- (1.) The appellant Messrs. Raghubar Mandal Harihar Mandal, hereinafter referred to as the assessee, is a firm of bullion dealers, carrying on its business at Laheriasarai in the district of Darbhanga in the State of Bihar. The assessee was assessed to sales tax for seven quarters ending 31-12-1945, 31-3-1946, 30-6-1946, 30-9-1946, 31-12-1946, 31-3-1947 and 30-6-1947, respectively. For three of the aforesaid quarters, namely those ending on 31-12-1945, 31-3-1947 and 30-6-1947 the assessee failed to file the necessary returns as required by the provisions of the Bihar Sales Tax Act, 1944 (hereinafter referred to as the Act), which was the Act in force during the material period; therefore, the assessee was assessed for those three quarters under a sub-s. (4) of S. 10 of the Act. For the remaining four quarters the assessee did file returns. The Sales Tax Officer rejected those returns as also the books of account filed by the assessee for all the seven quarters and assessed the assessee under cl.(b) of sub-s.(2) of S. 10 of the Act. The Sales Tax Officer passed separate orders assessing the tax for all the seven quarters simultaneously on 9-10-1947. He assessed the tax on a taxable turnover of Rs. 2,94,000 for each of the five quarters ending 31-12-1945, 31-3-1946, 30-9-1946, 31-12-1946 and 31-3-1947; for the other two quarters ending on 30-6-1946 and 30-6-1947, he assessed the tax on a taxable turnover of Rs. 3,92,000. The assessee then moved in appeal the Commissioner of Commercial Taxes, Tirhut Division, but the Commissioner dismissed the appeals by his order dated 23-2-1948. The Board of Revenue was then moved in revision but, by its order dated 31-7-1948, the Board refused to interfere. The Board expressed the view that the finding of the Sales Tax Officer and the Commissioner that the books of account maintained by the assessee were not dependable was a finding of fact which could not be interfered with in revision; therefore the assessing officer was bound to assess to the best of his judgment. The Board was then moved under S. 21 of the Act to refer certain questions of law to the High Court of Patna which the assessee contended arose out of its order. By its order dated 10-12-1948 the Board rejected the applications for making a reference to the High Court on the same ground namely that no question of law was involved and the assessment orders were concluded by a concurrent finding of fact. The assessee then moved the High Court and by its order dated 27-4-1949 passed in miscellaneous judicial cases Nos. 13 to 19 of 1949, the High Court directed the Board of Revenue to state a case on the following question: "Whether the Sales Tax Officer is entitled under S. 10 (2) (b) of the Act to make an assessment on any figures of gross turnover without giving any basis to justify the adoption of that figure - The Board of Revenue then stated a case, and the High Court disposed of the reference by answering the question in the affirmative by its judgment and order dated 8-1-1952. The assessee then moved this Court and obtained special leave to appeal from the said judgment and order of the High Court.
(2.) The main contention of the assessee is that the High Court has not correctly answered the question of law referred to it. Before we proceed to consider this contention of the assessee, it is necessary to clear the ground by delimiting the precise scope of the question referred to the High Court. It is well settled that the jurisdiction of the High Court in the matter of income tax references is an advisory jurisdiction and under the Income- tax Act the decision of the Tribunal on facts is final, unless it can be successfully assailed on the ground that there was no evidence for the conclusion on facts recorded by the Tribunal or the conclusion was such as no reasonable body of persons could have arrived at. It is also well settled that the duty of the High Court is to start with the statement of the case as the final statement of the facts and to answer the question of law with reference to that statement. The provisions of the Indian Income-tax Act are in peri materia with the provisions of the Act under our consideration, the main scheme of the relevant provisions of the two Acts being similar in nature, though the wording of the provisions is not exactly the same. Under S. 21 of the Act, the High Court exercises a similar advisory jurisdiction and under sub-s.(3) of that Section, the High Court may require the Board of Revenue to state a case and refer it to the High Court when the High Court is satisfied that the refusal of the Board to make a reference to the High Court under sub-s. (2) is not justified. Under sub-s.(5) of S. 21 the High Court bears the reference and decides the question of law referred to it giving in a judgment the grounds of its decision. In the case under our consideration, the question which was referred to the High Court related to the assessments made under S. 10 (2) (b) of the Act; in other words, the question related to those four quarters only for which the assessments were made under S. 10 (2) (b). The question did not relate to the three quarters for which the assessee had filed no returns and assessments were made under S. 10 (4) of the Act. At one place in its judgment, the High Court referred to a slight inaccuracy in the question framed, but it did not reframe the question so as to widen its scope and include the three quarters for which assessments were, made under S. 10 (4) of the Act. The question as it stood and as it was answered by the High Court, did not relate to the propriety or legality of the assessments made under S. 10 (4) of the Act. We must therefore make it clear at the very outset that the question relates to those four quarters only for which assessments were made under S. 10 (2) (b) of the Act, and the answer given to the question will govern those four quarters only.
(3.) Having thus indicated the precise scope of the question referred to the High Court, we proceed now to consider the main contention of the assessee. We must first read the relevant provisions of the statute under which the assessments were made. Sub-section (l) of S. 10 of the Act states that if the Commissioner is satisfied without requiring the presence of a registered dealer or the production by him of any evidence that the returns furnished in respect of any period are correct and complete, he shall assess the amount of tax due from the dealer on the basis of such returns. Clause (a) of sub-s. (2) states what the Commissioner shall do, if he is not satisfied without requiring the presence of a registered dealer who furnished the returns or production of evidence that the returns furnished in respect of any period are correct and complete; the clause states that in that event the Commissioner shall serve on the dealer a notice in the prescribed manner requiring him either to attend in person or to produce or cause to be produced any evidence on which such dealer may rely in support of his returns. Then comes cl. (b) of sub-s.(2) which must be quoted in extenso: "(b) On the day specified in the notice or as soon afterwards as may be, the Commissioner, after hearing such evidence as the dealer may produce, and such other evidence as the Commissioner may require on specified points, shall assess the amount of tax due from the dealer." These provisions are similar to the provisions contained in S. 23 of the Indian Income-tax Act. Sub-section (1) of S. 10 of the Act corresponds to sub-s. (1) of S. 23 of the Indian Income-tax Act; clause (a) of sub-s. (2) of S. 10 of the Act corresponds to sub-s. (2) of S. 23 of the Indian Income-tax Act; and clause (b)of sub-s. (2) of S. 10 of the Act corresponds to sub-s. (3) of S. 23 of the Indian Income tax Act, though there are some verbal differences between the two provisions. Sub-section (3) of S. 23 of the Indian Income-tax Act requires the Income-tax Officer to assess the total income of the assessee and determine the sum payable by him on the basis of such assessment by "an order in writing"; but cl.(b) of sub-s. (2) of S. 10 of the Act requires the Commissioner to assess the amount of tax due from the dealer and does not impose any liability as to an order in writing." In spite of these differences, the two provisions are substantially the same and impose on the assessing authority a duty to assess the tax after hearing such evidence as the dealer may produce and such other evidence as the assessing authority may require on specified points.;