B.M. Lal, C.J.
1. The petitioner-assessee M/s, Tata Iron and Steel Co. Ltd., which is a public limited company, having its registered office at 24, Homi Mody Street, Fort, Bombay-400 023, head Sales Office at Calcutta, and stockyards in various States in India, is primarily engaged in the manufacture of iron and steel products, factory at Jamshedpur in the State of Bihar, and is a registered dealer under the Bihar Sales Tax Act bearing registration No. J.R. 1 (R) to J.R. 1 (vi) R. and under Central Sales Tax Act bearing registration No. J.R. 1 (C), as the goods manufactured by the company are moved from its Steel Plant at Jamshedpur to its stockyards in another States in the regular course of business and as the Company sells its products from Jamshedpur and stores in the different stockyards from where the products are supplied to its customers in another State, has filed these two petitions for quashing the revised assessment order dated 4.9.80 as contained in Annexure-1 to the writ petition as also the demand notice dated 9.9.80 as contained in Annexure 2 issued in pursuance of Annexure 1 for payment of Rs. 2,10,19,242.25 (Rupees two crores ten lakhs nineteen thousand two hundred forty two and paise twenty five) only.
2. The writ petition (CWJC No. 727 of 1980-R) relates to Bihar Sales Tax and CWJC No. 728 of 1980-R relates to Central Sales Tax-both for the assessment year 1974-75. This judgment will govern the disposal of both CWJC Nos. 727 of 1980 (R) and 728 of 1980 (R).
3. Before adverting to the point in issue, we may state at the very outset that by order dated 20.11.80 on the very first day when the case was placed for admission and stay of the recovery proceeding of a huge amount, instead of passing appropriate order on admission, learned Court at Ranchi Bench of this Court, granted stay of recovery of huge amount and directed issuance of notice to the respondents by way of serving three copies of the petition on the learned State counsel. However, it appears that the learned Court realizing that without exhausting the statutory alternative remedy by way of appeal and depositing 20% of the assessed tax, these petitions were filed, that is why the learned Court kept this issue open to be raised by the respondent State at the time of hearing. The relevant part of the order reads as under:
At the time of hearing it will be open to the State to raise a preliminary objection that the application is not maintainable as the petitioner has not exhausted the statutory remedy of appeal available to him.
4. It is surprising that though the Court passed order for issuance of notice on 20.11.80 and right from this date from time to time these petitions were listed before the Court; but somehow or the other on a number of occasions adjournments were sought and granted. Even arguments were closed and the petitions were reserved for judgment but no judgment was pronounced and on the other hand these petitions were released by the Court. This is how, such cases wherein huge amount of tax is involved, are being dealt with at the said plight of the public exchequer.
5. Since by order dated 20.11.80 the matter was kept open for the respondent State of Bihar to raise objection in respect of maintainability of these petitions on the ground of exhaustion of alternative statutory remedy, objection is raised by the respondent-State of Bihar.
6. Thus to deal with the preliminary objection at the belated stage, a question arises as to whether the liberty granted to the State of Bihar vide order dated 20.11.80 to raise a preliminary objection as to the maintainability of the writ petitions, it still available at this stage after lapse of a period of 18 years on the ground that the petitioner has not exhausted the alternative remedy available to it under the law, and whether the petitions on this issue alone can be thrown out directing the petitioner to exhaust the alternative statutory remedy available to him by way of appeal under the relevant provisions of the Bihar Sales Tax Act, 1959 (hereinafter referred to as the Act)?
7. Though the petitioner has taken various grounds but the main thrust for attacking the impugned order is that in the reassessment proceeding applying the principle of 'escape assessment' the method adopted for determining the production is wholly contrary to the provisions of Section 18(1) of the Act and, therefore, the order impugned under challenge is 'without jurisdiction' and the same may be assailed in writ jurisdiction under Article 226 of the Constitution without exhausting the alternative statutory remedy. Besides the jurisdictional error, a number of other grounds have also been raised by the petitioner which we will deal with later after disposing of the preliminary objection raised by the learned Counsel for the respondent State of Bihar.
