TaxTMI 
TaxTMI 
1992 (9) TMI 343
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....dule 1. A notice in form No. VI dated April 29, 1991, from the respondent No. 1 under sections 11 and 14(1) of the Act was issued to Ramapada Ghosh asking him to produce books of accounts and other documents for the period of four quarters ending Chaitra 30, 1939 B.S. as the respondent No. 1 was of the view that as a registered dealer the said deceased did not furnish his returns for the said period. Thereafter on September 5, 1991, a demand notice in form No. VII under section 11 of the Act for the four quarters ending Chaitra 1389 B.S. was served upon the applicants. The purported notices and purported orders were all in the name of the deceased to pay sales tax with penalty and interest. A notice in form No. VII-L dated August 20, 1991, was also issued asking the said deceased to pay interest for the said period. The purported notices and orders are all illegal and invalid as those were made on a dead man. The assessments and determination of interest are also illegal and invalid and void ab initio as those are clearly barred by limitation and hit by section 11(2a) of the Act. The estimate of gross turnover and computation of taxable turnover by respondent No. 1 to the best of h....
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....18 in the said writ petition. Upon reading the said petition and upon hearing Dr. D. Pal, advocate for the petitioners, honourable Mr. Justice T.K. Basu passed an interim order of injunction on August 31, 1981, in terms of prayer ("f") of the writ petition till the disposal of the Rule. Prayer ("f") of the said writ petition reads as under: "An interim order of injunction restraining the respondents from proceeding with the pending assessments of the petitioners and from giving any effect to the said notices, orders and notifications till the disposal of the application." The petitioners in the said writ petition challenged, inter alia, the provisions of the amended Act by which the conditions and exceptions have been incorporated in the 1st column of entry No. 7 of Schedule I in respect of cooked food. The petitioners in the writ petition had contended that the provisions of the amended Act are illegal, invalid and ultra vires and beyond the competence and authority of the Government issuing notification for enforcing the Act. The interim injunction order granted by the High Court restrained the respondents from giving effect to notification regarding item No. 7 of Schedule I of ....
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....een given to the applicants before computing the assessments; (d) The ex parte assessments are without basis and materials. Before examining the contentions of the parties, it would be convenient to note the undisputed facts in the present case. 6.. Ramapada Ghosh was a registered dealer and he was carrying on a proprietorship business under the trade name of M/s. Burdwan Mistanna Bhandar at Benacheti, Durgapur. He died on March 14, 1981, i.e., before the writ petition was filed in the High Court. In the writ petition, Ramapada Ghosh figured as petitioner No. 18. The writ petition was filed on August 17, 1981. It may be noted that during the hearing of the case before this Tribunal the record of RN-55(T) of 1990 which was originally numbered in the High Court as C.R. 11168(W) of 1981 was brought before us. The record of the said case shows that in the vakalatnama filed before the High Court, applicant Nabakumar Ghosh had signed for Ramapada Ghosh. An interim injunction order was passed by the High Court on August 31, 1981, as per prayer ("f") of the petitioners. We propose to note the nature and extent of the interim injunction at the proper stage. The said writ case which stood....
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....of section 24B of the Income-tax Act, 1922, was under consideration. Mr. Majumdar, learned State Representative, has contended that the scope and ambit of section 24B of the Income-tax Act, 1922, have nothing to do with the present case where section 17 of the Act is applicable. The question for consideration before the Supreme Court was whether certain incomes in the hands of legal heirs and representatives of the deceased were assessable to income-tax and it was decided that the provisions of section 24B do not extend the tax liability of the estate of the deceased person beyond the previous or current year in which that person dies. Mr. Roy Chowdhury has contended that the impugned assessments are in respect of periods long after the death of Ramapada Ghosh and so these are nullity. In the case reported in [1963] 47 ITR 754 (Cal) (Sahasrangshu Kanta Acharya v. Collector of Malda) an assessment of income-tax was made on "the successor-in-interest of the late A" without giving the name of any executor, administrator or legal representative. It was held that no assessment could be made in this manner without specifying the name of the legal representatives. In the case reported in....
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....eath of a registered dealer is against fundamental rights. We fail to see how. Moreover, Mr. Roy Chowdhury's contention runs counter to what has been stated in para 4 of the affidavit-in-reply by Sri Nabakumar Ghosh, applicant No. 1. In para 4 of the said affidavit, he has stated that section 16 does not create any obligation in respect of information regarding the death of a dealer but the information is required to be furnished regarding the changes of business under section 16 of the said Act and in case the dealer dies, legal representative shall inform the said authority regarding the information as per clauses (a), (b), (c) and (d). There is no challenge by the applicants on the ground of constitutional validity of the requirement of information under section 16. Mr. Roy Chowdhury's contention that on the death of a dealer information is required to be furnished only as per clauses (a), (b), (c) and (d) does not appear to us sound. The informations as per clauses (a), (b), (c) and (d) are required from a dealer and not from the legal representative of a deceased dealer. Mr. Roy Chowdhury has contended that under section 17 of the Act, the legal representative may be liable fo....
