I.S. Tiwana, J.
1. The petitioner impugns the notice dated 16th June, 1972 (annexure A to the petition), issued by the Assessing Authority, Ludhiana, primarily on the ground that the same is barred by time as envisaged by Sub-section (4) of Section 11 of the Punjab General Sales Tax Act, 1948. In order to appreciate the contention raised on behalf of the petitioner it is but necessary to refer to the relevant parts of this section :
Section 11. (1) If the Assessing Authority is satisfied without requiring the presence of dealer or the production by him of any evidence that the returns furnished in respect of any period are correct and complete, he shall assess the amount of tax due from the dealer on the basis of such returns.
(2) If the Assessing Authority is not satisfied without requiring the presence of dealer who furnished the returns or production of evidence that the returns furnished in respect of any period are correct and complete, he shall serve on such dealer a notice in the prescribed manner requiring him, on a date and at a place specified therein, either to attend in person or to produce or to cause to be produced any evidence on which such dealer may rely in support of such returns.
* * * *(4) If a dealer having furnished returns in respect of a period, fails to comply with the terms of a notice issued under Sub-section (2), the Assessing Authority shall, within five years after the expiry of such period, proceed to assess to the best of his judgment the amount of the tax due from the dealer.
2. The case of the petitioner is that this notice relates to the assessment year 1966-67, ending on 31st March, 1967, and it having been issued on 16th June, 1972, is obviously beyond a period of five years from the end of the last quarter of the assessment year 1966-67 and thus the Assessing Authority has no jurisdiction to proceed to assess the petitioner on 'best judgment' basis in view of Sub-section (4) of Section 11 of the Act. The case of the respondent-authorities on the other hand is that there is no limitation prescribed for the issuance of a notice under Section 11(2) of the Act and the bar of limitation provided in Sub-section (4) of this section does not apply to the facts of this case.
3. After giving my thoughtful consideration to the matter, I do not find any merit in the stand taken by the respondent-authorities. In fact the provisions of Sub-section (4) of Section 11 of the Act, as it stood prior to its amendment by Punjab Act No. 28 of 1965, came up for consideration of their Lordships of the Supreme Court in Madan Lal Arora v. Excise and Taxation Officer, Amritsar [1961] 12 STC 387 (SC). Vide this amendment only the word 'registered' prior to the word 'dealer' has been dropped and the period of limitation has been raised from three years to five years. In all other respects the amended Sub-section (4) is in pari materia with Sub-section (4) of the Act as it stood prior to Punjab Amendment Act No. 28 of 1965. While interpreting that Sub-section, this is what has been held by the Supreme Court :
Section 11(4) of the East Punjab General Sales Tax Act, 1948, provided : 'If a registered dealer, having furnished returns in respect of a period, fails to comply with the terms of a notice issued under Sub-section (2), the Assessing Authority shall, within three years after the expiry of such period, proceed to assess to the best of his judgment the amount of the tax due from the dealer : Held, (i) that the power to make the best judgment assessment could be exercised only within the period of three years mentioned in the Sub-section and the three years had to be counted from the end of each quarter in respect of which the returns had been filed; (ii) that where the last of the quarters in respect of which the petitioner filed his returns ended on 31st March, 1956, the assessing authority could not proceed to make a best judgment assessment in respect of this quarter after 31st March, 1959.
4. Thus it is patently clear that the power to make the best judgment assessment can only be exercised within a period of five years mentioned in the sub-section and that period has to be counted from the end of each quarter in respect of which the return has been filed by the assessee. Where the last quarter in respect of which the petitioner filed his return ended on 31st March, 1967, the Assessing Authority cannot proceed to make the best judgment assessment in respect of that quarter or the period preceding that on or after 16th June, 1972, that is, the date on which the impugned notice has been issued.
5. Mr. Sood, the learned counsel for the respondent-authorities, points out that the stand taken by the respondent-authorities is fully supported by a judgment of the Supreme Court in Indian Alumininm Cables Ltd. v. Excise and Taxation Officer [1977] 39 STC 19 (SC). Having gone through that judgment, I find that the stand of the learned counsel is not correct. In this judgment, their Lordships have neither dissented from nor disapproved their earlier dictum recorded in Madan Lal Atom's case [1961] 12 STC 387 (SC) and rather the following observations made in this judgment completely support the case of the petitioner :
For the issuance of a notice under Sub-section (2) no time-limit has been fixed, but the Assessing Authority must remain on its guard of taking the steps and completing the assessment as soon as it may be possible to do so. Otherwise, the risk involved may just be pointed out. Take a case where a notice under Sub-section (2) is issued after the expiry or just on the verge of expiry of the period of 5 years and the dealer fails to comply with the terms of the notice. In such a case the Assessing Authority may have to proceed to make the best judgment assessment under Sub-section (4) attracting the bar of limitation of 5 years.
6. In the light of the aboye-noted authoritative pronouncement, I find that the impugned notice, annexure A, issued to the petitioner with a view to proceed to assess his liability on 'best judgment' basis, is wholly without jurisdiction and cannot be sustained. Thus I quash this notice and allow this petition to that extent. I, however, pass no order as to costs.