Hindustan Lever Ltd. Vs. S.M. Jadhav and anr. - Court Judgment

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service - dispute - section 217 of companies act, 1956 - appeal for challenging tribunal's decision of allowing certain benefits to respondent no. 1 (r1) on ground that his date of birth (dob) recorded by appellant-company is incorrect - correctness of dob disputed by r1 at the time of his retirement - r1 contended that dob in his ssc certificates had been changed and same was reported to company - no written intimation regarding the change was given to company - date reported in provident fund booklet, annual reports and service records never disputed by r1 - in the last days of his career r1 cannot raise such dispute - appeal allowed. - [s.k. dass, acting c.j.,; k. subba rao,; n. rajagopala ayyangar,; raghuvar dayal, jj.] the appellant was a registered dealer carrying on business in bidis. for the year 1949-50, i.e., for the period from october 22, 1949 to november 9, 1950 he submitted only one return on october 5, 1950 for one quarter and defaulted in respect of the other quarters. he was served a notice on august 13, 1954 under s. 11(1) and (2) of the c.p. and berar sales tax act, 1947, in respect of the turnover for the said period. there after, he filed the returns, but in the assessment proceedings he contended inter alia, that the proceedings before the sales tax commissioner were barred by time. this contention was rejected and his tax liability was determined. then the appellant moved the high court in writ petition. in the other appeal no. 102/1961, the appellant had not filed any return for the year 1950-51 i.e. for the period from november 10, 1950 to october 31, 1951. he was served a notice on october 15, 1954, under s. 11(4) of the act. the said notice was within 3 years from october 16, 1951 which fell within the 4th quarter of the concerned year. the appellant then, filed his returns under protest and contended that the assessment proceedings were barred by limitation under s. 11(a) of the act. this plea was re- jected and his tax liability was determined. the appellant then, filed another writ petition for a similar relief. both the writ petitions were heard together and the learned single judge relying on a decision in firm sheonarayan matadin v. sales tax officer, raipur, quashed the said assessments. the respondent then, filed letters patent appeals before the division bench and by a common judgment the orders of the learned single judge were set aside. in this court, the appellant contended : (1) the expression "escaped assessment" in s. 11-a of the act would apply also to a case where there was no assessment at all ; (2) even if the first assessment proceedings were pending before the appropriate authority, it could only make the assessment within three years from the date of the commencement of the said proceedings, which would start only after the appropriate authority issued a notice under s. 10(1) or s. 11(2) or s. 11(5) of the act; (3) in the present case no proceedings in respect -of the said assessment were pending and (4) as only a part of the fourth quarter in the second appeal falls within three years, the proceedings in respect of the said entire quarter would be barred under s. 11-a of the act and, in any view only the turnover escaped in respect of the period between november 10, 1950 to october 31, 1951 could be assessed. the respondent mainly contended that whatever may be said in the case of an unregistered dealer, in the case of a registered dealer the proceedings commence from the date fixed in the registration certificate within which the said dealer has a statutory obligation to furnish his return. held : (raghubar dayal, j. dissenting) : the expression "escaped assessment" in s. 11-a of the act includes that of a turnover which has not been assessed at all, because for one reason or other no assessment proceedings were initiated and therefore, no assessment was made in respect thereof. commissioner of income-tax, bombay v. pirojbai' n. contrac- tor, (1937) 5 i.t.r. 338, maharaj' kumar kamal singh v. com- missioner of income-tax, bihar and orissa, [1959] supp. - s.c.r. 10 maharajadhiraj sir kameshwar singh v. state of bihar, [1960] 1 s.c.r. 332, commissioner of income-tax, bombay v. narsee nagsee & co. [1960] 3 s.c.r. 988 and state of madras v. balu chettiar, (1956) 7 s.t.c. 519,relied on. the assessment proceedings under the sales tax must be held to be pending from the time the said proceedings were initiated until they were terminated by a final order of assessment. before the final order of assessment, it could not be said that the entire turnover or a part thereof of a dealer had escaped assessment, for, the assessment was not completed and, if completed, it might be that the entire turnover would be caught in the net. in re lachhiram basantlal, (1930) i.l.r. 58 cal. 909 and rajendra nath mukherjee v. income-tax commissioner, (1938) l.r. 61 i.a. 10, referred to. under sub-section (1) of s. 10, the commissioner need not issue a notice to a registered dealer for furnishing the relevant returns, but a statutory obligation is imposed on the said dealer to do so by such dates and to such authority as may be prescribed. in the case of a registered dealer there are four variations in the matter