D.P Madon, J.:— The applicants in this reference under section 34(1) of the Bombay Sales Tax Act, 1953, are a partnership firm carrying on business in crockery, glassware, chinaware, glazedware, earthenware and cutlery. The applicant-firm was registered as a dealer under the Bombay Sales Tax Act, 1946, and the Bombay Sales Tax Act, 1953. For the assessment period 1st April, 1952, to 31st October, 1952, the applicants were assessed by the Sales Tax Officer, B Ward, Bombay, on 31st July, 1953. On 13th January, 1956, the applicants' office was raided by the Sales Tax Officer (VI), Enforcement Branch, Bombay, and certain books of account were seized. Thereafter, on 8th March, 1956, a notice under section 15 of the Bombay Sales Tax Act, 1953 (hereinafter for the sake of convenience referred to as “the 1953 Act”), was issued to the applicants by the said Sales Tax Officer, and in pursuance of the said notice the said Sales Tax Officer reopened the assessment of the applicants for the said period 1st April, 1952, to 31st October, 1952, and reassessed them on the ground that they had suppressed certain sales effected by them. Against this order of reassessment the applicants filed an appeal to the Assistant Commissioner of Sales Tax (Appeals III), Bombay, and by his order dated 12th August, 1957, the said Assistant Commissioner set aside the said order of reassessment on the ground that the said notice under section 15 served on the applicants was of a period shorter than the one required under the said section. Thereupon on 11th October, 1957, the applicants were served with a fresh notice under the said section 15 by the said Sales Tax Officer. This notice was served upon one N.A Merchant, the manager of the applicant-firm. The applicants appeared before the said Sales Tax Officer through their Advocate, and on 6th January, 1958, the Sales Tax Officer passed an order reassessing the applicants. In the appeal filed by the applicants against the said order the Assistant Commissioner of Sales Tax (Appeals IV), Bombay, by his order dated 9th February, 1962, reduced the quantum of suppressed sales arrived at by the said Sales Tax Officer and confirmed the rest of the order appealed against. Against this appellate order the applicants filed a revisional application to the Deputy Commissioner of Sales Tax, and by his order dated 31st October, 1963, the Deputy Commissioner of Sales Tax, Bombay City Division (Appeals III), Bombay, further reduced the quantum of suppressed sales and dismissed the revisional application so far as the other matters were concerned. A second revisional application preferred by the applicants to the Tribunal was dismissed by the Tribunal on 20th December, 1966. On 7th June, 1967, the applicants made a rectification application to the Tribunal contending that certain facts, which were matters of record, and certain submissions advanced by the applicants had not been recorded in the order of the Tribunal dismissing the applicants' said revisional application. By its order dated 8th December, 1967, the Tribunal dismissed the said application stating that the facts which, according to the applicants, had not been mentioned in its said order dated 20th December, 1966, had in fact been referred to therein.

2. Amongst the various contentions urged by the applicants were a contention that at the material time cups, saucers, dishes, etc., sold by the applicants were liable to general tax at the rate of one-half of an anna in the rupee under section 6 of the Bombay Sales Tax Act, 1946, and were not chargeable to special tax at the rate of one anna under entry 17 of Schedule I to the said Act; that the said notice under section 15 of the 1953 Act having been served on the said Merchant was not a valid service in law and, therefore, the reassessment proceedings were not valid; and that since the first order of reassessment made on 29th June, 1956, had been set aside in appeal by the Assistant Commissioner of Sales Tax, the said Sales Tax Officer had no jurisdiction to initiate fresh reassessment proceedings in respect of the said period. All these contentions were negatived by the revenue authorities and the Tribunal.

3. Arising out of the said order of the Tribunal passed on 20th December, 1966, the following four questions have been referred to us at the instance of the applicants:

“(1) Whether, the Tribunal was correct in law in coming to the conclusion that during the material time cups, saucers, dishes, etc., sold by the applicants were chargeable to tax at the rate of one anna, being covered within the meaning of entry 17 of Schedule I to the Bombay Sales Tax Act, 1946?

(2) Whether, on the facts and in the circumstances of this case, the Tribunal was correct in law in holding that the notice under section 15 of the Bombay Sales Tax Act, 1953, served on Mr. Merchant, an employee of the concern, was a valid service in law?

(3) Whether, on a true and correct interpretation of section 15 of the Bombay Sales Tax Act, 1953, the Tribunal was correct in law in holding that the assessment proceedings were valid in law, though the notice under the said section 15 was served on Mr. Merchant, an employee of the concern, and not on the dealer?

(4) Whether, on the facts and in the circumstances of this case and upon proper construction of the second proviso to section 15 of the Bombay Sales Tax Act, 1953, did the Sales Tax Officer have jurisdiction to reassess the applicants after the order in appeal in respect of the same period was passed?”

