( 1 ) PROMPTED with equitable consideration, in proceedings arising out of escaped assessment, a division Bench of this Court in Kalpanath Singh v. Commr. of Sales Tax (1978 UPTC 1) ruled, if an assessee acquires knowledge of the pendency of the proceedings and acting on such knowledge appears and acts in aid of the proceedings before the assessing authority, he cannot be allowed to challenge the proceedings on the ground that no notice was served or that it was not validly served on him under rule 77. As one of us felt difficulty in following it in the abovenoted reference where the question referred was as under this Full Bench was constituted:

"whether under these circumstances the service of notice under Section 21 of the U. P. Sales tax Act on a stranger would be deemed to have been properly and validly effected on the petitioner and the learned Sales Tax Officer would acquire jurisdiction to finalise the proceedings under Section 21 under the circumstances of the case?"

The question hardly presents any difficulty but the circumstances found by revision authority were:"it is not disputed that the notice under Section 21 of U. P. Sales Tax Act was served on Om prakash and he had no concern with the assessees firm. The assessee however appeared on the date of hearing in the proceedings under Section 21 of the U. P. Sales Tax Act. Learned appellate Authority, therefore, held that service of notice on Om Prakash therefore, became immaterial and the proceedings cannot be said to be invalid".

( 2 ) IT is the correctness of this view, which finds complete support from Kalapanath Singhs case, that seeks determination in this case. But before coming to it, it may be worthwhile to examine scope of Section 21 itself which reads as under:

"21. (1) If the assessing authority has reason to believe that the whole or any part of the turnover of a dealer, for any assessment year or part thereof, has escaped assessment to tax or has been under assessed or has been assessed to tax at a rate lower than that at which it is assessable under this Act, or any deductions or exemptions have been wrongly allowed in respect thereof, the assessing authority may, after issuing notice to the dealer and making such inquiry as it may consider necessary assess or re-assess the dealer or tax according to law: provided that the tax shall be charged at the rate at which it would have been charged had the turnover not escaped assessment, or full assessment, as the case may be. "

(2 ). No order of assessment under sub-section (1) or under any other provision of this Act shall be made for any assessment year after the expiry of four years from the end of such year: provided that where the notice under sub-section (1) has been served within such four years the assessment or reassessment to be made in pursuance of such notice may be made within one year of the date of the service of the notice even if the period of four years is thereby exceeded: provided further that nothing contained in this section limiting the time within which any assessment or reassessment may be made shall apply to an assessment or re-assessment made in consequence of, or to give effect to, any finding or direction contained in an order under Section 9, Section 10, Section 11 or Section 30 or any order passed by the Supreme Court under Article 32. Article 132, Article 133, Article 136 or Article 137 or by the High Court under Article 226 or article 227 of the Constitution. The words, after issuing notice to the dealer, are significant. It has come up for interpretation in numerous decisions. It might be useful to notice a few of them.

In Commr. of Sales Tax U. P. v. Sewa Singh Mangal Singh, (1972) UPTC 537 at p. 538) it was held:"if the department chooses to proceed under Section 21 it is necessary that section should be strictly complied with. The service of the notice under Section 21 is a condition precedent for assumption of jurisdiction under that Section. "

Similarly in Kishan Chand v. Co

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