T.K.Basu, J. - (1.) In this rule, the petitioner Ashoka Marketing Ltd., challenges eight notices issued under Section 148 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The notices for the assessment years 1953-54, 1954-55, 1955-56 and 1956-57 are all dated the 10th May, 1966. The notice for the assessment year 1957-58 is dated the 18th February, 1966. The notices for the assessment years 1958-59, 1959-60 and 1960-61 are all dated the 20th January, 1967.
(2.) Dr. Debi Pal, learned advocate, appearing on behalf of the petitioner submits that, although several grounds have been taken in the petition, this matter can be disposed of on one short point. In order to appreciate the point it would be necessary to set out the reasons recorded by the Income-tax Officers before the issue of the eight impugned notices. Before I set out the recorded reasons I may mention that although the reasons for these eight years have been recorded by the two Income-tax Officers, viz., Mr. D.L. Brahamchari and Mr. K. Dasgupta, and although there are eight different reasons recorded for the respective assessment years, curiously enough the recorded reasons are word for word the same. This could obviously be the basis of an argument of non-application of mind by the concerned officers. Dr. Pal, however, invited me to decide this application on a different ground.
(3.) One of the specific reasons for the assessment year 1960-61--and I have already said the recorded reasons ipsissima verba--may be set out hereinbelow : "The assessee collected sales tax on cement sale to customers on the gross price by the State Trading Corporation, which included notional freight and other incidentals. The customers take delivery of cement on payment of actual freight charges directly to the Railways and the assessee-company, the selling agent of the State Trading Corporation, recovers from the customers only the balance, i.e., the difference between the gross price and the actual freight paid by the customers. The assessee paid to the State sales-tax authorities only the tax on this net amount recovered and thus every year accumulated the difference between sales tax on gross price collected from customers and sales tax on net price paid to sales tax authorities. The accumulation of such surplus, i.e., the sales tax on freight clement, amounted to about Rs. 44 lakhs as on 30-6-65. This practice was adopted by the assessee oven prior to the incorporation of State Trading Corporation and it has so far succeeded in its dispute with the State sales tax authorities on this point that no sales tax is payable on this freight element. Nor has the assessee any intention to refund this amount to the customers. In view of the Supreme Court's decision in the case of Punjab Distilling Industries Ltd. v. Commissioner of Income-tax , this surplus is assessable as a trading receipt because what the assessee was realising from the customers was the sale price (sales tax being a part of it and if a part of it was not paid to the sales tax authorities that amount must necessarily be regarded as trading receipt).;