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Case Number

Misc. Judl. Cases Nos. 211 and 291 of 1951

Attorney(S)

Tarkeshwar Prasad (in No. 211) and R.S. Chatterji and Ramanugrah Pd. (in No. 291)
Govt. Advocate (in both)

Judges

Das, C.J
Kanhaiya Singh, J.

Acts

provisions of Sections 24, 26 and 27 of the Bihar Agricultural Income-tax Act, 1938, and Sections 33, 34 and 35 of the Indian Income-tax Act
provisions of Sections 34 and 35 of the Indian Income-tax Act. Moreover, sub-section (4) of Section 20 of the Bihar Sales Tax Act
Section 26 of the Bihar Agricultural Income-tax Act, 1938, the Bihar Board of Agricultural Income-tax
provisions of the Bihar Sales Tax Act, 1944 and not the Bihar Sales Tax Act, 1947. The Act of 1947
provisions of Bihar Agricultural Income-tax Act, 1938, and the Indian Income-tax Act
SECTION 33 INDIAN INCOME TAX ACT
provisions of Sections 26 and 27 of the Bihar Agricultural Income-tax Act,
Section 20 of the Bihar Sales Tax Act, 1944. Sub-section (4) of that section
sub-s. (6) of Section 10 and Section 20 of the Bihar Sales Tax Act, 1944.33.
provisions of sub-s. (5) of Section 10 of the Bihar Sales Tax Act, 1944,
sub-sections (2) and (3) of Section 20 of the Bihar Sales Tax Act, 1944.
sub-section (6) of Section 10 of the Bihar Sales Tax Act, 1944.10.
Sub-section (6) of Section 10 of the Bihar Sales Tax Act of 1944
provisions of Ss. 34 and 35.24. The Bihar Sales Tax Act, 1944,
provisions of the Bihar Agricultural Income-tax Act, 1938,
Section 24 of the Bihar Agricultural Income-tax Act, 1938,
sub-s. (6) of Section 10 of the Bihar Sales Tax Act, 1944.2.
sub-s. (6) of Section 10 of the Bihar Sales Tax Act, 1944,
provisions of the Bihar Sales Tax Act, 1944.32.
Bihar Agricultural Income-tax Act, 1938, S. 24
provisions in the Bihar Sales Tax Act, 1944
Section 10 of the Bihar Sales Tax Act, 1944,
sub-s. (6) of S. 10, Bihar sales Tax act, 1944,
INDIAN INCOME TAX ACT
provisions of this Act. Therefore, S. 33
Section 34(3) of the Income-tax Act.46.
Bihar Sales Tax Act, 1944. Rule 61
Bihar Sales Tax Act

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Smart Summary

Structured Summary of the Judicial Opinion (Das, C.J. and Kanhaiya Singh, J.)

Factual and Procedural Background

The opinion contains two references under the Bihar Sales Tax Act, 1944. Although the factual matrices differed, both raised the common legal question concerning the true scope and effect of the proviso to sub-section (6) of Section 10 of the Bihar Sales Tax Act, 1944.

Miscellaneous Judicial Case No. 211 of 1951 (Gajo Ram Basant Ram): Messrs Gajo Ram Basant Ram, bullion merchants of Gaya, were assessed for the quarter ending 31-12-1944 on 21-5-1945. On appeal the Deputy Commissioner set aside the assessment and remanded for further enquiry (order dated 20th or 28th December 1945). Subsequent assessments for the quarter ending 31-12-1944 (reduced on 12-12-1946) and for the quarters ending 31-3-1945, 30-6-1945 and 30-9-1945 (all dated 12-12-1946), and a further assessment for the quarter ending 31-12-1945 (dated 22-12-1947) meant the firm was assessed for five quarters. In July 1948 the Deputy Commissioner sought the Commissioner's sanction to review these orders under Rule 61(2) (because more than three months had passed). The Commissioner sanctioned review on 23-9-1948. The assessee's applications to review the Commissioner's sanction, and to the Board of Revenue and for a High Court reference, were rejected. The assessments were reviewed on 24-6-1949, resulting in a higher tax. The High Court directed the Board of Revenue to state a case on whether the Commissioner's order of 23-9-1948 contravened the proviso to Section 10(6).