4. In our opinion, it will be convenient to deal with questions Nos. (2) and (3) first, because if the Tribunal was wrong in the view which it took and there was no valid service of the said notice under section 15 of the 1953 Act and if the said reassessment proceedings were invalid, the other two questions submitted to us would not arise for determination.

5. Before we turn to the arguments advanced at the Bar, it is necessary to refer to the relevant statutory provisions. There is no dispute before us that in respect of the assessment period 1st April, 1952, to 31st October, 1952, during which period the Bombay Sales Tax Act, 1946, was in force, any reassessment proceedings taking place after the repeal of the said Act would have to be taken under section 15 of the 1953 Act. Under the said section 15, if in consequence of any information which had come into his possession the Collector of Sales Tax was satisfied that any turnover in respect of sales or purchases of any goods chargeable to tax had escaped assessment in any year or had been under-assessed or assessed at a lower rate or any deductions had been wrongly made therefrom, the Collector had the power, within the period prescribed in that section, to assess or reassess, as the case may be, the amount due from such dealer, after serying upon the dealer a notice as mentioned in the said section. The relevant provisions with respect to notice as contained in sub-section (1) of the said section 15 are, “The Collector may, ………serve on the dealer liable to pay the tax in respect of such turnover a notice containing all or any of the requirements which may be included in a notice under sub-section (3) of section 14 and may proceed to assess or reassess the amount of the tax due from such dealer”. sub-section (3) of section 14, referred to in the said section 15(1), related to the issue of a notice in regular assessment proceedings requiring the presence of a dealer who has furnished his returns or requiring such dealer to produce his evidence. Section 45(1) of the 1953 Act conferred upon the State Government the power to make rules for carrying out the purposes of the said act. sub-section (2) of that section set out certain particular matters which the rules might provide for. Clause (z) of the said sub-section (2) was as follows:

“the manner in which, and the time within which, the applications shall be made, information furnished and notices served, under this Act.”

6. In pursuance of the power conferred by the said section 45(1) the State Government inter alia made the Bombay Sales Tax (Procedure) Rules, 1954. Rule 2 of the said Rules is the interpretation clause and defines certain terms used in the said Rules. The relevant portion of the said rule 2 was as follows:

“2. Definitions.—In these rules, unless there is anything repugnant in the subject or context—

(i) ‘agent’ means a person authorised in writing under clause (a) or (c) of section 43 to appear on behalf of a dealer or other person before any sales tax authority”.

7. Rule 46 of the said Rules provided that an authorisation given to an agent was to continue to be valid for the purpose of appearance in an appeal against, or application for revision of, any order passed in the proceeding in respect of which such authorisation was given. The proviso to that rule required a separate authorisation for appearance in proceedings relating to each separate period for which an order of assessment was to be made or had been made under section 14 of the 1953 Act. Chapter XI of the said Rules deals with service of notices. That chapter contained only one rule, namely, rule 47. The material provisions of rule 47 were as follows:

“47. Notices.—(1) Notices under the Act or any rules made thereunder maybe served by any of the following methods:—

(i) by delivery to the addressee or his agent, by hand of a copy of the notice;

(ii) by post:

Provided that if upon an attempt having been made to serve any such notice by any of the abovementioned methods, the sales tax authority concerned is satisfied that the addressee is evading the service of notice or that for any other reason, the notice cannot be served by any of the abovementioned methods, the said authority shall cause such notice to be served by affixing a copy thereof—

(a) if the addressee is a dealer on some conspicuous part of the dealer's office or the building in which the dealer's office is located, or upon some conspicuous part of any place of the dealer's business last notified by the dealer, and

(b) if the addressee is not a dealer, on some conspicuous part of his residence or office or the building in which his residence or office is located, and such service shall be as effectual as if it had been made on the addressee personally.”

8. Sub-rule (2) of the said rule 47 dealt with the formalities to be observed by the serving officer, sub-rule (3) with the mode of service by post and sub-rule (4) with the return of service to the officer who directed such service and the course to be adopted by that officer thereupon.

9. Relying upon the aforesaid provisions, Mr. Patel, the learned counsel for the applicants, submitted that under section 15 of the 1953 Act the notice could only be served upon the dealer personally and that assuming it could be served upon an agent, by reason of the provisions of the said rule 47(1) that agent could only be an agent as defined by the said rule 2(i). Mr. Patel further submitted that, in the present case, the notice was not served upon the applicants, which would be either by sending the notice to them by registered post with acknowledgment due as required by the said rule 47 or by service personally upon a partner of the applicant-firm, but was served upon the manager of the applicants who was not authorised in writing as required by the said rule 2(i), and the service was, therefore, invalid and contrary to law. Mr. Patel's contention Was that the proper service of a valid notice under the said section 15 was the foundation of the jurisdiction of the Sales Tax Officer who acted under delegated authority in making the reassessment order to initiate reassessment proceedings and make an order of reassessment and that, in the present case, the service being contrary to law the Sales Tax Officer acquired no jurisdiction to initiate the said reassessment proceedings under section 15 or to reassess the applicants and that the said reassessment proceedings were invalid.

