Judgment:
1. The questions for decision in this application under Section 8 of the West Bengal Taxation Tribunal Act, 1987 are whether the notice of demand in form VII, annexure page 2, was issued in violation of Section 11(3) of the Bengal Finance (Sales Tax) Act, 1941 read with Rule 55(1) of the Bengal Sales Tax Rules, 1941 (in short, "1941 Act" and "1941 Rules" respectively), and whether such notice was not served in terms of Section 20(1) of 1941 Act.
2. In brief, the case of the applicants is that respondent No. 2, Commercial Tax Officer, Strand Road Charge, made an ex parte order of assessment on best judgment for the period of four quarters ending December 31, 1986 under 1941 Act on October 12, 1990 demanding additional sales tax of Rs. 83,860.19 and turnover tax of Rs. 5,668.64 without disclosing any basis for such assessment. In the same order a penalty of Rs. 500 was imposed for late submission of returns. In terms of Section 11(3) of 1941 Act read with Rule 55(1) of 1941 Rules a notice of demand in form VII was issued to the applicant No. 1 directing it to pay the assessed dues on or before December 6, 1990.
Thus, thirty days' time as enjoined by the aforesaid provision of law, was not given for making the payment. An appeal was preferred before the Assistant Commissioner of Commercial Taxes, Burrabazar Circle from the order of assessment dated October 12, 1990. The order of assessment was modified by the appellate authority (respondent No. 1) by reducing the gross turnover to the extent of Rs. 5 lakhs and by allowing some more claims as also by setting aside or removing the penalty of Rs. 500 imposed by respondent No. 2. Ultimately, the appellate authority directed respondent No. 2 to make fresh computation of tax and turnover tax and inform the dealer accordingly. Being aggrieved by that appellate order dated February 18, 1993, the first applicant before us (namely, the company), preferred a statutory revision before the West Bengal Commercial Taxes Appellate and Revisional Board (in short, "the Board") from the said appellate order. The revision was dismissed by the Board's order dated October 27, 1997. In the present application, the applicant is not challenging the legality or correctness of order of assessment as modified by the appellate authority and ultimately confirmed by the Board. The only grievance, before us is about legality of the notice of demand in form VII.3. However, it should be noted that the order of assessment was made ex parte on best judgment, because although reasonable time was allowed to the applicant No. 1 to produce books of account, the company prayed for further time for production of the same. Since the case was going to be barred by limitation, the prayer for time was rejected and the order of assessment was made. The returned figure of gross turnover was Rs. 56,72,996.96. But the respondent No. 2, the assessing authority, estimated the gross turnover at Rs. 65 lakhs to the best of his judgment. He allowed the claim under Section 5(2)(a)(v) for Rs. 52,62,271.96. Thereafter he calculated tax and imposed a penalty of Rs. 500. The impugned demand notice dated October 12, 1990, signed by respondent No. 2 on October 31, 1990, was issued accordingly. The assessing authority did not disclose the basis on which he arrived at an estimated gross turnover at Rs. 65 lakhs. But the appellate authority (respondent No. 1) discussed the basis on which such assessment was made. He stated that as per returns and the books of account (obviously produced before him) gross turnover amounted to Rs. 56,72,996.96, but in the memorandum of appeal the gross turnover was stated in paragraph 5 of the grounds of appeal at annexure page 6, as Rs. 56,51,300.64. This discrepancy could not be reconciled by the representative of the applicant-company. The appellate authority further stated that during the preceding year (the year before), sales of the company amounted to more than Rs. 77 lakhs. It was explained before the appellate authority on behalf of the company, that the fall in gross turnover was due to fall in sales of the products. He held that the contention was considered and thereafter he estimated the gross turnover as Rs. 60 lakhs, thereby reducing it by Rs. 5 lakhs.
Thereafter the appellate authority allowed certain other claims of the company and removed the penalty which was imposed, and directed the assessing authority to make fresh computation of tax and turnover tax.
All these points were noted by the Board in its order dated October 27, 1997, while dismissing the revision.
4. In Section 11(3) of 1941 Act (now replaced by a new Act) it was clearly laid down that in the notice of demand the date for payment to be specified "shall be not less than thirty days from the date of service of such notice". In Rule 55(1) of 1941 Rules also, the same minimum period of time (thirty days after service of notice) was laid down. The case of the applicants is that the impugned notice of demand directing payment on or before December 6, 1990 was received on November 19, 1990. There was, at the time of hearing, no denial of that claim. It appears from the top of the impugned notice in form VII at annexure page 2 that it was sent on November 3, 1990. Therefore, it was quite natural that it was received by the applicant-company on November 19, 1990.
5. On those facts there is no doubt that the notice of demand is defective in so far as it relates to the date fixed for payment.
6. After the appellate order dated February 18, 1993 was confirmed by the Board in its order dated October 27, 1997, the Commercial Tax Officer (respondent No. 2) was obliged to make a fresh computation of taxes as directed by the appellate authority (respondent No. 1) and then to issue a fresh modified notice of demand. In fact, as soon as the order of assessment was modified by the appellate order, the impugned notice of demand became non est.