Judicial Case No. 291 of 1951 (Bishwanath Dokania): The assessee (unregistered) had papers seized in a raid on 5-12-1947. An assessment under Section 10(5) for the quarter ending 31-12-1945 was made on 30-12-1947 and a further assessment for 1-1-1946 to 31-12-1947 on 24-3-1948. The Commissioner set aside the first assessment on 18-5-1948 and the second on 9-7-1948, directing fresh assessments. On 21-7-1949 the Assistant Commissioner made a consolidated fresh assessment. On 27-4-1950 the Commissioner partially modified that order; on 16-4-1951 the Board of Revenue set aside the consolidated assessment and directed separate assessments under the 1944 Act and the 1947 Act for different portions of the period. The High Court posed the question whether assessment for the period prior to 1-7-1947 was barred under the proviso to Section 10(6) of the 1944 Act.

Legal Issues Presented

“Whether in the circumstances of the case, the order of the Commissioner, dated 23-9-1948, sanctioning review of assessment on the petitioner for the five quarters commencing from 1-10-1944, and ending on 31-12-1945, is bad in law inasmuch as it contravenes the provisions of the proviso to Section 10(6) of the Bihar Sales Tax Act, 1944?” (Misc. Judicial Case No. 211 of 1951)
“Whether the assessment for the period prior to 1-7-1947 was barred under the proviso to Section 10 of the Bihar Sales Tax Act, 1944?” (Judicial Case No. 291 of 1951)

Arguments of the Parties

Assessee's Arguments

The proviso to sub-section (6) of Section 10 (which states that no order assessing the amount of tax due from a dealer in respect of any period shall be passed later than 24 months from the expiry of such period) should be read as applying also to the power of review under sub-section (4) of Section 20; in other words, the time limitation in the proviso should control review and revision.
Reliance was placed on analogous provisions and judicial decisions under the Indian Income-tax Act (pre-1939 amendments) and the Bihar Agricultural Income-tax Act, 1938—notably the way limitations in sections dealing with income escaping assessment and rectification of mistake (e.g., Ss. 26 and 27 of the Bihar Agricultural Income-tax Act; Ss. 34 and 35 of the Indian Income-tax Act) had been held to limit powers of revision or review in prior cases.
In the second case the assessee relied on the decision in Ranchhoddas Karsondas … v. The Commissioner Of Income-Tax, Bombay City (AIR 1954 Bom 543) in support of a contention concerning limitation under Section 34(3) of the Income-tax Act.

