(1.) THE petitioner is a registered dealer under the Madhya Pradesh General Sales Tax Act, 1958. He carries on the business of manufacturing furniture under the name and style of "new Era Furniture Mart. " The petitioner was assessed for the year of assessment 1962-63 by an order of the Assistant Sales Tax Officer passed on 30th April, 1963. He was also assessed for the year 1963-64 on 17th October, 1964. In both these assessments the Assistant Sales Tax Officer came to the conclusion that the petitioner did not maintain regular books of account and he, therefore, made the assessments according to the best of his judgment under Section 18 (4) of the Act. On 17th April, 1967, two notices were issued by the Assistant Sales Tax Officer under Rule 33 of the Madhya Pradesh Sales Tax Rules, 1959, for reopening the assessments under Section 19 (1) of the Act. It was stated in the notices that because of irregular accounts main tained by the petitioner, sales had escaped assessment and that it was necessary to reassess the tax. By these notices the petitioner was called upon to show cause why reassessment of tax should not be made and was required to appear either personally or through representative and to produce on the date fixed the relevant accounts for the year and any other evidence that he may like to produce. From the records of proceedings of the reassessment cases, which have been produced before us, it appears that in reply to the notices the petitioner appeared and on 25th May, 1967, he filed an application before the Assistant Sales Tax Officer demanding reasons why he was being reassessed as also praying for inspection of the record. The prayer for inspection was allowed but the counsel appearing for the petitioner was not ready to take inspection and the case was adjourned to 7th June, 1967. On that date, the counsel along with the petitioner appeared and stated that because of illness they could not inspect the record. They reiterated their request for disclosure of the reasons why the reassessment proceedings were started against the petitioner. The order sheet records that they were informed that having regard to the purchases made by the dealer of spirit and plastic cane and irregularities in accounts it was necessary to reassess the tax. The counsel for the petitioner inspected the record on 12th June, 1967. The record contains a report of inspection of the petitioner's premises made by the flying squad of the sales tax department on 8th March, 1967. The report states that the expenditure incurred by the petitioner during the assessment years on cane and spirit and other articles showed that large portion of his turnover escaped assessment. The petitioner, thereafter, filed this petition under articles 226 and 227 of the Constitution for quashing the notices issued under Rule 33 for reopening the assessments.
(2.) IT has been contended by the learned counsel for the petitioner that the notice under Rule 33 is the foundation of the jurisdiction for re-assessment under Section 19 and, therefore, the notice issued must strictly comply with Rule 33 and Form No. XVI; that the notices issued in the instant case do not contain the particulars of escapement, i. e. , the amount of turnover that escaped assessment; that the reason given in the notices that turnover had escaped assessment because of irregular accounts maintained by the petitioner could not be a valid reason for reassessment as the assessment which was sought to be reopened was best judgment assessment and was made on the same ground that the accounts were not properly maintained; and that the notices were invalid.
(3.) TO appreciate the argument of the learned counsel it is necessary to refer to the relevant statutory provisions. The assessment of turnover escaping assessment is made under Section 19 of the Act, Sub-section (1) of which reads as follows : Where an assessment has been made under this Act and if for any reason any sale or purchase of goods chargeable to tax under this Act, during any period has been under-assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made there from, the Commissioner may, at any time within five calendar years from the expiry of such period, after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he considers necessary, proceed, in such manner as may be prescribed, to reassess the tax payable by such dealer and the Commissioner may direct that the dealer shall pay, by way of penalty in addition to the amount of tax so assessed, a sum not exceeding that amount. Section 51 of the Act empowers the State Government generally to make rules "for carrying out the purpose of the Act". The rule-making power is also conferred in respect of particular matters one of them being "all matters which are expressly required to be prescribed under this Act". In exercise of the rule-making power, the State Government made the Madhya Pradesh General Sales Tax Rules, 1959. Rule 33, which deals with the manner of reassessment, in so far as it is relevant, reads as follows : 33. Manner of assessment, reassessment and imposition of penalty. ( (1) Where -. . . . (f) the sale or purchase of goods by a dealer during any period has been under-assessed or has escaped assessment or has been assessed at a lower rate or any deduction has been wrongly made therefrom within the meaning of Sub-section (1) of Section 19, or (g ). . . . then in every such case the assessing authority shall serve on the dealer a notice (which shall as far as may be, be) in Form XVI, specifying the default, escapement or concealment, as the case may be and calling upon him to show cause by such date ordinarily not less than 30 days from the date of service of the notice as may be fixed in that behalf why he should not be assessed or reassessed to tax and/or penalty should not be imposed upon him and directing him to produce on the said date his books of accounts and other documents, which the assessing authority may require and any evidence, which he may wish to produce in support of his objection : Provided that no such notice shall be necessary where the dealer, having appeared before the assessing authority, waives such notice. (2) On the date fixed in the notice issued under Sub-rule (1), or in case the notice is waived on such date which may be fixed in this behalf, the assessing authority shall, after considering the objections raised by the dealer and examining such evidence as may be produced by him and after taking such other evidence as may be available, assess or reassess the dealer to tax and/or impose a penalty or pass any other suitable order. Form No. XVI prescribed under this rule pertaining to reassessment is as under : I have reason to believe that your sale or purchase during the period (s) from. . . to. . . has been under-assessed/has escaped assessment/has been assessed at a lower rate/has been allowed in the assessment order to be reduced for purpose of tax by reasons of wrongly making a deduction therefrom and thereby rendered yourself liable to be reassessed and liable to penalty under Section 19 (1) of the Act ; (Here state the reasons) or. . . or. . . Now therefore you are hereby called upon to show cause on. . . why you should not be assessed/reassessed/why a penalty should not be imposed/why the correct amount of fee should not be levied upon you. Further, you are hereby directed to attend in person or by a person authorised by you in writing in that behalf being a person specified as required by Sub-section (1) of Section 21, before me and to produce or cause to be produced your books of accounts and the documents specified in the Schedule there under in respect of the above period and any evidence on which you rely in support of your objection at. . . (place ). . . (time) on. . . (date) and further required to present yourself or through an authorised person on the said place, date and time to be heard in this regard.;