10. To these submissions of Mr. Patel, the reply of Mr. Sanghavi, the learned counsel for the respondent, was that though a defect in a notice under section 15 of the 1953 Act would make the notice invalid and would not confer jurisdiction upon the Sales Tax Officer to initiate reassessment proceedings, the same principle did not apply to bad service and that if a dealer came to learn about the issue of such notice and appeared before the Sales Tax Officer, it was not open to him thereafter to object to the invalidity of the notice. Mr. Sanghavi further submitted that if a dealer desired to challenge the validity of the service of the notice and of the reassessment proceedings initiated in pursuance thereof, he could not do so by appearing before the Sales Tax Officer, but he should content himself with appearing only before the appellate authority and contending that the service of the notice was not proper, that is to say, he should let an ex parte order of reassessment go against him and challenge it in appeal on the ground of want of proper service. Mr. Sanghavi further urged that the provisions of the said rule 47 were not exhaustive and the word “agent” as used in sub-rule (1) of that rule did not mean an agent as defined by the said rule 2(i), but meant an agent as understood in the law of agency. Lastly, Mr. Sanghavi contended that, on the facts and circumstances of this case, the applicants had knowledge of the said notice under section 15 of the 1953 Act and had appeared before the Sales Tax Officer and had not raised any objection as to the validity of the service of the said notice before the Sales Tax Officer and were, therefore, precluded from contesting the validity of the said notice or its service in appellate or revisional proceedings therefrom as also in this reference.

11. We will now examine the correctness of these rival submissions. It is now too well-settled that the service of a valid notice is the foundation of the jurisdiction to reassess an assessee. We ourselves had occasion to consider this question in Commissioner Of Sales Tax v. Paramount Industrial Stores [1976] 38 S.T.C 555.. In that case we pointed out that section 34 of the old Indian Income-tax Act, 1922, was in pari materia with section 15 of the 1953 Act and that section 22(2) of the said Indian Income-tax Act was in pari materia with section 14(3) of the 1953 Act. After holding on the facts that the notice in that case was defective and after referring to the various cases under section 34 of the Indian Income-tax Act, 1922, we held that a defect in a notice under the said section 15 would invalidate the notice and confer no jurisdiction upon the Sales Tax Officer to make an order of reassessment. Mr. Sanghavi, however, has sought to draw a distinction between a defect in the notice itself and a defect in the service of the notice. We are unable to see any reason or logic for drawing the distinction urged before us by Mr. Sanghavi. We fail to see why a mistake in the contents of the notice would invalidate the notice although the assessee may subsequently come to know what the correct position was, but a defect in the service of the notice, such as serving the notice upon a wrong party or other non-compliance with the provisions of law in that behalf, would not invalidate the notice if the assessee came to learn about the issue of the notice at a later day and appeared before the reassessing authority. In M.O Thomas v. Commissioner of Income-tax, Kerala [1963] 47 I.T.R 775., a Division Bench of the Kerala High Court held that the notice prescribed by section 34 of the Indian Income-tax Act, 1922, could not be regarded as a mere procedural requirement and that if no notice were issued or if the notice issued were shown to be invalid, then the proceedings taken by the Income-tax Officer without a notice or in pursuance of such invalid notice would be illegal and void. The High Court further held that a notice may be invalid either because it was incorrectly issued or because it was improperly served, and the view that procedural defects would not invalidate a notice was not correct. This view has found favour with their Lordships of the Supreme Court in Commissioner of Income-tax, Kerala v. Thayaballi Mulla Jeevaji Kapasi. The relevant observations of the Supreme Court in that case are:

“Service of the notice under section 34(1)(a) within the period of limitation being a condition precedent to the exercise of jurisdiction, if the Income-tax Officer was unable to prove that the notice was duly served upon the respondent within the prescribed period, any return filed by the respondent after the expiry of the period of eight years will not invest the Income-tax Officer with authority to reassess the income of the respondent pursuant to such return.”

(The emphasis* has been supplied by us.)

