Judgment

RAMASWAMI,, J.

( 1 ) THIS appeal is brought, by special leave, from the judgment of the Madhya Pradesh High court dated 31/03/1964, in Miscellaneous Petition No. 37 of 1963 whereby the High court quashed the notice dated 16/03/1963, and the proceedings for assessment to sales tax initiated by the respondent for the year 1955-56.

( 2 ) THE respondent is a partnership firm which has been carrying on the business of a draper at Indore. The firm was registered as a "dealer" under the Madhya Bharat Sales Tax Act, 1950, hereinafter referred to as "the Act". For the year 1955-56 the respondent failed to submit its return whereupon the Sales Tax Officer, Indore, made an order under section 8 (l) (b) of the Act and after determining the turnover of the respondent for the said period to the best of his judgment, made an assessment of the respondent to sales tax on the basis thereof. The respondent took the matter in revision to the Commissioner of Sales Tax, Madhya Pradesh. By his order dated 12/10/1958, the Commissioner of Sales Tax held that the assessment order dated 13/08/1956, passed by the Sales Tax Officer should be set aside since the respondent was not afforded an opportunity of being heard. The Commissioner of Sales Tax accordingly remanded the case for fresh assessment to the Sales Tax Officer after giving a fresh notice under section 8 (l) (b) of the Act. Thereafter the Sales Tax Officer served upon the respondent a fresh notice on 29/11/1958. It appears that the proceedings remained pending and no action was taken against the respondent and the Sales Tax Officer issued another notice to the respondent on February 11, 1963. The respondent then raised an objection that the Sales Tax Officer had no jurisdiction to proceed to tax the sales made in the year 1955-56 because the period of three years contemplated by section 10 of the Act for making the assessment had expired. The objection was overruled by the Sales Tax Officer by his order dated 18/07/1963, on the ground that section 10 of the Act did not apply to the respondent as it was not a case of escaped assessment. Thereafter the respondent moved the Madhya Pradesh High court for grant of a writ to quash the proceedings pending before the sales tax authorities for assessment to sales tax relating to the year 1955-56. The writ petition was allowed by the High court by its judgment dated 31/03/1964, the order of the Sales Tax Officer dated 18/07/1963, was set aside and the appellant was directed to forbear from proceeding with the assessment to sales tax for the year 1955-56.

( 3 ) IT is necessary at this stage to set out the relevant provisions of the Act as they stood at the material time. Section 8 (1) (a) and (b) is to the following effect: "8. (l) (a) Assessment of taxable turnover and determination of tax due for any year, shall be made after the returns for all the periods of that year have become due : Provided that in the case of Melas the assessment shall be made as soon as the return of turnover has been received. (b) Notwithstanding anything contained in clause (a), if any dealer fails to submit a return under section 7 (1) for the prescribed period within the prescribed time the assessing authority shall, after making such enquiry as he considers necessary and after giving the dealer a reasonable opportunity of being heard, determine the turnover of the dealer for the said period to the best of his judgment and assess the tax on the basis thereof. This assessment, subject to the provisions of section 10 and to such orders as may be passed in appeal or revision, shall be final for the period. " Section 10 of the Act states :"assessment of tax and levy of licence fees, or registration fees or exemption fees incorrectly assessed.-If for any reason the whole or any part of the turnover of business of a dealer has escaped assessment to the tax, or if the licence fee, registration fee or exemption fee has escaped levy or has been assessed at too low a rate in a