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PETITIONER: SUPDT.  OF TAXES, DHUBRI & ORS.

       Vs.

RESPONDENT: ONKARMAL NATHMAL TRUST ETC.  ETC.

DATE OF JUDGMENT01/05/1975

BENCH: RAY, A.N. (CJ) BENCH: RAY, A.N. (CJ) KHANNA, HANS RAJ MATHEW, KUTTYIL KURIEN BEG, M. HAMEEDULLAH CHANDRACHUD, Y.V.

CITATION:  1975 AIR 2065            1975 SCR  365  CITATOR INFO :  R          1978 SC 533  (9)  F          1990 SC 772  (30)

ACT: Assam   Taxation  (on  goods  carried  by  Road  or   Inland Waterways)  Act, 1961, sub-ss. (1) and (2) of s.  7,  sub-s. (4)  of  s.  9 and s. 11--Notice on assessee  to  be  served within  two years for filing return--Court ordering stay  of proceedings under the Act--Notice of demand for return after expiry  of  two  years  period--Notice  under  s.  7(2).  if illegal.

HEADNOTE: Consequent  upon  the declaration of the invalidity  of  the Assam  Taxation  (in  goods carried by  Road  or  on  Inland Waterways)  Act, 1954, by the Supreme Court in Atiabari  Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on  the ground that prior sanction of the President was  not taken,  the Assam Legislature passed on April 6,  1961,  the Assam  Taxation  (on  goods carried by  Road  or  on  Inland Waterways) Act, 1961.  This Act was to remain in force  with retrospective  effect  from 24 April, 1954,  upto  1  March, 1962.   The respondents challenged the validity of  the  Act before  the High Court of Assam in writ petitions  and  they applied  for  injunction  restraining  the  appellants  from taking  any  proceedings under the Act.  Interim  orders  of injunction  were  passed on various dates.   The  appellants opposed  the interim orders of injunction.  A  common  order was  passed  by  the Court on 18-9-1961  making  the  orders absolute  and  restraining the appellants  from  taking  any proceedings  under  the Act, The order  staving  proceedings continued  till  the  new  Act  was  held  ultra  vires  the Constitution by the High Court.  On August 1, 1963, he  High Court  held the new Act to be ultra vires.  On the same  day the  High Court granted certificate of fitness to appeal  to this Court. On December 13, 1963, this Court in Khyeberi Tea Co.  Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R.  975, held  the Act of 1961 to be valid.  On the strength  of  the certificate  granted by the High Court, the State  of  Assam filed an appeal in this Court on March 4, 1964.  On  October

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28,  1964, this Court granted interim stay of the  operation of the judgment of the High Court.  On January 29, 1965, the interim  stay granted by this Court was made  absolute.   On April 1, 1968, this Court accepted the appeals filed by  the State. The  first sub-section of section 7 requires every  producer and dealer to furnish returns of manufactured tea carried in tea  containers and jute carried in bales in such forms  and to  such  authority as may be prescribed.  The  second  sub- section  states that in case of any producer or dealer  who, in the opinion of the Commissioner, is liable to pay tax for any  return period’ or a part thereof, the Commissioner  may serve  within  two  years of the  expiry  of  the  aforesaid period,  a  notice in the prescribed form requiring  him  to furnish  a  return  of goods carried and  such  producer  or dealer  shall thereupon furnish the return within  the  date and  to the authority mentioned in the notice.   Sub-section (2)  of  section 9 states that if the  Commissioner  is  not satisfied that a return furnished under section 7 is correct and  complete  he shall serve on the producer  or  dealer  a notice  requiring  him,  on  the date  and  hour  and  place mentioned therein, either to attend in person or to  produce or cause to be produced any evidence on which he may rely in support  of  his return.  Sub-section (4) states that  if  a producer  or  dealer fails to make a return as  required  by section  7 or having made the return, fails to  comply  with the  terms of the notice issued under sub-section (2) of  s. 9, the Commissioner shall, by an order in writing, assess to the  best  of  his  judgment  the  producer  or  dealer  and determine  the  tax  payable by him on  the  basis  of  such assessment.   It is provided that before  making  assessment the commissioner may allow the producer or dealer such                             366 further  time  as  he thinks fit to make the  return  or  to comply with the terms of he notice issued under  sub-section (2) of section 9. It is only after the State obtained interim order from  this Court  that  notices were issued by  the  Superintendent  of Taxes  to  the respondents for filing the returns  for  the- quarters mentioned in the writ petitions.  The  respondents- assessees challenged these demand notices in the High  Court on  the ground that the notices were illegal and beyond  the jurisdiction  of  the State.  The broad  contention  of  the assessees was that the State could issue notices within  two years  from the expiry of the return period and none of  the notices  was within the time mentioned in the New  Act,  and therefore,  the  State  had no  jurisdiction  to  issue  the notices.  The State, on the other hand, contended that  from 10 August, 1961 to 1 August, 1963 there was an order of  the High  Court staying all proceedings, and, therefore, it  was not  possible  to  issue  any notice  until  the  State  was permitted by orders of this Court to commence proceedings. The  High  Court accepted the contention of  the  assessees. The  High  Court  held  that  the  notices  were  barred  by limitation  in terms of the provisions contained in s.  7(2) of  the  New Act.  Each of the challenged notices  was  much beyond  the date of expiry of two years from the  date  when return  should  have been filed.  These  appeals  have  been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i)  The  State  cannot contend that it was  impossible,  to issue  any notice within the period mentioned in s. 7(2)  of the  New  Act.   The  State  did  not  endeavor  to   obtain appropriate orders to surmount the difficulties by reason of

