Kotval, J.
1. The petitioners Messrs Ramkrishna Ramnath, Bidi Merchants of Kamptee, carry on the business of manufacture and sale of bidis, with their head office at Kamptee and branch offices at several other places such as Tumsar, Gondia, Bhandara, Tiroda, Nagpur, Akola and other places in Vidarbha. The petitioners are registered dealers under section 8 of the Central Provinces and Berar Sales Tax Act, 1947 (XXI of 1947), hereinafter referred to as the Act. As registered dealers, the petitioners were making quarterly returns under section 10 of the Act. For the period from 7th November, 1953, to 26th October, 1954, they had similarly made their returns. It is now not in dispute that these returns were not made upon the due dates under the Act but were delayed by some days. The respective dates on which the returns were due and were actually filed are shown in a tabular statement below :-
---------------------------------------------------------------------- Return for the Due date Date of actual period ending filing ---------------------------------------------------------------------- 3-2-1954 3-4-1954 20-4-1954
2-5-1954 2-7-1954 27-3-1955
29-7-1954 29-9-1954 31-12-1954
26-10-1954 26-12-1954 27-3-1955 ----------------------------------------------------------------------
2. On 11th November, 1957, the Assistant Commissioner of Sales Tax, Eastern Division, Nagpur, issued a notice against the petitioners. The notice was in Form XII as prescribed by rule 32 of the Central Provinces and Berar Sales Tax Rules, 1947. By this notice, the petitioners were called upon to show cause why they should not be assessed and/or why a penalty should not be imposed upon them. The notice, it is not disputed, was issued under section 10(3) read with section 11(4)(a) of the Act though several other sections are mentioned at the top of the form.
3. The petitioners took objection to the issue of this notice and one of the grounds which they raised was that the notice had been issued beyond the period of three years from the date of the assessment of the petitioners for the said period. Thereafter, the proceedings before the Assistant Commissioner were stayed due to certain other proceedings pending in the High Court of Judicature at Nagpur and later on in the High Court of Bombay and because of the latter proceedings the objection could not be disposed of. On 7th June, 1958, however, the Assistant Commissioner of Sales Tax, Eastern Division, before whom the proceedings were pending, transferred the case to the Sales Tax Officer, Circle No. 2, Nagpur, respondent No. 1 before us. Thereafter, respondent No. 1 issued on 27th December, 1958, a fresh notice in Form XII under rule 32 of the Sales Tax Rules, against the petitioners. The petitioner is directed against the said notices dated 11th November, 1957, and 27th December, 1958, and the petitioners pray in the first instance that writs of prohibition or certiorari should be issued to quash the two notices referred to above. They also claim a writ of prohibition against the first respondent prohibiting him from continuing the assessment proceedings pursuant to the second notice.
4. The sheet-anchor of the special civil application is the decision of this Court in Bisesar House v. State of Bombay [1958] 9 S.T.C. 654; 60 Bom. L.R. 1395. In that case, the petitioner had made a return for the years from 1st July, 1951, to 30th June, 1954, and had paid the tax in accordance with the return. On 31st December, 1956, notices were issued under section 11(2) of the Act and were served upon the petitioner in that case so far as the first year was concerned, on 4th January, 1957, and so far as the second year was concerned, on 8th January, 1957. It was contended that the Sales Tax Authorities had no jurisdiction to issue these notices because having regard to the scheme of the Act, and particularly to the provisions of section 11-A thereof, a notice under section 11(2) could not be issued beyond three calendar years from the date of assessment of the petitioner. The Full Bench relied upon a previous decision of this Court in Commissioner of Income-tax v. Narsee Nagsee & Co. : [1957]31ITR164(Bom) , and held that the notices were bad and that no such notices could be issued beyond three years from the date of the initial assessment. In the Bisesar House case [1958] 9 S.T.C. 654; 60 Bom. L.R. 1395, the Full Bench was impressed by one consideration and it was that if such a period of limitation were not imported into section 11(2), the effect would be anomalous. The Full Bench held that whereas under section 11-A the Legislature expressly limited the period of time during which the income which has been under-assessed, or escaped assessment or had been assessed at a lower rate could be assessed, still so far as the initial assessment under section 11(2) is concerned, there would be no period of limitation whatsoever. This would lead to anomalous results. The learned Chief Justice who delivered the judgment on behalf of the Full Bench observed :
