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HIGH COURT OF CALCUTTA
SINHA, SEN GUPTA
KHAS KAJORA COAL CO. LIMITED - Appellant
Versus
MEMBER, BOARD OF REVENUE - Respondent
Matter 385 Of 1961
Decided On : JANUARY 07, 1966
BENGAL FINANCE (SALES TAX) ACT, 1941 - SECTION 10(3), 11(1) - RETURN - PREPAYMENT OF ADMITTED AMOUNT - CONDITION PRECEDENT - NO RETURN FILED - NOTICE IN FORM VI - VALIDITY.
Fact of the Case:
The assessee, Messrs Khas Kajora Coal Co. Ltd., a registered dealer under the Bengal Finance (Sales Tax) Act, 1941, failed to pay certain amounts of tax and file challans on the due date. On 28th January, 1950, the assessee filed a return without challans for the period 1st April, 1949, to 31st December, 1949. On 18th August, 1950, the Commercial Tax Officer issued a notice under Section 11(1) of the Act, treating it as a case of "no return". The assessee challenged the validity of the notice and the subsequent assessment proceedings.
Finding of the Court:
The Court held that the prepayment of the admitted amount mentioned in Sub-section (3) of Section 10 of the Act is a precondition to the furnishing of a return. Unless such payment has been made, the return filed cannot be considered a valid return and it is "no return" in the eye of law. Therefore, the Commercial Tax Officer was justified in treating the matter as if no return has been filed.
Issues: 1. Whether the assessee had filed a valid return in accordance with the provisions of the Act. 2. Whether the Commercial Tax Officer was justified in issuing a notice in Form VI treating it as a case of "no return". 3. Whether the notice in Form VI was valid in law.
Ratio Decidendi: 1. The Court interpreted Section 10(3) of the Act and held that the prepayment of the admitted amount is a condition precedent to the furnishing of a valid return. 2. The Court held that the assessee had not filed a valid return since the admitted amount was not prepaid. Therefore, it was a case of "no return" and the Commercial Tax Officer was justified in issuing a notice in Form VI. 3. The Court also held that even if the notice in Form VI was issued under the wrong clause, it did not make it invalid in law. The exercise of power should be referred to the jurisdiction which confers validity upon it rather than which makes it nugatory.
Final Decision: The Court answered the question referred to it by holding that the Commercial Tax Officer was justified in treating the matter as a case where no return was filed and to issue notice in Form VI on that footing. The notice was valid in law and the subsequent assessment proceedings were in accordance with law.
( 1 ) THIS is a reference under Section 21 (3) of the Bengal Finance (Sales Tax) Act, 1941 (hereinafter referred to as the said Act ).
( 2 ) BEFORE I come to the question posed before us, I shall briefly enumerate the facts. The assessee, Messrs Khas Kajora Coal Co. Ltd. is a registered dealer under the said Act. We are concerned here with the period 1st April, 1949, to 31st December, 1949. In respect of this period, the assessee made certain payments of tax particulars whereof are given below :
Date Amount
20-1-50 Rs . 4,452 13 0
20-1-50 Rs . 3,879 6 0
1-3-50 Rs . 1,894 1 9
7-7-50 Rs . 7,548 11 3
Total Rs . 17,775 0 0
( 3 ) ON the 28th January, 1950, the assessee filed a return for the period mentioned above, but in the return no challans were filed and indeed on the date on which the return was filed, the last two items mentioned above had not been paid at all. Under the said Act and the Rules made thereunder, 1st March, 1950, was the date on which the return should have been filed. Therefore, the fact is that on the date that the return was field, certain amounts of monies which were payable had not been paid, and challans had not been filed and in regard to two unpaid sums, challans could not possibly have been filed. On the 18th August, 1950, the Commercial Tax Officer issued notice under Section 11 (1) of the said Act, read with Rule 49 of the Rules. A copy of this notice has been set out in the paper book at page 7. Thereafter, on 15th January, 1952, the assessee sought to file an amended return but nothing turns upon it. On the 4th November, 1952, the Commercial Tax Officer, after hearing the assessee and looking into the books that had been produced before him, made an assessment order. In that assessment order a penalty of Rs. 50 was imposed. Thereafter there were further proceedings in the course of the assessment which may be briefly enumerated as follows : Firstly, the assessment was set aside and a fresh assessment was directed by the Assistant Commissioner on 8th July, 1953. Then on the 27th September, 1954, a fresh assessment was made but this was set aside on an appeal to the Assistant Commissioner by his order dated 31st March, 1955. On the 27th August, 1957, a notice was issued under Section 20 (2) (b) of the said Act. On the 27th September, 1957, the order of the Assistant Commissioner was set aside. Thereafter, on the 27th December, 1957, a petition for revision under Section 20 (3) of the said Act was made to the Board of Revenue, West Bengal. On the 13th July, 1960, this application for revision was rejected. Thereafter, on the 10th September, 1960, an application was made for a reference to this Court under Section 21, but this was rejected by the Board of Revenue on the 19th September, 1961. Thereupon an application was made to the High Court and ultimately this Court directed the Member, Board of Revenue, to refer to the High Court the following question : whether in the facts and circumstances of the case the Commercial Tax Officer was justified in treating the matter as a case where no return was filed and to issue notice in Form VI on the footing and whether such notice is valid in law and if such notice is not valid in law, how it has affected the assessment.
( 4 ) BEFORE I deal with the question posed, it will be necessary to refer to certain provisions of the said Act. The first provision is Section 10 of the said Act, the relevant provisions of which are set out below:10. (1) Tax payable under this Act shall be paid in the manner hereinafter provided at such intervals as may be prescribed. (2) Such dealers as may be required so to do by the Commissioner by notice served in the prescribed manner and every registered or certified dealer shall furnish such returns by such dates and to such authority as may be prescribed. (3) Before any registered or certified dealer furnishes the returns required by Sub-Section (2), he shall, in the prescribed manner, pay into a Government
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