12. Bearing these principles in mind, let us now consider whether the service in this case was proper and in conformity with the provisions of law. Section 15(1) of the 1953 Act requires the notice to be served upon the dealer. rule 47 of the Bombay Sales Tax (Procedure) Rules, 1954, specifies the modes of service. There are two modes mentioned in that rule, one is by personal service and the other is by post. Detailed provisions have been made in that rule for both these modes of service, and if service is to be effected by post, under sub-rule (3) of the said rule 47 it is to be effected by properly addressing, preparing and posting the notice by registered post with acknowledgment due, in which case service is deemed to be effected unless the contrary is proved. Personal service is to be effected by delivering a copy of the notice to the addressee or his agent. Further, detailed provisions have been made for service of the notice by affixing it on some conspicuous part of the dealer's office or the building in which such office is situate or upon some conspicuous part of any place of his business last notified by him in a case where the concerned sales tax authority is satisfied that the assessee was evading service of the notice or for any other reason the notice could not be served by either of the above methods. The question before us is whether in the case of personal service the word “agent” in rule 47(1) bears the same meaning as given to that word by rule 2(i) or whether that word is used in rule 47(1) in the general sense which that word bears in the law of agency. In considering this question it must be borne in mind that under section 15(1) service is required to be effected upon the dealer and not upon the dealer or his agent. It is by virtue of the rule-making power conferred by section 45(2)(z) of the 1953 Act that the said rule 47 has been made. We must, therefore, so construe rule 47 as not enlarging the scope of the section, because while the section is a part of the statute, the rule is a part of the subordinate legislation, which derives its authority from the parent statute. To define “agent” as meaning a person authorised in writing under clause (a) or (c) of section 43 of the 1953 Act to appear on behalf of a dealer or other person before any sales tax authority, as clause (i) of rule 2 of the Bombay Sales Tax (Procedure) Rules, 1954, has done, is consistent with the scheme of the 1953 Act. Section 43 dealt with the question of appearance before any authority in proceedings under the 1953 Act. It provided as follows:

“43. Appearance before any authority in proceedings.—Any person, who is entitled to attend before any authority in connection with any proceedings under this Act, may attend before the authority—

(a) by a person authorised by him in this behalf being his relative or a person regularly employed by him, or

(b) by a legal practitioner, or

(c) subject to such conditions as may be prescribed, by an accountant or sales tax practitioner who possesses the prescribed qualifications.”

13. Thus, section 43 read with the said rule 2(i) required a written authority for appearance in proceedings by a relative or an employee of a dealer who had been regularly employed by him or by an accountant or a sales tax practitioner possessing the necessary qualifications. Such an authority was not required from a legal practitioner, because under the law for a legal practitioner to represent a client a written authority in the form of a vakalatnama is necessary. The requirement of a written authority in the case of a relative, an employee, a chartered accountant or a sales tax practitioner was with a view to obviate any controversy arising in the future whether such agent was in fact duly authorised to appear in a particular proceeding. In this connection, it is necessary to bear in mind that the definition of “agent” given in rule 2(i) is restrictive and not inclusive or extensive.

14. It was submitted by Mr. Sanghavi, the learned counsel for the respondent, that this would be putting too narrow an interpretation upon the relevant rules, because it would cut down the scope of service upon an agent only to those cases where proceedings had commenced and an agent as described in clause (a) or (c) of the said section 43 had appeared in the proceedings under a written authority from the dealer. It may be that the interpretation we have put above does have that effect, but that is the only interpretation which we can put upon rule 47(1) consistently with the provisions of the 1953 Act and the Rules and the language of rules 2(i) and 47(1). In this connection, we may point out that the rule-making authorities themselves realised the restrictive effect of these modes of service when the Bombay Sales Tax Act, 1959, was enacted and the Rules thereunder came to be framed; for, though in the Bombay Sales Tax Rules, 1959, the definition of “agent” as given in clause (b) of rule 2 remains in substance the same, save that it also requires a written authority for a legal practitioner, rule 68 of the said Rules, which deals with service of notice, is wholly recast so as to provide for personal service upon the addressee or upon a person declared by him to be the manager of his business or upon his agent duly authorised in that behalf by him or upon a person regularly employed by him in connection with the business in respect of which he is registered as a dealer or upon any adult member of his family residing with the dealer. It may also not be out of place to point out that section 35 of the Bombay Sales Tax Act, 1959, which deals with reassessment, as amended with retrospective effect by maharashtra act no. 32 of 1972, speaks of giving the dealer a reasonable opportunity of being heard and not of service of a notice upon the dealer.

15. Mr. Sanghavi further submitted that the interpretation we were giving to rule 47 of the Bombay Sales Tax Rules, 1953, would lead to unnecessary difficulty in service of notices and would result in evasion of such service. We are not impressed by this argument. Apart from the fact that the 1953 Act has been repealed with effect from 1st January, 1960, even under that Act if difficulty was found in serving a dealer personally, provision had been made for serving him by affixing the notice at his place of business or his last notified place of business as also by serving the notice by registered post. The simplest thing for the department in such cases would have been either to have served the notice by registered post or in case they wanted to save the expenditure of postage, to have affixed it on some conspicuous part of a dealer's place of business if satisfied that a dealer was evading service. Mr. Sanghavi next submitted that the definition of “agent” given in clause (i) of rule 2 of the Bombay Sales Tax (Procedure) Rules, 1954, was repugnant to the context of rule 47 of the said rules, because rule 47 contemplated service upon any agent and not merely upon a limited class of agents mentioned in rule 2(i) and that the definition given in the said rule 2(i) was intended to apply to the term “agent” mentioned in rule 46 of the said Rules, which we have referred to earlier and which dealt with the continuance of an authorisation to appear. We are unable to accept this submission also. The opening words of rule 2 are, “In these rules”. Thus, the definitions given in rule 2 were for the purposes of the rules wherever the terms which were defined by that rule appeared, unless there was anything repugnant in the subject or context in which such words appeared. Looking to the language of section 15 of the 1953 Act and looking to the intention both of the legislature and of the rule-making authorities, we do not see anything repugnant in either the context or subject in a provision that a service should in the first instance for initiating proceedings be effected upon a person who would be affected by such proceedings and not upon another and that once that person had authorised another to represent him, then it could be effected either upon such person or his authorised agent.

