SUPERINTENDENT OF TAXES, TEZPUR AND ORS. vs. M/S. BORMAHAJAN TEA CO. LTD.

CIVIL APPEAL No. 602/1974Supreme Court[1978] 2 S.C.R. 57317 January 1978Bench: 2 JudgesAuthor: N.L. UNTWALIA, P.S. KAILASAM8 pages
AI SummaryDismissed

What were the facts?

The assessee, M/s. Bormahajan Tea Co. Ltd., is challenging assessment orders passed by the Superintendent of Taxes, Tezpur. For the period ending September 30, 1960, the assessee filed a return under section 7(1) of the Assam Taxation (On Goods Carried by Road or on Inland Waterways) Act, 1961, without paying the tax due as required by section 20(2). In another case, for the quarter ending December 31, 1960, the return was filed beyond the 30-day period prescribed by section 7(3) and without paying the tax. The assessing authorities treated these returns as invalid and proceeded with best judgment assessments under section 9(4) without issuing notices under section 7(2) or 11. The assessee filed a writ petition challenging these orders.

What did the Supreme Court hold?

The Supreme Court dismissed the appeals. The Court noted that while the revenue's argument that tax payment is not strictly necessary before submitting a valid return might not be without substance, it was not called upon to decide this specific question on the facts of the case. Crucially, the Court found it could not permit the revenue to argue that the assessment proceedings were valid based on the returns, especially when the revenue had admitted before the High Court that the assessment was not based on the filed returns and had treated them as invalid. The Court emphasized that it had previously held in Superintendent of Taxes, Dhubri and Ors. v. Onkarmal Nathmal Trust etc. that issuing a notice under section 7(2) is mandatory before proceedings under section 9(4). Given the admission by the revenue and the discretionary nature of Article 136, the Court declined to interfere, taking the totality of the circumstances into account. The Court did not decide whether the failure to pay tax made the return non-est.

What were the issues?

1. Whether the returns filed by the assessee are invalid ('non est') because they were submitted without payment of the due tax (in both cases) and beyond the prescribed period (in one case), thereby precluding assessment proceedings under section 7(1) of the Assam Taxation (On Goods Carried by Road or on Inland Waterways) Act, 1961. 2. Whether the assessment proceedings initiated under section 9(4) are invalid due to the non-issuance of notices under section 7(2) or section 11 of the Act, rendering the proceedings time-barred under section 7(2). Assessee's contentions: - The returns are invalid ('non est') as they were filed without depositing the tax and, in one instance, beyond the statutory period. Therefore, no assessment proceedings could be initiated based on these returns. - Since no notices under section 7(2) or 11 were issued, the assessment proceedings became time-barred under section 7(2). - The revenue cannot argue that the returns were valid when they admitted before the High Court that the assessment did not proceed on the basis of the filed returns and treated them as invalid. Revenue's contentions: - The demand by the Taxing Officer under section 9(3) was in pursuance of the voluntarily filed return, which should be considered a valid return for assessment under section 9.

Which sections of the Income-tax Act were involved?

Section 7,Section 7(1),Section 7(2),Section 7(3),Section 9,Section 9(3),Section 9(4),Section 11,Section 20,Section 20(2)

AI-generated summary — verify with the full judgment below

,, ,J 573 SUPERINTENDENT OF TAXES, TEZPUR AND ORS. v. M/s. BORMAHAJAN TEA CO. LTD.

January 17, 1978 [N. L. UNTWALIA AND P. S. KAILASAM, JJ.] (;onstitution of India Art. 136-The discretion of the Court at the final. hearing to decide whether the court would interfere taking the totality of tfle facts into consideration.

Assani Taxation (On- Goods Carried by Road or on lnland Waterways) A B Act. 1961. Section 7, 9, 11, 20-The return filed beyond the period prescribed C lvhether 11011 est.-Retiirn filed without payment of the tax due whether non est.-Whether Revenue can treat the return as invalid and thereafter contend before this Court that the return lvas valid.

The respondent is an assessee under the Assam Taxation (On Goods Carried by Road or on Inland Waterways) Act, 1961. The respondent in C. A. 602 ot 1974 submitted the return under section 7(1) of the Act for the period ending September 30, 1960, without paying the tax on the return as required under section 20(2) of the Act.

The respondent in C. A. No. 603 of 1974 submitted his return under section 7 ( 1) for the quarter ending 3 lst December, 1960. The return \Vas filed beyond the period of 30

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 7

All 291 judgments and leading authorities on Section 7 →

Recent GST High Court judgments

Search GST case law →