Kan Singh, J.:— We have before us a group of 21 writ petitions which raise common questions of law about the validity of notices issued by the Assistant Commercial Taxes Officer u/sec. 12 of the Rajasthan Sales Tax Act, 1954 (hereinafter to be referred to as the Act), against the several petitioners who were all dealers registered under the Act and had been assessed to sales tax prior to the issuing of these notices. The writ petitions can conveniently be disposed of together.

2. The writ petitions however fall under two categories. Writ petition No. 145 of 1965 is by National Clinic which is a firm consisting of two doctors who supply loose medicines to their patients and also take skiagram at the X-Ray plant which they maintain. The notice issued to them states that the whole or part of Page: 258their business escaped assessment and has been assessed at too low a rate for the reason that in their returns they had only shown the sales of X-Ray films but had not included their own charges for taking the photographs. In consequence, it was mentioned in the notice that the charges of taking X-Ray photos were to be brought to tax. The other petitioners are all dealers of Pali who carry on business in ivory, ivory articles and bangles. Their case is that for the years 1956–1957, 1957–1958, and 1958–1959 they had filed their returns and had shown their total turn-over of business therein……… They claimed exemption in respect of sale of bangles made of lac, Topali (coconut), Xylonite or cateline tubes to which they were entitled by virtue of their exemption certificates. The Sales Tax Officer assessed them to tax as per their returns. By the impugned notices under Section 12 of the Act the Commercial Taxes Officer, Pali seeks to re-assess them on the ground that the sales of bangles claimed as exempted were not of the materials as were covered by the exemption certificate. In the circumstances the Commercial Taxes Officer thought that the sale of the articles which were taxable had escaped the levy of tax. Learned counsel for the petitioners Shri C.N Lodha has contended that the Commercial Taxes Officer had no jurisdiction to issue the impugned notices as all the material facts were placed before the taxation authority and he having taxed them could not re-open those assessments in exercise of his powers under Section 12 of the Act, merely because he has come to hold a different opinion. Learned counsel maintains that a mere change of opinion by the officer cannot clothe him with the power to re open the assessment once made. As the fate of the cases turns on a proper interpretation of Section 12 of the Act and the language of the notices of re-assessment we will re-produce them below:

“12. Assessment of tax and levy of exemption fee or registration fees incorrectly assessed—If for any reason the whole or any part of the business of a dealer has escaped assessment to the tax, or if the registration fee or exemption fee has escaped levy or has been assessed at too low a rate in any year the assessing authority at any time within a period of eight years next succeeding that to which the tax or the registration fee or the exemption fee relates, or, if such assessment has been a subject matter of proceedings in appeal or revision under this Act, within a period of eight years next succeeding the date of termination of such proceedings, may, serve on the dealer liable to pay the tax in respect of such business or such registration fee or exemption fee from a notice in the prescribed form and may proceed to assess or re-assess the amount of the tax or levy the correct amount of registration fee or exemption fee from such dealer.

Provided that if a Deputy Commissioner (inspection) or a Deputy Commissioner (Administration) has reason to believe that the whole or any part of the business of a dealer has escaped assessment to tax or has been under assessed or has been assessed at too low a rate, he may at any time subject to the time limit specified above, either direct the Assessing Authority to assess or re-assess the amount of tax or himself proceed to assess or reassess the tax.”

3. Notice in writ petition 14-5 of 1965 was in the following terms: (Annexure IV)

“FORM S.T 12-A

NOTICE UNDER SECTION 12 OF THE RAJASTHAN SALES TAX ACT, 1954

(See Rules 55-A)

National Clinic Ganganagar.

Whereas it appears to me that for the year 57/58(a) part/the whole of your business escaped assessment to tax/has been assessed at too low a rate of tax for the following reasons: (translation is ours)

“That you in the above year had shown only the sale of films but the charges for taking X-Ray photo were not included. In this way you had shown less sales tax. Consequently for the charges of taking X-Ray photos having not been taxed it is necessary to re-assess the tax.”

(b) Registration and or Exemption fee has escaped levy or has been charged less.

