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SUPREME COURT OF INDIA
A.N. RAY, C.J.I., H.R. KHANNA, K.K. MATHEW, M.H. BEG AND Y.V. CHANDRACHUD JJ.
Supdt. of Taxes, Dhubri and others, Appellants
Versus
M/s. Onkarmal Nathmal Trust, Respondent.
Civil Appeals Nos. 140-143, 262-275, 678 and 1761-1762 of 1973
D/- 1-5-1975
Civil Appeals No.s.140-143 of 1973:
Civil Appeals Nos. 262-275 of 1973:
Advocates Appeared
Supdt. of Taxes, Dhubri and others, Appellants v. Assam Jute Supply Co. Ltd. etc.Respondents.
Civil Appeals Nos. 687 of 1973:
Supdt. of Taxes, Dhubri and others, Appellants v. M/s. Lakshmichand Indra Chand, Respondent.
Civil Appeals Nos. 1761-1762 of 1973:
Supdt. of Taxes, Tinsukia and others, Appellants v. Thanai Tea Estate, Respondent.
Advocates Appeared
Mr. L. N. Sinha, Solicitor General (In CAs. Nos. 140-143, 687 and 1761-62 of 1973; Mr. Moinul Haque Choudhry, Sr. Advocate (In CAs. Nos. 262, 275/73), Mr. S. N. Choudhary, Advocate with them) for Appellants; M/s. A. K. Sen and B. Sen, Sr. Advocates (Mrs. Leila Seth. M/s. U. K. Khaitan and J. P. Bhattacharjee, Advocates of M/s Khaitan and Co. with them), for Respondents (In CAs. Nos. 140-143. 262. 263, 287 and 270, 275 of 1973); Mr. Sachin Choudhary Sr. Advocate, (M/s. Prasanta K. G. Goswami, S. R. Agarwala, Advocates and M/s. P. H. Parekh, Mrs. S. Bhandare and Miss Manju Jetley, Advocates of M/s. Bhandare Parekh and Co. with him). for Respondents (In CAs. Nos. 1761-82 of 1973) and interveners (In CAs. Nos. 140 to 143 of 1973).
Assam Taxation (on Goods Carried by Road or on Inland Waterways) Act, 1961 - Section 7 (2) and9 (4) - Limitation Act - Section 5 or 14 - Question of validity of notices of demand - In Civil Appeals notice under section 7 (2) of New Act was issued for return of quarter respondent assessees challenger these demand notices in High Court on found that notices were illegal and beyond jurisdiction of the State broad contention of assessees was that State Could issue notices within two years from expiry of the return period and none of notices was within the time mentioned in the New Act and therefore, the State had no jurisdiction to issue notice - State, on the other hand, contended that there was an order of High Court staying all proceedings, and, therefore, it was not possible to issue any notice until State was permitted by orders of this Court to commence proceedings – Held, Whether on mere language of Section 7 (2) and Section 9 (4) a failure to issue a notice under Section 7 (2) of Act within return period constitutes a bar to proceedings under Section 9 (4) of the Act I do not see how a failure to issue such a notice would not become a bar due to clear provisions of Section 11 of the Act This bar, at any rate, is against exercise of jurisdiction to assess beyond the prescribed period - Notice here is part of the procedure for assessment - There is no power given to issue it beyond period fixed - There is no provision of the Act making anything like Section 5 or Section 14 of Limitation Act applicable to proceedings for escaped assessment under Act - We cannot by an exercise of our judicial power of interpretation defeat clear effect of enacted law - If the law was badly drafted or has revealed a gap which its makers did not foresee, the remedy of the State lies elsewhere - Appeal dismissed.
Judgement
A. N. RAY, C. J. (for himself and on behalf of Y. V. Chandrachud J-):- These appeals by special leave raise the question of the validity of notices of demand under the Assam Taxation (on Goods Carried by Road or on Inland Waterways) Act. 1961 hereinafter referred to as the New Act.
2. The Assam Taxation (on Goods Carried by Road or Inland Waterways) Act, 1954 hereinafter referred to as the Old Act was passed by the Assam Legislature in 1954. On 26 September, 1960 this Court declared the Old Act to be ultra vires the Constitution on the ground that prior sanction of the President was not taken. On 6 April, 1961 the New Act was passed by the Assam Legislature. The New Act was published in the Gazette on 15 April, 1961. The New Act was to remain in force with retrospective effect from 24 April, 1954 up to 3 March, 1962.
3. On 28 July, 1961 the New Act was challenged by about 485 assessees in the Assam High Court. The High Court passed an order staying all proceedings. The order staying proceedings continued till the New Act was held ultra vires the constitution by the High Court. On 1 August, 1963, the High Court held the New Act to be ultra vires. On 1 August, 1963 the High Court granted certificate of fitness to appeal to this Court.
4. On 13 December, 1983 on a writ application filed by M/s Khyerbari Tea Co. Ltd. this Court held the New Act to be valid. The decision of this Court is reported in (1984) 5 SCR 975 Khyebari Tea Co. Ltd . v. The State of Assam.
5. On 4 March, 1964 the State of Assam an the strength of the certificate granted by the High Court filed an appeal in this Court against the judgment of the High Court dated 1 August, 1963. On 28 October, 1964 this Court granted interim stay of the operation of the judgment of the High Court dated 1 August, 1963. On 29 January, 1965 the interim stay granted by this Court was made absolute subject to the condition that the assessment proceedings in respect of 485 respondents would continue but no levy would be made, and the respondents could initiate assessment proceedings in respect of those assessees. On 1 April, 1968 this Court accepted the appeals filed by the State Government.
6. It is only after the State obtained interim order from this Court an 29 January, 1965 that notices under Section 7 (2) of the New Act were issued. These appeals challenged the validity of those notices. In Civil Appeals No. 140-143 of 1973 notice under Section 7 (2) of the New Act was issued an 4 March, 1965 for the return of the quarter 1 January to 31 March, 1962. In Civil Appeal No. 687 of 1973 notice under Section 7 (2) of the New Act was issued on 4 March, 1965 for the return of the quarter 1 January to 31 March, 1962. In Civil Appeals No. 262-275 of 1973 notice under Section 7 (2) of the New Act was issued on 2 August, 1965 for the return of the quarter 1 October 1961 to 31 December, 1961. In Civil Appeals Nos. 1761-1762 of 1973 notice under section 7 (2) of the New Act was issued on 30 February, 1965 for the return of the quarter 1 October, 1961 to 31 December, 1961. The respondent assessees challenger these demand notices in the High Court on the found that the notices were illegal and beyond the jurisdiction of the State The broad contention of the assessees was that the State Could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act and therefore, the State had no jurisdiction to issue the notice. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings.
7. The High Court accepted the contention of the assesees. The High Court held that the notices were barred by limitation in terms of the provisions contained in Section 7 (2) of the New Act. Each of the challenged notices was m
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