16. We will now examine Mr. Sanghavi's submission that rule 47 of the Bombay Sales Tax (Procedure) Rules, 1954, is not exhaustive of the modes of service. What Mr. Sanghavi's submission in this behalf really amounts to is not that the service could be properly effected in some mode other than the modes specified in the said rule but that service could be effected by serving the notice upon some person other than those mentioned in that rule. In support of this argument, Mr. Sanghavi relied upon the opening words of rule 47(1), namely, “Notices under the Act or any rules made thereunder may be served by any of the following methods”, and submitted that the use of the word “may” showed that it was open to the serving officer to serve the notice in some mode other than those envisaged in the rule. We are unable to accept this submission. According to us, the word “may” was not used in rule 47(1) to give an option to a serving officer either to adopt one of the modes of service specified in rule 47 or some other mode, but was used in order to give an option to a serving officer to select one out of the modes of service specified in rule 47 as he thought fit. This is made amply clear by the phrase “be served by any of the following methods”, which follows the word “may”. In support of his submission Mr. Sanghavi also relied upon a decision of the Gujarat High Court in Commissioner of Income-tax, Gujarat I, Ahmedabad v. Bhanji Kanji's Shop. In that case, the facts were that a notice under section 34(1) of the Indian Income-tax Act, 1922, was served upon a temporary agent of an assessee, who was not an authorised agent, for receipt of notices on behalf of the assessee. The assessee filed a return in pursuance of the notice, but did not raise any contention about the validity of the service of the notice, and an order of reassessment was passed. The assessee thereupon filed an appeal and, even in his petition of appeal, did not challenge the validity of the service of the notice upon him. Subsequently, however, he asked for leave to raise an objection urging that the notice was not validly served upon him, which leave was granted to him. The Gujarat High Court held that the two modes of service mentioned in section 63(1) of the Indian Income-tax Act, 1922, namely, by registered post and in the manner similar to service of writ or summons under the Code of Civil Procedure, 1908, were not exhaustive and that it was permissible to have the notice served in a way not mentioned in the said section. The Gujarat High Court further held that even if there was a procedural irregularity in the service of a notice of reassessment, if the assessee admitted that he had received the notice or from the facts it could be found that he must have received the notice even later on, the contention urged on behalf of such an assessee that the notice was improperly served must be rejected. In arriving at its conclusion that the modes of service specified in section 63 of the Indian Income-tax Act, 1922, were not exhaustive, the Gujarat High Court relied upon a decision of this High Court in Messrs. K.C Tiwari & Sons v. Commissioner Of Income-Tax, Bombay., Bombay. The Bombay case relied upon by the Gujarat High Court was a case which turned upon its own facts. In that case, notices were admitted by the dealer to have been received by him. It further appears from the judgment in that case that the dealer took sixteen adjournments but contended on the final date of hearing that the notice was not served upon him but was served upon his manager who was not authorised in writing to accept the notice. No reason is given in the judgment why the court came to the conclusion that the said section 63(1) was not exhaustive and that it was permissible to have the service of the notice effected in a mode other than the two modes mentioned in that section. In arriving at this conclusion the Bombay High Court relied upon an earlier decision of the same High Court in Ramnivas Hanumanbux Somani v. S. Venkataraman, Income-tax Officer, C-III Ward, Bombay. On a careful perusal of the judgment in Ramnivas Hanumanbux Somani's case, we do not find any observations to the effect mentioned in K.C Tiwari & Sons' case. In fact, in Ramnivas Hanumanbux Somani's case, it was held on the facts that the service of the notice was in accordance with the terms of Order V, rule 17, of the Code of Civil Procedure, 1908. In any event, we are really not concerned with the interpretation placed upon section 63(1) of the Indian Income-tax Act, 1922. The language of section 63(1) is materially different from that of rule 47 of the Bombay Sales Tax (Procedure) Rules, 1954. Section 63(1) merely referred to service by post or in the manner provided by the Code of Civil Procedure, 1908. Rule 47 itself contained not only the different modes of service of notice but also detailed procedure in respect thereof to be adopted. Further, the said section 63(1) was a part of the statute itself, namely, the Indian Income-tax Act, 1922. Rule 47 was not a part of the 1953 Act, but was a piece of delegated legislation made in pursuance of the authority conferred by the parent statute upon the rule-making authority. We have already referred to the scheme of the 1953 act and the rules in this behalf and have pointed out that the intention of both the legislature and the rule-making authority was to provide for service of a notice upon the particular person or persons affected thereby, and once proceedings had started and such a person had authorised in writing another person belonging to the class of agents specified in section 43 to represent him, upon such a person. It may also be pointed out that in arriving at its decision the attention of the Gujarat High Court was not drawn to the observations of the Supreme Court in Commissioner of Income-tax, Kerala v. Thayaballi Mulla Jeevaji Kapasi [1967] 66 I.T.R 147 S.C., which we have referred to earlier, to the effect that the foundation of jurisdiction of an Income-tax Officer to initiate reassessment proceedings and pass an order of reassessment under section 34(1) of the Indian Income-tax Act, 1922, was due service of a valid notice under that section. Further, the Gujarat High Court also failed to notice that the case of K.C Tiwari & Sons before the Bombay High Court was a case of regular assessment and not of reassessment, and failed to notice the vital difference between these two types of proceedings which is pointed out by this High Court in The Commissioner Of Income-Tax, Bombay City…Applicant; v. Messrs Ramsukh Motilal….* [1955] 27 I.T.R 54., where Chagla, C.J, speaking for the Bench, observed as follows:

“Now, there is a very important, and, in our opinion, a fundamental distinction between a notice issued under section 22(2) and a notice issued under section 34. A notice under section 22(2) is not obligatory and it is not a condition precedent to the assumption of jurisdiction by the Income-tax Officer. A public notice under section 22(1) is obligatory and without issuing any notice under section 22(2) if a return is made by an assessee pursuant to the public notice, the Income-tax Officer would have jurisdiction to assess. Nay, even if no public notice was issued and a voluntary return was made by an assessee, it cannot be disputed that the Income-tax Officer would have jurisdiction to assess. In that sense section 34 is entirely different from section 22(2). As we have already pointed out, the very scheme of that section is that the Income-tax Officer has no jurisdiction to assess under section 34 without giving the notice referred to in that section. Therefore, whereas it will be perfectly true to say, as the Federal Court said, that section 22(2) is a procedural section and the failure to give notice or a defect in a notice is a procedural defect, in the case of section 34 it is not a procedural defect but it is a failure to comply with a condition precedent to the assumption of jurisdiction.”

(The emphasis is ours.)

17. This decision was approved by the Supreme Court in Y. Narayana Chetty v. Income-tax Officer, Nellore. In that case the Supreme Court observed as follows:

“The notice prescribed by section 34 cannot be regarded as a mere procedural requirement; it is only if the said notice is served on the assessee as required that the Income-tax Officer would be justified in taking proceedings against him. If no notice is issued or if the notice issued is shown to be invalid, then the validity of the proceedings taken by the Income-tax Officer without a notice or in pursuance of an invalid notice would be illegal and void. That is the view taken by the Bombay and Calcutta High Courts in Commissioner of Income-tax v. Ramsukh Motilal and R.K Das & Co. v. Commissioner of Income-tax and we think that that view is right.”

(The emphasis has been supplied by us.)

18. Even assuming we are wrong in the interpretation we have placed upon rule 47 of the Bombay Sales Tax (Procedure) Rules, 1954, and further assuming that the word “agent” used in that rule meant an agent under the general law of agency, we must point out that no attempt whatever has been made by the department to show that the said Merchant was such an agent. Every employee in a business does not become an agent of his employer in respect of all matters pertaining to that business. Managers in different businesses and concerns have different duties to perform. In order to establish that the said Merchant had authority to accept service it must be shown that he was authorised to do so. It is admitted that the said Merchant does not hold a power of attorney from the applicant-firm. It is equally admitted on the record that there is no other writing or document under which the said Merchant had any such authority. Even if, therefore, the word “agent” meant an agent generally, it has not been shown that the said Merchant was an agent.

19. We will now deal with the last contention urged before us by Mr. Sanghavi that the assessees not having taken this point before the Sales Tax Officer and having appeared before the Sales Tax Officer and taken part in the proceedings, it was not open to them to raise this point in subsequent proceedings by way of appeal or revision or reference. Leaving aside for the time being the question whether wrong service of a notice, that is to say, the service of a notice upon a wrong person, can be waived by an assessee, we do not find it possible on the facts to hold that the applicants had waived the point of invalidity of service or had acquiesced in the service. In support of his contention that the applicants had so waived the service of the invalidity of the notice or had acquiesced in the service of the notice Mr. Sanghavi relied upon the order of the Sales Tax Officer to show that there was no objection raised by the applicants before the Sales Tax Officer with respect to the validity of service of notice. Mr. Sanghavi also relied upon the following observations in the order of the Tribunal, namely:

“As regards the other contention of Mr. Patel that the notice was not properly served, I find that there is no substance in this argument. If the notice was not properly served, it is not known why the applicant caused his books of account to be produced before the Sales Tax Officer through his manager and also sending the Advocate along with him. When the learned Advocate was before the Sales Tax Officer along with the manager Shri Merchant, in pursuance to his notice under section 15 no challenge seems to have been made by him to the notice at all. It is also admitted that the notices were issued to the applicant during his life time and as such it is too late in the appeal to contend thereafter that the notice was not properly served on him. If he was to challenge the service of the notices before the Sales Tax Officer, probably the decision would have been different. I, therefore, reject this argument also.”