8. The concept of 'jurisdiction' is to be understood in its right perspective. In common knowledge 'jurisdiction' means authority to decide and 'authority' means statutory authority, which is vested/conferred by the statutory powers under the relevant statute, therefore, whenever an order is assailed attacking jurisdictional error, the root cause of jurisdiction is to be enquired into, as to whether the authority who passes the order, is conferred with the statutory powers so as to seize with the matter and decide it. If by examining the same, it is found that the authority was conferred with the statutory powers, the authority indeed gets jurisdiction to decide it and merit if the authority comes to a wrong conclusion-in law or in fact, it does not lose its jurisdiction by passing the order making it 'Coram non judice.' Thus only in a case where the order suffers from 'Coram non judice.' i.e. not vested with the statutory powers, plea of 'without jurisdiction' would be available. The party taking the plea of 'without jurisdiction' at times labours in a wrong notion that a wrong conclusion on facts or law makes the order without jurisdiction. The authority if vested with the powers of having jurisdiction over the subject-matter of the lis as well as over the parties thereto, the authority is bound to decide. The decision may be right or wrong and if the decision is wrong it would not attract 'jurisdiction error' only because the authority makes an error in deciding a vital issue in the lis and in such a situation it cannot be said that the order is without jurisdiction. Thus, in nut shell, the authority having jurisdiction over the matter, its decision may be right or wrong, the test is only that if the order suffers from 'Coram non judice' indeed in that case jurisdictional ground may be raised in writ jurisdiction under Article 226 of the Constitution and in all other cases the error may be got corrected by resorting to the remedy of appeal or revision as the case may be. See the decision in Ittyavira Mathai v. Varkey Varkey and Anr. : [1964]1SCR495 , Official Trustee v. Sachindranath Chatterji. : [1969]3SCR92 and in Sri M L. Sethi v. Sri R.P Kapur : [1973]1SCR697 , wherein Mathew, J. has explained the legal position as, the word 'jurisdiction' is a verbal coat of many colours. Jurisdiction originally seems to have had the meaning which Lord Reid ascribed to it in Anisminic Ltd. v. Foreign Compensation Commission (1969) 1 All ER. 208, namely, the entitlement 'to enter upon the enquiry in question.' If there was an entitlement to enter upon the enquiry, into the question, then only subsequent error could only be regarded as an error within the jurisdiction. The best known formulation of this theory is that made by Lord Darman in R v. Bolton (1841) 1 QB 466. He said that the question of jurisdiction is determinable at the commencement not at the conclusion of the enquiry as Lord Reid had approved in Anisminic Ltd. (supra).
9. Thus, the contention raised by the petitioner's Counsel that reassessment order is without jurisdiction has not been substantiated by pointing out that under the provisions of the Bihar Finance Act reassessment authority was not vested with the statutory powers to pass the impugned order.
10. With the above touchstone if the instant case is examined what we find is that the authority who has passed the impugned order acting and discharging its statutory function under the provisions of Section 18(1) of the Act is vested with the jurisdiction under the Act and thus it cannot be said that the order impugned is without jurisdiction.
11. Thus the word 'jurisdiction' is an expression which is used in variety of senses and takes its colour from its context. Elaborately this point has been dealt with by Lord Denning in his book 'Discipline of Law' and also by De Smith in 'Judicial Review of Administration'-4th Edition.
12. Therefore, the submission made by learned Counsel that the order is without jurisdiction is of no avail. However, it does not cut the ice. Having kept the matter pending for 18 years the petitioner cannot be asked to seek redressal in accordance with the statutory provisions of the Act invoking appeal or revisional jurisdiction under the Act.
13. Learned Counsel for the respondent submitted that since the matter is kept open vide order dated 20.11.80, therefore, still the petitioner may be asked to resort to the statutory remedy under the Act available to it and in support of his submission strongly relied upon the decisions in the cases of Titaghur Paper Mills Co. Ltd. v. State of Orissa : [1983]142ITR663(SC) ; Tata Iron and Steel Co. Ltd. v. State of Bihar and Ors. 1986 P.L.J.R. 477 and H.B. Gandhi v. Copinath and Sons and Anr. , and contended that both the petitioners are liable to be dismissed.
14. However, equally strong reliance has also been placed on behalf of the petitioner on a decision in the case of L. Hirday Narain v. Income-Tax Officer. Bareilly : [1970]78ITR26(SC) . After the admission of the writ petition, the petitioner cannot be relegated to avail the alternative remedy. We have already observed that though the matter is kept pending for 18 years but yet the petitions have not been admitted. Thus L. Hirday Narain case (supra), does not help the petitioner. However, this is not all. Recently in Commissioner of Income-tax, Lucknow v. U.P. Forest Corporation, : [1998]230ITR945(SC) , the Apex Court has held that where alternative remedy is available and the same is not exhausted, the writ petition is liable to be thrown out on this ground alone. But if the matter is kept pending since long and at the very threshold the petition was not disposed of, this ground is not available and instead of resorting the principle of exhaustion of alternative remedy the writ petition requires to be disposed of on merits.