Therefore propose to assess/re-assess the same.

I hereby require you to appear in person or by your authorised agent on 30-3-65.date at 11 A.M/time at Ganganagar to show cause, if any, against the proposed action, and on your failure to do so, I shall proceed to assess or re-assess the amount of the tax of levy or charges the correct amount of the registration fee or exemtption fee.

4. Notice given in the case of Pali dealers were in the following identical terms—

“FORM S.T 12-A

NOTICE UNDER SECTION 12 OF THE RAJASTHAN SALES TAX ACT, 1954

(Sec. Rule 55 ‘A’)

Messrs———

Whereas it appears to me that for the year 1956–1957

(a) Part/the whole of your business escaped assessment to tax for the following reasons:—

The sales of bangles claimed as exempted on the basis of the Exemption certificate held by you for sale of bangles made of catelin tubes, Page: 259xylonite etc. were not of these materials and hence taxable but escaped levy of tax. I, there propose to reassess the same;

I hereby require you to appear in person or by your authorised agent on———at——at Pali to show cause, if any, against the proposed action; and on your failure to do so. I shall proceed to re-assess the amount of the tax.

The books of account be also produced on the above date.

5. It is common knowledge that the eternal race between the tax payer and the State has been going on ever since the State started levying tax by statutory law. Ingenuity of the tax payer is always found matched against the wits of the tax collector. In order, therefore, to ensure that legitimate taxes due to the exchequer are properly realised and are not allowed to escape the legislature had devised measures of its own from time to time. In that scheme of things, are the provisions for re-assessment in certain cases to get the escaped tax. These provisions have laid down specific conditions under which the tax officer can resort to the machinery of re-assessment. Sec. 34 in the Income Tax Act has provided the pattern for the re-assessment machinery in the Sales Tax Statutes as well. Sec. 34 of the Income Tax Act has undergone change several times. To start with, it provided that “if for any reason income, profits or gains have escaped assessment in any year the Income-tax Officer may at any time, within one year serve a notice on the person liable, to pay tax on such income and may proceed to assess and re-assess such income, profits or gains.” sec. 12 of the Sales Tax Act in its frame was akin to sec. 34 of the I.T Act when it was in the form just now described. In 1939 sec. 34 at the Income Tax Act was amended and in laying down a condition for the exercise of the power, of re-assessment it was provided that “if in consequence of definite information which has come in his possession the Income-tax officer discovers that income, profits or gains chargeable to income-tax have escaped assessment he may proceed to re-assess etc. etc.” Then it was again changed in 1948. This time it was provided that “if the Income-tax officer has reason to believe that by reason of the omission or failure on the part of an assessee the income has escaped assessment or if the Income-tax Officer has, in consequence of information in his possession, reason to believe that income, profits or gains chargeable to tax had escaped assessment for any year he may proceed to re-assess”. The history of sec. 34 discloses that it has been made at one time more stringent and then later on its rigour was somewhat softened. In doing so the legislature has always tried to harmonise the two competing considerations. On lone hand the finality of assessment was not to be lightly disturbed so that the assessees may not have to face unnecessary harassment and on the other it wanted to ensure that the exchequer should not be denied its legitimate taxes. In interpreting sec. 12 therefore we have to give due consideration to the language employed therein. Sec. 12 postulates that there should be a reason for holding that the business of a dealer has escaped assessment to tax. The existence of a reason that is required to be there shows that it should not be just a suspicion based on mere gossip or rumour as it were, as could justify a tax officer to re-open a duly completed assessment. ‘Reason’ is the justification of an act or belief (vide Chambers's Twentieth Century Dictionary Revised Edition page 919) If sec. 12 is read in the light of the Rajasthan Sales Tax Rules—Rule 55(A) and Form S.T 12 A which has already been re-produced above—it will be clear that the reason has to be recorded in the notice and further it should appear to the officer that the business has escaped assessment. The tenor of the form S.T 12-A therefore suggests that the Tax Officer should come to entertain the belief about the escapement of the business from tax as an honest and reasonable person and such belief should be based upon reasonable grounds. It is then alone that the officer can initiate action by way of re-assessment. This clearly implies that a mere change of opinion will not be enough to initiate an action because in the very nature of things that will not be a reasonable thing to do. Now, what is reasonable and what is not reasonable will depend upon the facts and circumstances of each case and it will not always be possible to put all the circumstances in a straight jacket. In Maharaj Kumar Kamal Singh v. The Commissioner of Income-tax, Bihar & Orissa (1) their Lordships were construing S. 31 of the Income tax Act as amended in 1948 where under an officer could act on the information that he might receive. Their Lordships held that this term “information” will also comprehend knowledge about a state of the law or a decision on a point of law. In construing the meaning of the term “escape” their Lordships observed that even in a case where a return has been filed but the Income-tax officer erroneously fails to Page: 260tax a part of assessable income, it is a case where the said part of the income has escaped assessment. The relevant observations were as follows:

