Judgment

SUBBA RAO, J.: (For S. K. Das Actg. C. J., himself, N. Rajagopala Ayyangar and J. R. Mudholkar JJ.): These two appeals by certificate raise the question of the true interpretation of the meaning of the expression "escaped assessment in S. 11-A of the Central Provinces and Berar Sales Tax Act, 1947 (XXI of 1947), hereinafter called the Act.

2. The facts in Civil Appeal No. 101 of 1961 are as follows : The appellant is the manager of a joint Hindu family firm carrying on business in bidis. He is registered as a dealer under S. 8 of the Act. Every registered dealer under the Act is required to furnish quarterly returns of his turnover within one month from the end of the quarter. For the year 1949-50, i. e., for the period from October 22, 1949 to November 9, 1950, he submitted a return of his turnover on October 5, 1950 for one quarter only and made a default in respect of the other quarters. The Assistant Commissioner of Sales-tax, Nagpur, issued a notice to the appellant on August 13, 1954 in Form No. 11 under S. 11(1) and (2) of the Act in respect of the turnover of the firm for the said period. The appellant thereafter filed the returns for the three quarters in respect of which he had made default, but in the assessment proceedings he contended, inter alia, that the Assistant Commissioner could not assess his escaped turnover as he could only do so within three years from the expiry of the period in respect whereof his turnover had escaped assessment. The Sales-tax Commissioner rejected the said contention, proceeded with the assessment and determined the tax liability at Rs. 15,846./-. Aggrieved by the said order, the appellant filed a petition under Art. 226 of the Constitution in the High Court of Judicature at Nagpur mainly on the ground that the proceedings before the Sales-tax Commissioner were barred by time under S. 11-A of the Act.

3. Civil Appeal No. 102 of 1961 is in respect of assessment of sales-tax on the turnover of the appellant for the year 1950-51. The appellant had not filed any return for the whole year. The Assistant Commissioner of Sales-tax, Nagpur served a notice on the appellant on October 15, 1954 under S. 11(4) of the Act. The appellant filed his returns and produced the account-books under protest and also raised objections that the assessment proceedings were barred by limitation under S. 11-A of the Act. The Assistant Commissioner rejected his plea of limitation and determined his tax liability at Rs. 16,537-5-0. The appellant filed another petition under Art. 226 of the Constitution in the said High Court for a similar relief.

4. Both the petitions were heard together by Kotval J. The learned Judge, following the decision of a division Bench of that Court in Firm Sheonarayan Matadin v. Sales-tax Officer, Raipur, 1956-7 STC 623 (Nag) held that, as the notices were issued beyond three years from the expiry of the relevant periods, the Sales-tax Commissioner had no jurisdiction to make the assessments. On that ground he quashed the said assessments.

5. The respondent filed Letters Patent Appeals to a division Bench of the said High Court. On the formation of the State of Madhya Pradesh, the above appeals were transferred to the Madhya Pradesh High Court and were heard by a Division Bench consisting of Hidayatullah C. J. and Choudhuri J. The Division Bench held that S. 11-A of the Act could apply only to a case where there was a final assessment and that in the instance cases the first assessment proceedings were pending and, therefore, the said Section had no application thereto. In the result, by a common judgment, they set aside the orders of Kotval J. Hence the present appeals.

6. Mr. J. M. Thakar, learned counsel for the appellant raised before us the following four points: (1) The expression "escaped assessment in S. 11-A of the Act would apply also to a case where there was no assessment at all. (2) Even if the first assessment proceedings were pending before the appropriate authori