TaxTMI 
TaxTMI 
1984 (10) TMI 206
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....d out by the sales tax authorities at the business premises of the petitioner which is situate at Unza and as a result thereof certain records were seized. It appears that the petitioner could not explain certain consignments noticed in the sense that he could not furnish the precise particulars of the consignor and/or the consignee. The petitioner, however, contended that he was not a dealer and therefore not liable for registration. This contention did not find favour with the Sales Tax Officer (1), Unza, who was seized of the matter. He, therefore, proceeded to make an order of assessment under section 9(2) of the Central Sales Tax Act, 1956, read with section 41(6) of the Act raising the aggregate demand of Rs. 1,24,717.12 comprising of Rs. 99,774.12 as Central sales tax and Rs. 24,943 as penalty for concealment. By the present petition this order of assessment is challenged mainly, inter alia, on the ground that it is without jurisdiction inasmuch as the Sales Tax Officer failed to make a draft order of assessment as he was obliged under section 46A of the Act which could have been finalised by the Assistant Commissioner of Sales Tax (Appeals) on the objections being raised....
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....h the revised declaration or return before the period specified in sub-section (3) of section 40, if he discovers any omission or any incorrect statement having gone in his return. The Commissioner has also power under sub-section (2) to call upon any dealer whose turnover is likely to exceed the specified amount which has been prescribed according to the nature of the business of the dealer by serving a notice in the prescribed manner and on such notice being served, the dealer is under an obligation to furnish the declaration or return as if he was a registered dealer. Under section 41, a registered dealer is to be assessed separately for each year during which he is liable to pay tax or for such period exceeding one year on an application being made in that behalf by the dealer. The Commissioner would on being satisfied about the declaration or the return being complete and correct, assess the amount of tax accordingly. If he is not satisfied and feels that the presence of the dealer or the production of further evidence is necessary, he may fix a date and place and call upon the dealer by a notice in that behalf to attend and produce or cause to be produced the evidence on whic....
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....pose on a dealer a liability to pay an amount not less than Rs. 25,000 by way of tax in respect of a period in addition to amount of tax indicated by the dealer in his declaration or return in respect of that period, such authority shall serve in such manner as may be prescribed on such a dealer a draft order and invite his objections in relation to it. (2) Where any sales tax authority mentioned in section 27 exercising the powers under section 44, 45 or 46 proposes to make an order of reassessment under section 44 or an order imposing a penalty under section 45 or 46 and such order if made, would in the opinion of such authority, impose on a dealer a liability to pay an amount not less than Rs. 25,000 by way of tax or an amount not less than Rs. 7,500 by way of penalty in respect of a period in addition to the amount of tax assessed or penalty imposed in respect of that period, such authority shall serve in such manner as may be prescribed on such dealer a draft order and invite his objections in relation to it. (3) and (4) ........" The grievance of the petitioner is that the Sales Tax Officer has acted beyond his jurisdiction inasmuch as the tax liability which ensued ....
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....n in context of the purpose and object of the newly inserted provisions of section 46A, we are afraid that the contention is not capable of being sustained. The reasons are obvious. On the plain reading of the two subsections, it is clear that the legislative intent appears to be that whenever the assessment results in additional liability either on account of tax or penalty as specified in the two sub-sections respectively, there is an obligation on the Sales Tax Officer to make a draft order. It is no doubt true that the two sub-sections, as they are worded, may create an impression that it is only when a return is filed and the tax liability is indicated on self-assessment which is sought to be increased by the additional liability as specified in sub-section (1), there is an obligation of making a draft assessment order and similarly if the liability of penalty exceeds the specified amount in addition to the one already determined in respect of the same period, then there is an obligation of making draft assessment order. But when we read the section closely the interpretation which has been advanced on behalf of the State Government appears to us to be clearly de hors the legi....
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.... are the exceptional cases or what are the principles which should guide the Courts for departing from the grammatical and literal construction of the words of a statute. One of the exceptional situations where such a departure has been recognised on matter of principle of interpretation of statutes is that where the ordinary meaning and the grammatical construction of the words of a statute lead to a manifest contradiction of the apparent purpose of the enactment, it is permissible to depart from the cardinal principle of the plain grammatical and literal construction of the words. (See Maxwell on the Interpretation of Statutes, Twelfth Edition, page 229, and Tirath Singh v. Bachittar Singh AIR 1955 SC 830 at page 833). We must, therefore, remind ourselves that section 46A is a new provision which has been inserted in the Gujarat Sales Tax Act by the Gujarat Sales Tax (Amendment) Act (No. 10 of 1979) with effect from 1st April, 1979. We have, therefore, to consider what is the purpose of this enactment, namely, provision contained in section 46A. In order to understand the apparent purpose of the enactment, we are entitled to look to the Committee Report since it is legitimate to ....
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....oing through the normal procedure of assessment of the dealer's case, pass an order of assessment. If the suggestion is accepted, the chances of arbitrary increase in tax burden or of carelessness or even of corruption, will be considerably reduced and both the quality of work of assessment and the confidence reposed therein by the dealers will improve. The number of appeals filed will also tend to decrease..." It is, therefore, clear that the apparent purpose of the enactment is to curb the arbitrary assessment or assessments made carelessly or for ulterior purposes. The purpose of the new provision is also to reduce the number of appeals arising from such arbitrary, indifferent and tainted assessments. If that is the purpose of the enactment, we are of the opinion that the restricted interpretation canvassed by the State Government would defeat the legislative intent which has not been manifested unequivocally. We do not see any reason as to why there should be a statutory obligation of making a draft assessment order only in those cases where the tax liability is indicated in the return or the declaration. The learned Government Pleader failed to give satisfactory explanation....