15. This being so, no doubt the petitions could have been thrown out at the very threshold but since the matter has been kept pending for the last 18 years, it will not be proper in the interest of justice to dismiss the petitions on the ground of non-exhaustion of alternative remedy.
16. And now we proceed to decide the matter on merits giving few facts which are necessary for the disposal of the petitions. The reassessment in question relates to the period of assessment year 1974-75. The original assessment was made by the Assistant Commissioner of Commercial Taxes, Jamshedpur, vide his order dated 22.11.76. However, since the returns submitted by the petitioner were neither in accordance with the provisions of law nor were furnished in the prescribed forms and as the same were lacking disclosure of complete particulars, therefore, on 28.12.77 a notice was issued by respondent No. 4, Deputy Commissioner, Commercial Taxes, Jamshedpur, to the petitioner for verification of the petitioner's books of accounts for the period, inter alia, 1974-75 under Section 37(1) of the Act, read with Section 54 of the Bihar Sales Tax Ordinance, 1977, and on examination of the same he submitted his report charging the company, inter alia, on following counts:
(i) The returns were not in the prescribed form and in formations were not given in the prescribed manner because the quarterly statement filed did not contain the details of sales outside State in terms of the definition of turnover given in Section 2(k) of the Bihar Sales Tax Act. The sales through Jamshedpur stockyard (local sales) were not accounted for correctly and the periods were abruptly changed without assigning reasons in the annual returns. Similarly auction sales of miscellaneous stores etc. were not shown quarterly and a single annual return was filed at the end of the period. The figures of different accounts of sales were changed several times without giving any explanation therefor.
(ii) The gross turnover shown in the published accounts were not correct and the reconciliation of difference between the returns and published accounts were wrongly shown at the time of assessment. The gross turnover of the company during 1974-75 is to be raised to Rs. 286,10,01,528/- (Rupees two hundred eighty six crores ten lakhs one thousand five hundred twenty eight) instead of Rs. 279,11,24,811/- (Rupees Two Hundred Seventy nine crores eleven lakhs twenty four thousand eight hundred eleven) shown in the published accounts.
(iii) Discrepancies in the production account showed non-accountal of substantial quantities of productions. In a supplementary report dated 8.12.79 sent to the Deputy Commissioner, Commercial Taxes, Intelligence Branch, Jamshedpur, under cover of letter No. 1789 dated 8.12.79 the suppression of production was estimated as follows:
(a) Non-accountal of production or availability of alloy steel ball bearing rings numbering 185674, the estimated value being Rs. 16,71,066/- (Rupees Sixteen lakhs seventy one thousand sixty six).
(b) Non-accountal of production and consequently sales of 3,50,000 M.T. of steel valued to Rs. 64,30,00,000.00 (Rupees Sixty four crores thirty lakhs).
(iv) The entire sales made through stockyards is inter State sales and, as such, taxable under the Central Sales Tax Act. The value of sales through stockyard held taxable under the Central Sales Tax Act amounts to Rs. 96,63,86,690.00 (Rupees Ninety six crores sixty three lakhs eighty six thousand six hundred ninety).
17. Thus, on the above basis proceeding under Section 18(1) of the Act was initiated on 2.9.1978. However, by order dated 19.7.79 the proceeding was transferred to Sri B.D. Roy, Deputy Commissioner of Commercial Taxes. Against this transfer order, the petitioner-assessee filed a writ petition challenging the validity of transfer of the proceeding from one Sri Bindhyachal Prasad to Shri B.D. Roy, Deputy Commissioner of Commercial Taxes. But the said petition was dismissed upholding the transfer of the proceeding and thus on two points the reassessment proceeding was conducted, viz.
No. 1. The point relating to suppression in production as detailed above,
No. 2 The point relating to taxation of sales through stockyards.
