning of the words "any period" in section 11-A has been settled by the Supreme Court in the cases of Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax[1963] 14 S.T.C. 976 (S.C.); [1964] 51 I.T.R. 557 (S.C.); A.I.R. 1964 S.C. 766. and Anandji Haridas Co. v. S.P. Kushare[1968] 21 S.T.C. 326 (S.C.); A.I.R. 1968 S.C. 565., where it has been held that these words mean a quarter on the reasoning that a quarter is a unit of assessment and this meaning must also be adopted for construing these words in section 10(5). 19.. In Baltulal v. Commissioner of Sales Tax[1962] 13 S.T.C. 893; 1962 M.P.L.J. 915., it was held that "period" in section 10(5) meant the whole period during which a dealer being liable to pay tax had wilfully failed to apply for registration and that it did not refer to a quarter. The learned judges observed that recourse to the Rules could not be taken for construing the word "period " which was not defined by the Act. It was also obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese observations do not support the view that the period consisting of several quarters has to be taken as a continuous whole for reckoning limitation. Since singular includes plural, the word "period" must mean "period" or "periods" and, therefore, quarter or quarters and this is what is meant by the observations of the Supreme Court that "the period may consist of more than one quarter". Properly understood, these observations do not support the conclusion reached in Battulal's case(3), rather they support the conclusion reached by us. Further, in Battulal's case(3) it was not noticed that if the words "any period" in section 11(5) are construed to mean a continuous period and not a quarter or quarters taken separately it will give rise to discrimination between unregistered dealers proceeded against under this section and those proceeded under section 11-A. In our opinion, Battulal's case(3) and the other cases in which it was followed were wrongly decided. The conclusion reached by us is in accord with the view taken in Commercial Credit Corporation Ltd. v. State[1965] 67 Bom. L.R. 138., where a Division Bench of the Bombay High Court, dissenting from the view taken in Battula ..... X X X X Extracts X X X X X X X X Extracts X X X X
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