TaxTMI 
TaxTMI 
1972 (5) TMI 53
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....e. (2) Imposition of purchase tax amounts to imposition of excise duty which could be levied by the Government of India only. (3) Definition of purchase is defective. (4) In the matter of purchase tax leave to appeal to the Supreme Court has been granted by the High Court of Punjab. (5) Assessee is not liable to pay tax on purchase made through commission agents, as they are not his purchases." Mr. K. K. Uppal, who was the Assessing Authority of Punjab (Enforcement Officer, Punjab), created an additional demand of Rs. 35,041.23 for the assessment year 1960-61 by his order dated 21st March, 1963. The assessee having felt aggrieved against the said order filed an appeal to the Deputy Excise and Taxation Commissioner, Jullundur Division, Jullundur, which was decided by him on 9th November, 1964, by which he remanded the case to the Assessing Authority to decide it afresh according to the observations made in the order. The case came up for decision before Shri Sarbjit Singh, Assessing Authority, Ferozepore, who issued fresh notice to the assessee on 29th July, 1965, for appearance before him on 16th August, 1965. He made the assessment afresh and created an addit....
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....ee should have furnished returns in respect of any period. In the present case, the assessment had been made by the Assessing Authority on 30th October, 1965, and, therefore, it was not within limitation. The next contention which had been urged was that Shri K. K. Uppal, who was the Assessing Authority of Punjab, had taken cognizance of the matter and had issued notice in form S. T. XIV under sub-section (2) of section 11 of the Act. It was contended that the said notice was bad in the eye of law as he was not the Assessing Authority before whom the returns were filed and he was not entrusted with the case specifically to deal with. The proceedings before him were, therefore, without jurisdiction and nullity. The subsequent proceedings which were started by Shri Sarbjit Singh, Assessing Authority, by issuing a notice on 16th August, 1965, were barred by time as the period of three years had elapsed which was prescribed under sub-section (5) of section 11 of the Act. The representative of the State, on the other side, contended that the assessee had submitted to the jurisdiction of Shri K. K. Uppal, who had the jurisdiction to make assessment throughout the State of Punjab. It was ....
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....ing to him, the returns were filed by a proper person on a proper form. If he has not given the data required by the Rules, they can, at the most, be treated to be the returns which were not correct and complete as given in sub-section (2) of section 11 of the Act. We have heard the learned counsel for the parties at length. Before dealing with this matter, it will be better to reproduce sections 10 and 11 of the Act, which are as follows: "Section 10. Payment of tax and returns.-(1) Tax payable under this Act shall be paid in the manner hereinafter provided at such intervals as may be prescribed. (2) The Commissioner may, in such circumstances and subject to such conditions as may be prescribed, accept from any dealer, in lieu of the amount of the general tax payable during any period, a lump sum by way of composition determined in the prescribed manner. (3) Such dealers as may be required so to do by the Assessing Authority by notice served in the prescribed manner and every registered dealer shall furnish such returns by such dates and to such authority as may be prescribed: Provided that, if any dealer establishes to the satisfaction of the Assessing Authority that his....
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....ecified in the notice or as soon afterwards as may be, the Assessing Authority shall, after hearing such evidence as the dealer may produce, and such other evidence as the Assessing Authority may require on specified points, assess the amount of tax due from the dealer. (4) If a registered dealer, having furnished returns in respect of a period, fails to comply with the terms of a notice issued under subsection (2), the Assessing Authority shall within three years after the expiry of such period, proceed to assess to the best of his judgment the amount of the tax due from the dealer. (5) If a registered dealer does not furnish returns in respect of any period by the prescribed date, the Assessing Authority shall within three years after the expiry of such period, after giving the dealer a reasonable opportunity of being heard, proceed to assess to the best of his judgment, the amount of tax, if any, due from the dealer. (6) **** (7) The amount of tax- (a) due where the returns are furnished without receipt showing full payment thereof, or (b) assessed under sub-sections (1), (3), (4) and (5), less the sum, if any, already paid by the dealer in respect of the said ....