'The peril to which we referred in the case of Narsee Nagsee : [1957]31ITR164(Bom) , and which we said it was our duty to save the assessee from, does not exist in this case. An order of assessment made under section 11 at any time cannot possibly prejudice the assessee in any sense whatsoever. That order would not make him liable to pay any additional tax. That order will not put any further liability upon him. It would be merely a formal acceptance by the authority of the tax which the assessee has already paid, and there is no reason why in construing section 11(1) we should import into it the period of limitation which the Legislature has incorporated in section 11-A. The compelling necessity which drove us to do it in Narsee Nagsee's case : [1957]31ITR164(Bom) does not exist. But the position is different with regard to section 11(2). Section 11(2) is in the substantial sense an initiation of fresh proceedings by the Commissioner. It is open to the Commissioner to be satisfied with what the assessee has done and pass an order under section 11(1). But if he is not satisfied, then he initiates fresh proceedings under section 11(2) by issuing a notice. That undoubtedly is putting the assessee to the peril of the apprehension that as a result of the notice his tax might be enhanced. If the principle we have laid down in Narsee Nagsee's case : [1957]31ITR164(Bom) is correct, then that principle would undoubtedly apply to the issuing of a notice under section 11(2).'
5. Accordingly, the Full Bench held that if a case arises for the issue of a notice under section 11(2) then it is clear that that notice must be issued within three years, because if the notice is issued after three years, it would infringe the provisions of section 11-A, because the Commissioner would be doing indirectly, if not directly, what the law prohibits him from doing, namely, to bring to assessment an escaped turnover which he could not do beyond the period of three years.
6. The decision of the Full Bench is binding upon us and obviously there is no question of considering whether it was rightly or wrongly decided. The present notices however are not notices under section 11(2) as in the Bisesar House case [1958] 9 S.T.C. 654; 60 Bom. L.R. 1395. They are, as we have pointed out, notices issued under the provisions of section 10(3) read with section 11(4)(a). The Form XII suggests that the notice to be issued under it can be under a variety of sections, but in the form in which the notice was served in the instant case it is obvious that all that the petitioners were called upon to do was 'to show cause on or before 22nd November, 1951, why you should not be assessed and/or why a penalty should not be imposed upon you'. Obviously then the notices intended were under section 10(3) read with section 11(4)(a). This was also not disputed before us.
7. The relevant portions of these sections run as follows :-
'10. (3) If a dealer fails to comply with the requirements of a notice issued under sub-section (1) or a registered dealer fails to furnish his return for any period within the prescribed time to the prescribed authority without any sufficient cause, the Commissioner may, after giving such dealer a reasonable opportunity of being heard, direct him to pay, by way of penalty, a sum not exceeding one-fourth of the amount of the tax which may be assessed on him under section 11.'
* * * * '11. (4) If a registered dealer -
(a) does not furnish returns in respect of any period by the prescribed date,
* * * * the Commissioner shall in the prescribed manner assess the dealer to the best of his judgment'.
8. Now, the contention of Mr. Phadke on behalf of the petitioners has been that if upon the ratio decidendi of the Full Bench case the Sales Tax Authorities could not take action under section 11(2) to initiate fresh proceedings for purposes of assessment beyond three years, then with stronger reason they could not issue a notice under section 10(3) upon failure to comply with the requirements of a notice under section 10(1), or upon failure to furnish a return within the time prescribed, in order either to penalize the petitioners or to arrive at a best judgment assessment as required by section 11(4)(a).