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the   injunction  against  taking  steps  within  the   time contemplated in S. 7(2) of the New Act.  The State is guilty of  default.  The State had remedies open to take  steps  by asking  for  modification of the order.  The  State  had  to assert the right that the State was entitled to demand taxes and  the respondent was liable to pay the same.   The  State followed  the  policy  of  inactivity.   Inactivity  is  not impossibility.  The order of injunction is not to be equated with  an act of God or an action of. the enemy of the  State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s.     7(2)  of the Act is the only method  for initiation  of valid assessment proceedings under  the  Act. The  period of two years under s. 7(2) of the New Act  is  a fetter  on the power of the authority and is not just a  bar of time.  No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has  not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required  by s. 7" occurring in s. 9 of the New Act make  it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not  the requirements  only under sub-s. (1).  Reference can be  made to  s.  11 of the New Act.  Section 11  deals  with  escaped assessment.  There is a time limit for initiating an escaped assessment  under s. 11 of the New Act.  The time  limit  is two  years  from the end of the return period.   It  is  the scheme  of  the Act that the service of  notice  within  two years of the return period is an imperative requirement  for initiation  of  assessment proceeding as  also  reassessment proceeding under the Act. [375-CD] State  of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970]  1 S.C.R. 780, discussed. (iii)     In the present case, the respondent cannot be said to have waived the provisions of the statute.  There  cannot be any waiver of a statutory requirement or provision  which goes to the jurisdiction of assessment.  The  367 origin  of  the assessment is either an  assessee  filing  a return  as  contemplated  in the Act or  an  assessee  being called  upon  to file a return as contemplated in  the  Act. The respondents challenged the Act.  The order of injunction does  not  amount to a waiver of the  statutory  provisions. The  issue  of  a notice under the  provisions  of  the  Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The  respondents were entitled to impeach the statute  under which they were made liable.  The, respondents have done  no wrong.  The respondents are not taking any advantage of  any act  of  theirs.   The  State was  entitled  to  resist  the respondents.   The State did so by contending that  the  Act was  valid, but the State took no steps during the  pendency of the litigation to take directions from the Court to serve notices  of  demand upon the respondents to keep  alive  the right of the appellants. [379 B-C] Dawson’s Bank Limited v. Nippon Menkwa Kabushiki Kaisha,  62 I.A.  100; Vellayan Chettiar v. Province of  Madras  74-I.A. 223;  Kammins  Ballrooms  Co.  Ltd.  v.  Zenith  Investments (Torquary)  Ltd./1971/A.C. 850; William Shepard,  v.  O.E.D. Barron,  194  U.S.  553-48 L. Ed. 1115 and  Re  :  Hallett’s Estate  Knatchbull  v. Hallett 13 Ch.  D. 696 at  page  727, referred to. Per- M. H. Beg J, (Concurring) The  waiver, even where both sides have agreed to waive  the