“Judging by the dictionary meaning alone it would be difficult to confine the meaning of the word “escape” in section 34(1)(b) only to cases where no return has been submitted by the assessee. Even if the assessee has submitted a return of his income, cases may well occur where the whole of the income has not open assessed and such part of the income as has not been assessed can well be regarded as having escaped assessment. There is no justification for holding that cases of income escaping assessment must always be cases where income has not been assessed owing to inadvertence or oversight or owing to the fact that no return has been submitted. Even in a case where a return has been submitted, if the Income-tax Officer erroneously fails to tax a part of assessable income, it is a case where the said part of the income has escaped assessment.”

6. However, on the specific question whether it would be open to an Income-tax Officer to act under Sec. 34 of the Income Tax Act even if he merely changed his mind without any information from an external source and came to the conclusion that in a particular case he had erroneously allowed an assessee's income to escape assessment their Lordships declined to express any opinion in that case. This case, however, came to be considered by a Bench of this Court in Smt. Panna Devi v. The Income-tax Officer, Special Investigation Circle ‘A’, Jaipur (D.B Civil Writ Petitions Nos. 188 and others of 1964 decided on 10th February, 1965). After considering the matter the Court held that it will not be open to the Taxation officer to take action without any fresh information in his possession. In other words, a mere change of opinion of the Officer was not considered enough to justify re-opening of the assessment. Learned counsel for the assessee cited before us a number of decisions in support of the contention that a mere change of view of the Tax Officer was not sufficient to enable him to re-open the assessment. Learned counsel cited State of Madras, represented by Collector of Madras v. Louis Dreyfus and Company Ltd. (2), Kondapalli Viraraju v. State of Andhra (now Andhra Pradesh) (3), Commissioner of Sales Tax, Madhya Pradesh, Indore v. Kunte Brothers (4) and Firm Janta Hardware Stores, Raigarh v. B.S Parihar, Asstt. Sales Tax Officer, Raigarh Circle, Raigarh (5) in support of his contention that mere change of opinion on the part of the Tax officer is not enough to warrant the re-opening of assessments. In the last mentioned case it was observed that there must be a causative and rational connection between the reasons stated and the consequences of under assessment or escaped assessment. In appreciating the amendment in the statute, which was under consideration, it was observed that the proceedings under the amended section could not be initiated merely on the chance of under assessment or escaped assessment. The proceedings can be initiated only on some definite facts showing that under assessment was on account of a wrong deduction for any reason. In Calcutta Discount Co. Ltd. v. Income-tax Officer, Companies District, Calcutta (6) it was observed that though it is the duty of the assessee to truly disclose all material facts he need not disclose the inferential facts. In this case their Lordships of the Supreme Court were considering the scope of sec. 34 as it stood amended in 1948. As noticed already the frame of sec. 12 of the Sales Tax Act is akin to what Sec. 34 of the Income Tax Act was prior to 1939. Even so, their Lordships had clearly recognised that it was the duty of the assessee who wants the Court to hold that jurisdiction was lacking in the officer to establish that the Income-tax Officer had no material at all before him for believing that there had been, such non-disclosure (vide para 16 of that judgment).