Respondent / Other Parties

The opinion does not contain a detailed account of the respondent's or the State's separate oral or written arguments; it primarily records the assessee's submissions and the Court's analysis distinguishing those submissions from existing statutory schemes and precedents.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Province of Bihar v. Khetro Mohan Kumar, AIR 1949 Pat 418	Held that under S.24 of the Bihar Agricultural Income-tax Act the Board of Agricultural Income-tax could not exercise revision to set aside an appeal order over a year after the end of the relevant financial year—i.e., revision is subject to limitation provisions (Ss.26 and 27).	The Court cited this decision to illustrate how, in the Agricultural Income-tax Act, revision was expressly made subject to other sections containing time limits; the Court distinguished it from the Sales Tax Act because S.24 expressly made revision “subject to the provisions of this Act,” a feature absent in the Sales Tax Act.
Commr. of Income-tax, Bombay Presidency and Aden v. Khemchand Ramdas, AIR 1938 PC 175	Held that Sections 34 and 35 of the Income-tax Act (dealing with income escaping assessment and rectification of mistake) were exhaustive and prescribed the only circumstances and times in which fresh assessments could be made; thus the Commissioner's power of review under S.33 was subject to Ss.34 and 35.	The Court used this precedent to show the principle that where an Act contains specific limitation provisions and makes review subject to the Act's provisions, powers of review can be limited by those provisions; the Court distinguished the Sales Tax Act because it lacks analogous, expressly applicable limitation provisions.
Commr. of Income-tax, Madras v. Abdul Kadir Maracayar & Co., AIR 1928 Mad 257	Noted that even where no specific time limitation is prescribed for revision, courts will usually treat exercise of such power as constrained to a reasonable time, to be assessed in light of the Act's other provisions.	The Court referenced this decision to show that where statutes are silent courts may read a reasonableness constraint into revision; nevertheless, the Court found this principle insufficient to override the structural and textual distinctions between the Sales Tax Act and the Income-tax/ Agricultural Income-tax Acts in the present cases.
Clav Center State Bank v. McKelvie, 19 Fed (2) 308	Expressed the general rule that the grammatical and legal scope of a proviso is usually confined to the subject-matter of the principal clause to which it is attached; provisos ordinarily refer only to the provision to which they are attached.	The Court invoked this canon of construction to support the conclusion that the proviso to S.10(6) should be confined to original orders of assessment under S.10 (the principal clause) and should not, without clear textual indication, be read as controlling distinct provisions such as S.20 dealing with review/revision.
Ranchhoddas Karsondas… Applicant; v. The Commissioner Of Income-Tax, Bombay City, AIR 1954 Bom 543	Decision dealing with limitation under Section 34(3) of the Income-tax Act (facts and principle as applied to limitation in a different statutory context).	The Court observed that the facts and principle in Ranchhoddas Karsondas were entirely different and held that the decision had no application to the present cases under the Bihar Sales Tax Act, 1944.

Court's Reasoning and Analysis

The Court's analysis proceeded in the following structured steps (as found in the opinion):

The Court first identified the precise statutory provisions: sub-s. (6) of Section 10 (including its proviso limiting original assessments to within 24 months from the expiry of the period) and sub-s. (4) of Section 20 (the power of review), together with Rule 61(2) (which requires the Commissioner's prior sanction to review an order not passed by the Commissioner if more than three months have elapsed).
The central question was whether the proviso to S.10(6) (a time limit on assessment orders) applies to and thus limits the review power conferred by S.20(4).
The Court examined the assessee's reliance on analogous provisions and decisions under the Indian Income-tax Act and the Bihar Agricultural Income-tax Act. It found key textual and structural distinctions: in those Acts (e.g., S.24 of the Bihar Agricultural Income-tax Act and S.33 of the Indian Income-tax Act), the power of revision was expressly made “subject to the provisions of this Act,” and the Acts also contained explicit limitation provisions (e.g., Ss.26 and 27; Ss.34 and 35) that curtailed revision/review.
By contrast, the Bihar Sales Tax Act, 1944 does not contain provisions analogous to Ss.26/27 or Ss.34/35, and S.20(4) limits the power of review only by reference to “such rules as may be prescribed,” not by making it expressly subject to other provisions of the Act. Hence the textual basis for importing the limitation into the review power (present in the tax Acts relied upon by the assessee) is absent from the Sales Tax Act.
The Court applied the statutory construction principle that a proviso is generally confined to the clause it qualifies; it cited Clav Center State Bank v. McKelvie to support the presumption that a proviso refers only to the provision to which it is attached unless a contrary intention is manifest.
The Court considered and rejected an expansive reading of the proviso that would make it control appellate or revisional powers under S.20. It emphasized the practical absurdity and repugnancy that would follow: if the proviso applied to appellate/revisional authorities, those authorities would be prevented from performing functions (e.g., setting aside an assessment and directing a fresh assessment) when the two-year period had already elapsed before the appellate/revisional decision—leading to internal conflict between S.10 and S.20 and thwarting the legislature's evident capacity to empower appellate action.
The Court therefore drew a distinction between an original order of assessment made under S.10 (to which the proviso applies) and a fresh order of assessment made pursuant to directions by appellate or revisional authorities under S.20 (to which the proviso does not apply). This distinction was adopted to avoid absurdity and to preserve the coherence of the Act's appellate/revisional scheme.
The Court expressly held that the principles applied in the cited Income-tax and Agricultural Income-tax cases did not govern the Sales Tax Act context because of the textual differences explained above.
Applying this construction to the facts of the two references, the Court concluded that the Commissioner's sanction to review and the subsequent fresh assessments were not barred by the proviso to S.10(6).