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operation of a statutory provision, cannot extend to a  case in  which the effect may be either to oust the  jurisdiction conferred  by  statute or to confer  a  jurisdiction,  which according to the statute is not there.  In other words, if a notice under s. 7(2) of the Act is a condition precedent  to the  exercise  of  jurisdiction to make  the  best  judgment assessment,  it cannot be said that the doctrine  of  waiver will  confer jurisdiction so as to enable parties  to  avoid the   effect  of  violating  a  mandatory  provision  on   a jurisdictional matter even by agreement.  On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any  period or has been under-asmssed the Commissioner must take  action within two years of the ,expiry of the return period.  It is this  part  of  the Act which win operate as a  bar  to  the jurisdiction   of  the  Commissioner  to  tax  any   escaped assessment beyond two years of the return period.  Therefore quite  apart from the question whether on the mere  language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2)  of  the  Act within the period constitutes  a  bar  to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act.  This bar, at any rate,  is  against the exercise of  jurisdiction  to  assess beyond the prescribed period. [389 E-F,392 E-G]      Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State  of  Assam  Anr. v. D. C. Chouadhuri  &Ors.  [1970]  1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i)  The respondents obtained the orders of injunction from the Court which  the Court would not have issued, had the Court  known at  the time that the Act was intra vires the powers of  the legislature  as  it  ultimately  turned out  to  be  by  the decision  of  this  Court.   The  Court  issued  orders   of injunction  on the has is of its view that  the  respondents has  a  prima  facie case; but when  ultimately  this  Court declared  that the Act was valid, justice requires that  the respondents  should not be allowed to set up the  contention that they were entitled to get the notices within the period during  which the judgment of the High Court  declaring  the Act ultra vires remained in operation.  In other words,  the respondents,   after  having  successfully   prevented   the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should  not be  heard to say that they were entitled to notices as  they themselves made it impossible for the Commissioner to  issue the  notices  within the period by obtaining the  orders  of injunction. [382 G-H] (ii) Even  assuming that the provision for issue  of  notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the 368 liability  to file the returns, the respondents  could  have waived the benefit of it and, in fact, they did waive it  by their  conduct.   That apart, the principle  of  restitution requires  that the party prejudiced by a wrong order of  the Court  should  be put in the position which he or  it  would have occupied had the wrong order not been passed. [383-H] (iii)     It  was  the orders of injunction  and  the  order declaring  the Act as ultra vires which made  it  impossible for the Commissioner to issue the notices within the  period specified in s. 7(2).The respondents were bound to file  the returns  even  though the notices were not  issued  to  them within  the period specified in s. 7(2).  The  liability  to file  the  return  was  created  by  s.  7(1)  and  as   the

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requirement of notice within the period specified in s. 7(2) could  not have been insisted upon by the  respondents,  the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan  Chettiar v. Province of Madras, A.I.R.  1947  P.C. 197;  Graham. v. Ingleby [1948] 1 Exch 651, 655-56;  Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850;  Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28  C.L.R. 305  at p. 327 and Corporation of Toronto v. Russell  [1908] A.C. 493, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 140-143 of 1973. Appeals  by special leave from the judgment and order  dated the 25th September, 1972 of the Gauhati High Court in  Civil Rule No. 441, 442.  443 and 444 of 1968.                             AND              Civil Appeals Nos. 262-275 of 1973 Appeals  by special leave from the judgment and order  dated the 28th September, 1972 of the Gauhati High Court in  Civil Rule Nos. 80, 82, 646 & 652 of 1969.                             AND                 Civil Appeal No. 687 of 1975 Appeal  by special leave from the judgment and  order  dated the  25th May, 1972 of the Gauhati High Court in Civil  Rule No. 49 of 1969.                          AND             Civil Appeals Nos. 1761-1762 of 1973 Appeals  by special leave from the judgment and order  dated the  22nd  March, 1973 of the Gauhati High  Court  in  Civil Rules Nos. 403 & 404 of 1969. L.   N.  Sinha, Solicitor General of India (In C. As.   Nos. 140143, 687 & 1761-62/73), Moinul Haque Choudhry (In C.  As. Nos. 262-275/73) and S. N. Choudhry, for the appellants. (In all the appeals). A.   K.  Sen,  B. Sen, Leila Seth, U. K. Khatan  and  J.  P. Bhattachajee, for respondents. 369 Sachin  Choudhary, Prashanta K. Goswani, S. R. Agarwala,  B. M.  Parekh, S. Bhandare and Manju Jaitley,  for  respondents (In  C.  As.  Nos. 1761-62/73) and Interveners  (In  C.  As. Nos. 140-143/1973). The  Judgment of A. N. Ray, C. J. and Y. V. Chandrachud,  J. was  delivered  by  Ray,  C. J., K. K.  Mathew,  J.  gave  a dissenting  opinion  on  behalf  of H.  R.  Khanna,  J.  and himself.  M. H. Beg, J. also gave a separate opinion. RAY.   C.  J.-These  appeals  by  special  leave  raise  the question  of  the validity of notices of  demand  under  the Assam  Taxation  (on  Goods carried by  Road  or  on  Inland Waterways) Act, 1961 hereinafter referred to as the New Act. The  Assam  Taxation (on good-, carried by  road  or  Inland Waterways) Act, 1954 hereinafter referred to as the Old  Act was  passed  by  the  Assam  Legislature  in  1954.   On  26 September, 1960 this (Court declared the Old Act to be ultra vires the Constitution on the ground that prior sanction  of the  President was not taken.  On 6 April, 1961 the New  Act was  passed  by  the Assam Legislature.   The  New  Act  was published in the Gazette on 15 April, 1961.  The New Act Was to remain in force with retrospective effect from 24  April, 1954 up to 1 March, 1962. On  28  July, 1961 the New Act was challenged by  about  485 assesses in the Assam High Court.  The High Court passed  an