of assessment of his 'turnover : (1) he submits a return by the date prescribed and pays the tax due in terms of the said return; the commissioner accepts the correctness of the return and appropriates the amount paid towards the tax due for the period covered by the return. (2) the commissioner is not satisfied with the correctness of the return ; he issues a notice to him under s. 11(2), and makes an enquiry as provided under the act, but does not finalize the assessment. (3) the registered dealer does not submit a return; the commissioner issues a notice under s. 10(3) and s. 11(4) of the act. (4) the registered dealer does not submit any return for any period and the commissioner issues notice to him beyond three years. in the case of a registered dealer the proceedings before the commissioner starts factually when a return is made or when a notice is issued to him either under s. 10(3) or under s. 11(2) of the act. the acceptance of the contention that the statutory obligation to file a return initiates the proceedings is to invoke a fiction not sanctioned by the act. bisesar house v. state of bombay (1958) 9 s.t.c. 654 and ramakrishna ramnath v. sales tax officer, nagpur, (1960) 11 s.t.c. 811, distinguished. a statutory obligation to make a return within a prescribed time does not proprio vigore initiate the assessment proceedings before the commissioner; but the proceedings would commence after the return was submitted and would continue till a final order of assessment was made in regard to the said return. in the first case, therefore, the tribunal had no jurisdiction to issue a notice under s. 11-a with respect to the quarters other than that covered by return made by the appellant. in the second case, the commissioner had jurisdiction to assess the turnover in respect of the entire fourth quarter, but as it was done without showing separately the assessment of tax payable in respect of each quarter, this court cannot confine the relief to be given to the appellant in these appeals to the period barred under s. 1 1-a of the act. the appeals, therefore must be allowed. per raghubar dayal, j.--the turnover for the years 1949-50 and 1950-51 could not be said to be turnover which escaped assessment, within the meaning of that expression in s. 11-a of the act and therefore, the notices issued by the assistant commissioner of sales tax in 1954 under s. 11(2) cannot be said to be notices issued under s. 11-a beyond the period within which they could have been issued. the proceedings for the assessment commence against the registered dealer from the prescribed date for his submitting the return which he is required to submit by sub- section (1) of s. 10. no notice is necessary to be issued to him for the submitting of the return for the purpose of assessment. the statute, by the provisions of sub-section, (1) of s. 10, gives him the required notice to the effect that he is to submit the necessary returns by the dates prescribed by the rules. the registration certificate issued to him mentions the period of the dealer's year, the prescribed return period and the dates by which the dealer had to furnish the returns. the registered dealer is, in this way, in no worse position than an ordinary dealer who receives a notice for -submitting the returns by a certain date. in the case of the unregistered dealer, the proceedings commence by the issue of a notice under subsection (1) of s. 10. there is no time limit fixed for the sales tax officer to take action against the registered dealer under sub-sections (2) and (4) of s. 11. he does not contravene art. 14, if he takes action against a registered dealer under sub-section (2) or sub- section 4 of s. 11 even after the expiry of three years from the period whose turnover is to be assessed.s.n.variava, j.1. this appeal is against the order dated 24th june. 1998. briefly stated the facts are as follows: on 4th of february, 1952, the 1st respondent joined the services of m/s. brooke bond lipton india limited (which is now amalgamated with the appellant) as a salesman. in the application submitted by him the 1st respondent showed his date of birth as 12th of june, 1927 and his age to be 25 years. the manager of m/s. brooke bond lipton india ltd. issued a certificate dated 19th february, 1952 certifying that he had examined the matriculation certificate and that the date of birth was 12th of june, 1927. the manager also certified that the age of the 1st respondent at that time was 24 years 8 months. 2. the 1st respondent has worked with m/s. brooke bond lipton india ltd. till his retirement. his service record at all times, showed the date of birth as 12th of june, 1927. the provident fund booklet showed his date of birth as 12th of june, 1927. the annual reports, published by the company under section 217 of the company act, showed his date of birth as 12th of june, 1927. 