Holding and Implications

Holding: The Court answered both references against the assessee. It held that the proviso to sub-section (6) of Section 10 of the Bihar Sales Tax Act, 1944 is restricted in its operation to an original order of assessment under Section 10 and does not apply to a fresh order of assessment directed by appellate or revisional authorities under Section 20. (The Court therefore found that the Commissioner's order dated 23-9-1948 sanctioning review and the assessments for periods prior to 1-7-1947 were not barred by the proviso.)

Implications / Consequences:

Direct effect on the parties: Both references were decided against the assessee. The assessments and reviews made pursuant to S.20 were not invalidated by the proviso to S.10(6).
Costs: The opposite party (the revenue) was entitled to costs; the Court assessed the hearing fee at Rs. 150 in each of the two cases.
Broader precedent: The Court's decision rests on statutory construction particular to the Bihar Sales Tax Act, 1944, and on distinguishing prior Income-tax and Agricultural Income-tax authorities on the grounds of textual differences. The opinion does not assert a sweeping new rule beyond the constructed distinction (i.e., it confines the proviso's operation to original assessment orders under S.10 and declines to import it into S.20 review/revisional powers).

Answer(s) accordingly. (Kanhaiya Singh, J. agreed.)

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Messrs Gajo Ram Basant Ram And Another v. State Of Bihar Opposite Party.

Das, C.J:— These two references under the Bihar Sales Tax Act have been heard one after the other. The facts of the two cases are different, though the question which we have to answer in the two cases relates to the true scone and effect of the proviso to sub-s. (6) of Section 10 of the Bihar Sales Tax Act, 1944.

2. It will, I think, be convenient if the two cases are dealt with separately, because they have been separately argued and the facts in the two cases are different, though the question to be answered in one case is similar to the question in the other. I take up first Miscellaneous Judicial Case No. 211 of 1951. The question to be answered in this case is the following:

“Whether in the circumstances of the case, the order of the Commissioner, dated 23-9-1948, sanctioning review of assessment on the petitioner for the five quarters commencing from 1-10-1944, and ending on 31-12-1945, is bad in law inasmuch as it contravenes the provisions of the proviso to Section 10(6) of the Bihar Sales Tax Act, 1944?”

3. The facts are the following. Messrs Gajo Ram Basant Ram are bullion merchants of Gaya. On 21-5-1945, they were assessed to a certain amount of tax by the Sales Tax Officer, Gaya, for the last quarter of 1944, that is, the quarter ending on 31-12-1944. By an order dated the 20th or 28th of December, 1945, the Deputy Commissioner, on appeal, set aside the order of assessment and remanded the case for further enquiry.

4. On 12-12-1946, the Sales Tax Officer reduced the assessment to a particular amount, the amount being irrelevant for our purpose. On the same day, namely, 12-12-1946, three other assessments were made against the said firm for the quarters ending 31-3-1945, 30-6-1945 and 30-9-1945.

5. Another assessment was made on 22-12-1947, in respect of the quarter ending on 31-12-1945. All told the firm was assessed to a tax for five quarters, namely, the last quarter of 1944 and four quarters of 1945. Some time in July, 1948, the Deputy Commissioner of Commercial Taxes, Bihar, sought the sanction of the Commissioner for reviewing the aforesaid orders of assessment.

6. This was done in accordance with R. 61 of the rules made under the Bihar Sales Tax Act, 1944. Rule 61 is in these terms:

“61.(1) When the Commissioner or any other officer reviews any order under sub-s. (4) of S. 20, he shall record his reasons in writing for doing so.

(2) Save with the previous sanction of the Commissioner an order not passed by the Commissioner shall not be reviewed more than three months after the passing of the order which is sought to be reviewed.”

7. As more than three months had passed since the orders of assessment, the Deputy Commissioner of Commercial Taxes asked for the sanction of the Commissioner under R. 61(2) quoted above. The Commissioner gave his sanction on 23-9-1948. The assessee firm then filed an application for review against the order of the Commissioner sanctioning a review.