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.... the present applicants. The decisions reported in [1968] 21 STC 109 (MP) (Gopalkishan v. Sales Tax Officer) and [1973] 31 STC 581 (Mad.) (State of Madras v. Smt. K.A. Valliammal) relied upon by the learned Advocate, Mr. Roy Chowdhury, have no application in the present case. In both the cases cited by Mr. Roy Chowdhury, the notices and the assessments made on deceased dealer have been held to be invalid. We have not been shown that in the Madhya Pradesh General Sales Tax Act, 1958 and in the Tamil Nadu General Sales Tax Act, 1959, there are provisions exactly identical like those in sections 16 and 17 of the Act. But in both the cases, the taxing authorities had full information about the death of the dealer and in spite of that information, the taxing authorities chose to proceed against the deceased dealers. Mr. Majumdar, learned State Representative, has relied upon a decision reported in [1964] 15 STC 277 (Cal) (Bibhas Chandra Gon v. State of West Bengal). In that case under the Act, the petitioners had contended that the assessment was made upon a dead person and as such, was a nullity. The contention was held to be without substance. At page 282, the following observation ha....
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....sentatives of the deceased registered dealer, Ramapada Ghosh, have not filed any return as required by section 10(2) read with section 17 of the Act. They have not also exercised their right to get the registration certificate amended under section 17 of the Act. In the context of such a situation, the applicants' learned Advocate, Mr. Roy Chowdhury wants us to hold that the notice on the deceased registered dealer, Ramapada Ghosh, is a nullity. 9.. Mr. Majumdar, learned State Representative, has contended that the knowledge and receipt of the notice by the applicants cannot be disputed and that such knowledge and receipt can be easily inferred from the fact that the applicants have appended xerox copies of the notice to their applications. It is not their case that they have appended xerox copies on obtaining the same from the office of the respondents. Mr. Majumdar's contention is not without substance. 10.. A notice in form No. VI under sections 11 and 14(1) of the Act for the purposes of assessment of tax is a statutory notice and the taxing authority is bound by the statute to give the registered dealer an opportunity of hearing. A denial of an opportunity of hearing would ....
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....en given to them. To allow the applicants' plea of nullity would be to render the provisions of sections 16 and 10(2) of the Act nugatory in so far as they require compliance by the legal representatives of a deceased registered dealer, and would also amount to putting a premium on their non-compliance of statutory provisions. We are, therefore, of opinion that the notices in form No. VI and form No. VII and the assessment orders are not a nullity and those are not invalid. 11.. The second objection against the initiation of the proceedings of assessment taken by Mr. Roy Chowdhury, learned Advocate for the applicants, is that these are barred by limitation as the 4-year time limited by section 11(2a) of the Act was over when the proceeding was initiated. The respondent's case is that the limitation as prescribed under section 11(2a) of the Act is not applicable in the present case as the respondent was restrained by an order of injunction by the honourable High Court and so, the period during which the respondent remained restrained from commencing or continuing the proceeding of assessment should be excluded under section 11(2b) of the Act. Mr. Roy Chowdhury, learned Advocate fo....
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....s would be barred by limitation. Let us now see if the respondents have taken rightly the ground of applicability of section 11(2b) of the Act in the present case. 13.. For appreciating the scope and extent of the interim injunction order passed on August 31, 1981, it would be convenient to note the respective stand of the parties. The contention of Mr. Roy Chowdhury, learned Advocate for the applicants, is that the writ petitioners filed the writ case challenging, inter alia, the legality and validity of the action of the respondent, commercial tax authority, in proceeding with the assessment and all orders, notices, and notifications and all proceedings relating thereto under the Act on various grounds set out in the grounds to the said writ petition. Interim order of injunction in terms of prayer ("f") was an order restraining the respondent from proceeding with pending assessments of the petitioners and from giving any effect to the said notices, orders and notifications till the disposal of the application. Mr. Roy Chowdhury has contended that the impugned notices were annexed to the writ petition but no notifications were annexed as those were not in existence. The notices ....
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....sessment proceedings as the alleged orders and notifications were not in existence. 15.. By an affidavit in the form of rejoinder to the supplementary affidavit, the respondents have stated their stand regarding the scope of interim injunction order. Mr. Majumdar, learned State Representative, has contended that the interim injunction order had two parts, viz., (1) from proceeding with the pending assessments of the petitioners and (2) from giving any effect to the said notices, orders and notifications till disposal of the writ application. Mr. Majumdar has contended that in para 14 of the said writ petition at page 12, the writ petitioners had unequivocally thrown challenge to the provisions of the amendment Acts by which entry No. 7 in Schedule I of the Act has been amended from time to time on the ground that incorporation of exception and/or exemption in the 1st column of the corresponding entry in Schedule I, is ultra vires of section 6(1) of the Act, and is illegal, invalid and without jurisdiction and beyond the competence, jurisdiction and/or authority of the State Government issuing the notification. Mr. Majumdar has contended that in para 16 of the said writ petition, t....