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order   staying   all  proceedings.    The   order   staying proceedings continued till the New Act was held ultra  vires the Constitution by the High Court.  On 1 August, 1963,  the High Court held the New Act to be ultra vires.  On 1 August, 1963 the High Court granted certificate of fitness to appeal to this Court. On  13  December, 1963 on a writ application filed  by  M/s. Khyerban  Tea  Co. Ltd. this Court held the New  Act  to  be valid.   The decision of this Court is reported in (1964)  5 S.C.R.  975  Khyerbari Tea Co. Ltd. & Anr. v. The  State  of Assam. On  4 March, 1964 the State of Assam on the strength of  the certificate  granted  by the High Court filed an  appeal  in this  Court against the judgment of the High Court  dated  1 August,  1963.   On  28 October,  1964  this  Court  granted interim  stay of the operation of the judgment of  the  High Court dated 1 August, 1963.  On 29 January, 1965 the interim stay granted by this Court was made absolute subject to  the condition that the assessment proceedings in respect of  485 respondents  would continue but no levy would be  made,  and the  respondents  could initiate assessment  proceedings  in respect  of  those assesses.  On 1 April,  1968  this  Court accepted the appeals filed by the State Government. It is only after the State obtained interim order from  this Court on 29 January. 1965 that notices under section 7(2) of the  New  Act, were issued.  These  appeals  challenged  the validity of those notices. 370 A In Civil Appeals No. 140-143 of 1973 notice under  section 7(2)  of  the New Act was issued on 4 March,  1965  for  the return  of  the quarter 1 January, to 31  March,  1962.   In Civil  Appeal No. 687 of 1973 notice under section  7(2)  of the  New Act was issued on 4 March, 1965 for the  return  of the  quarter 1 January to 31 March, 1962.  In Civil  Appeals No. 262-275 of 1973 notice under section 7(2) of the New Act was issued on 2 August, 1965 for the return of the quarter 1 October,  1961 to 31 December, 1961.  In Civil  Appeals  No. 1761-1762  of 1973 notice under section 7(2) of the New  Act was  issued  on  30 February, 1965 for  the  return  of  the quarter,  1  October,  1961  to  31  December,  1961.    The respondent  assesses challenged these demand notices in  the High  Court on the ground that the notices were illegal  and beyond the jurisdiction of the State.  The broad  contention of  the  assessees was that the State  could  issue  notices within  tWO years from the expiry of the return  period  and none of the notices was within the time mentioned in the New Act, and, therefore, the State had no jurisdiction to  issue the  notices.  The State, on the other hand, contended  that from 10 August, 1961 to 1 August, 1963 there was an order of the  High Court staying all proceedings, and, therefore,  it was  not  possible to issue any notice until the  State  was permitted by orders of this Court to commence proceedings. The  High  Court accepted the contention of  the  assessees. The  High  Court  held  that  the  notices  were  barred  by limitation  in terms of the provisions contained in  section 7(2)  of  the New Act.  Each of the challenged  notices  was much  beyond the date of expiry of two years from  the  date when  return  should have been filed.  The High  Court  held that  the provisions contained in the Limitation Act do  not apply to legislation of the type of the New Act. Section  3  of the New Act is the charging  section.   Under that  section tax is levied on (a) manufactured tea and  (b) jute  in  bales  carried by means  mentioned  therein.   The period and the rate for taxes are specified in the Schedule. The  tax levied on manufactured tea shall be  realised  from