8. This application was rejected. The assessee firm then moved the Board of Revenue for quashing the order of the Commissioner dated 23-9-1948, sanctioning a review. This application was also rejected by the Board of Revenue. The assessee firm then moved the Board for a reference to the High Court. This application was also rejected. In the meantime on 24-6-1949, the assessment orders were reviewed and the assessee firm was taxed to a higher amount of tax.

9. The assessee firm then moved this Court by an application dated 16-7-1951 and on this application this Court directed the Board of Revenue to state a case with regard to the question which I have already set out at the beginning of this judgment. In short, the question is the true scope and effect of the proviso to sub-section (6) of Section 10 of the Bihar Sales Tax Act, 1944.

10. I should make it quite clear at the very outset that the question we have to answer has to be answered with reference to the provisions of the Bihar Sales Tax Act, 1944 and not the Bihar Sales Tax Act, 1947. The Act of 1947 contains different provisions, which provisions do not fall for consideration in the present case.

11. I must first read sub-s. (6) of S. 10 and the proviso appended thereto. Sub-section (6) of Section 10 of the Bihar Sales Tax Act of 1944 is in these terms:

“10.(6) Any assessment made under this section shall be without prejudice to any prosecution instituted for an offence under this Act:

Provided that no order assessing the amount of tax due from a dealer in respect of any period shall be passed later than 24 months from the expiry of such period.”

12. I may state here that S. 10 contains five other sub-sections which deal with the different modes in which assessment can be made. The section dealing with appeal, revision and review is Section 20 of the Bihar Sales Tax Act, 1944. Sub-section (4) of that section is relevant for our purpose. That sub-section is in these terms:

“20.(4) Subject to such rules as may be prescribed, any order passed under this Act or the rules made thereunder by any person appointed under S. 3 may be reviewed by the person passing it.”

13. There is a safeguard in sub-s. (5) of S. 20 which states that before any order is passed which is likely to affect any person adversely, such person shall be given a reasonable opportunity of being heard.

14. Now the question before us is if the period of limitation mentioned in the proviso to sub-s. (6) of S. 10 applies to and controls the power of review given by sub-s. (4) of S. 20. The argument of learned Counsel for the assessee is that the limitation mentioned in the proviso to sub-s. (6) of S. 10 should be read in sub-s. (4) of S. 20 as well; in other words, the limitation prescribed by the said proviso also controls the power of review given by sub-s. (4) of S. 20.

15. In support of his contention learned Counsel for the assessee has placed reliance on certain provisions of the Indian Income-tax Act (before the amendments of 1939) and the provisions of the Bihar Agricultural Income-tax Act, 1938, and on certain decisions relating to those provisions. In Bihar Agricultural Income-tax Act, 1938, S. 24 deals with the power of revision. Sub-section (2) of that section says ‘inter alia’ that on receipt of the record, the superior authority may make such enquiry, or cause such enquiry to be made, and subject to the provisions of the Act, may pass such orders thereon as he thinks fit.

16. Sections 26 and 27 deal with income escaping assessment and rectification of mistake. In both these sections there is a limitation. The limitation in S. 26 Is one year of the end of the financial year in which the agricultural income has escaped assessment. The limitation in S. 27 is one year from the date of the order on appeal or revision or one year from the date of any demand made upon an assessee.

17. In — ‘Province of Bihar v. Khetro Mohan Kumar’, AIR 1949 Pat 418 (A) it was held that in view of Section 26 of the Bihar Agricultural Income-tax Act, 1938, the Bihar Board of Agricultural Income-tax was not competent under S. 24 to set aside, over a year after the end of the financial year from which tax had been assessed, an order passed on appeal by the Commissioner reducing an assessment and to restore the original assessment.

18. It was held that the exercise of the power of revision by the Board under S. 24 was subject to the limitation provided in Sections 26 and 27. Similarly, the Indian Income-tax Act (before the amendments of 1939 and thereafter) gave the Commissioner a power of review under S. 33 of the Act. Section 33 did not provide any limitation of time. Sections 34 and 35 dealt with (1) income escaping assessment, and (2) rectification of mistake. Both those provisions contained a period of limitation of time.

