1980 PLP 150 (PTD)

Ss. 28 & 30 ‑ Re‑assessment ‑ Original assessment made by two Sales Tax Officers at stations L and J for two quarters each‑Notice under S. 28 issued by third Sales Tax Officer on assumption that income had "wholly escaped assessent"‑Held, ab inito void. Sh. Abdul Haque for Applicant. Muhammad Amin Bull for Respondent. MUHAMMAD FAZLE GHANI, J. ‑The original assessment in this case was made in two parts by the Sales Tax Officer, B Ward, Lyallpur, for the first two quarters ending 30th September 1954, on the 1st November 1954, and for the last two quarters ending 31st March 1955 by the Sales Tax Officer, Jhang, on 28th February 1957. On 5th January 1959, the Sales Tax Officer, Ward, Lyallpur, issued notice under section 28 of the Sales Tax Act to the assessee stating that he had reasons to believe that the taxable sales for the assessment year ending 31st March 1955, had "wholly escaped assessment". Consequent to the notice, the assessee appeared and intimated to the Sales Tax Officer that the said assessment had already been made and the sales tax had also been paid. Since no evidence was produced by the assessee a reference was made to the Sales Tax Officer, Jhang, who informed the Sales Tax Officer, Lyallpur, that the assessment for that year had not been made on the assessee firm. Acting on the information supplied by the Sales Tax Officer, Jhang, and after making further enquiry, the Sales Tax Officer, Lyallpur, completed toe assessment on 31st March 1959, determining the total liability of the assessee on the sales calculated at Rs. 20,80,

000. On appeal, before the Appellate Assistant Commissioner, the assessee produced the attested copies of the original assessment order and the Appellate Assistant Commissioner was satisfied that the assessment in respect of the relevant charge years had already been completed. He, however, observed that some sales had escaped assessment and accordingly he held that action under section 28 of the Saes Tax Act was called for in respect of sales which had escaped assessment but no such action was necessary in respect of the total sales, the assessment was set aside and ordered to be made afresh in accordance with law. On second appeal, before the Appellate Tribunal, it was contended that the Appellate Assistant Commissioner had found that only a part of the sales had escaped assessment, therefore, the notice issued by the Sales Tax Officer under section 28 was illegal as he had proceeded on the assumption that the assessee's business for the assessment year ending 31st March 1955, had "wholly escaped assessment". It was, therefore, urged that the notice was void and did not confer jurisdiction on the Sales Tax Officer to proceed against the assessee. The assessment for the charge year had been originally made on 1st November 1954 and 28th February 1957 and it was on account of ignorance of those assessments that fresh assessment were started by the Sales Tax Officer in which he tided the sales which had been already assessed. The Tribunal upheld the contention of the assessee with the observation that tine words "partially escaped assessment" also occur in the prescribed form of notice under section 28 but these were scored off by the Sales Tax Officer indicating that he wanted to reopen the whole cases and tax the entire sales. It was there fore, held that the assumption on which the Sales Tax Officer proceeded was incorrect and since the proceedings were started on an improper notice the proceedings were declared to be void ab initio. The contention of the Depart mental Representative that the striking of "partially" instead of "wholly" was a mere technical defect was not accepted by the Tribunal.

2. On an application by the Commissioner of Sales Tax, the Tribunal has referred the following question of law to this Court arising out of above‑mentioned order: ‑ "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that notice under section 28 of the Sales Tax Act was ab initio invalid and vitiated the assessment proceedings made in pursuance thereof?

3. The learned counsel appearing on behalf of the Commissioner had reported his argument which was agitated by the Departmental Representa tive before the Tribunal, that scoring off the words "partially escaped assess ment" should be considered to a mere clerical omission and the proceedings should not be held to be vitiated as a notice under section 28 of the Sales Tax Act had in fact been served upon the assessee. The contention of the learned counsel has no force because the above narration of the facts makes it clear that the Sales Tax Officer, Lyallpur, assumed jurisdiction in this case on the premises that the income of the assessee for the relevant charge year had "wholly escaped assessment" which was a wrong assump tion. The assessee had informed the Sales Tax Officer, that he had already been assessed and if the departmental papers were not forthcoming it was no fault of the assessee. The Income‑tax Officer made full investigation to find out whether the income of the assessee had been assessed for the charge year or not and in that he granted various adjournments to the assesee an also made inquiries from the Sales Tax Officer, Jhang, and having fully satisfied himself that the assessment of the firm had "wholly escaped assess ment" he completed the assessment upon the entire business of the assessee for the relevant charge year and that included the sales which had already been taxed to the sales Tax. Therefore in this case it cannot be argue that the Sales Tax Officer was dealing with a case of partially escaped assess ment and the striking off the words "partially escaped assessment" was mere technical defect. Once a final assessment had been made the Sales Tax Officer cannot go on making fresh computations and issuing fresh notices of demand. A final assessment once made cannot be reopened except in circum stances detailed in section 28 and section 30 of the Sales Tax Act and within the time limited by these sections. The provisions of these two sections are exhaustive and prescribe the circumstances, in which such assessment can be made and fresh notice of demand can be issued. The original assessment made in this case was final and the notice issued for the fresh assessment should have conformed strictly with provisions of section 28 of the Sales Tax Act, and since the Sales Tax Officer, in this case, had proceeded making fresh assessment, treating it as a case of "wholly escaped assessment", we are of the opinion that the Tribunal was right in holding that the notice issued in this case was void ab initio, and answer the reference in the affirmative. Parties shall in the circumstance bear their own costs. Question answered in the affirmative.