20. In connection with this contention of Mr. Sanghavi we have perused the orders of the different authorities and of the Tribunal, and we are constrained to observe that we have perused each of these orders with evergrowing amazement. The order of the Sales Tax Officer is a model of what an order of reassessment should not be. It starts with mentioning the place of business, the business which the dealer was carrying on, the books which were seized, the Sales Tax Officer's opinion that these were double sets of books of account, and then it states as follows:

“Notice in form XIV under section 15 of the Bombay Sales Tax Act, 1953, bearing No. INV-738/55/B-7093 dated 9-10-57 is served on the dealer on 11-10-57 calling him to office on 30-10-57.”

(The emphasis has been supplied by us.)

21. The order then proceeds to state:

“Gross turnover of sales

The turnover of suppressed credit sales which has escaped assessment is determined as follows:

Book No. Period Sales subject to tax at 0-1-0 Sales subject to tax at 0-0-6 7(XIX) 1-4-52 to 30-4-52 Rs. 13,086-0-0 Rs. 9,157-0-0 7(XVII) 1-5-52 to 31-5-52 Rs. 14,344-0-0 Rs. 6,948-0-0 7(XXI) 1-6-52 to 30-6-52 Rs. 11,265-0-0 Rs. 5,143-0-0 7(XIV) 1-7-52 to 31-7-52 Rs. 21,139-0-0 Rs. 8,972-0-0 7(VI) 1-8-52 to 31-8-52 Rs. 15,796-0-0 Rs. 8,913-0-0 7(XV) 1-9-52 to 30-9-52 Rs. 16,642-0-0 Rs. 6,608-0-0 7(XVI) 1-10-52 to 31-10-52 Rs. 15,425-14-0 Rs. 4,491-7-0 Rs. 1,07,697-14-0 Rs. 50,232-7-0

Total suppressed credit sales Rs. 1,57,930-5-0.

The turnover of suppressed cash sales is determined at Rs. 24,500 for the period under assessment on the basis of Rs. 3,500 per month on an average on the grounds mentioned below:”

22. As we peruse this order a pertinent thing that strikes us is that no contention whatever raised by the assessees has been mentioned in this order or dealt with therein. As appears from the order of the Tribunal, the assessees had briefed an Advocate and appeared through him. Surely, the assessees had not briefed an Advocate for the purpose of acquiescing in the reopening of their assessment and for an order of reassessment to be made against them. They had briefed an Advocate to contest the reassessment proceedings. If so, the Advocate must have advanced some arguments at least before the Sales Tax Officer. None of them find place in the said order. It is none the less significant that the said Sales Tax Officer has taken the trouble of mentioning that the notice under section 15 of the 1953 Act was served on the dealer. It appears to us that he had done so because a contention was raised before him as to the validity of service of the notice. The careless manner in which this order is made can be seen from the fact that the order states that the notice was served on the dealer, implying that it was served on the dealer personally, while the admitted position is that it was served on the said Merchant. In their petition of appeal to the Assistant Commissioner of Sales Tax, the applicants took up a contention that the notice had not been validly served. That contention was dismissed by the Assistant Commissioner of Sales Tax in these words:

“The point for consideration before me is whether Shri Merchant who holds general power of attorney on behalf of the appellant (that is, the applicants) could receive notices issued in the name of the appellant. The answer to the question is that notices can be served validly on such authorised agent……”

23. We regret that a responsible officer like the Assistant Commissioner of Sales Tax should have shown such want of care in setting out facts in his appellate order, because the admitted position is that Merchant did not hold any power of attorney, much less a general power of attorney, from the applicants. This contention as to the invalidity of the notice was reiterated by the applicants in their application for revision to the Deputy Commissioner of Sales Tax, and this is how that contention was dealt with by the Deputy Commissioner of Sales Tax:

“This contention too appears to be clearly without force as Shri Merchant appears to be holding a general power of attorney from the firm and if that was so, service of notice on him would not vitiate the assessment proceedings.”

(The emphasis has been supplied by us.)

