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TMI Blog1982 (2) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year prior to its introduction in the statute book and that the term "assessing authority" in section 45A of the Act would not include an Intelligence Officer but only the regular assessing authorities under the Act. In appeal, in the decision reported in Intelligence Officer, Central Intelligence Squad, Agricultural Income-tax and Sales Tax, Ernakulam v. Hotel Ambassador [1980] 45 STC 425, the finding that the powers under section 45A could be exercised only in the course of assessment was set aside. But the finding on the vice of retrospective operation was upheld. The detection of irregularity by the Intelligence Officer in that case took place prior to 26th October, 1975, when section 45A was enacted. The Division Bench held that section 45A had no application to the facts of the case. The Division Bench noticed the definition of "assessing authority" in section 2(iv) of the Act and referred to a Notification, S.R.O. No. 335 of 1963, but did not express itself on the question whether an Intelligence Officer would be an assessing authority in view of the finding that section 45A did not apply to the facts of the case before. The submission made before me by the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cised de hors assessment proceedings. The initiation of proceedings in this case is not in the course of assessment proceedings and hence is bad. (3) The only provision that enables the first respondent to impose penalty is the one contained in section 28(8). Section 45A is an independent section dealing with a different situation and is not available for an Intelligence Officer. (4) The inspection took place on 30th August, 1980. The offence is alleged to have been committed either on that day or prior thereof. Act 19 of 1980, by which explanation II was introduced, came into force only on 12th September, 1980. Therefore the first respondent was not competent to invoke section 45A in respect of an offence which took place prior to 12th September, 1980. (5) The powers of inspection, search and seizure offend article 14 of the Constitution of India since it is left to the Intelligence Officers to pick and choose the assessees for the purpose of proceedings under the provisions of the section. The assessee has no right of appeal or second appeal. The only remedy available is by way of revision to a departmental authority acting on the administrative side. This robs the assessee of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of assessment proceedings, as stated by the learned judge. The learned judge seems to have overlooked section 45A, which we have already quoted. Section 19 of the Act provides for assessment of the escaped turnover. Clause (1) of section 19 is the section which provides for an escaped assessment; and clause (2) of the section enacts: '19. (2) In making an assessment under sub-section (1), the assessing authority may, if it is satisfied that the escape from assessment is due to wilful nondisclosure of assessable turnover by the dealer, direct the dealer to pay, in addition to the tax assessed under sub-section (1), a penalty as provided in section 45A: Provided that no such penalty shall be imposed unless the dealer affected has had a reasonable opportunity of showing cause against such imposition. Explanation.-Notwithstanding anything contained in the Indian Evidence Act, 1872, the burden of proving that the escape from assessment was not due to wilful non-disclosure of assessable turnover by the dealer shall be on the dealer.' This is only an enabling power which allows the assessing authority even while making a reassessment of an escaped assessment to resort to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority" and that with a set purpose. If these powers can be exercised by any officer as the counsel for the revenue contends, that would create an anomaly and the working of the sales tax machinery would be rendered difficult. The only provision, according to him, which enables any officer under the Act to impose penalty is provided in section 28(8) of the Act. The expression used in the section mentioned above is "any officer". 8.. These submissions are entitled to considerable weight. But they cannot help the petitioner now after the introduction of explanation II to section 45A. Section 2(iv) defines "assessing authority" as follows: " 'Assessing authority' means any person authorised by the Government or by any authority empowered by them to make any assessment under this Act." The learned Government Pleader would contend that this definition enables the Government to bring within its ambit any officer including the Intelligence officer. The definition deals generally with assessing authorities. Government can by rules empower any particular officer to make any assessment under the Act. This appears to be so. But the question still remains whether the first respondent in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication was brought to the notice of the Division Bench in Intelligence Officer, Central Intelligence Squad, Agricultural Income-tax and Sales Tax, Ernakulam v. Hotel Ambassador [1980] 45 STC 425 and the Division Bench had this to say on this notification: "Our attention was invited to the notification printed at page 302 of Sugathan's book on the Law of Sales Tax, where S.R.O. No. 335/63 issued by the Government is seen printed. The schedule to that S.R.O. has been omitted. It was pointed out by the learned Advocate-General that the notification empowers the Intelligence Officer to function as assessing authority within the meaning of the Sales Tax Act. In the view that we have taken that section 45A has no application to the facts, we do not propose to express ourselves on this question." It is therefore evident that the question posed based on this notification was not decided by the Division Bench and that it is at large and is open for examination. In my view, the revenue cannot succeed on the strength of this notification for the reason that the said notification has virtually been replaced by explanation II to section 45A. If this notification had been sufficient to clo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said powers. Similarly sections 39 and 41 followed by S.R.O. Nos. 346/63 and 345/63 regarding appeal to the Appellate Tribunal which provides any officer empowered by the Government in this behalf. It is not disputed that no notification has been issued under explanation II to section 45A which means that the Intelligence Officer who initiated the proceedings in this case has not been specifically empowered to take any action under section 45A by the issuance of a notification. The submission made by the learned counsel for the revenue that the notification issued in 1963 should be deemed to be a notification under explanation II has to be rejected. 11.. Another limb of the argument of the petitioner's counsel is that there is no material before the court to hold that the Intelligence Officer in that case is an officer not below the rank of a Sales Tax Officer. According to him, the Sales Tax Act is silent about the hierarchy of officers under it. The notification of 1963 takes within its fold officers differing in rank and status and all of them are clubbed together. Section 3 of the Act deals with sales tax authorities and section 4 with the Appellate Tribunal. 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