3. apart from the above on 16th of november, 1981 there was a settlement between the management of m/s. brooke bond lipton india ltd. and the all india brooke bond employees federation. by this it was, interalia, agreed that the age of the employees would be decided on the basis of the birth certificate and school or university certificate. it was agreed that in future no fresh cases would be brought up for consideration about the date of birth of an employee. the 1st respondent raised no dispute in respect of his date of birth at this time. 4. as the 1st respondent's date of birth was 12th of june, 1927 he was to retire, as per the company rules, on 1st of april, 1987. m/s. brooke bond lipton india ltd sent a notice dated 11th november, 1986 intimating 1st respondent that he was due to retire on 1st of april, 1987. they enquired whether he wished to encash his leave. in reply to this, the 1st respondent, by his advocate's letter dated 14th november, 1986, for the first time raised a contention that his date of birth was 29th august, 1930 and not 12th june, 1927. the 1st respondent claimed that the date of birth in the ssc certificate had been corrected and that the corrected date had been informed to the company in the year 1953 itself. at this stage to be noted that in the advocate's letter it is not claimed that a written intimation had been given to the company. m/s broke bond india ltd. point out that the date of birth in the provident fund booklet and the service record is 12th june, 1927. they reiterate that the 1st respondent would be retiring on 1st april, 1987. 5. the 1st respondent then filed a suit in the court of the iii additional munsiff, belgaum praying for a declaration that his date of birth be corrected. in this suit he applied for an interim injunction. the trial court by a detailed and reasoned order refused interim injunction. in so refusing the trial court, interalia observed as follows: 'it is the say of the plaintiff that in the year 1953 itself this was informed to the defendant company for due correction in his service records. no documents have been produced by the plaintiff do not disclose the fact that such an information was given to the defendant company, if really such an information was given, the plaintiff ought to have followed it up with some enquiry etc., in this connection. nothing is before the court to show that any correspondence was done with the defendant company in this regard.' 6. on 1st of april, 1987, the 1st respondent retired and accepted his retiral benefits and dues. thereafter on 2nd of june, 1987, the 1st respondent raised an industrial dispute claiming that his correct date of birth was 29th of august, 1930. the industrial tribunal by its award dated 4th october, 1993 allowed the claim of the 1st respondent. the industrial tribunal directed m/s brooke bond india ltd. to pay full back wages for 3 years along with consequential benefits to the 1st respondent. 7. the appellant filed a writ petition in the high court of karnataka. the writ petition was allowed by a single judge on 13th june, 1996. the single judge noted that the material on record was sufficient to show that the 1st respondent's date of birth in the records was 12th june, 1927 and that only at the fag end of his career he could not be allowed to raise a dispute regarding his date of birth. 8. the 1st respondent filed a writ appeal which has been allowed by a division bench by the impugned order dated 24th june, 1998. the appellant have thus filed this appeal. 9. we have heard the parties. it is settled law that at the fag end of career, a party cannot be allowed to raise a dispute regarding his date of birth. the case of the 1st respondent that he had intimated the company in 1953 itself is not believable. in the application, which had been filed by the 1st respondent he himself had given his date of birth as 12th of june, 1927 and also mentioned that his age as 25 years. on the basis of this application and the matriculation certificate the manager had issued a certificate. thereafter his service record. provident fund booklet and even the annual reports contained the 1st respondent's date of birth as 12th june, 1927. it is impossible to believe that for all these years the 1st respondent was not aware of the date of birth in his service record or the provident fund booklet. it is impossible to believe that he has not read a single annual report in all these years. if, as claimed by him he had informed the company in 1953, he would surely have made some enquiry whether the service record was corrected. this would have been done, if not earlier, at least at the time when the settlement took place between the union and the company. that was the time when other employees were getting their age corrected and therefore it is impossible to believe that the 1st respondent would not have at that time ascertained what his date of birth was in the service record. 10. no reliance can be placed on the letter dated 15th may, 1953. this is produced for the first time in the high court. there is no reference to this letter in the advocate's reply. in the suit, which had been filed by him, there was no reliance on any such written intimation. the learned judge hearing the interim application noted that no document was produced. significantly there is no endorsement of the company or proof of service of such a letter on the company. 11. in our view, the impugned order cannot be sustained at all. the 1st respondent cannot be allowed to raise such a dispute at the fag end of his career. accordingly, the appeal is allowed. the impugned order dated 24th june, 1998 is set aside. the order of the learned single judge dated 13th june, 1996 is restored. there will be no order as to costs.