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the producer.  The tax levied on jute shall be realised from the dealer. Section  7 of the New Act speaks of return.  There are  four subsections  of  section 7. The first  sub-section  requires every producer and dealer to furnish returns of manufactured tea  carried in tea containers and jute carried in bales  in such  form and to such authority as may be prescribed.   The second  sub-section states that in case of any  producer  or dealer who, in the opinion of the Commissioner, is liable to pay  tax for any return period or a part thereof,  the  Com- missioner  may serve within two years of. the expiry of  the aforesaid period, a notice in the prescribed form  requiring him  to furnish a return of goods carried and such  producer or dealer shall thereupon furnish the return within the date and  to the authority mentioned in the notice.  The  notices in  the present appeals are issued under.  this  sub-section (2)  of  section 7 of the New Act.   The  third  sub-section states that the returns, during the first year of  operation of  the  New  Act, shall be furnished for  such  period  and within such time as may 371 be notified by the Commissioner and thereafter quarterly and within  thirty days of completion of the quarter in  respect of  which  the  returns are to be filed.   The  fourth  sub- section states that if any producer or dealer discovers  any omission  or other error in any return furnished by  him  he may  furnish a revised return at any time before  assessment is made on the original return. Section  9 of the New Act speaks of assessment.   There  are four sub-sections of section 9. Sub-section (1) states  that if the Commissioner is satisfied that a return furnished  by a  dealer  or a producer under section 7 in respect  of  any period  is  correct and complete, he shall by  an  order  in writing,  assess the producer or, dealer and  determine  the tax payable by him on the basis of such return.  Sub-section (2) states that if the Commissioner is not satisfied that  a return furnished under section 7 is correct and complete, he shall  serve  on the producer or dealer a  notice  requiring him,  on  the  date and hour and  place  mentioned  therein, either  to  attend in person or to produce or  cause  to  be produced any evidence on which he may rely in support of his return.  Sub-section (3) states that on the day mentioned in the  notice under sub-section (2) or as soon  afterwards  as may be, the Commissioner, after bearing such evidence as the producer  or dealer may produce and such other  evidence  as the Commissioner may require, shall, by an order in writing, assess the producer or dealer and determine the tax  payable by  him  on the basis of such assessment.   Sub-section  (4) states  that if a producer or dealer fails to make a  return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2)  (A  section 9, the Commissioner shall, by an  order  in writing, assess so the best of his judgment the producer  or dealer and determine the tax payable by him on the basis  of such   assessment.   It  is  provided  that  before   making assessment the Commissioner may allow the producer or dealer such further time as he thinks fit to make the return or  to comply with the terms of the notice issued under sub-section (2) of section 9. The  Rules under the New Act are framed under section 32  of the  New  Act.   Rule  No. 6 states  that  every  dealer  or producer shall furnish returns of the total gross weight  of jute  or tea carried to the Superintendent in Form  1.  Rule No. 8 states that the notice referred to in sub-section  (2) of  section 7 may be issued to dealer or producer  who  have