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....s that if the dealer fails without sufficient reason to comply with the requirements of sub-sections (3) and (4), the Commissioner or any person appointed to assist him after giving such dealer a reasonable opportunity of being heard, direct him to pay penalty. Subsection (2) of section 11 says that if the Assessing Authority is not satisfied, without requiring the presence of dealer to furnish the returns that such returns are correct and complete, he shall serve on such dealer a notice in the prescribed manner requiring him, on a date and place specified therein, either to attend in person or to produce any evidence on which the dealer may rely in support of his returns. Rule 33 of the Rules prescribes the form in which the notice is to be issued by the appropriate authority. Sub-section (3) of section 11 authorises the Assessing Authority to hear the dealer and assess the amount of tax due from him. In case, the dealer fails to comply with the notice issued under sub-section (2), the Assessing Authority has been authorised under sub-section (4) to proceed to assess to the best of his judgment the amount of tax due from such dealer within a period of three years. If the dealer do....
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....roversy whether the extraction of oil amounts to manufacture of goods or not. On the whole, the reading of the five notes appended to the returns shows that he was asserting that he was under a belief that he was filing the returns bona fide and was not liable to pay tax on the purchases for the reasons which have been given in the notes. The learned counsel has laid a great stress that in the notes the assessee challenged the vires of the definition of "purchase" and also the provisions of the Act, which shows that he was not interested in disclosing any information. According to him, the reasons do not help the assessee in not disclosing the information which is required to be given in the form. He has specifically drawn our attention to clause 'A' in the form which is in the following terms: "Purchase price paid and payable for goods purchased during the return period for use in the manufacture of goods for sale." We are not convinced by the said argument. In case the assessee wanted that these returns should be treated as no returns, he should have not appended the notes. In the alternative, he could have sent only a letter containing his grounds for not filing the returns. ....
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....urns. In support of his argument, he has referred to sub-section (5) of section 11 of the Act. He submits that in the case of no returns, the assessee can be dealt with under the said section within a period of three years from the date prescribed for filing the returns. We have also not been able to appreciate this argument of the learned counsel for the assessee. The case of no returns stand on a different footing than that of incomplete and incorrect returns. In such a case, the returns should not have been filed or the columns should not have been filled at all. In the present reference, this is not the case. The learned counsel for the assessee has relied on Abhey Ram Chunni Lal, In re[1933] 1 I.T.R. 126. in support of his argument. The facts of that case were that the assessee had his business at three places, namely, Benares, Jaunpur and Piparia with head office at Benares. The Income-tax Officer of Benares called for a return of his total income including the income from Jaunpur and Piparia offices. The assessee filed a return in regard to Benares office alone and did not file the return of income from the other two offices in spite of extension of time by the Income-tax....
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....n to various sections of the Act and the rules of the Rules. First of all, it will be better if the various sections and rules which have been referred to, are noticed as hereunder: SECTIONS "2. (a) 'Assessing Authority' means any person authorised by the State Government to make any assessment under the Act. 2.. (f) 'Prescribed' means prescribed by rules made under the Act. 2.. (ff) 'Purchase' with all its grammatical variations or cognate expressions, means the acquisition of goods specified in Schedule 'C' for cash or deferred payment or other valuable consideration otherwise than under a mortgage, hypothecation, charge or pledge. 2.. (j) 'Year' means the financial year. 3.. Taxing authorities.-(1) For carrying out the purposes of this Act, the State Government may appoint a person to be Excise and Taxation Commissioner, and such other persons to assist him as it thinks fit." RULES "2. (b) 'Appropriate Assessing Authority' in respect of any particular dealer means the Excise and Taxation Officer or the Assistant Excise and Taxation Officer, within whose jurisdiction the dealer's place of business is situated, or if the dealer has more than one place of business....
