GHANSHYAM DAS vs. REGIONAL ASSISTANT COMMISSIONER OF SALES TAX, NAGPUR

CIVIL APPEAL No. 101/1961Supreme Court[1964] 4 S.C.R. 43616 August 1963Bench: 5 JudgesAuthor: S.K. DAS, K. SUBBA RAO, RAGHUBAR DAYAL, N. RAJAGOPALA AYYANGAR, J.R. MUDHOLKAR25 pages
AI SummaryAllowed

What did the Supreme Court hold?

The Supreme Court, by a majority (Justice Raghubar Dayal dissenting), held that the expression 'escaped assessment' in Section 11-A includes turnover that has not been assessed at all due to the non-initiation of assessment proceedings. The Court clarified that assessment proceedings are pending from their initiation until a final order is made. Before completion, it cannot be said that turnover has escaped assessment. For registered dealers, proceedings commence factually when a return is made or a notice is issued under Section 10(3) or 11(2), not from the mere statutory obligation to file a return. In the first case, the Tribunal lacked jurisdiction to issue a notice under Section 11-A for quarters not covered by the return. In the second case, while the Commissioner had jurisdiction for the entire fourth quarter, the assessment was not properly segregated by quarter. Therefore, the appeals were allowed, setting aside the Division Bench's judgment and restoring the High Court's order quashing the assessments.

What were the facts?

The appellant, a registered dealer in bidis, is in appeal against the setting aside of a High Court order that had quashed sales tax assessments. For the assessment year 1949-50, the appellant filed only one return and defaulted on others. A notice under Section 11(1) and (2) of the C.P. and Berar Sales Tax Act, 1947, was issued in August 1954. For the assessment year 1950-51, no return was filed. A notice under Section 11(4) was issued in October 1954, within three years of the end of the relevant quarter. In both cases, the appellant contended that the assessment proceedings were barred by limitation under Section 11-A. The High Court initially quashed the assessments but was later overruled by a Division Bench.

What were the issues?

1. Whether the expression 'escaped assessment' in Section 11-A of the Act applies to a turnover that has not been assessed at all, even if no assessment proceedings were initiated. 2. Whether assessment proceedings, when pending, must be completed within three years from the date of commencement, which starts upon issuance of a notice under Section 10(1), 11(2), or 11(5). 3. Whether, in the present cases, assessment proceedings were pending at the time of the notices. 4. Whether, if only a part of a quarter falls within the three-year period, the entire quarter's turnover can be assessed under Section 11-A. Assessee's Contentions: - 'Escaped assessment' includes cases where no assessment was made. - Assessment proceedings, even if pending, must conclude within three years of their commencement, which begins with a notice. - No proceedings were pending in these cases. - If only part of a quarter is within the limitation period, the entire quarter cannot be assessed. Revenue's Contentions: - For a registered dealer, proceedings commence from the date fixed for furnishing a return, as per their statutory obligation.

Which sections of the Income-tax Act were involved?

Section 10(1),Section 11(2),Section 11(4),Section 11-A

AI-generated summary — verify with the full judgment below

1963 August 16 436 SUPREME COURT REPORTS [1964] . GHANSHYAM DAS v. REGIONAL ASSIST ANT COMMISSIONER OF SALES TAX, NAGPUR (S. K. DAs, AcTING C.J., K. SuBBA RAO, RAGHUBAR DAYAL, N. RAJGOPALA AYYANGAR AND J. R. MUDHOLKAR, JJ.) • Sales Tax-Assessnient of turnover escaping assessment- "Escaped Assesstnent"-Meaning of-Assessment proceedings in res- pect of a registered dcaler-Comn1encen1ent of-Central Provin- ces and Berar Sales Tax Act, 1947 (XX/ of 1947), ss. 10(1), 11-A.

The appellant was a registered dealer carrying on business in bidis.

For the year 1949-50, i.e., for the period from Octo- ber 22, 1949 to November 9, 1950 he submitted only one re- turn on October 5, 1950 for one quarter and defaulted in res- pect of the other quarters.

He \Vas served a notice on August 13, 1954 under s. 11(1) and (2) of the C.P. and Berar Sales Tax -Act, 1947, in respect of the turnover for the said period. There after, he filed the returns, but in the assess1nent proceedings he contended inter alia, that the proceedings before the sales tax commissioner \Vere barred by time.

This contention was rejected and his tax liability was detern1ined.

Then. the appellant moved

The order continues below.

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