18. Whatever records etc., of the assessee were made available the same were examined at its head office, Bombay, on 31.12.79, 2.1.80, 4.1.80, 5.1.80 and 7.1.80 and assessee's Bombay stockyard was also examined including all the books of accounts and entries made therein. The stockyards accounts of the petitioner at Bangalore, Madras, Calcutta and Delhi were also examined on different dates. The production accounts of the company were examined in its factory office at Jamshedpur on different dates. The statement of Shri R.S. Sethi, Metallurgical Adviser, TISCO and of Shri A.K. Ghosh, Manager, Ring Rolling Mill, were recorded on the point of production. Similarly statements of Shri R.K. Balasara, Senior Marketing Officer, Shri R.K. Venkatachelam, Chief of Production Control on the point of procedure of sales and despatches were recorded. Shri R.S. Kashyap, Controller of Accounts presented the Company's case on the point of production and all books of accounts which were made available were also examined. On these examinations there was non-accountal of 185764 number of alloy Steel ball bearing rings and the trading position was found as below:
Opening stock 8084 Nos. Turnover 6.20,639 Nos.
on 1.4.1974
Production 611,856 Nos. Closing stock on 1,84,995 Nos.
31.3.75
Difference 185,694 Nos.
___________ ______________
805634 Nos. 8,05.634 Nos.
___________ ______________
First the quantities are given in number and it was admitted that it was not possible to give quantities in weight. Second the difference of 1,85,694 Nos. shown between availability and disposal as in the table above could also not be explained and this item also did not find place in the item of production shown in the published accounts of the assessee. Thus it is found that the whole matter remained unexplained and the difference of 1,85,694 Nos. appeared to be unaccounted.
19. Similarly difference of 17217 Nos. of ball bearing rings was not explained and in this regard no document was produced to prove the contention that 17217 rings represented stock verification and other adjustments. The plea that the relevant records cannot be produced after a lapse of so many years cannot be accepted and in view thereof it is found that there is no proper account for 17217 rings and, as such, their sales value would be added back to the gross turnover shown by the dealer.
20. Similarly gap of 3,10,700 M.T. in the production of Steel Melting shops was not accounted for and high percentage of wastage was claimed but on demand no comparative chart of losses of production at Indian Iron & Steel Co., Burnpur, Bhilai and other Steel plants was produced so as to work out the production loss or wastage. Similarly a lot of other technical details were also not supplied and, as such, the gap of 3,10,700 M.T between input and output including wastage in the Steel Melting shops was found which was not explained except contending that it is on account of spitting to the atmosphere and waste in the form of slag which is normal in any steel melting operation but the same was not accepted. Even wastage to the extent of 40% on ores and ferros input, has been allowed on technical consideration as both ores and ferros have only 60% metalic yields. But in the case of hot metal where input is 16,08,627 M.T. there is no metal loss as hot metal has 100% metalic yield. The scrap input was 4,72,796 M.T. with 100% metalic yield. In this regard it is found that if the explanation furnished by Sri Kashyap on behalf of the petitioner is accepted even then a gap still remains to the extent of 2,88,632 M.T. The total wastage and gap of the item under discussion comes to 3,52,714 M.T. and on deducting 2,57,446 M.T. a net gap comes to 95,268 M.T. representing non-accounted production and its value would be added back to the gross turnover of the assessee as shown in the books of accounts.
21. Similarly unaccountal Ingot production as per record comes to 95,268 M.T. This is not all. Even semi finished and scrap combined accounts relating to the analysis of production and consumption of semi finished and scrap was also not accounted for correctly and ultimately the chart submitted by the Company showed a discrepancy of 65,047 M.T. in the consumption of semi finished at the finishing mill. Non-accountal of 1,25,000 MT. of hot metal in Blast furnace was also found.
22. Thus 17217 number of unaccounted ball bearing rings, 95,000 M.T. unaccounted production as per steel melting shop as discussed above, 20,218 M.T. as gap in primary mills production and Finishing Mill production were found. Accordingly, the total selling value of unaccounted production is estimated for unaccounted rings at Rs. 1,54,953.00 (Rupees One Lakh fifty four thousand nine hundred fifty three), for unaccounted steel at 3,54,577 M.T. Out of total unaccounted steel of 3,54,577 M.T.-sale of 2,54,577 M.T. is estimated to be that of finished steel and remaining 1,00,000.00 M.T. is estimated to be the sale of semi finished material and scraps, the value whereof is determined of semis and scraps @ Rs. 1415/- per M.T. for 10.00,000 M.T. which comes to Rs. 14,15,65,000.00 (Rupees Fourteen crores fifteen lakhs) and that of finished steel @ Rs. 2,006/- per M.T. for 2,54,577 M.T. which comes to Rs. 51,06,82,462.00 (Rupees Fifty one crores, six lakhs eighty two thousand four hundred sixty-two) only. The cost of unaccounted rings comes to Rs. 1,54,953.00 (Rupees One lakh fifty four thousand nine hundred fifty three). The total value comes to Rs. 65,23,37,415/- (Rupees Sixty five crores twenty three Lakhs thirty seven thousand four hundred fifteen). Similar discrepancies with respect to sales through stockyards were also found.