19. In — ‘Commr. of Income-tax, Bombay Presidency and Aden v. Khemchand Ramdas’, AIR 1938 PC 175 (B) it was held that the provisions of Ss. 34 and 35 of the Act were exhaustive and prescribed the only circumstances in which and the only time in which fresh assessments could be made, and the power of the Commissioner under S. 33 was subject to the provisions of Ss. 34 and 35.

20. The same view was also expressed in — ‘Commr. of Income-tax, Madras v. Abdul Kadir Maracayar & Co.’, AIR 1928 Mad 257 (C), where it was pointed out that even though no limitation of time was prescribed for interference by way of revision under S. 33, the Court would almost always incline in favour of taking the view that such exercise of power should be within a reasonable time of the proceedings sought, to be revised, reasonable time being computed by the Court having regard to all the other provisions of the Act.

21. Learned Counsel for the assessee has submitted before us that the same principle should govern the present case and the limitation of time laid down in the proviso to sub-s. (6) of S. 10 should apply to the power of review given under sub-s. (4) of S. 20.

22. In my opinion this argument fails to take note of several important distinctions which exist between the provisions of Bihar Agricultural Income-tax Act, 1938, and the Indian Income-tax Act on the one hand and the provisions in the Bihar Sales Tax Act, 1944 on the other. First of all, Section 24 of the Bihar Agricultural Income-tax Act, 1938, says in clear terms that the power of revision given by sub-s. (2) of that section is “subject to the provisions of this Act”. Therefore in express terms S. 24 is made subject to the provisions of Ss. 26 and 27.

23. The position is the same with regard to the Indian Income-tax Act. Sub-section (2) of Section 33 of the Indian Income-tax Act (before the amendments of 1939 and thereafter) stated in express terms that the power of review given to the Commissioner was “subject to the provisions of this Act”. Therefore, S. 33 was subject to the provisions of Ss. 34 and 35.

24. The Bihar Sales Tax Act, 1944, however, contains no provisions similar to the provisions of Sections 26 and 27 of the Bihar Agricultural Income-tax Act, 1938; nor does it contain provisions similar to the provisions of Sections 34 and 35 of the Indian Income-tax Act. Moreover, sub-section (4) of Section 20 of the Bihar Sales Tax Act states that the power of review is “subject to such rules as may be prescribed”.

25. The power is not subject to the “other provisions of the Act” so as to attract the operation of the proviso to sub-s. (6) of S. 10. Then there is another very important distinction. The general rule is that the operation of a proviso should be confined to that clause or portion of the statute which directly precedes it. The position ha; been thus explained in — ‘Clav Center State Bank v. McKelvie’, 19 Fed (2) 308 (D). (I am quoting from Crawford on the Construction of Statutes (1940 Edn.) p. 606):

“Its grammatical and legal scope is confined to the subject-matter of the principal clause……While it is sometimes used to introduce independent legislation, the presumption is that it is used in accordance with its primary purpose and refers only to the provision to which it is attached.”

26. It is true that the aforesaid general rule is not always applicable, and all the provisions of the statute must be construed in such a way as to avoid any repugnancy or absurdity. I agree that he placing of the proviso to sub-s. (6) of Section 10 of the ??? Sales Tax Act, 1944, is somewhat unhappy, take it that the proviso relates to an original order of assessment made under S. 10. In other ???, the proviso in its true meaning and effect ??? down that no original order assessing the mount of tax due from a dealer in respect of by period shall be passed later than 24 months ??? the expiry of such period.

27. I do not agree, however, that the proviso could be read as controlling all the other plosions of the statute. Take, for example, S. 20, under sub-s. (2) of S. 20, the appellate ??? in disposing of an appeal may confirm, ??? enhance or annul the assessment or penalty, ??? any, or both, or the appellate authority may ??? aside the assessment or penalty, if any, or ??? and direct the assessing authority to pass fresh order after such further enquiry as may ??? directed.

