REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1410 OF 2003

Supreme Paper Mills Ltd.            … Appellant

Versus

Asst. Commnr. Commercial Taxes  Calcutta & Ors     ... Respondents

JUDGMENT

Dr. Mukundakam Sharma, J.

1. The issue that falls for consideration in the present appeal is whether  

the show cause notice issued by the respondent is illegal and defective as the  

same did not provide for a time period of 15 days as prescribed in the statute  

and also because it did not disclose materials leading to the satisfaction of  

the  concerned  authorities  justifying  the  issuance  of  such  a  show  cause  

notice.

2. The  appellant  Company  was  carrying  on  the  business  of  

manufacturing various types of papers at its paper mill situated at Village

Raninagar Chakdah, District Nadia, Kolkata.     In the course of its carrying  

on business it filed necessary returns as required under the Bengal Finance  

(Sales Tax) Act, 1941 (for short the “1941 Act”) and also paid the taxes on  

the basis of the said return.   The Revenue also completed the assessment  

proceeding which was deemed to have been made under Section 11 E (1) of  

the 1941 Act by operation of law.   Subsequently, however, the appellant  

received a show cause notice from the Deputy Commissioner, Commercial  

Taxes, Corporate Division whereby the appellant was directed to show cause  

why deemed assessment case for the period mentioned in the said impugned  

notices would not be re-opened.  Since the validity of the aforesaid notices  

has been challenged by the appellant herein, we would extract the relevant  

contents of one of the notices which reads as follows:-

“Whereas I am satisfied that the returns filed by you  which formed the basis of the above mentioned deemed  assessment  case  exhibit  incorrect  statement  of  your   turnover/incorrect  particulars  of  sales  whereas  it   appears to me that the assessment is required to be re- opened,  you  are  hereby  directed  to  show  cause  on   29.6.99 at 11.00 a.m. why the assessment will not be   re-opened.”

3. The  other  notices  which  are  also  impugned  herein  have  similar  

contents.   In terms of the aforesaid notices, the appellants were directed to  

submit their reply to the show cause notice on 29.6.1999.  

2

4. Being aggrieved by the issuance of the aforesaid notices, the appellant  

filed an application under Section 8 of the West Bengal Taxation Tribunal  

Act,  1987 challenging the  validity  of  the  aforesaid notices  issued by the  

respondent proposing to re-open the deemed assessment for the four periods.  

The West Bengal Taxation Tribunal heard all the four cases analogously and  

by judgment dated 27.7.2001, dismissed the same.  

5. Being aggrieved and dissatisfied by the aforesaid judgment and order  

passed by the Tribunal, the appellant preferred a Writ Petition in the High  

Court of Calcutta which was entertained.    However, the High Court of  

Calcutta dismissed the writ petition by the impugned judgment and order  

dated 19.7.2002 which is under challenge in this appeal.

6. Counsel  appearing  for  the  appellant  submitted  before  us  that  the  

aforesaid  show cause  notice  is  illegal  and without  jurisdiction  as  a  time  

period of 15 days which is required to be given was not extended to the  

appellant  to  submit  its  reply  to  the  show  cause  notice.     It  was  also  

submitted  that  the  said  notices  were  invalid  due  to  non-mentioning  of  

materials leading to the satisfaction of the authority for issuance of such a  

notice.

3

7. In  support  of  the  aforesaid  contentions,  counsel  appearing  for  the  

appellant relied upon the provisions of section 11E (2) of the Act as also on  

the decision of the Calcutta High Court in  Apollo Tyres Ltd. Vs.  Deputy  

Commissioner (Commercial Taxes) and Others reported in 2001 38 Sales  

Tax Advices  4  and the decision  in  Hindustan Lever Ltd. Vs.  Director  

General (Investigation and Registration) and Anr. reported in  (2001) 2  

SCC 474.    

8. Counsel appearing for the respondent, however, refuted the aforesaid  

submission contending inter alia that what is challenged in the present case  

is only a show cause notice and that no final order is yet passed.    It was  

also submitted that the pre-condition as mentioned in the statutory provision  

is the satisfaction of the concerned Authority that the assessee had furnished  

incorrect  statements  of  his  turnover  or  incorrect  particulars  of  the  sale  

submitted under Section 10 or otherwise, and that such a satisfaction can be  

derived  on  the  basis  of  the  information  received  by  that  Authority  or  

otherwise.    