23. In view of above discrepancies and as per the assessment on accepting the petitioner-assessee's claim, a sum of Rs. 96,63,86,690.00 (Rupees ninety six crores sixty three lakhs eighty six thousand six hundred ninety) on account of sales outside Bihar was allowed for 1974-75 to the company. As per escape assessment the claim of sale outside Bihar would be reduced by 25% and thus a sum of Rs. 24,15,94,672.00 (Rupees twenty four crores fifteen lakhs ninety four thousand six hundred seventy two) will be taxable as inter-State sales and the balance of Rs. 72,47,92,018.00 (Rupees Seventy two crores forty seven lakhs ninety two thousand eighteen) is allowed as sale outside the State. As such, after allowing rebate etc. the net tax assessed comes to Rs. 3,66,39,839.10 (Rupees three crores sixty six lakhs thirty nine thousand eight hundred thirty nine andpaise ten) only which is being challenged on various grounds by the assessee.
24. The impugned escape assessment order dated 4.9.80 as contained in Annexure 1 has been challenged, inter alia, on the ground that the method adopted for determining production in the escape assessment proceeding is wholly wrong and impermissible determination of actual production by Central Excise authority should prevail, to convert assumed production at each stages into turnover of sale is not permissible, determination of the question of turnover is already decided by Sri Bindhyachal Prasad, the earlier officer, who was entrusted with the task of escape assessment and Shri B.D. Roy had no jurisdiction to proceed with the said escape assessment proceeding, escape assessment is made without any basis, no finding has been recorded as to whether the suppressed production was sold, finding with regard to ball bearing ring is vitiated and the finding with regard to levy of Central Sales Tax over the sales made to Steel Priority Committee (S.P.C.) allottees has been rendered only on account of change of opinion, which is not permissible.
25. On behalf of the respondent-State of Bihar, while supporting the impugned order, it is contended by Shri V.N. Sinha that the escape assessment is also an assessment and re-assessment includes assessment and, therefore, procedure prescribed for assessment is to be followed and if the same procedure is followed, the proceeding cannot be challenged on the ground that the re-assessment or escape assessment is not permissible.
26. Sri K.D. Chatterji, learned Counsel appearing for the petitioner, has laid much emphasis that mere change of opinion on the same facts cannot constitute reassessment, In support of his contention, while placing strong reliance on a decision in the case of Oudh Sugar Mills Ltd. v. Union of India (1978) E.L.T. (172), learned Counsel for the petitioner submitted that the reassessment based on assumption and presumption cannot be done. No show cause notice can be issued on the basis of average production. No evidence of removal of goods without payment of duty is found out. It is submitted that human element plays a significant part in the process of manufacture. Average production cannot be made the basis for issuance of show cause notice. The finding based on such issuance of notice is without any tangible euidence and are based only on inferences involving unwarranted assumption and are, therefore, vitiated by error of law.
27. The submission made by learned Counsel for the petitioner placing strong reliance on the decision in the case of Oudh Sugar Mills (supra) has no application in the facts and circumstances of the present case. The authority cannot be cited on abstract. The proposition of law laid down in Oudh Sugar Mills case (supra) is based upon the facts found in that case. But in the instant case the Enquiring Officer as also the reassessment authority have placed facts and figures on record, referred to in the preceding paragraphs of this judgment, to constitute that certain production gap was found with the petitioner company inasmuch as during the course of reassessment, representative of the petitioner took a stand that it would not be possible to furnish the relevant documents in support of the claim of the assessee after a lapse of so many years and further no comparative chart for substantiating the claim of production loss was produced by the assessee. In fact on account of the above attitude of the petitioner-assessee, the escape assessment authority proceeded to make best judgment assessment, which is discussed and concluded at pages 70-71 of the brief in C.W.J.C. No. 728 of 1980 (R) wherein suppression of the production of 17217 number of ball bearing ring was found on the basis of monthly production chart of the company as per details at pages 68-70 of the brief of C.W.J.C. No. 728 of 1980 (R). This is not all. The authorities have also recorded a finding about the suppressed production of 352714 M.T. of Ingot in the Steel Melting shop, 20718 M.T. of steel in the Finishing Mill and 348020 M.T. of semifinished goods and scrap. In view of above findings recorded by the Escape Assessment Authority, which are based on relevant materials of the petitioner company itself, suppression of huge quantity of production was found and on that basis sale was inferred. Therefore, the decision in the case of Oudh Sugar Mills (supra) is of no avail to the petitioner considering the facts of the present case.
