TaxTMI 
TaxTMI 
1979 (5) TMI 134
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of 1972. -------------------------------------------------- The judgment of the Court was delivered by SARKARIA, J.-This judgment will dispose of' two batches of appeals. The first batch includes Civil Appeals Nos. 287 to 290 and 2529 of 1972 and Civil Appeal No. 303 of 1974 preferred by the State of Gujarat/Sales Tax Officer on the basis of a certificate granted by the High Court. Of this batch, Civil Appeals Nos. 287 to 290 of 1972 are directed against a common judgment dated July 8, 1970, of the High Court of Gujarat; while Civil Appeal No. 303 of 1974 is preferred against a judgment dated July 4, 1973, of the Gujarat High Court, which follows its earlier decision in Patel Ramjibhai Danabhai v. A. S. Tambe, Sales Tax Officer, Anand. The second batch comprises of Civil Appeals Nos. 2450 and 2451 of 1972 and Civil Appeals Nos. 1206 and 1213 of 1975. They have been preferred by the State of Maharashtra after obtaining special leave under article 136 of the Constitution. Of these, the first two are directed against an order dated April 19, 1972, of the Maharashtra Sales Tax Tribunal which, in turn, is based on a judgment dated October 11/12, 1971, o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....over of the business, during the relevant period, never exceeded the limit of Rs. 9,000 in the past and, therefore, the question of their incurring liability to get the firm registered as a dealer and to file sales tax returns under the 1959 Act did not arise. During the pendency of this writ petition, on September 9, 1968, the Sales Tax Officer assessed the writ petitioners under section 33(6) of the 1959 Act on "best judgment" basis and an amount of Rs. 9,771.45 was determined as tax arrears and a further amount of Rs. 10,000 was imposed as penalty. A notice making demand of both these amounts was also issued on September 12, 1968. Facts in C.A. No. 289 of 1972 The writ petitioner, the respondent herein, is carrying on the business of manufacturing and selling wooden boxes, bamboos, timber, etc., under the name of M/s. Manilal Ranchoddas at Kalol. On June 1, 1965, he was served with a notice under section 33(6) of the 1959 Act by the Sales Tax Officer to show cause why he should not be assessed on best judgment basis for the period from January 1, 1960, to August 31, 1964, and further with penalty on account of his failure to get himself registered. Thereafter, on Aug....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ied mainly upon this Court's decision in Anandji Haridas & Co. v. S. P. Kushare [1968] 21 S.T.C. 326 (S.C.); A.I.R. 1968 S C. 565. It also drew support from this Court's decision in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax, Nagpur [1963] 14 S.T.C. 976 (S.C.); [1964] 51 I.T.R. 557 (S.C.); A.I.R. 1964 S.C. 766. Facts in C.A. No. 2529 of 1972 This appeal is directed against a judgment dated March 13, 1972, of the Gujarat High Court, whereby it, following its earlier decision dated July 8, 1970, in Writ Petition No. 1378 of 1968, quashed the assessment of the respondents herein, for the period January 1, 1960, to April 5, 1964, on the ground that section 33(6) under which it was made, was violative of the equality clause contained in article 14 of the Constitution and, as such, void. SECOND BATCH Facts in C.A. Nos. 2450-2451 of 1972 In these two cases, the respondent was assessed as an unregistered dealer under section 14(6) of the Bombay Sales Tax Act, 1953, for the period from 1st November, 1952, to 31st March, 1954, and from 1st April, 1954, to 24th April, 1956. In revision, the Maharashtra Sales Tax Tribunal, following the decision dated Octob....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e impugned assessments. Learned counsel for the appellants submits that the Gujarat High Court was in error in holding that the provisions of sections 33(6) and 35 of the Act of 1959 overlap each other; that it overlooked the fact that upon its very language, section 33(6) is a special provision confined to an unregistered dealer who is guilty of committing the twofold violation of law indicated in that provision; that this special provision, by inevitable implication, excludes the application of the general provision in section 35(1) to the case of an unregistered dealer who escapes assessment on account of his failure to get himself registered and failure to file a return. Counsel has further submitted that Anandji Haridas [1968] 21 S.T.C. 326 (S.C.); A.I.R. 1968 S.C. 565., is distinguishable inasmuch as that was a case of a registered dealer, while all the instant cases, out of which these appeals have arisen, are of unregistered dealers of the category specified in section 33(6). It is submitted that putting the unregistered dealers, who escape assessment by the modus operandi mentioned in section 33(6), in a separate class to be dealt with, under that provision, rests on ra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Commissioner shall, after giving him a reasonable opportunity of being heard, assess, to the best of his judgment, the amount of tax, if any, due from the dealer in respect of such period, and any period subsequent thereto." "Section 35. (1) If the Commissioner has reason to believe that any turnover of sales or turnover of purchases of any goods chargeable to tax under this Act has in respect of any year escaped assessment, or has been under-assessed or assessed at a lower rate, or that any deductions have been wrongly made, then the Commissioner may,- (a) where such turnover has escaped assessment or has been under-assessed or assessed at a lower rate by reason of the fact that the provisions of sub- section (1) of section 2 of the Bombay Sales Tax (Validating Provisions) Act, 1957, were not then enacted, at any time within eight years, (b) where he has reason to believe that the dealer has concealed such sales or purchases or any material particularly relating thereto, or has knowingly furnished incorrect returns, at any time within eight years, and (c) in any other case, at any time within five years of the end of that year, serve on the dealer liable to pay tax in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....taining all or any of the requirements which may be included in a notice under sub-section (3) of section 14 and may proceed to assess or reassess the amount of the tax due from such dealer and the provisions of this Act shall apply accordingly as if the notice were a notice served under that sub-section: Provided that the amount of the tax shall be assessed after making the deductions permitted from time to time under the Bombay Sales Tax Act, 1946, the Bombay Sales Tax (No. 2) Ordinance, 1952, and this Act, as the case may be, at the rates at which it would have been assessed had the turnover not escaped assessment or full assessment, as the case may be: Provided further that where in respect of such turnover or deduction, as the case may be, an order has already been passed under section 30 or section 31, the Collector shall make a report to the appropriate appellate or revising authority, as the case may be, which shall thereupon after giving the dealer concerned a reasonable opportunity of being heard, pass such order as it deems fit." An analysis of section 33(6) of the 1959 Act [corresponding to section 14(6) of the 1953 Act] will show that it applies to that partic....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in pursuance of which, they can, by the exercise of due vigilance, check and detect any tax evasion by him within a reasonable time. This reasonable time is the period of limitation fixed by the legislature, in its wisdom, in section 35. But the case of a tax evading unregistered dealer is different. In his case, the authorities have on their record no such basic information such as the registration record which would supply them a "lead" to work upon. For lack of information or want of adequate staff, resources and time at the disposal of the department, and the secretive nature of the modus operandi, tax evading activities of an unregistered dealer may go on undetected for years on end. That is why for taking action under section 33(6) against a tax evading unregistered dealer, the legislature has not fixed any period of limitation. Thus, putting the unregistered dealer, who, though liable to pay tax, fails to get himself registered and does not pay any tax, in a separate class, to be dealt with under section 33(6), differently from other dealers falling under section 35, rests on intelligible differentia having a rational nexus with the object of preventing tax evasion. The ....