9. It was submitted that on fulfilling all the pre-conditions mentioned in  

the  statute  itself  and  if  the  Commissioner  is  satisfied  of  the  aforesaid  

situation, it is possible for him to issue such a show cause notice.   He also  

submitted that the aforesaid show cause notice cannot be said to be invalid  

4

because of paucity of time granted to the appellant.   We have considered the  

aforesaid submissions of the counsel appearing for the parties in the light of  

the records placed before us.

10. Section 11 E (2) in terms of which the aforesaid show cause notice is  

issued reads as follows:-

“Sec.  11E  (2)   -  Where  the  Commissioner  is  satisfied  on   information or otherwise that a registered dealer –

(a)  has concealed any sales or particulars thereof, or  

(b)   has  furnished  incorrect  statement  of  his  turnover  or   incorrect  particulars  of  his  sales  in  the  return  submitted   under section 10 or otherwise.

relating to an assessment made under sub-section (1) which  has resulted in reduction of the amount of tax payable by him  under  this  Act  in  respect  of  any  of  the  periods,  the   Commissioner  shall,  subject  to  such  conditions  as  may  be  prescribed, within six years from the date of such assessment,   reopen  in  the  prescribed  manner  the  assessment  for  such  period and, after giving such dealer a reasonable opportunity  of being heard, make fresh assessment under sub-section (1)   of section 11 for such period to the best of his judgement.”

11. The aforesaid provision makes it crystal clear that if on information  

received by the Commissioner or even otherwise, if he is satisfied that the  

assessee namely the registered dealer has furnished incorrect statement of  

his turnover or incorrect particulars of his sales in the return submitted or  

even otherwise, he may issue a show cause notice to show cause as to why  

5

the assessment made should not be re-opened.   It is crystal clear that the  

show  cause  notice  is  issued  with  the  purpose  of  giving  the  dealer  a  

reasonable  opportunity  of  being  heard  before  an  order  is  passed  for  re-

opening  of  the  assessment  for  the  reason  that  he  has  furnished incorrect  

statement of his turnover or incorrect particulars of his sales in his return.    

12. In  Sales  Tax  Officer,  Ganjam Vs.  M/s.  Uttareswari  Rice  Mills  

[(1973) 3 SCC 171], a similar issue as sought to be raised herein was urged  

before the Supreme Court.     In the said case, a similar notice was issued by  

the Sales Tax Officer to the dealer contending inter alia that he had a reason  

to believe that his turnover for the quarter ending 1963-64 on which sales tax  

was  payable  under  the  Orissa  Sales  Tax  Act,  1947  had  escaped  

assessment/had been under-assessed.   In that view of the matter, the dealer  

was called upon to submit his reply.    The aforesaid notice was challenged  

by filing a writ petition in the High Court of Orissa whereas the High Court  

allowed the writ petition on the ground that the Sales Tax officer did not  

indicate any reason for issuing notice under Section 12(8) of the Act.   On  

appeal being filed, this Court in that context considered sub-sections (5) and  

sub-sections (8) of Section 12.  After considering the aforesaid provisions,  

the Supreme Court in paragraph 8 held as follows:-

6

“8. Although the opening words used in Section 12(8) are   “if for any reason” and not “if the sales tax authority has  reason to believe”, the difference in phraseology, in our   opinion,  should  not  make  such  material  difference.  A  reason cannot exist in vacuum. Somebody must form the   belief  that  reason  exists  and  looking  to  the  context  in   which the words are used, we are of the view that it should   be the sales tax authority issuing the notice who should  have reason to believe that the turnover of a dealer has   escaped  assessment  or  has  been  under-assessed.  The   approach  in  this  matter  has  to  be  practical  and  not   pedantic. Any view which would make the opening words   of Section 12(8) unworkable has to be avoided. It may be   noted  in  this  context  that  in  Form  VI  appended  to  the   rules, which has been prepared in pursuance of Rule 23,   the words used are “whereas I have reason to believe that   your turnover . . . . . . . . . . . . has escaped assessment . . . .   . . . . . . . .”

13. Then again in paragraph 14, this Court further held in the following  

manner:-

“14. There is nothing in the language of Section 12(8) of   the Act which either expressly or by necessary implication   postulates the recording of reasons in the notice which is   issued to the dealer under the above provision of law. To   hold that reasons which led to the issue of the said notice   should be incorporated in the notice and that failure to do   so  would  invalidate  the  notice,  would  be  tantamount  to   reading  something  in  the  statute  which,  in  fact,  is  not   there.  We  are  consequently  unable  to  accede  to  the   contention that the notice under the above provision of law  should be quashed if the reasons which led to the issue of   the notice are not  mentioned in the notice.  At  the  same  time, we would like to make it clear that if the Sales Tax   Officer is in possession of material which he proposes to  use against the dealer in proceedings for reassessment, the  said officer must before using that material bring it to the   notice of the dealer and give him adequate opportunity to   explain and answer the case on the basis of that material.”