7. But the learned advocate for the applicant did not leave the matter at that. He referred to the Explanation below Sub-section (1) of Section 20 of 1941 Act and argued that the appeal could be preferred within sixty days or any further period, if extended, from the receipt of a notice of demand. According to him, since the impugned notice of demand was invalid in respect of the date of payment, the appellate and revisional orders should be set aside by us and a fresh assessment should be directed. The learned State Representative appearing for the respondents opposed these contentions. He submitted that the notice of demand serves two purposes, namely, to inform the amount to be paid, and to inform the date on or before which the payment should be made.
According to him, the notice of demand was in perfect order regarding the amount assessed. But it was wrong in one respect, as a period of thirty days was not available to the applicant-company for payment after the date of service thereof. There is no reason to reject the entire demand notice as bad. He submitted that a fresh demand notice was to be issued ; but truly there was no such defect, legal or otherwise, in the notice of demand, justifying the argument on behalf of the company that the appellate and revisional orders should be set aside and the order of assessment also.
8. In a number of decisions of this Tribunal, it has been held that the notice of demand under Section 11(3) serves two purposes, as argued by the learned State Representative. It was held in those cases by this Tribunal that if the notice is defective regarding the fixed date of payment due to want of thirty days after service thereof, then the entire notice does not become invalid, and the notice could be rectified by issuing a fresh notice of demand fixing a fresh date for payment after thirty days of service of such modified notice. In this case also, in the facts and circumstances, we hold accordingly. The impugned notice was not invalid. It was defective only with regard to the fixed date of payment. Under Section 20(1) an appeal might be preferred within sixty days from receipt of the notice. Such appeal was preferred by the applicant-company where he lost. He also lost in the revision before the Board.
9. In such circumstances, we hold that there is no reason or justification for reopening the assessment once again. The appellate authority had wide power in respect of an assessment. The orders of the appellate authority and also the Board gave sufficient reasons supporting the modified assessment made by the appellate authority.
Merely because, the original notice of demand contained a defect relating to the fixed date of payment of assessed dues, we cannot hold that it was void so that the subsequent appeal and the revision may be said to be also void. In any case, the applicant had not taken this plea before the appellate and revisional authorities. It has been held by this Tribunal in several cases that a notice containing a defect of this nature does not invalidate either the assessment order or the appellate and revisional orders. For example, in RN 95 of 1998 [Selwin Tanks & Pressure Vessels v. Commercial Tax Officer, Shibpur Charge [1999] 114 STC 42 (WBTT)], decided on May 8, 1998, the following was held : "We have considered this question in several cases in different facts and circumstances. According to us, the correct position is this. Section 11(3) of 1941 Act lays down that the assessed dues shall be demanded from the assessee (in prescribed form No. VII) by specifying a date which shall be not less than thirty days from the date of service of the notice. Sub-section (4) of Section 11 makes it clear that no recovery proceeding can be commenced without service of a valid notice under Section 11(3). There are two important elements in a demand notice : (a) the amounts assessed as tax or penalty ; and (b) the date by which the payment should be made and such date must not be less than thirty days from the date of service of the notice. When one of the elements is missing, the notice becomes invalid, but such invalidity of the notice does not make the order of assessment invalid in any manner. The appeal is preferred against the order of assessment. Rule 76 of the Bengal Sales Tax Rules, 1941 enumerates the particulars to be furnished in a memorandum of appeal. One of the particulars is the date of receipt of the demand notice under Section 11(3), but nothing more than that. Moreover, another important point falls for consideration in this connection. A demand notice certainly becomes defective and invalid for non-compliance with Section 11(3) regarding allowance of at least thirty days' time for payment. But this invalidity depends on a question of fact, as to on what date the applicant had received the demand notice. In the present case, the assessee did not take this point in the appeal or in the revision. He chooses to take this point for the first time before us. This is a mixed question of law and fact, and not purely a question of law ; hence ought to have been taken before the authorities below who then might get an opportunity to record a finding of fact. As already said, the invalidity of the demand notice on this score does not affect either the order of assessment or appeal or revision. The defect is cured when a fresh demand notice is issued in accordance with Section 11(3) and that must be issued in the present case as well." Such a defect entitles the dealer to be served with a fresh notice of demand giving at least thirty days for payment after service thereof.
The appeal preferred in this case by the applicant-company was quite in order, because the appeal questioned the order of assessment ; for that purpose, the notice had been duly served.
10. Accordingly, the application is dismissed. Respondent No. 2, Commercial Tax Officer, Strand Road Charge, is directed to comply with the appellate order dated February 18, 1993 passed by respondent No. 1 and to issue a modified demand notice after fresh computation. He is directed to do so within two weeks from the date of this judgment.
11. The main application is thus finally disposed of. No order is made for cost.