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TMI Blog1984 (3) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... turns in form S.T. VIII disclosing a turnover pertaining to its sales, and accordingly paid sales tax thereon. The Assessing Authority, Ludhiana, issued notice under section 11(2) of the Act in form S.T. XIV to the petitioner on 1st December, 1976, calling upon it to produce necessary books of account and documents in support of the sales tax return filed. Finally on 26th June, 1978, the Assessing Authority framed the assessment, and since an additional demand had been created (the details of which we are not concerned presently) in the assessment, penalty was imposed. The petitioner being satisfied with the order did not appeal to the appellate authority. The assessment order is annexure P1 to the petition. As is plain, the assessment had itself been finalised by the Assessing Authority after a period of 5 years when computed from 1st April, 1971. The Commissioner in exercise of his powers under section 21(1) of the Act sent for the proceedings of that assessment. On perusal thereof, he took the view that the tax on purchases undertaken by the petitioner had escaped. He then required the petitioner to give a written explanation. The petitioner was also asked to submit a list of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which on bare glance, I find to be in form S.T. VIII-A (prescribed for purchase tax returns) but is signed as if in a scrawl bereft of any details. In any case, there is no reference to it either in the orders of the Assessing Authority or that of the Commissioner. It suddenly sprang up before the Sales Tax Tribunal and there only the contention of the Revenue was noticed about the presence of the said return. But its operative value was not determined and even there was no positive finding by the Tribunal that such return had been filed and was a genuine one. It was brought to the notice of the Tribunal, possibly to contend that jurisdiction thereon could be assumed by the Commissioner since proceeding with regard thereto could be taken to be pending before the Assessing Authority. The argument indeed is ingenuine but it has to be weighed in the light of the facts and circumstances emerging herein. Exercise of revisional jurisdiction by the Commissioner is always a conscious exercise and not an accidental one. By no stretch of imagination can it be said that the assumption of jurisdiction by the Commissioner should be deemed to be on the basis of the said purchase tax return ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner had failed to file the purchase tax returns, no record had been initiated (sic), no proceedings stood taken thereon and thus there was no functional basis, on which the Commissioner could invoke his revisional jurisdiction. Added thereto is the comment that no notice was served under section 11 of the Act on the dealer for his failure to file purchase tax returns within the five years' period as prescribed therein. A cursory look at section 11 of the Act shows that best judgment assessment can be made by the Assessing Authority under sub-sections (4), (5) and (6) of section 11 of the Act. In other words, framing of best judgment assessment is a positive act by the Assessing Authority. The assessment of tax under section 11 of the Act proceeds on the functional basis of returns. Sub-section (5) thereto covers a situation, in which a dealer does not furnish returns by the prescribed date. Sub-section (6) also deals with a case in which return has not been filed by a dealer who has failed to apply for registration. Thus under section 11 it can broadly be stated that it operates on the premises that in one case the returns have been filed and in the other they have not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rming to the provisions of section 21 of the Act, but in a given situation subject to the outer limit as conceived of in section 11. A Full Bench of this Court in Hari Chand Rattan Chand Co. v. Deputy Excise and Taxation Commissioner (Additional), Punjab [1969] 24 STC 258 (FB) while construing section 11-A of the Act in case of escaped assessment observed: ".........But, before he decides to exercise this power, he must come to the conclusion that the order or the proceedings suffer from the vice of impropriety or illegality and for this conclusion he has to confine himself to the record which is called for by him and which was before the lower authority, as the lower authority can be presumed to have applied his mind only to that record. He cannot take into consideration any fresh material in order to come to this conclusion. After having come to that conclusion, he will be entitled to scrutinise the proceedings and the order passed in order to determine the correct turnover which should have been assessed to tax on the basis of that record. He cannot, however, bring to tax, in the purported exercise of revisional powers, any turnover which had not been disclosed to the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein it is worthy to recall that the period in question terminated on 31st March, 1971, and the period for initiation of best judgment assessment proceedings in relation thereto terminated on 31st March, 1976. The Assessing Authority itself finalised the assessment on sales tax return on 26th June, 1978. Before the expiry of the 5 year period concededly no notice under form S.T. XIV was issued to the assessee by the Assessing Authority for its failure to file purchase tax returns. In that situation, none could be issued for the purpose by the Commissioner and no best judgment assessment could be framed by him correctively, as a substitute to the role assigned to the Assessing Authority in exercise of powers of revision. The only notice issued to the assessee on 1st December, 1976, in form S.T. XIV related to some explanation supportive of the sales tax return. Admittedly, that is no substitute for the requisite notice meant for failure to file purchase tax returns. Before leaving this aspect, I deem it appropriate to mention that section 4 of the Act, which provides incidence of taxation talks of a taxable turnover comprised of sales effected and purchases made. Turnover as suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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