7

14. In our considered opinion, the ratio of the aforesaid decision of this  

Court is squarely applicable to the facts of the present case.   The expression  

used in Section 11 E of the Act is that the Commissioner must be satisfied  

on information or otherwise that the registered dealer has furnished incorrect  

statement of his turnover or furnished incorrect particulars of his sale in the  

return.   A show cause notice is issued to the dealer with the purpose of  

informing  him  that  the  department  proposes  to  re-open  the  assessment  

because the Commissioner himself is satisfied that the dealer has furnished  

incorrect statement of his turnover or incorrect particulars of his sales in the  

return submitted, so as to enable the dealer to reply to the show cause notice  

as  to  why  the  said  power  vested  on  the  Commissioner  should  not  be  

exercised.     

15. A notice  was  issued  in  order  to  provide  an  opportunity  of  natural  

justice  to  the  dealer.   There  is  nothing  in  the  language  of  the  aforesaid  

provision which either expressly or impliedly mandates the recording of any  

reasons.  The provision of the Act nowhere postulates that the reasons which  

led to the issue of the said notice should be incorporated in the notice itself,  

and that in case of failure to do so, the same would invalidate the notice.

8

16. The aforesaid provision is clear and explicit and there is no ambiguity  

in it.  If the legislature had intended to give any other meaning as suggested  

by  the  counsel  appearing  for  the  appellant  it  would  have  made  specific  

provision laying down such conditions explicitly and in clear words.  It is a  

well-settled  principle  in  law  that  the  court  cannot  add  anything  into  a  

statutory provision, which is plain and unambiguous.  Language employed  

in  a  statute  itself  determines  and  indicates  the  legislative  intent.   If  the  

language is clear and unambiguous it would not be proper for the court to  

add any words thereto and evolve some legislative intent not found in the  

statute.   

17. Here is a case where the section provides that if the Commissioner is  

satisfied  that  the  assessee  namely  the  registered  dealer  has  furnished  

incorrect statement of his turnover or incorrect particulars of his sales in the  

return  submitted  or  even  otherwise  and in  that  event  a  notice  would  be  

issued  as  envisaged  therein  to  the  dealer  to  show cause  as  to  why  the  

assessment made should not be re-opened.  Therefore, notice issued in the  

present  case  giving  the  dealer  an  opportunity  to  show  cause  within  a  

stipulated period does not in any manner prejudice the right of the appellant  

to file an effective reply.  It was always possible for the appellant to seek for  

further time, if according to him the time given by the authority for filing the  

9

reply was required to be extended in order to enable him to collect some  

record.  It cannot therefore be said that if detailed reasons for issuance of  

notice being absent in the show cause notice, the same was invalid and void.  

18. The aforesaid  Section 11 E (2)  nowhere  specifically  mentions  that  

factual basis of the ground of Deputy Commissioner’s satisfaction on either  

or both the points mentioned in sub-Section 2(a) or 2(b) of Section 11 of the  

Act  are  required  to  be  incorporated  in  the  notice  for  re-opening  of  the  

deemed assessment and supplied to the dealer.

19. The appellant at this stage is simply called upon to file his objection  

or show cause as to why the re-opening of the assessment should not be  

done.    Once he submits his reply to the show cause, he would also be heard  

and would also be allowed to produce his records namely books of accounts,  

only after which a decision would be taken whether the assessment already  

done should be re-opened or  not.    Even after  that,  the  appellant  would  

definitely get an opportunity of hearing in the fresh assessment proceeding.  

In that view of the matter, we are of the considered opinion that the appellant  

would not in any manner be prejudiced due to issuance of the aforesaid show  

cause  notice.  We  therefore,  dismiss  the  appeal  filed  by  the  appellant,  

10

maintain the judgment and order passed by the Tribunal and upheld by the  

High Court.

20. The appeal has no merit and is dismissed.

…………………………………J.                        [D.K. Jain]

……………..………………….J.                                         [Dr. Mukundakam Sharma]

…………………………………J.                                  [R.M. Lodha] March 25, 2010 New Delhi.

11