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failed  to submit returns within the period  mentioned  sub- section  (3) of section 7. The notices shall be in Form  11. Rule No. 9 states that every dealer or producer shall submit to the Superintendent every quarter a return so as to  reach that  officer on or before the dates therein. 30  April,  30 July,  30 October and 30 January are the dates on or  before which  the producer or dealer ,,ball submit return  for  the quarters  preceding  these dates, viz., quarters  ending  31 March, 30 June, 30 September and 31 December respectively. Form No. 1 under Rule No. 6 mentions the name of the dealer, the return period and the details of net weight carried  and amount of tax.  Form No. II under section 7(2) and Rule  No. 8 states that                             372  whereas  the  person notified carried manufactured  tea  or jute  as  the case may be, during the period ending  on  the date mentioned therein and whereas the carrier is liable  to pay tax he is required to furnish a return. The New Act received the assent of the President on 6 April, 1961. It was notified in the Gazette on 12 April, 1961.  The New Act was deemed to have had effect as from 24 April, 1964 and remained in force till 31 March, 1962.  Section 3 of the New  Act refers to the Schedule which specifies the  period. and rate of tax.  The rates vary from year to year.  In view of  the  fact  that the New Act  became  retrospective  with effect  from 1954 section 7(3) of the New Act provided  that returns  during the first year of operation of the, New  Act "shall be furnished for such period and within such time  as may be notified by the Commissioner and thereafter quarterly and  within  thirty  days of completion of  the  quarter  in respect of which the returns are to be filed".  It therefore follows  that the return for the years during which the  New Act  became  retrospective in operation was  to  furnish  in accordance  with  the  notification  to  be  issued  by  the Commissioner under section 7(3) of the New Act.  The present appeals  do not concern that aspect of the New  Act.   After the New Act came into existence returns were to be furnished by  the  producers  and dealers on 30  April,  30  July,  30 October  and  30 January for the  preceding  quarters.   The provisions contained in section 7(1) of the New Act enjoined dealers  and  producers  to furnish  returns  on   the  date mentioned  in the Rules for the appropriate  quarters.   The provisions of section 7(2) of the New Act contemplate  cases where  the  Commissioner may serve within two years  of  the expiry of the return period a notice upon producer or dealer who,  in the opinion of the Commissioner, is liable  to  tax for any return period or a part thereof. On  behalf of the State the Solicitor General  raised  three contentions.  First, that for the period 1 October, 1961  to 31  December, 1961 or for the period 1 January, 1962  to  31 March,  1962 the State could not issue any notice by  reason of  stay  of  proceedings granted by the High  Court  on  10 August,  1961.   It  was said that when  this  Court  on  28 October, 1964 granted interim stay of operation of the  High Court judgment dated 1 August, 1963 it was possible for  the State  to issue notice.  The State issued notice within  two years  from 28 October, 1964.  It was also said that if  the period  of two years be counted from 13 December, 1963  when this Court pronounced the New Act to be valid in the case of Khyerbari  Tea Co. Ltd. (supra) the notices would be  within the  period  of two years from 13 December, 1963.   It  was, emphasised  by the Solicitor General  that an act  of  Court granting stay of the proceedings should not be permitted  to act  adversely to the interest of the Sate against whom  the injunction was granted.

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The  second  contention of the Solicitor  General  was  that section   9(4)  of  the  New  Act  confers  power   on   the Commissioner  to  assess to the best of his  judgment  if  a producer or dealer fails to furnish  373 a return as required by section 7 or having made the  return fails  to comply with the terms of the notice  issued  under section  (2) of the New Act.  The notice under section  9(2) of the New Act refers to ,cases where if the Commissioner is not  satisfied with the return furnished under section 7  he serves  a  notice on the assessee to  produce  ,evidence  in support of the return.  The Solicitor General leaned heavily on  the  words 14 if a producer or dealer fails  to  make  a return  as required by section 7 and contended that  section 7(1) of the New Act required the producer or dealer to  make a return and that section 7(2) of the New Act did not itself require  the  producer or dealer to make a return  but  only clothed  the Commissioner in certain circumstances  to  call for  a return.  Therefore, the Solicitor  General  submitted that the condition precedent to the exercise of power  under section  9(4) of the New Act is a default with reference  to section  7(1) of the New Act and not the issue of  a  notice under  section 7 (2) of the New Act.  The Solicitor  General submitted  that  at  the best section 7(1) of  the  New  Act regulates the exercise of the power created by section  9(4) of  the New Act but is not the source and condition  of  the power. The  third contention of the Solicitor General was  that  by obtaining .and enjoying the benefit of an injunction for the relevant  period  expiring within the period  of  two  years prescribed  by section 7(2) of the New- Act  the  respondent must be deemed to have waived the benefit of section 7(2) of the  New Act.  This was amplified to mean that  the  interim injunctions  in  the  present  cases  were  founded  on  the postulate that the action restrained during the pendency  of the proceedings would be and could be taken if the ground of attack   ultimately   failed  on  the  conclusion   of   the proceedings.  The Solicitor General further submitted that a party  who  obtained such an injunction could not set  up  a plea  arising  solely from the injunction issued  and  ulti- mately  dissolved.   It  was said that  by  reason  of  such injunction  if  a preliminary step like a  notice  within  a particular  period became impossible, it must be  deemed  to have  been  waived just as any provision  intended  for  the protection  of the property owner may be waived by him by  a course  of conduct where it would be unjust to permit it  to be set up. The  first contention on behalf of the State that it  became impossible for the State to issue notice under section  7(2) of the New Act within two years of the expiry of the  period of return is unsound on principle and facts.  The maxim  lex non cogit ad impossibilia means that the law does not compel a  man to do that which he cannot possibly perform.  In  the present  appeals,  the applications were moved in  the  High Court  for stay of proceedings.  The respondents  challenged the  validity  of  the Act, and,  therefore,  asked  for  an injunction  restraining  the State from  taking  proceedings under the Act.  At no stage, did the State ask for variation or  modification  of, the order of injunction.  It  is  well known  that if it is brought to the notice of a  court  that proceedings are likely to be barred by time by reason of any order  of injunction or stay the court passes such  suitable or  appropriate orders as will protect the interest  of  the parties and will not prejudice                             374

