DWARKA PRASAD, J. - (1.) THE petitioner, M/s. Jaipur Udyog Ltd. (hereinafter referred to as "the company"), is carrying on business of manufacture and sale of cement, having its registered office at Sawai Madhopur in the State of Rajasthan. THE company was registered as a dealer under the Rajasthan Sales Tax Act in respect of the assessment year 1955-56, relating to the period from 1st April, 1955, to 31st March, 1956. THE company was assessed to tax and the Sales Tax Officer, Sawai Madhopur (hereinafter called "the assessing authority"), by his order dated 23rd February, 1957, held that a sum of Rs. 1,38,76,958-6-0, representing the price of the cement exported by the company outside the State of Rajasthan, should not be included in the taxable turnover of the company. He, therefore, excluded the aforesaid amount from the taxable turnover of the company.
(2.) ON 24th February, 1959, the assessing authority issued a notice to the company under section 12 of the Rajasthan Sales Tax Act, 1954, on the ground that the turnover of the company to the extent of Rs. 1,38,76,958-6-0 has escaped assessment to tax under the Act. The Sales Tax Officer, after hearing the representative of the company, proceeded to assess tax in respect of the aforesaid amount, which represented the sale price of the cement exported by the company outside the State of Rajasthan. But, in his view, only that part of the aforesaid sales, which fell due between 1st April, 1955, and 10th November, 1955, was taxable in the hands of the company. He, therefore, imposed tax on the company in respect of the sum of Rs. 76,41,546-1-3 considering the same to be the escaped turnover of the company. The company preferred an appeal against the aforesaid order passed by the Sales Tax Officer before the Deputy Commissioner (Appeals), which was allowed by the order dated 22nd March, 1965, on the ground that no proper notice under section 12 of the Act was served on the company. The Deputy Commissioner was of the view that the notice, which was served upon the company, was not in the prescribed form. But, while allowing the appeal preferred by the company before him, he remanded the case to the Sales Tax Officer for reassessment directing the assessing authority to ensure that a notice in proper form was issued to the company, as required under section 12 of the Act and that proper opportunity of hearing was given to the company. Both the parties filed revision petitions against the aforesaid order passed by the Deputy Commissioner, Commercial Taxes (Appeals), before the Board of Revenue for Rajasthan at Ajmer. One of the contentions of the company before the Board of Revenue was that the notice issued under section 12 was not a valid notice and, as such, the proceedings were not properly initiated and were void. It was also urged that no notice could be issued then, as the period of eight years, being the limitation prescribed in section 12 of the Act, had already expired. The learned Additional Government Advocate appearing for the State of Rajasthan, agreed before the Board that the notice issued to the company was not valid and that the Sales Tax Officer could assume jurisdiction only when a proper notice under section 12 of the Act for reopening the assessment on the ground that part of the turnover of the assessee has escaped assessment was issued. The learned Members of the Board of Revenue, by their order dated 12th December, 1967, dismissed both the revision petitions holding that no valid notice was issued to the company and, as such, the very foundation of the reassessment proceedings under section 12 of the Act was washed out and the proceedings before the Sales Tax Officer were invalid. It was also held by the Board that after setting aside the earlier assessment proceedings, the appellate court could not have proceeded to decide the other questions, which arose out of such invalid proceedings. However, the order of reassessment passed by the Deputy Commissioner (Appeals) was upheld. It appears that thereafter the State of Rajasthan filed an application before the Board of Revenue for rectifying their earlier order under section 17 of the Act, but that application was also dismissed by the order of the Board dated 15th September, 1969. In the meanwhile, after the Deputy Commissioner (Appeals) had allowed the appeal of the company by his order dated 22nd March, 1965, on the ground that no valid notice was served upon the company under section 12 of the Act, the Commercial Taxes Officer issued a fresh notice to the company on 6th May, 1965, under section 12 of the Act. In the present writ petition, the company has challenged the validity of the fresh notice (annexure C) issued by the assessing authority on 6th May, 1965. The only submission advanced by the learned counsel for the petitioner-company in this case before us is that, after the limitation prescribed for giving a notice under section 12 of the Act had expired, the Commercial Taxes Officer was incompetent to issue such a notice to the company and the notice dated 6th May, 1965, was invalid on that ground alone. The submission of the learned counsel for the petitioner is that initially notice under section 12 could be issued within three years of the expiry of the period to which the tax relates. But, after an amendment was made in section 12, such a notice could be issued within a period of four years and thereafter within an extended period of eight years. According to the learned counsel, thus, the maximum period within which the notice under section 12 of the Act could be issued at the relevant time was eight years from the expiry of the period to which the tax relates and that, in the present case, the period of eight years elapsed on 31st March, 1964. Thus, the notice (annexure C), which was issued by the Commercial Taxes Officer on 6th May, 1965, was far beyond the period of eight years prescribed in section 12 and, as such, the same was invalid. It was also argued by the learned counsel for the petitioner that, once the period of four years had expired and the order of assessment became final, further proceedings for reassessment could not have taken place, even if the period for reassessment for issuing notice under section 12 was subsequently enlarged to eight years and that too with retrospective effect. However, it is not necessary for us to deal with the last-mentioned submission of the learned counsel, as, in the present case, we find that the fresh notice issued under section 12 of the Act on 6th May, 1965, was not issued even within the period of eight years from the expiry of the period to which the tax relates, which was provided for by the amended section 12 of the Act. Section 12 of the Act, as it stood at the relevant time, was as under : " 12. Assessment of tax and levy of exemption fee or registration fees incorrectly assessed.