28. Now, it may so happen that by the time the appellate authority passes its order the period mentioned in the proviso to sub-s. (6) of S. 10 ??? already over. In the second case to which I ??? presently refer, that is what actually ???. If the proviso to sub-s. (6) of S. 10 ??? the provisions of S. 20, then the appellate authority would not be competent to pass any der in respect of an assessment except perhaps ???, reducing, enhancing or annulling the assessment, when the period of two years had sassed from the expiry of the period of assess-lent. In other words, there will be a conflict or ??? between the two provisions.

29. The proviso to sub-s. (6) of S. 10 will render ??? the powers given to the appellate ??? under cl. (b) of sub-s. (2) of S. 20. I do not ??? that this could have been the intention of ??? Legislature. Such a construction will result an absurdity; and after the period mentioned the proviso to sub-s. (6) of S. 10 is over, it could not be possible for the appellate authority ??? revisional authority to pass the orders which under S. 20 it would be competent to pass.

30. I think that a distinction must be drawn between an original order of assessment under S. 10, which is subject to the proviso to sub-s. (6) of that section, and a fresh order of assessment ??? by an appellate or revisional authority is mentioned in sub-sections (2) and (3) of Section 20 of the Bihar Sales Tax Act, 1944. I am aware that the only section dealing with assessment of tax is Section 10 of the Bihar Sales Tax Act, 1944, and a fresh order of assessment will also proceed on the principles laid down in S. 10.

31. That does not, however, mean that a distinction between an original order of assessment under S. 10 and a fresh order of assessment directed by the appellate or revisional authority cannot be made. In my opinion, such a distinction an and ought to be made in order to avoid absurdity and repugnancy between the different provisions of the Bihar Sales Tax Act, 1944.

32. For these reasons. I do not think that the principle laid down with regard to the provisions of Sections 24, 26 and 27 of the Bihar Agricultural Income-tax Act, 1938, and Sections 33, 34 and 35 of the Indian Income-tax Act can be applied with regard to the provisions contained the proviso to sub-s. (6) of Section 10 and Section 20 of the Bihar Sales Tax Act, 1944.

33. I would accordingly answer the question in Miscellaneous Judicial Case No. 211 of 1951 against the assessee. My answer is that the order of the Commissioner dated 23-9-1943 ??? review of assessment on the petitioner for the five quarters in question does not contravene the provisions of the proviso to sub-s. (6) of S. 10, Bihar Sales Tax Act, 1944, that proviso being restricted in its operation to an original order of assessment made under S. 10 of the said Act.

34. I now proceed to a consideration of the second case, namely Judicial Case No. 291 of 1951. The facts are the following. The assessee is one Bishwanath Dokania. He was not registered as a dealer. As a result of a raid certain papers of the dealer were seized on 5-12-1947. On 30-12-1947, an assessment was made under the provisions of sub-s. (5) of Section 10 of the Bihar Sales Tax Act, 1944, and a penalty was also imposed.

35. The assessment was for the quarter ending on 31-12-1945. On 24-3-1948, a second assessment-was made for the period commencing on 1-1-1946, and ending on 31-12-1947. On 18-5-1948, the Commissioner set aside the first assessment on an appeal preferred by the assessee.

36. The Commissioner remanded the case on the ground that the dealer had not been given a full opportunity to rebut the facts and circumstances appearing against him as a result of the raid and on the basis of which the assessment order was passed. On 9-7-1948, the Commissioner set aside the second assessment also and directed a fresh assessment.

37. On 21-7-1949, the Assistant Commissioner dealt with the two assessments together and assessed the assessee to a certain amount of tax plus a penalty as well. It is worthy of note that on the date, 21-7-1949, on which the Assistant Commissioner made the fresh assessment, the period of two years mentioned in the proviso to sub-s. (6) of Section 10 of the Bihar Sales Tax Act, 1944, had already expired with regard to the period covered by the first assessment and part of the period of the second assessment.