28. On the other hand, law laid down by the Apex Court in Commissioner of Sales Tax. Madhya Pradesh v. H.M. Esuf Ali H.M. Abdul Ali (1973) 32 S.T.C. 77 applies in full force to the facts of the present case wherein their Lordships have ruled that it was open to the officer to infer that the assessee had large scale dealing outside the account and, in such a situation, it would not be possible for the officer to find out precisely the turnover suppressed and he could only make an estimate of the suppressed turnover on the basis of materials before him. So long as the estimate made by him was not arbitrary and had reasonable nexus with the facts discovered, it could not be questioned. It was wrong to hold that the officer must have materials before him to prove exact turnover suppressed.
29. In the instant case also the escape assessment authority proceeded with the case and found facts and figures as referred to in the preceding paragraphs of this judgment. So it cannot be said that only in case where sale having taken place is proved beyond doubt then only in Escape Assessment proceeding tax can be levied. Thus, the submission made in this regard on behalf of the petitioner has no force.
30. It is next submitted that information' has been wrongly construed and the entire reassessment proceeding based on change of opinion, is not permissible under the law, being contrary to the scheme of the Escape assessment. 'Information' in reassessment proceeding, a mistake apparent on the face of the record of the original assessment also constitute 'information', whether someone else gave that information to the officer or whether he informed himself was immaterial. The availability of the powers vested in the officer does not bar the recourse to the jurisdiction vested in him in drawing proceeding for reassessment. In Salem Provident Fund Society Ltd. v. Commissioner of Income-tax Madras : [1961]42ITR547(Mad) , this point has been elaborately dealt with. Similarly in Maharqj Kumar Karnal Singh v. Commissioner of Income-tax Bihar and Orissa : [1959]35ITR1(SC) , it is held that 'information' includes information as to the true and correct state of law and so would cover information as to the relevant judicial decision. Thus information which comes into the possession of the assessing authority subsequent to the making of the original assessment order and that information leads to his belief that chargeable tax has escaped assessment which has been under assessed or assessed at too low a rate or has been made the subject of excessive relief, the same can be rectified. Thus, the submission that in the absence of any information the reassessment proceeding is based on mere change of opinion on the same facts and cannot constitute re-assessment and does not give any jurisdiction to reassessment authority has no force. We have discussed that it is not a case of mere change of opinion.
31. Discovery of the officer after he had made assessment that he had committed an error in not including the entire turnover is in itself an information which he gets after the assessment. In such circumstances, the impugned re-assessment is fully covered under Section 18 of the Act and re-assessment cannot be said to be invalid and, therefore, it cannot also be said that it is a case of mere change of opinion on the same facts; but, on the other hand, it is a case of getting information that sale had escaped assessment. In Commissioner of Income-tax, Madras v. Rathinasabapathy Mudaliar : [1964]51ITR204(Mad) and in Phool Chand Bajrang Lal v. I.T.O.. : [1993]203ITR456(SC) , elaborately this point has been dealt with and has been taken care of by the Apex Court, which applies in fuil force to the facts of the present case.
