NIVAS TALKIES Vs. STATE OF BIHAR

JUDGEMENT

(1.) This writ petition on behalf of M/s. Nivas Talkies and M/s. Shankar Talkies, described as proprietorship firms of Shri Ramesh Kumar Poddar, proprietor of cinema shows doing business at Musabani in the district of Singhbhum East, is directed against the notices dated 5-1-94 issued by the Deputy Commissioner of Commercial Taxes, Singhbhum Circle, Jamshedpur, asking the petitioners to show cause why tax be not re-assessed under Section 19 of the Bihar Finance Act, 1981 in the light of the audit objection.

(2.) It may be stated at the outset that the dispute involved in this case relates to payment of entertainment tax governed by the Entertainments Tax Act, 1948, hereinafter referred to as 'the Act', Section 13B of which contains provisions regarding escaped assessment, paramateria with those of Section 19 of the Bihar Finance Act. However, as would appear from the following discussion, this aspect of the matter is completely irrelevant for decision of this case.

(3.) Mr. Pawan Kumar, learned counsel for the petitioners made submissions, in the beginning, under the assumption that Section 19 of the Bihar Finance Act is applicable even in the case of reassessment of entertainment tax. Later, when it transpired that the Entertainments Tax Act contains an independent provision in that regard, he submitted that irrespective of the question as to whether Section 19 of the Bihar Finance Act, 1981 or Section 13B of the Bihar Entertainments Tax Act, 1948 is applicable, the legal position is well settled that assessment once completed can be reopened only when the Assessing Officer is satisfied that reasonable grounds exist to believe that amount liable to be taxed has escaped assessment. In the present case, however, no such satisfaction has been recorded by the Deputy Commissioner. As a matter of fact, he pointed out, notice has been issued in printed form which is indicative of the non-application of mind. He contended that the fact that in the notice reference has been made to Section 19 of the Bihar Finance Act and not to Section 13B of the Entertainments Tax Act also is suggested of non-application of mind as if the authority was not even aware as to under which Act it proposed to take action against the petitioners. Counsel submitted that notice has been issued simply in the light of the audit objection without being satisfied that reasonable grounds exist to believe that any amount has escaped assessment. It was urged that Assessing Officers perform quasi-judicial functions and they are supposed to act within the parameters of statute and not at the behest of others. Counsel continuing his submissions urged that when return is filed it is open to the Assessing Officer to make enquiry and assess the tax but after assessment has been completed, the same cannot be reopened unless there are some new materials before him and he is satisfied on the basis of such materials that amount liable to be taxed has escaped assessment. In support of his contentions counsel placed reliance on a Full Bench decision of this Court in Bhimraj Mandanlal v. State of Bihar, (1984) 56 STC 273 : (1984 Tax LR 3002) and unreported judgment in Barabhara Fertilisers v. State of Bihar (CWJC No. 464 of 1993, decided on 13-4-93), copy whereof has been marked Annexure-3 to the writ petition.