- If for any reason the whole or any part of the turnover of business of a dealer has escaped assessment to the tax, or if the registration fee or exemption fee has escaped levy or has been assessed at too low a rate in any year, the assessing authority at any time within a period of eight years next succeeding that to which the tax or the registration fee or the exemption fee relates, assess the tax payable on the turnover which has escaped assessment or levy the correct amount of registration fee, or exemption fee, after issuing a notice to the dealer and after making such inquiry as he considers necessary. " Under the aforesaid provision, if the business of a dealer has escaped assessment to tax for any reason, the assessing authority can serve upon the dealer a notice in the prescribed form at any time within a period of eight years next succeeding that to which the tax relates. As we have already mentioned above, the assessment in the present case related to the period from 1st April, 1955, to 31st March, 1956, and, as such, the period of eight years from the expiry of the relevant assessment year came to an end on 31st March, 1964. Thus, it cannot be contested and, in fact, it has not been contested before us that the notice dated 6th May, 1965, was issued beyond the period of eight years of the expiry of the relevant assessment year. But, the argument of the learned Additional Government Advocate, appearing for the State of Rajasthan, is that the notice dated 6th May, 1965, was valid as the same was issued in pursuance of the order of the Deputy Commissioner (Appeals) dated 22nd March, 1965, and in continuation of the earlier notice for reassessment issued to the company on 24th February, 1959. We shall presently examine this aspect of the matter.
(3.) THE Board of Revenue, while deciding the revision petition of the company, held that, as no valid notice was issued to the company, "the very foundation" of the proceedings was "washed out" and that the notice issued to the company on 24th February, 1959, was invalid. THE aforesaid finding of the Board had become final and conclusive between the parties, as the application for rectification filed by the State of Rajasthan in respect thereof was dismissed by the Board of Revenue on 15th October, 1969, and the State of Rajasthan has not challenged the aforesaid order passed by the Board of Revenue either by means of an application for reference or otherwise. On these facts, it is difficult to appreciate the argument advanced by the learned Additional Government Advocate that the notice issued on 6th May, 1965, was in continuation of the earlier notice issued on 24th February, 1959. In Commissioner of Income-tax, Delhi and Rajasthan v. Rao Thakur Narayan Singh ([1965] 56 I. T. R. 234 (S. C.)), it was held by their Lordships of the Supreme Court that when the order of the Appellate Tribunal became final, the finding of the Tribunal, even though by mistake, was binding on the Income-tax Officer and he could not open the reassessment over again. THEir Lordships observed that it was not the intention of the legislature to enable the Income-tax Officer to reopen final decisions made against the revenue in respect of questions that directly arose for decision in the earlier proceedings, and, if it was not so, it would result in placing unrestricted power in the hands of the Income-tax Officer to go behind the findings given by a hierarchy of Tribunals and even those of the High Court and Supreme Court, with his changing moods. Thus, the aforesaid decision clearly shows that the finding arrived at by the Board of Revenue in the present case is binding on the Commercial Taxes Officer and he could not give a fresh notice on the basis of the earlier proceedings. It is settled law that the service of a valid notice is a condition precedent before jurisdiction can be assumed for reassessment under section 12 of the Act. In Y. Narayana Chetty v. Income-tax Officer, Nellore ([1959] 35 I. T. R. 388 (S. C.)), their Lordships of the Supreme Court observed as under : " THE argument is that the service of the requisite notice on the assessee is a condition precedent to the validity of any reassessment made under section 34; and if a valid notice is not issued as required, proceedings taken by the Income-tax Officer in pursuance of an invalid notice and consequent orders of reassessment passed by him would be void and inoperative. In our opinion, this contention is well-founded. THE notice prescribed by section 34 cannot be regarded as a mere procedural requirement; it is only if the said notice is served on the assessee as required that the Income-tax Officer would be justified in taking proceedings against him. If no notice is issued or if the notice issued is shown to be invalid, then the validity of the proceedings taken by the Income-tax Officer without a notice or in pursuance of an invalid notice would be illegal and void. " In Commissioner of Income-tax, Kerala v. Thayaballi Mulla Jeevaji Kapasi ([1967] 66 I. T. R. 147 (S. C.)), it was held by their Lordships of the Supreme Court that the service of a notice prescribed by section 34 of the Indian Income-tax Act, 1922, for the purpose of commencing proceedings for reassessment is not merely a procedural formality. Their Lordships observed as under : " Service of notice prescribed by section 34 of the Income-tax Act, for the purpose of commencing proceedings for reassessment is not a mere procedural requirement : it is a condition precedent to the initiation of proceedings for assessment under section 34. If no notice is issued or if the notice issued is shown to be invalid, then the proceedings taken by the Income-tax Officer, without a notice or in pursuance of an invalid notice, would be illegal and void. " It was also held in the aforesaid case that the service of notice within the period of limitation is a condition precedent to the exercise of jurisdiction, and if it is not proved that the notice was duly served upon the assessee within the prescribed time, the assessing authority cannot assume jurisdiction to reassess the income of the assessee. ;