32. It is also submitted that sales tax and Central sales tax are only leviable where sale of goods has taken place. Learned Counsel for the petitioner. Sri K.D. Chatterji, attacking on the impugned re-assessment order has also, contended that the provisions of Central Sales Tax Act have no application inasmuch as it has not been proved that transaction of sale had taken place from one State to another attracting the provisions of Central Sales Tax Act and until and unless that is proved the provisions of Central Sales Tax Act cannot be attracted. This point as argued by Mr. Chatterji has been suitably dealt with in Oil India Ltd. v. The Superintendent of Taxes and Ors. : [1975]3SCR797 , wherein it is explained by Hon'ble Justice Mathew, J. (as his Lordship then was) as to what exactly inter-State sale means, which we are reproducing herein below and we may say that what has been held by his Lordship Hon'ble Mathew, J. still holds the field and at least we cannot better explain than what has been explained by his Lordship Hon'ble Mathew, J., which is as follows: a sale which occasions movement of goods from one State to another is a sale in the, course of inter-State trade. No matter in which State the property in the goods passes. It is not necessary that the sale must precede the inter-State movement in order that the sale may be deemed to have occasioned such movement. It is also not necessary for a sale to be deemed to have taken place in the course of inter-State trade or commerce, that the covenant regarding inter-State movement must be specified in the contract itself. It would be enough if he movement was in pursuance of and incidental to the contract of sale. It has also been held in that case that in number of cases the Supreme Court has held that if the movement of goods from one State to another is the result of a covenant or an incident of the contract of sale then the sale is an inter-State sale. Similar point was also taken into consideration in the case of The State of Bihar and Anr. v. Tata Engineering and Locomotive Co. Ltd. : [1971]2SCR849 . The Apex Court has held that if the contract of sale contains stipulation of such movement the sale may be deemed to be in the course of inter-State trade but it can also be inter-State sale even if contract of sale does not pro vide for movement of goods from one State to another but such movement is the result of covenant in the contract of sale or is an incident of that contract. Therefore, in nut-shell, a sale may be regarded as inter-State sale, it is immaterial whether the property in the goods passes in one State or another. The question as regards the nature of the sale, i.e. whether it is in inter-State sale or inter-State sale does not depend upon the circumstances as to in which State the property in the goods passes. It may pass in either State and yet the sale can be an inter-State sale. (See the decision in the case of Union of India and Anr. v. K.G. Khosla & Co. Ltd. and ors. : [1979]2SCR453 and in the case of Co-operative Sugars (Chittur) Ltd. v. State of Tamil Nadu (1993) 90 S.T.C. 1.
33. Therefore, the basis of findings as reached by the re-assessment authority in respect of inter-State sale cannot be said to be unjustified or illegal as argued by learned Counsel for the petitioner. In our opinion, rightly in re-assessment proceeding Central sales tax has been charged and imposed and this is our finding in respect of issues involved in C.W.J.C. No. 728 of 1980 (R).
34. This legal position is not disputed that the escape assessment is also an assessment and re-assessment includes assessment and, therefore, the procedure prescribed for assessment is to be followed and if the same procedure is followed, the same cannot be challenged on the ground that re-assessment or escape assessment is not permissible. In Commissioner of Sales Tax, Madhya Pradesh v. H.M. Esuf Ali H.M. Abdul Ali 32 STC 77, the Apex Court has held that,
What is true of assessment must also be true of re-assessment because re-assessment is nothing but a fresh assessment. When reassessment is made the Earlier assessment is completely reopened and in its place fresh assessment is made.
Best judgment assessment is an honest guess work of the authority making best judgment assessment, which could not be interfered with by a Court and thus the findings with regard to suppression of production made by the petitioner, in our opinion, is not required to be interfered with in these two petitions. Law in this regard is well settled that ' ordinarily an assessment made by an authority ought not to be revised unless it becomes erroneous ab initio as a result of deliberate or inadvertence suppression by the assessee or even omission or mistake committed by the authority. In the instant case both the grounds have been found inasmuch as in the original assessment entire record was not produced with the result the assessing authority omitted to consider the correct assessment and that is how mistake has been committed by the authority.
35. It is also contended that the production loss as referred to during the course of re-assessment by examining certain witnesses have not been taken into consideration. If it was so the assessee could have examined those witnesses at the very threshold of the first assessment. Technical evidence and even authoritative publication should have been placed at the first instance. Therefore, the plea taken by the learned Counsel for the petitioner is not available to him. See the decision in the case of Collector, Central Excise v. Steel Strips Ltd. : 1995(77)ELT248(SC) , Pr. 7. The Apex Court has dealt with the matter elaborately which applies in full force to this case.
36. Lastly, it is contended by learned Counsel for the petitioner that the method adopted for determining production in the escape assessment proceeding is wholly wrong and impermissible inasmuch as it is nothing but a mere change of opinion. This submission though we have dealt with in the preceding paragraphs elaborately, however, it needs further discussion considering the facts of the instant case. The report of Sri R.P. Sinha has been made the basis for initiation of proceeding under Section 18(1) of the Act. The report clearly demonstrates a number of points which clearly show that the production has not been shown what should have been shown in the records maintained by the petitioner. This also shows suppression of consumption of 603903 M.T. of raw materials as is evident from the order of re-assessment authority. The report clearly demonstrates suppression of production of 17217 number of unaccounted ball bearing rings, 95000 M.T. unaccounted production as per steel melting shop and 20218 M.T. as gap in Primary Mills production and Finishing Mill production. The total selling value is estimated for unaccounted ring at Rs. 1,54,953.00 (Rupees One Lakh fifty four thousand nine hundred fifty three). Out of the total unaccounted steel of 354577 M.T. sale, 2,54,577 M.T. is estimated to be that of finished steel and remaining 100000 MT is estimated to be that of semi finished material and scraps, the value whereof is determined of semis and scraps @ Rs. 1415/- per M.T. for 100000 M.T. which comes to Rs. 14,15,00,000.00 (Rupees fourteen crores and fifteen lakhs) and that of finished steel @ Rs. 2006/- per M.T: for 2,54,577 M.T which comes to Rs. 51,06,82,462.00 (Rupees Fifty one crores Six Lakhs eighty two thousand four hundred sixty two) and thus the total value comes to Rs. 65,23,37,415.00 (Rupees Sixty five crores twenty three lakhs thirty seven thousand four hundred fifteen). Similar discrepancy was also found with respect to sale through stockyard.