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....his case were filed before the Excise and Taxation Officer, Ferozepore, and he was the only appropriate Assessing Authority who could take any action under the Act. There is no order by which the said proceedings have been transferred from the appropriate Assessing Authority, Ferozepore, to Shri K.K. Uppal. In the circumstances, according to his submissions, Shri K.K. Uppal had no jurisdiction to take cognizance of the matter. On the other hand, the learned counsel for the respondent has submitted that Shri K.K. Uppal was an Excise and Taxation Officer for the whole of the State of Punjab and, as such, there was no bar why he could not take cognizance of this matter. He has referred to the definition of "appropriate Assessing Authority" in sub-rule (b) of rule 2 of the Rules where it is mentioned that it includes "any person" as may be appointed under section 3 of the Act and authorised by the State Government to make assessment in respect of such dealer within the meaning of clause (a) of section 2 of the Act. In these circumstances, he urged that Shri K.K. Uppal had the jurisdiction to decide this matter. Secondly, he submits that the objection which is being raised now was never....
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.... to his file. It will be appropriate to first see whether any authority had jurisdiction to transfer the case from the file of one Assessing Authority to the file of another Assessing Authority. Rule 39 of the Rules says that the Excise and Taxation Officer in-charge of a district may suo motu or on an application made to him in this behalf, transfer any case from the file of an Additional Excise and Taxation Officer or Assistant Excise and Taxation Officer serving in his district to his own file and vice versa or to the file of another Excise and Taxation Officer serving in his district, subject to the pecuniary jurisdiction prescribed. Shri K.K. Uppal will be considered to be an Additional Excise and Taxation Officer for the purpose of the assessee and the Excise and Taxation Officer could transfer the case of the assessee to the file of the Additional Excise and Taxation Officer. Rule 39 is explicit and no other inference can be drawn from it except the one given above. Rule 69 of the Rules states that the Commissioner shall superintend the administration and the collection of tax leviable under the Act and shall control all officers empowered thereunder. The power to superinten....
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.... court and punish where necessary was a special jurisdiction which is inherent in all courts of record and section 1(2) of the Code of Criminal Procedure expressly excludes special jurisdiction from its scope. The observations were made in that context. So the abovesaid case is distinguishable from the present case and the assessee cannot take any benefit from those observations. He has then referred to Bidi Supply Co. v. Union of India and Others [1956] 29 I.T.R. 717 (S.C.); A.I.R. 1956 S.C. 479. In that case, the assessment proceedings relating to the years 1950-51, 1951-52, 1952-53, 1953-54 and 1954-55 were pending before the Income-tax Officer, District Ill, Calcutta. He had also made the assessments for the years 1948-49 and 1949-50. An order was passed by the Central Board of Revenue under sub-section (7-A) of section 5 of the Income-tax Act of 1922 that the Board transfers the case of Bidi Supply Co. to the Income-tax Officer, Special Circle, Ranchi. This order was challenged by the petitioner under article 32 of the Constitution praying for an appropriate writ and order restraining the Income-tax Officer, Special Ward, Ranchi, from taking up any proceeding with the as....
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....ere was no specific power vested in him (the Commissioner) to transfer the cases. The case could also be transferred from the Assessing Authority under rule 39. Now, we take up the question already stated above, namely, whether Shri K.K. Uppal could take cognizance of this matter without any specific order of transfer. In the first instance, the contention of the learned counsel for the respondent-State is that the said authority as an appropriate authority had the jurisdiction to make an assessment and the mere fact that no specific order of transfer had been made, does not take away the jurisdiction of that authority. He has also submitted that in case the assessee does not raise such an objection at the earliest, it cannot be done at a subsequent stage. In support of his contention, the learned counsel for the State has submitted that in order to determine the jurisdiction, sections 2(c) and 3 have to be taken into consideration. He has also referred to clause (b) of rule 2 and submits that the authorities mentioned therein have got concurrent jurisdiction to make the assessment. It is not necessary, according to him, that the order should be posted for transfer of the....