24. We are taken aback that the Deputy Commissioner of Sales Tax has not even cared to ascertain whether the said Merchant in fact held a general power of attorney from the applicants but has merely proceeded on the basis that if he held it, the service of the notice on him was proper. The reasons given by the Tribunal for rejecting this contention raised by the applicants in no way improve the situation. The Tribunal has proceeded upon suppositions and hypotheses evolved by itself. Instead of giving a categorical finding whether the applicants had challenged the validity of service of the notice before the Sales Tax Officer, it has stated that no challenge seems to have been made by them. The reasons which it has advanced in arriving at this supposition are three-fold, namely, (1) that the applicants, if they had not been properly served with the notice, would not have caused their books of account to be produced before the Sales Tax Officer and would not have appeared before the Sales Tax Officer through an Advocate, (2) that had the applicants challenged the validity of the notice, the decision of the Sales Tax Officer would possibly have been different, and (3) that the notice was served upon the applicants during their lifetime. We are unable to understand any of these reasons. If the first reason were correct, any party to a litigation who challenges the jurisdiction of a court or a tribunal and appears before the court or the tribunal to do so and, in the alternative, pleads to the merits would be taken to have submitted to the jurisdiction of such court or tribunal, and if instead of appearing in person, he were to brief a legal practitioner to raise the point of want of jurisdiction, he would equally be taken to have submitted to such jurisdiction. While giving its second reason, namely, that had these contentions been raised before the Sales Tax Officer the decision would properly have been different, the Tribunal has overlooked that even according to its own reasoning if the decision would probably have been different, it could equally probably not have been different. So far as the third reason is concerned, we are unable to fathom what the Tribunal meant by it. The applicants in this case is a partnership firm and not an individual. It is nobody's case that all the partners of the applicant-firm had died before service of the notice. If assuming that the assessee was an individual, we fail to see how the fact that a notice was served upon a wrong person during the lifetime of the assessee and not after his death could have made any difference to the position.

25. On the record we find that there is no warrant for saying that the applicants acquiesced in the service of the notice upon the said Merchant or waived the point of invalidity of the said notice. On the contrary, we find that the applicants took up this contention right from the beginning. In this connection, we may also point out that in The Commissioner Of Income-Tax, Bombay City…Applicant; v. Messrs Ramsukh Motilal….*, already referred to above, this High Court held as follows:

“it is difficult to understand how there can be a waiver of the condition precedent, compliance with which alone can confer jurisdiction upon an authority or a tribunal. It is well-settled that no consent can confer jurisdiction upon a court if the court has no jurisdiction, and if we take the view that the Income-tax Officer can have jurisdiction only provided he complies with the conditions laid down in section 34 (of the Indian Income-tax Act, 1922), then no consent by the assessee or no waiver on his part can confer jurisdiction upon the Income-tax Officer”

26. To summarise our conclusions:

(1) Under section 15(1) of the Bombay Sales Tax Act, 1953, the reassessing authority would acquire jurisdiction only if a valid notice under that section was issued and duly served upon the assessee.

(2) Not only a defect in the notice under section 15(1) but also wrong service of the notice under section 15(1) would invalidate the notice and would confer no jurisdiction upon the reassessing authority to initiate proceedings in pursuance of such notice and to pass an order of reassessment.

(3) In the case of personal service a notice must be served either upon the dealer himself or upon his agent as defined by rule 2(i) of the Bombay Sales Tax (Procedure) Rules, 1954.

(4) In the case of initiation of fresh proceedings personal service of notice can only be upon the dealer in the manner prescribed by rule 47 of the Bombay Sales Tax (Procedure) Rules, 1954.

(5) In the case of proceedings which have already started and where for the purposes of such proceedings the dealer has appointed an agent under clause (a) or (c) of section 43 of the Bombay Sales Tax Act, 1953, personal service can either be upon the dealer or his said agent.

(6) Appearing before the sales tax authorities in order to contest the service of the notice and in the alternative to plead to the merits does not amount to waiver of or acquiescence in the invalidity or invalid service of a notice.

27. Since on the facts we find that there has been no waiver and no acquiescence in the invalid service, we do not finally decide the question whether, if no objection had been raised at earlier stages to the invalidity of the service of the notice, the assessees could be said to have waived that objection.

28. So far as this particular reference is concerned, we find on the facts that the said Merchant was not an agent as contemplated by rule 47 of the Bombay Sales Tax (Procedure) Rules, 1954, that the service upon him of the said notice under section 15(1) of the Bombay Sales Tax Act, 1953, did not amount to a valid service in law and, therefore, the said Sales Tax Officer acquired no jurisdiction to initiate reassessment proceedings against the applicant-firm.

29. We accordingly answer questions Nos. (2) and (3) in the negative.

30. So far as questions Nos. (1) and (4) are concerned, in view of our answer to questions Nos. (2) and (3), we find it unnecessary to determine those questions or to give any answers to them.

31. The respondent will pay to the applicants the costs of this reference fixed at Rs. 300.

32. Reference answered accordingly.