9. In support of his contention, Mr. Phadke has also referred to some decisions given by me in the Nagpur High Court. They are Miscellaneous Petitions Nos. 437 of 1954 and 381 of 1955, decided on 27th September, 1956, and Miscellaneous Petitions Nos. 285 of 1955 and 12 of 1955, decided on 27th September, 1956, and 24th September, 1956, respectively. The principal decision in that set of cases was contained in my order in Miscellaneous Petition No. 285 of 1955. In the case last mentioned I was concerned with section 11(5) of the Act. Under that section the Commissioner is empowered within three calendar years from the date on which the assessee was bound to apply for registration, to come to a best judgment assessment after giving the assessee a reasonable opportunity of being heard. Following an earlier Division Bench case in Firm Sheonarayan Matadin v. Sales Tax Officer, Nagpur and Another [1956] 7 S.T.C. 623 Miscellaneous Petition No. 343 of 1955 - I held that under the section an assessment cannot be made for any period which expired three years prior to the date of the notice in Form XII. Of the above cases Miscellaneous Petitions Nos. 12 of 1955 and 437 of 1954 were, in view of the States Reorganization Act, transferred to the Madhya Pradesh High Court, and in Letters Patent Appeal No. 207 of 1956 decided on 13th December, 1957, a Division Bench of the Madhya Pradesh High Court reversed my decision in M.P. No. 12 of 1955 and held that the period of limitation therein of three years cannot be imported into the construction of section 11(5) of the Act. [See Regional Assistant Commissioner of Sales Tax v. Ghanshyamdas Chhotelal [1958] 9 S.T.C. 179; 1958 M.P.L.J. 140.
10. On the other hand, my decisions in Miscellaneous Petitions Nos. 285 of 1955 and 381 of 1955 were transferred to this Court under a certificate under section 59 of the States Reorganization Act. In Letters Patent Appeals Nos. 209 of 1956 and 210 of 1956 Assistant Commissioner of Sales Tax, Nagpur v. Firm Ramkrishna Ramnath [1960] 11 S.T.C. 807, a Division Bench of this Court confirmed the view I had taken in view of the Full Bench decision in the Bisesar House case [1958] 9 S.T.C. 654; 60 Bom. L.R. 1395, which by then had come to be decided. It is further to be noted that the Full Bench also considered the case in Regional Assistant Commissioner v. Ghanshyamdas [1958] 9 S.T.C. 179; 1958 M.P.L.J. 140, and the Full Bench dissented from that view and thus confirmed the view I had taken in M.P. No. 12 of 1955. As a result of all these decisions, then two points are clear, (1) that no action can be taken by the Sales Tax Authorities under section 11(5) or section 11(2) unless it is taken within three years from the date of the notice issued, and (2) that the authority of the Bisesar House case [1958] 9 S.T.C. 654; 60 Bom. L.R. 1395 stands unchallenged so far as this Court is concerned, and we are, with all respect, bound to follow it.
11. Mr. Phadke invoked the principle of the decision of the Full Bench case in the present case also. We have already indicated that the proceedings taken in the instant case, however, are not under section 11(2) but under the provisions of sections 10(3) and 11(4)(a). It seems to us that there is a fundamental difference between the nature of the proceedings to be taken under these provisions of the Act and the proceedings to be taken under section 11(2). We have already reproduced a passage from the Full Bench judgment to show that the ground on which the Full Bench took the view in that case was that the proceedings under section 11(2) were in a 'substantial sense the initiation of fresh proceedings' and that therefore fresh proceedings, i.e., for assessment for the first time could not be taken beyond three years after the assessee had made his return and paid the tax, especially when the Legislature expressly prohibited escaped income from being taxed after three years. In our opinion, however, the proceedings to be taken under section 10(3) or section 11(4)(a) cannot possibly partake of this nature.
12. The proceedings under section 10(3) are obviously proceedings for the purpose of levying a penalty upon the dealer for failing to register or for failing to comply with the requirements of a notice under section 10(1). Penal proceedings of this nature can, in our opinion, never be approximated to proceedings initiated for the first time for purposes of assessment. There is a palpable and recognisable distinction between a proceeding initiated by a taxing authority for collecting revenue on behalf of the public exchequer and one commenced for penalizing a person for failing to comply with some step which he was bound in law to take in an attempt to assess him. The proceedings under section 10(3) are proceedings which, in our opinion, fall in the latter category.