37. Thus, in this regard law is well settled that it is not necessary that information should come from outside and that information which has not been detected by the Assessing Authority and it is found that the materials on record clearly demonstrate that there is no statement of turnover, the Authority has every right to re-open the assessment under Section 18(1) of the Act. In the case of Phool Chand Bqjrang Lal and Anr. v. Income-tax Officer and Anr. : [1993]203ITR456(SC) , the Apex Court has aptly dealt with this issue wherein it is held about acquiring fresh information, which goes to expose falsity of statement made by the assessee at the time of original assessment is different from drawing a fresh inference from the same facts and materials available with the Income-tax Officer at the time of the original assessment proceeding.
38. On behalf of the State it is submitted by Sri Sinha that a sum of Rs. 2,10,19.242/25 (Rupees Two Crores ten lakhs Nineteen thousand two hundred forty two and paise twenty five) has been withheld by the petitioner assessee for quite a long time of more than 18 years and, therefore, from the date of re-assessment/demand notice issued against the petitioner for recovery of said tax amount, interest at the rate of 18% per annum may be charged. It is submitted that this amount has been utilised by the petitioner in its business activities.
39. We have already discussed above that by order dated 20.11.80 the recovery of the said tax amount, has been stayed by this Court. This, in our opinion, the payability of the principal amount itself has been arrested under the orders of this Court dated 20.11.80 and since the amount was not payable how interest can be charged thereon for the period during which the order dated 20.11.80 is operative. Thus payable1 may be interpreted to mean legally enforceable and the amount which is not recoverable by virtue of the Court's order dated 20.11.80 how can it be said that interest on it can be charged. In State of Rajasthan v. Ghasi Lal : [1965]2SCR805 , it is ruled that till the tax payable is ascertained by the assessing authority, no tax can be said to be due for till then there is only liability to be assessed to tax. Thus the question of payment of any interest does not arise. In J.K Synthetics Ltd. v. Commercial Tax Officer : 1994ECR329(SC) , it is ruled that it is difficult to hold that the law envisages the assessee to predicate the final assessment and expect him to pay the tax to avoid interest and that would be asking him to do the near impossible. In Smt. Vrinda Gujarati v. Bareilly Development Authority : AIR1997All107 , wherein one of us (B.M. Lal, J. as he then was) is a member of the Bench, it is held in paragraphs 27, 28, 29, 30 and 31 that if by Court's order recovery of the amount is stayed, till that order operates no interest can be charged.
40. However, strong reliance has been placed by the learned State Counsel Shri V.N. Sinha on a decision in the case of Agricultural and Processed Food Products v. Oswal Agro Furnace and Ors. : 1996ECR5(SC) and also in a case reported in 1996 (2) P.L.R. 1207, Indian Explosives Ltd. v. State of Bihar and submitted that interest should be charged. These cases no doubt envisage a proposition of interest to be charged at the rate of 18% per annum under the presumption that the imposed tax has been utilized by the assessee. Thus, no doubt, we can impose interest at the rate of 18% per annum but not for the period during which order of stay is operative i.e. from 20.11.80 till the date of delivery of the judgment became payability of tax is arrested by Court's order. Thus interest at the rate of 18% per annum shall be charged from the date of demand notice dated 9.9.80 to 19.11.80 and from the date of delivery of this judgment onwards till the date of payment, which shall be calculated and worked out accordingly at the rate of 18% per annum and be charged and realised from the petitioner.
41. In view of the foregoing discussions, no other point remains to be discussed. In view of our foregoing conclusions, we are of the opinion that these two petition have no merit, which are accordingly dismissed.
S. K. Singh, J.
I agree.