38. On 27-4-1950, the Commissioner partially modified the order of the Assistant Commissioner. He did not interfere with the order of the Sales Tax Officer in respect of the quarter from 1-10-1945 to 31-12-1945; but he reduced the assessment from 40 lakhs to Rs. 24 lakhs for the period from 1-1-1948 to 31-12-1947.

39. The assessee then moved the Board, and by its order dated 16-4-1951, the Board set aside the consolidated assessment and directed a fresh assessment separated — under the 1944 Act for the period up to 30-6-1947, and under the 1947 Act for the rest of the period. The assessee then moved the Board for a reference to the High Court. The Board refused to make a reference. The assessee then moved this Court and the Board was directed to state a case on the following question:

“Whether the assessment for the period prior to 1-7-1947 was barred under the proviso to Section 10 of the Bihar Sales Tax Act, 1944?”

40. This is the Question which falls for decision in the second case. I have already stated earlier in my judgment that in my view the proviso to sub-s. (6) of S. 10 is restricted in its operation to an original order of assessment made under Section 10 of the Bihar Sales Tax Act, 1944. This second case furnishes an example of the absurdity which may result if the view canvassed for by learned counsel for the assessee is ??? that the period of limitation laid down in the proviso to sub-s. (6) of S. 10 also appeals to the appellate to or revisional authority when that authority is ??? with an appeal or revision.

41. In this second case the appellant authority set aside the filet assessment on 18-5-1948 This the appellate authority did at the instance of the assessee himself. On 18-5-1948, the period of two years laid down by the proviso to sub-s. (6) of S. 10 had already expired with regard to the first period, the period from 1-10-1945 to 31-12-1945.

42. If the view canvassed for by learned Counsel for the assessee is correct, then on the 18-5-1948, it was not open to the Commissioner to set aside the first assessment and direct a fresh assessment; in other words, it was not open to the Commissioner to do what he was authorised to do under S. 20 of the Act. On 21-7-1949, also, when the Assistant Commissioner consolidated both the assessments, the period of two years had already passed with regard to the period prior to 1-7-1947.

43. Therefore, on 27-4-1950, the Commissioner had no authority, on the argument of learned Counsel for the assessee, to interfere with the assessment. Neither had the Board power to interfere with the assessment on 16-4-1951, with regard to the assessment for the period prior to 1-7-1947. In other words, having got from the Commissioner and the Board of Revenue certain orders in his favour, the assessee now seeks to make out that those orders were really without jurisdiction and that no assessment could be made for the period prior to 1-7-1947.

44. In my opinion, the whole result will be absurd in the extreme if the view of learned Counsel for the assessee is accepted. I do not wish to repeat the reasons which I have given in dealing with Miscellaneous Judicial Case No. 211 of 1951. For those very reasons, I would hold that the proviso to sub-s. (6) of S. 10 is restricted to an original order of assessment and does not apply to a fresh order of assessment directed by the appellate or the revisional authority.

45. Learned Counsel for the assessee has relied on the decision in ‘Ranchhoddas Karsondas…Applicant; v. The Commissioner Of Income-Tax, Bombay City, Bombay….*, Bombay City’, AIR 1954 Bom 543 (E). The facts of that case are entirely different and the principle laid down in that decision has no application to the facts of the present case. That was a decision with reference to the period of limitation laid down in Section 34(3) of the Income-tax Act.

46. I would accordingly answer the question formulated in this case against the assessee. My answer is that the assessment for the period prior to 1-7-1947, is not barred under the proviso to sub-s. (6) of Section 10 of the Bihar Sales Tax Act, 1944. The result, therefore, is that both the references are answered against the assessee and the opposite party are entitled to their costs. We assess the hearing fee at Rs. 150/- in each of the two cases.

Kanhaiya Singh, J.:— I agree.

D.H.Z

47. Answers accordingly.

Messrs Gajo Ram Basant Ram And Another v. State Of Bihar Opposite Party.

Structured Summary of the Judicial Opinion (Das, C.J. and Kanhaiya Singh, J.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Assessee's Arguments

Respondent / Other Parties

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Messrs Gajo Ram Basant Ram And Another v. State Of Bihar Opposite Party.

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