Tax Officer-Cum-Regional Transport Officer & Ors. v. Durg Transport Company (Pvt.) Ltd. Durg

Judgment

The Judgment of the Court was delivered by Heade, J.-This is an appeal by certificate arising from the decision of the High Court of Madhya Pradesh in Miscellaneous !'etition No. 640 of 1966 on its file. The asscsscc is a Transport Operator. It was liable to pay passenger tax under Madhya Pra· desh Motor Vehicles (Taxation of Passengers) Act, 1959-hcreinafter referred to as "the Act". It is said that it failed to pay the tax due from it for the period from October 1, 1961 to May 6, 1962. Admittedly it submitted no return as required by section 5 of the Act, nor did it make the required deposit under section 6 of that Act. No action appears to have been taken against It till November 6, 1963 on which date the Tax Officer issued to it a notice under section 7 of the Act. Thereafter he proceeded to assess it. The impugned assessment order was made on June 19, 1965. That order was challenged before the Madhya Pradesh (ll.T.O.V. DUllG TRANSPOllT Htgde,J.)

High Court by means of a writ petition under sections 226 and 227 of the Constitution. The High Court accepted that petition and quashed the impugned order. The question before this Court is whether the order of the High Court is sustainable. The only question that ca.Jls for deci· sion in this appeal is whether the proceedinas initiated by the Tax Officer by means of a notice under section 7 of the Act was beyond the time prescribed and therefore the proceedings taken were not maintainable against !he assessee. In order to answer this question, we shall read sections 5, 6, 7 and 8 of the Act. Section (5) Submission of returns.-(!) In respect of the stage carriage or stage carries held by him, the operator shall deliver or cause to be delivered to the Tax Officer or to such prescribed officer as the Tax Officer may specify a return in the prescribed form and manner, either daily or at such intervals as ma.y be prescribed :

Provided that different rules may be prescribed for the purpose of this sub-section in relation to fleet-owner from those in relation to other operators. 12) When any return is received by a prescribed officer he shall forward it to the Tax Officer within the prescribed period and in the prescribed manner. Section (6) Tax to be paid every month into Government Treasury.-The tax payable during any month in accordance with the returns submitted under section 5 shall be paid into a Government treasury by the operator and the receipt evidencing such payment forwarded to the Tax Officer, on or before such date or dates of the month immediately succeeding as may be prescribed in the case of fleet-owners and othe(' operators. . Section (7) Procedure where no returns are submitted, etc.-ln the following cases, that is to say- (a)

Where no returns have been submitted by the operator in respect of any stage carriage for any month or portion thereof; or lb) where the returns submitted by the operator in respect of any stage carriage for any month or portion thereof appear to the Tax Officer to be incorrect or in· complete; the Tax ~cer shall, after givi_ng th~ operator a responsible op- .\)Ortunity, m case (a~ ~f makmg his represcntabon if any, and m case (b) of estabhshing the correctness and completeness of Ji' 9UO (1971] SUPP. s.c.R. the returns submitted by him, determine the sum payable to the .:.•.:e Government by ~he operator by way of tax during such month or portion thereof : Provided that the sum so determined shall not exceed the rna.ximum tax which would have been payable to the State Government if the stage carriage had carried its full complement of passengers during such month or portion thereof. Section (8)

Fares e<caping assessment.-If, for any reason, the whole or any portion of the tax leviable under thi.• Act, for any month has escaped assessment, the Tax Officer may, at any time within, but not beyond, one year from the expiry of that month, assess the tax which has escaped assessment, after issuing a notice to the operator and making such inquiry as the officer may consider necessary. It may be noted that the expression "escaped assessment" ha6 not been defined in the Act. Therefore we have to consider whether an assessment that was not made as a result of the assessee not submitting his return can be considered as an escaped assessment. According ·to Mr. Shroff, learned counsel for die State of Madhya Pradesh, "escaped assessment" means an amount that had escaped from being included in the tax assessed.

According to him no amount can be considered as "escaped assessment" unless there has been an assessment anterior to the finding out of the amount that had escaped from being included in the a~ ment made. He submitted that only such cases come within the scope of section 8. Accordi.ng to his submission when a return is not submitted as a consequence of which there was no assessment the tax thus evaded does not become escaped assessment. This contention does not appeal to us. In our opinion, when the liability to pay tax is evaded by one method or other there is an escapement of Msessment. The term "escaped assessment" includes both non-assessment as well as underassessment. When a person is not assessed to tax though he is liable to be taxed be escapes ~mcnt. We are unable to agree with Mr. Shroff that while the legisfature fixed one year time within whioli a re-assessment has to be made it fixed no time limit for making the assessment. This is a prima facie unacceptable argument.

The provisions of the Act are somewhat similar to the Madhya Bharat Sales Ta« Act, 1950. While considering the meaning to be given to the expression "escaped assessment" this Court in Regional Assistant Corn· missioner of Siles Tax, Indore v. Malwa V anaspati & Chemical R.T.O. v. DURG TRANSPORT (Hegde. J.) Company Ltd.(') held that where a dealer has not tiled the prescribed return of his turnover at all, it would be a case of "escaped assessment" and the proceedings for assessment must be commenced in respect of that turnover within the period of three years prescribed by s. 10. We are of the opinion that the ratio . of decision apply to the facts in the present case. Reading sections 6 to 8 together, we come to the conclusion that the proceedings under section 7 or section 8 will ·have to be taken within the period of one year mentioned in section 8. For the. reasons mentioned above, this appeal fails and the same is dismissed.

Under the circumstances we make no order .as to costs. .K. B. N. Appeal Dismissed. (1) [1968) 2 S.C.R. 431.