7. The learned Government Advocate cited before us some cases bearing on the interpretation of sec. 34 of the Income-tax Act as it stood before 1939. They were: Madan Mohan Lal v. Commissioner of Income Tax Punjab (7), The Commissioner of Income Tax, Madras v. Shri Krishnachandra Ganapathi (8), The State of Bihar v. Maharajadhiraja Sir Kameshwar Singh Bahadur of Darbhanga (9) and Anglo Persian Oil Co. Ltd., In re Civil Reference Decided on 8th February, 1933. (10) It was held in these cases that the words “Tor any reason” occurring in sec. 34 appear to widen the interpretation and not to narrow the meaning of the word “escape”. Hence where an item of an income, though included in the return, was left un-assessed it will be deemed to have escaped the assessment within the meaning of sec. 34. However, in view of the decision of this Court in Panna Devi's case Page: 261we are not persuaded to accept the position that a mere change of opinion on the part of a Tax Officer will justify him in re-opening the assessment. As observed by us earlier, it will depend upon the facts and circumstances of each case whether there existed any reason for the Tax Officer to think that the business has escaped assessment. For ascertaining this we have to look primarily to the reasons recorded by the Officer in his notice and then see whether they have any reasonable connection with the escapement of business from the levy of tax. Let us in this light turn to the facts of the present cases. In the case from Ganganagar the reason given in the notice is that the charges for drawing the X-ray photo were not included. Now, on the face of it, taking X-ray photo is nothing but rendering a professional service and by itself does not have any element of sale in it. In the circumstances the reason recorded in the notice (annexure 4) being patently wrong we do not find that it has any rational connection with the escapement of business from Sales Tax. This notice, therefore, cannot be considered by us to be a valid notice so as to confer jurisdiction on the Officer to proceed further with the matter.

8. Turning next to the cases of Pali dealers: We have already set out the notice given to the various dealers. It does mention that the exemption certificate held by the dealers was in respect of bangles made of cateline tubes, xylonite etc. but the bangles actually sold were not of the material covered by the exemption certificate. It is the common case of both the parties that the material of which the bangles were made was styron. Learned Government Advocate submitted on the basis of the affidavit of the Commercial Taxes Officer, Pali that the petitioners represented that the bangles were made of xylonite, cateline, or ivory goods when the bangles were really made of styron. According to the reply of the respondents the material of which bangles were made namely, styron was sent for chemical examination by the National Test House, Alipore, Calcutta and the National Test House after examination of the material reported that styron did not belong to the type of plastic represented by xylonite or cateline. In countering the reply of the learned Government Advocate petitioners submitted that several dealers had made it known to the assessing authority that the bangles were of styron and were covered by the exemption certificate because cateline is only the trade name of the material. The petitioners submit on the basis of their rejoinder affidavit that the officer knew very well that the material was styron and being in full know of the facts he held that the bangles were covered by the exemption certificate. In other words, it is vehemently contested that the officer had come to know that styron was a material different from cateline only as a result of the report from the laboratory at Calcutta.

9. This is a controversy about facts. At this stage when only a notice had been given to the dealers it will be premature to examine this controversy even though it may relate to a jurisdictional fact. We have to see prima facie whether the notice could be said to be bad and whether the petitioners have been successful in showing that it is bad for want of the existence of a reason within the meaning of sec. 12 of the Act. We are satisfied that in a case of this nature such controversy should be first raised before the tax authority itself and then its decision should be sought on the point raised. We are unable to hold, at this stage, whether styron of which the articles sold were admittedly made was the same thing as catelin or xylonite within the meaning of the exemption certificate. It will be the duty of the competent authority to determine the controversy objectively as and when it is raised and then hold whether he has any justification for going ahead with the proposed re-assessment proceeding. As the matter stands we consider that these writ petitions are premature. In the light of the above discussion we hold that notice (annexure 4) in the case of National Clinic, Sri Ganganagar is bad and we consequently hereby quash it. The other writ petitions being premature are hereby dismissed.

10. All the parties are left to bear their own costs.