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HIGH COURT OF CALCUTTA
Sinha
NAGENDRA NATH SHAH - Appellant
Versus
STATE OF WEST BENGAL - Respondent
Civil Revn. 174 Of 1955
Decided On : APRIL 09, 1957
BENGAL FINANCE (SALES TAX) ACT, 1941 - SECTION 20(1), 20(3) - REVISION OF ASSESSMENT - JURISDICTION - NATURAL JUSTICE - LIMITATION - AMENDMENT ACT XLVIII OF 1950 - RETROSPECTIVITY - RULES 76 TO 80 - APPEAL - REVIEW.
Fact of the Case:
The petitioner, a registered dealer under the Bengal Finance (Sales Tax) Act, 1941, was assessed for sales tax for a period of four quarters ending on the last day of Chaitra 1354 B. S. The assessment was enhanced by the Assistant Commissioner on the ground of suppression of certain purchases and sales. The petitioner filed a revision application to the Commissioner, who set aside the enhancement order and directed the Assistant Commissioner to proceed with the revision. The Assistant Commissioner issued a fresh notice in Form IX and adjourned the hearing several times. The petitioner did not appear on the appointed date and an ex parte order was passed fixing the taxable turnover. The petitioner challenged the revision of turnover by filing a writ petition under Article 226 of the Constitution.
Finding of the Court:
The court held that the petitioner had an alternative remedy of appeal or revision under the Act and therefore could not come to the court directly under Article 226 of the Constitution. The court further held that the amendment to Section 20(3) of the Act, which enabled revision of assessment orders, was not retrospective and that the Assistant Commissioner had the power to revise the assessment order even though it related to a period prior to the amendment. The court also held that there was no violation of the rules of natural justice as the petitioner had no legal right to be served with notices intimating him about the several adjournments.
Issues: 1. Whether the petitioner had an alternative remedy of appeal or revision under the Act and therefore could not come to the court directly under Article 226 of the Constitution? 2. Whether the amendment to Section 20(3) of the Act, which enabled revision of assessment orders, was retrospective? 3. Whether there was a violation of the rules of natural justice?
Ratio Decidendi: 1. The court held that the petitioner had an alternative remedy of appeal or revision under the Act and therefore could not come to the court directly under Article 226 of the Constitution. The court relied on the provisions of Sections 20(1) and 20(3) of the Act, which provide for appeal and revision respectively. 2. The court held that the amendment to Section 20(3) of the Act, which enabled revision of assessment orders, was not retrospective. The court relied on the fact that the amendment conferred power to revise "an assessment made", which includes an assessment made for any period, including a prior period. The court also relied on Rule 80(5) of the Rules, which provides that any assessment made or order passed under the Act before the commencement of the Amendment Act may be revised at any time within four years from the commencement of the Amendment Act. 3. The court held that there was no violation of the rules of natural justice as the petitioner had no legal right to be served with notices intimating him about the several adjournments. The court relied on the decision of the Privy Council in Commissioner of Income Tax UP and CP v. Badridas Ram Rai Shop, which held that there is no legal liability on behalf of the authorities to carry on any correspondence, or to inform the assessees of adjournments, by issuing notices and then serving them.
Final Decision: The court dismissed the writ petition.
( 1 ) THE facts in this case are briefly as follows: The petitioner carries on business under the name and style of Messrs. N. N. Shah, and the firm as such is a registered dealer as contemplated under the Bengal Finance (Sales Tax) Act 1941 (hereinafter called the "act" ). The registered address at which the business was being carried on was No. 4, Baithakkhana, 2nd Lane, Calcutta. On or about 31-8-1949 there was an asesssment of sales tax of the said business for the period of four quarters ending on the last day of Chaitra 1354 B. S. The assessment was made by Sri K. B. Roy, the then Commercial Tax Officer, Sealdah Charge, The taxable turnover was computed at Rs. 1,61,713-0-0. After the assessment was made, it was detected by the Assistant Commissioner, by making cross-reference to other dealers with whom the petitioner had dealings, that there was a suppression of certain purchases and sales and that the books and documents kept were not true. On or about 7-12-1949 the Assistant Commissioner, Central Section, issued a notice in Form IX stating that there was an escape of assessment and that the petitioner was under assessed and it was proposed to enhance his taxable turnover to Rs. 4,28,559/ -. The petitioner contested the enhancement and after hearing him, on 28-12-1940 an order of assessment was made enhancing the taxable turnover to Rs. 4,28,559/ -. Against this order the petitioner made an application in revision to the, Commissioner under Section 20 (3) of the said Act. That provision, as it stood then, enabled an application for revision to be made against any order passed under the Act or the Rules, by a person appointed, under Section 3 to assist the Commissioner. There was a controversy as to whether this provision enabled a revision to be made against an assessment order. There were several decisions of the Board of Revenue to the effect that it did. but it was generally argued that it did not. In or about 6-11-1950 the Bengal Finance (Sales Tax) (West Bengal Amendment) Act XLVIII of 1950 came into operation. By this amendment inter alia, Section 20 (3) was amended. So far as Sub-section (3) of Section 20 is concerned instead of the words "order passed", the words "assessment made or order passed" were substituted. It was further provided that no application for revision should lie to the Commissioner in respect of any assessment, if an appeal lay under Sub-section (1) to the Commissioner in respect of such assessment.
( 2 ) IT was thus made clear that a revision would lie under certain circumstances against an assessment order. The matter having come up before the Commissioner, he passed an order on 26-10-1954 and inter alia held that on 28-12-1949 the amendment not having come into operation yet, the Assistant Commissioner had not the power to revise an assessment. He accordingly set aside the order and directed the Assistant Commissioner, Calcutta Circle, to proceed to take up the matter of revision. He further stated that if the Assistant Commissioner so desired, the petitioner should be given an opportunity of being heard. The Assistant Commissioner, Calcutta North Circle, appears to have decided to give the petitioner every possible opportunity of being heard. To start with, he issued a fresh notice in Form IX, and on the returnable date nobody appeared. Then on 18-8-1954 a letter was received from the petitioner stating that all his own books etc. had been, by an order of the High Court, sent down to the Alipore Court, and would be received back in a week. Adjournment was asked for. On 31-8-1954 the matter was adjourned till 15-9-1954 and a mamorandum to this effect was sent, to be served on the petitioner. As I have mentioned above, the registered address of the petitioner has always been 4 Baithakkhana, 2nd Lane, and the notices were all directed to that address. Not only the correct address is to be registered under the Act but under Section 16 of the Act, if any dealer changes his place of
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