13. Turning next to the provisions of section 11(4)(a) also, it seems to us that the section provides a similar procedure. It provides that if a registered dealer does not furnish returns is respect of any period by the prescribed date, the Commissioner shall in the prescribed manner assess the dealer to the best of his judgment. Now, a best judgment assessment is no doubt founded upon a judicial exercise of judgment; nevertheless, it is not a judgment reached under formal procedure after taking evidence but is more or less a summary assessment; and the reason why the law thus permits recovery of tax by a summary assessment is that the assessee has failed to comply with a notice or with some requirement of the law and that therefore he may be penalised by the forfeiture of his right to a regular and considered assessment. The proceedings are taken 'in terrorem' and the dealer is penalized by a 'best judgment' assessment in default of compliance under section 11(4)(a). Thus, the proceedings under both the provisions of law are analogous to proceedings for the purpose of imposing a penalty, and that in our opinion, is the crucial point of distinction between the proceedings in the present case and the proceedings with which the Full Bench was concerned.
14. We do not think that we can import, therefore, the same considerations which prevailed with the Full Bench, into the present case. We do not think that the provisions of section 11-A are attracted nor can they be used by way of analogy in the present case, because admittedly here we are not dealing with a case of initial proceeding with a view to assessment but we are dealing with a case where the petitioners are being proceeded with by way of a penalty for having committed a default.
15. The principles governing the interpretation of a taxing statute like the Sales Tax Act are now settled and here we cannot do better than reproduce the remarks of Viscount Simon, L.C., in the Canadian Eagle Oil Co., Ltd. v. The King [1946] A.C. 119 , as governing the principle in cases of this kind :
'In the words of the late Rowlatt, J., whose outstanding knowledge of this subject was coupled with a happy conciseness of phrase, 'in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used :' Cape Brandy Syndicate v. Inland Revenue Commissioners [1921] 1 K.B. 64 .'
16. So viewed, we have no doubt that in the present enactments the Legislature intended to lay down a period of limitation in certain specific cases only and by contrast did not provide for any period of limitation in other cases. In the Sales Tax Act there is no period of limitation laid down within which proceedings under section 10(3) or section 11(4)(a) should be taken and the ratio decidendi being different, we cannot extend to the present case the principle laid down in the Full Bench case or in the cases which were concerned with the interpretation of section 11(5) as we shall presently show.
17. We therefore turn to the reference made by Mr. Phadke to section 11(5) of the Act and to my decision in Miscellaneous Petition No. 381 of 1955 which, as we have said, was affirmed by a Division Bench of this Court in Letters Patent Appeal No. 209 of 1956. Since reported as Assistant Commissioner of Sales Tax, Nagpur v. Firm Ramkrishna Ramnath [1960] 11 S.T.C. 807. In that case I had no doubt taken the view that a three year period commencing from the date of notice was prescribed for proceedings under section 11(5). It may also be argued that section 11(5) also is concerned with a best judgment assessment, and yet a period of limitation was read into it but it may be pointed out that in section 11(5) itself a period of limitation is mentioned and the only question that arose for decision in all the cases were have mentioned above in which that section fell to be construed was what was the meaning of the words 'from the expiry of such period' in that section and whether the Commissioner should act within three years from the date when he first took action or within three years from the date of notice in Form XII. If the provisions of any other section had been invoked by way of analogy, such as section 11-A as in the instant case, we have no doubt that the distinction between the two kinds of proceedings would have been pointed out as we have done above. In sheonarayan Matadin's case [1956] 7 S.T.C. 623 as well as in all the other cases concerning section 11(5) the decisions turned upon the plain construction of the section itself and not upon the applicability or analogy of any other section as is here claimed. There was certainly no reference made in those cases to section 11-A of the Act. In the present case the argument is that by analogy the period of limitation in section 11-A should be read into section 10(3) read with section 11(4)(a).
18. In view of what we have said above, we are of opinion that the principle of the Full Bench case is inapplicable to the facts of the present case. This was the only ground upon which the notices in the instant case were challenged. The application, therefore, fails and is dismissed with costs.
19. Application dismissed.