BHARGAVA - (1.) THE respondents in these six appeals are all dealers carrying on business in the State of Punjab. THEy were all assessed to sales tax by the assessing authority, the Excise and Taxation Officer, Jullundur, under the Punjab General Sales Tax Act, 1948 (No. 46 of 1948). THE assessments were best judgment assessments under sub-sections (4), (5) and (6) of section 11 of that Act. THE respondents challenged these orders of assessment before the High Court of Punjab in petitions under Articles 226 and 227 of the Constitution on the ground that all the assessment orders had been made after the expiry of three years from the end of the periods to which the assessments related, and since the assessments were not completed within the period of three years mentioned in sub-sections (4), (5) or (6) of section 11, the assessments were without jurisdiction and void. This plea was accepted by the High Court and all the assessment orders were quashed. THE original orders in the writ petitions were made by a Single Judge and the appeals to the Division Bench were summarily dismissed. THE Excise and Taxation Officer, and the Deputy Excise and Taxation Commissioner have now come up to this Court in these appeals under certificates granted by the High Court.
(2.) THE point decided by the High Court in favour of the respondents and against the appellants is now concluded by the decisions of this Court in THE State of Punjab and Others v. Tara Chand Lajpat Raj and THE State of Punjab and Another v. M/s. Murlidhar Mahabir Parshad. In these cases, this Court, following the principle laid down in the case of Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax, Nagpur, has held that, if returns are died by a registered dealer, or a notice is given any time before the expiry of the period of three years for the purpose of making a best judgment assessment, the actual assessment can be made even after the expiry of the period of three years. Mr. K.C. Sud, appearing on behalf of the respondents in Civil Appeals Nos. 288-290/1967, did not dispute that these appeals must be allowed and decided in favour of the appellants in view of those decisions. In Civil Appeals Nos. 291 and 293/1967, no one appeared on behalf of the respondents. In all these five appeals, the respondents were registered dealers. THEy all filed their returns before the expiry of three years from the end of the periods to which the returns related. Once those returns were filed, proceedings for assessment of sales tax came into existence and there was no question of initiation of proceedings subsequently. THE proceedings having been initiated, they could be completed even after the expiry of three years and, consequently, the High Court was not justified in allowing the writ petitions and quashing the assessment orders. In Civil Appeal No. 292/1967, there is a distinctive feature. Learned counsel appearing on behalf of the respondent in this appeal drew our attention to the fact that the respondent was not a registered dealer and no return was filed by the respondent voluntarily. It was on 8th March, 1961, that the notice was issued for the first time by the assessing authority in the name of the respondent in respect of the assessment year 1957-58. The notice was issued fixing 23rd March, 1961, for appearance and filing of return and was sent by registered post. It, however, appears that the acknowledgement for that notice was never received back and, consequently, not being satisfied that the notice had been served, the assessing authority issued a fresh notice on 23rd March, 1961, fixing 10th April, 1961. This notice was addressed to the respondent, Banwari Lal Gupta, but it was not served personally on him. The service report shows that it was affixed at the shop of Messrs Ram Dhari Mal Raj Kumar, Kat Mandi, Hissar, on the ground that Banwari Lal Gupta off and on visited this shop, even though the assessment order shows that the assessing authority knew that Banwari Lal Gupta is the son of Bhanna Ram and is the resident of a different village Surana Kheri. On these facts, learned counsel urged two grounds before us in support of the order passed by the High Court. The first ground was that, since in this case no return was actually filed by the respondent, who was not a registered dealer, within three years of the assessment year '1957-58, it should be held that the assessment proceedings were time-barred. This argument cannot be accepted, because it ignores the circumstance that proceedings for assessment of the respondent were actually initiated on the 8th March, 1961, when a notice in Form S.T. XIV prescribed under the Rules framed under the Punjab General Sales Tax Act was issued in the name of the respondent. The issue of that notice on 8th March, 1961, resulted in initiation of proceedings against the respondent and, consequently, it cannot be said that the proceedings were started after the expiry of the period of limitation prescribed in sub- sections (4), (5) and (6) of section 11. In this connection, learned counsel relied on a decision of this Court in Madan Lal Arora v. Excise and Taxation Officer, Amritsar, and urged that in view of that decision we should hold that the assessment proceedings against the respondent were invalid. It does appear that there are some remarks in that judgment which appear to support the submission made by learned counsel, but an examination of the judgment in that case shows that the real point decided in that case does not advance the case of the respondent at all. In that case, the assessment which was questioned related to the financial years ending on 31st March, 1955, and 31st March, 1956. Since the assessing authority was not satisfied with the correctness of the returns filed, he gave notices on 18th August, 1959, intimating that he proposed to make best judgment assessment in respect of the quarters constituting the financial years 1955 and 1956, the last of which had expired on 31st March, 1956. All that was held by this Court in that case was that these notices of August 18, 1959, were futile as the notices were all given after the expiry of three years from the end of the periods in respect of which best judgment assessment was sought to be made. In the case of the respondent in C.A. No. 292/1967 now before us, as we have already indicated earlier, the notice for the best judgment assessment was issued on 8th March, 1961, and that was within three years of the period to which the assessment related. Consequently, on this ground, the assessment order cannot be quashed.
(3.) HOWEVER, we think that there is considerable force in the second point urged on behalf of the respondent, viz., that the assessment of the respondent was made by the assessing authority without giving him an adequate opportunity of being heard. The first notice of 8th March, 1961, was held by the assessing authority himself not to have been properly served, and the second notice of 23rd March, 1961, was also obviously not properly served. The service which was accepted by the assessing authority was affixation at a shop which used to be visited by the respondent. The shop was not his own and his place of residence was known. No attempt was made to serve the notice on him at his residence. In these circumstances, the proceedings taken ex parte against the respondent were not justified. On this ground alone, the order of the High Court quashing the assessment has to be upheld. As a result, Civil Appeals Nos. 288-291 and 293 of 1967 are allowed, the order of the High Court is set aside and the petitions filed by the respondents in these appeals are dismissed. Civil Appeal No. 292 of 1967 is dismissed and the order of the High Court quashing the assessment is upheld on the limited ground that the order of assessment had been made without affording an adequate opportunity of being heard to the respondent. In the circumstances of these cases, we direct the parties to bear their own costs.;