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....any injunction restraining them from proceeding with pending assessments or from giving effect to the notifications. Mr. Roy Chowdhury's contention that the challenge was only in respect of pending assessments and "one time prices" does not appear to us to be convincing. What was challenged was the vires of the amendments which effected changes in column 1 in respect of entry No. 7 of Schedule I of the Act. Mr. Majumdar, learned State Representative, has rightly contended that the interim injunction clearly restrained the respondent No. 1 from commencing or continuing both present and future assessments of the writ petitioners. We cannot accept the contention of the applicants that the respondent No. 1 could not be held for contempt if he had proceeded with future assessments. We have already seen that interim injunction order came to an end by operation of law some time in May, 1989. The impugned proceeding and assessments having been done by August, 1991, the same is not barred by limitation. The respondents have taken rightly the ground of applicability of section 11(2b) of the Act in the present case. 17.. Mr. Roy Chowdhury has contended that the proceedings have to be initiat....
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.... Chowdhury's reference to AIR 1974 SC 1539 (Andhra Industrial Works v. Chief Controller of Imports) has no application in the context of the facts in the present case. The objection taken by Mr. Roy Chowdhury cannot be sustained. 21.. The last objection taken by Mr. Roy Chowdhury, learned Advocate for the petitioners, is that the best judgment assessment made by respondent No. 1 is without any basis and without any material. This objection also does not appear to us to be sound in view of the fact that the best judgment assessment is based on past records of the registered dealer. The best judgment assessment being based on past records of the registered dealer, it cannot be said that it was arbitrary or whimsical or without basis or material. The objection taken by Mr. Roy Chowdhury, therefore, cannot be sustained. 22.. In view of our above discussions and findings, we are of the opinion that the objections taken against the impugned assessments are without merit and substance. The applications are, therefore, dismissed. 23.. In the circumstances, no cost is allowed. The interim order passed on October 8, 1991, is hereby vacated. 24.. Let this judgment and order govern all the....
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....d assessments were illegal and void for being made in the name of deceased Ramapada Ghosh. My learned brother discussed the cases cited by Mr. Roy Chowdhury as well as the cases cited by Mr. Majumdar, learned State Representative and was of the opinion that the orders of the assessments and notices were not a nullity and were not invalid. In coming to this conclusion, my learned brother relied on some observations made in the case of Bibhas Chandra Gon v. State of West Bengal [1964] 15 STC 277 as well as (a) failure of the applicants to file any return as required by section 10(2) read with section 17 of the Act of 1941, (b) failure of the applicants to have the registration certificate in the name of Ramapada amended in their names under section 17 of the Act of 1941 and (c) their failure to inform the commercial tax authorities about the death of Ramapada under section 16 of the Act of 1941 read with rule 73 of the Bengal Sales Tax Rules, 1941 (hereinafter referred to as "the Rules of 1941" for the sake of brevity). To appreciate the rival contentions, the relevant sections of the Act are reproduced below: "10. Payment of tax and returns.-(1) Tax payable under this Act shall be....
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....rt in the case of Bibhas Chandra Gon v. State of West Bengal [1964] 15 STC 277 related to an assessment in the name of a business run under the name and style of "Messrs. Jogesh Chandra Gon" at 57, Clive Street, Calcutta. The business was carried on by a registered dealer, Jogesh Chandra Gon. Jogesh died intestate on March 2, 1956. Upon his death his three sons, who happened to be the petitioners in the High Court, Calcutta, succeeded to the business. On July 5, 1956, the petitioner Bibhas Chandra Gon sent a letter to the Commercial Tax Officer intimating the death of Jogesh and intimating further that the three sons of Jogesh had become the partners of the business. Another letter dated November 6, 1956, sent by those three sons was received by the Commercial Tax Officer. In that letter it was stated that the three petitioners were the only proprietors of the properties left by Jogesh. On November 11, 1956, the change of ownership of the business was recorded by the Commercial Tax Officer. The certificate of registration was also amended. Before his death, Jogesh had filed returns for four quarters ending Chaitra 1361 B.S. After the death of Jogesh, the petitioners of that case fi....