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....regular manner of seizing of assessment proceedings would not by itself attract jurisdictional infirmity necessarily vitiating a final assessment order. The next case relied upon by the learned counsel for the State is Kishan Chand & Co. v. K.K. Opal, Excise & Taxation Officer (Enforcement), Amritsar(1), which was also filed by the same Kishan Chand & Co. In that case, the Excise and Taxation Officer, Chandigarh, Shri S.K. Jain, sent to the petitioner notices in form S.T. XIV for the years 1961-62 and 1962-63 under the Act requiring it to appear before him on 3rd March, 1964. The notices issued were challenged by the company and were quashed by this court in the case reported as Kishan Chand & Co. v. S.K. Jain[1965] 16 S.T.C. 521. Secondly, Shri K.K. Opal required the petitioner to produce before him certain books of account for the years 1961-62 and 1962-63 along with certain other documents. It was also required to produce account books for the year 1963-64 along with certain other documents. It filed a petition under article 226 challenging these notices and contended that the Assessing Authority issuing the notice had no jurisdiction to do so and only the Assessing Authority at....
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....acts. The notice was challenged as soon as it was issued by Shri K.K. Opal. We do not find that this case helps the assessee in any way. There are specifically no observations in the case that the Assessing Authority could not take cognizance of the matter without an order of transfer. Mr. Siri Chand Goyal has also referred to Kishan Chand & Co. v. N.L. Murgai, Excise and Taxation Officer, Amritsar[1966] 18 S.T.C. 110., which is again a case of the same Kishan Chand and Company. This also relates to the returns for the year 1961-62 which were filed with the Assessing Authority, Amritsar. Subsequently, Shri S.K. Jain, issued notice under sub-section (2) of section 11 of the Act for that year. The petitioner challenged his jurisdiction in the High Court. The Joint Excise and Taxation Commissioner, Punjab, informed the petitioner by notice dated 23rd March, 1965, that the assessment proceedings would be taken up and finalised by Shri D.P. Gupta, Assessing Authority. On 10th June, 1965, the petitioner was served with a notice by Shri N.L. Murgai, Excise and Taxation Officer, Amritsar, in form S.T. XIV for his appearance with the account books for the year 1961-62. The petitioner then q....
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....ed by a single Judge of this court in Rex Hosiery Factory v. S.K. Jain and Another[1966] 18 S.T.C. 247. The firm in that case was carrying on business at Ludhiana and filed its returns with the Assessing Authority of that place for the year 1962-63. The petitioner received notice from Shri K.S. Jaspal (Finance Department), at Chandigarh, to appear before him for assessment. Shri K.S. Jaspal was subsequently succeeded by Shri S.K. Jain. Shri Jain assessed the petitioner to tax and also imposed a penalty on him under sub-section (7) of section 10 of the Act. He filed a writ petition in this court in which he challenged that Shri Jain was not competent to deal with his assessment in the absence of an order of transfer to him by the competent authority and the imposition of penalty under sub-section (7) of section 10 was illegal. It was held that the assessment made by him having jurisdiction throughout the State of Punjab would not become void merely because no order transferring the proceedings was made by the competent authority. We are in agreement with the view of the learned single Judge. The facts of the abovesaid case are almost similar to those of the present one. The learn....
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....er of superintendence was given to the Commissioner under rule 69 of the Rules and that power also included the power of transfer. This contention of the learned counsel for the assessee also does not hold good. The learned counsel for the State has also urged that the objection regarding jurisdiction of Shri K.K. Uppal, if any, should have been raised before him at the time when the assessee appeared before him for the first time. In case, he did not raise the objection, he cannot raise it subsequently in appeal or in revision before the higher authorities. He has also relied on the following observations of their Lordships of the Supreme Court in Messrs. Pannalal Binjraj and Others' case[1957] 31 I.T.R. 565 (S.C.); A.I.R. 1957 S.C. 397. : "There is moreover another feature which is common to both these groups and it is that none of the petitioners raised any objection to their cases being transferred in the manner stated above and in fact submitted to the jurisdiction of the Income-tax Officers to whom their cases had been transferred. It was only after our decision in Bidi Supply Co. v. The Union of India[1956] 29 I.T.R. 717 (S.C.); A.I.R. 1956 S.C. 479. was pronounc....