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.... living person and there could be no assessment on a dead person. These observations were made, while analysing the provisions of section 24B of the Income-tax Act, 1922, which ran as follows: "24-B. Tax of deceased person payable by representative.-(1) Where a person dies, his executor, administrator or other legal representative shall be liable to pay out of the estate of the deceased person to the extent to which the estate is capable of meeting the charge, the tax assessed as payable by such person, or any tax which would have been payable by him under this Act if he had not died. (2) Where a person dies before the publication of the notice referred to in sub-section (1) of section 22 or before he is served with a notice under subsection (2) of section 22 or section 34, as the case may be, his executor, administrator or other legal representative shall, on the serving of the notice under sub-section (2) of section 22 or under section 34, as the case may be, comply therewith, and the Income-tax Officer may proceed to assess the total income of the deceased person as if such executor, administrator or other legal representative were the assessee. (3) Where a person dies, witho....
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....apada only for duration of the four quarters ending on 30th Chaitra 1388 B.S. and the income received from the business run under the name and style of Burdwan Mistanna Bhandar for the subsequent years cannot be assessable to tax in the name of Ramapada by order of assessment for such subsequent years in the name of Ramapada. Such orders of assessment for subsequent years in the name of Ramapada cannot be justified on the basis of the provisions in section 17 of the Act of 1941. 32.. The cases reported in [1963] 47 ITR 754 (Sahasrangshu Kanta Acharya v. Collector of Malda) and [1978] 114 ITR 155 (Sajjan Kumar Saraf v. Commissioner of Income-tax) have been decided by the Calcutta High Court. In the case of Sahasrangshu Kanta Acharya v. Collector of Malda [1963] 47 ITR 754 (Cal), an assessment was made on the basis of the provisions in section 24B of the Income-tax Act, 1922, on "the successors-in-interest to the late A" without giving the name of any executor, administrator or legal representative and certificate proceedings were also issued in the name of "the successors-in-interest to A". It was held in that case that the assessment could not be made in this manner without speci....
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....t and that the provisions of that Act shall apply to him in respect of the business of the deceased dealer. In the Division Bench decision of the Madhya Pradesh High Court in the case of Gopalkishan v. Sales Tax Officer [1968] 21 STC 109, it has been held that there is no material difference between section 24B of the Income-tax Act, 1922 and section 33B of the M.P. General Sales Tax Act, 1958. While construing section 33B of the M.P. General Sales Tax Act, 1958 it was held in that case that in order to bind the legal representative, the notices under that Act must be issued to him and that the assessment order must also be passed against him. It was further held in that case that the deeming provision in section 33B of that Act cannot be relied upon for holding that though the notices were issued in the name of the dead person and the assessment was also made against the dead person, the assessment should be deemed to be the assessment of the legal representative. In these present cases, the assessments in the name of Ramapada cannot be justified on the basis of the deeming provisions in section 17 of the Act of 1941, on holding that the impugned assessments should be deemed to be....
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....e notices cannot be held to be valid on the ground that the legal representatives did not inform the death of Ramapada and get the registration certificate amended in their names on the basis of the provisions in section 17 of the Act of 1941. 37.. The case reported in AIR 1982 MP 59 (U.P. Singh v. Board of Governors, MACT) underlines the principle behind substituted service, as enjoined by Order 5, rule 20 of the Code of Civil Procedure, 1908, the provisions of which have also been incorporated in the proviso to rule 84 of the Rules of 1941. This is not a case wherein notice in form No. VI was issued in the name of the applicants and the applicants impeded the service of the notice on them, so as to attract the principles regarding service of notice mentioned in the case reported in AIR 1982 MP 59 (U.P. Singh v. Board of Governors, MACT). This is a case where notices were issued in the name of a dead person and even if these notices were received by the applicants, the assessments or the notices should not be held to be valid for reasons discussed already. 38.. So far as exclusion of the rule of audi alteram partem is concerned, the exclusion cannot be justified on the ground th....
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....ending on 30th Chaitra, 1389 B.S. and the subsequent three years. 40.. I agree with the view of my learned brother that the proceedings and the assessments are not hit by limitation on the basis of the provisions in section 11(2a) of the Act of 1941. Even then, such assessments in question cannot be sustained. The orders of assessment dated August 6, 1991, in case No. RN-269 of 1991 and the orders of assessments in the other three cases are to be set aside and the respondent No. 1 is to be given opportunity to make fresh assessments for the period of four quarters ending on Chaitra 1389 B.S. and the subsequent three years on sending fresh notice in form No. VI under rule 49 of the Rules of 1941. It is to be stated in this connection that as the impugned assessments are to be set aside, there will be no question of limitation in making fresh assessments after serving fresh notices in form No. VI on the applicants. Best judgment assessment under section 11 of the Act of 1941 is made in respect of a dealer. The word "dealer", as defined in section 2(c) of the Act of 1941 means any person (emphasis* supplied by me) who carries on the business of selling goods in West Bengal or of purc....