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either party.  Even when certificate to appeal to this Court was granted on 1 August, 1963, the State did not ask for any order for stay of operation of the judgment.  That is  quite often  done.   For the first time, on 10  August,  1964  the State  filed  an application for stay of  operation  of  the judgment of the High Court.  The State did not take steps at the  appropriate  time.   This Court  on  28  October,  1964 granted  an interim order staying the operation of the  High Court  judgment.  The interim order was made absolute on  28 January,  1965  with certain conditions.  The  State  cannot take advantage of its own wrong and lack of diligence.   The State  cannot  contend that it was impossible to  issue  any notice  within the period mentioned in section 7(2)  of  the New  Act.  The State did not endeavor to obtain  appropriate orders  to  surmount  the  difficulties  by  reason  of  the injunction against taking steps within the time contemplated in  section  7(2) of the New Act.  The State  is  guilty  of default.   The  State  had remedies open to  take  steps  by asking  for  modification of the order.  The  State  had  to assert the right that the State was entitled to demand taxes and  the respondent was liable to pay the same.   The  State followed    the  policy of inactivity.   Inactivity  is  not impossibility.  The order of  injunction   is  not   to   be equated with an act of God or an action of   the  enemy   of the State or a general strike. The second contention of the State that the State has  power under  section 9(4) of the New Act to pass an order of  best assessment  is unmeritorious.  The provisions  contained  in section  7 of the New Act indicate these steps.  A  producer or  dealer is to furnish a return for the preceding  quarter on  30 April, 30 July, 30 October and 30 January.   Where  a producer  or  dealer  is liable to pay tax  for  any  return period  and he does not furnish a return,  the  Commissioner may,  within two years of the expiry of the period, serve  a notice  requiring him to furnish a return.   The  provisions contained in section 9(4) of the New Act with regard to best judgment  assessment apply where a producer or dealer  fails to  make a return or having made the return fads  to  comply with  the terms of the notice under section 9(2) of the  New Act.   A notice under section 9(2) of the New Act is  served where  the  Commissioner is not satisfied  with  the  return furnished  under section 7 of the New Act.  The words "if  a producer  or dealer fails to make a return as  required  by, section  7" occurring in section 9 of the New Act  apply  to failure  to  make  a return as  contemplated  by  both  sub- sections (1) and (2) of section 7 of the New Act.  To accede to  the contention of the Solicitor General that  the  words "if a producer or dealer fails to make a return as  required by  section 7" occurring in section 7 of. the New Act  apply only  to a return under sub-section (1) of section 7 of  the New Act is to read new words into the legislation.  In order to have the best judgment assessment under section 9 (4)  of the  New  Act, there must be first a failure  to  furnish  a return  under section 7(1) of the New Act or a  failure,  to furnish a return after notice under section 7(2). of the New Act.  Further, the contention of the Solicitor General means that there will never be any question of limitation of  time with regard to service of notice by the Commissioner to file a  return.   Section  7  (2) of the New  Act  is  a  section conferring power and jurisdiction on the authorities to tax 375 by  calling  upon the producer or dealer to  file  a  return within the time mentioned therein.  H a return under section 7(1) is not made, the service of a notice under section 7(2) of  the  Act  is the only method  for  initiation  of  valid

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assessment  proceedings  under the Act.  The period  of  two years  under section 7(2) of the New Act is a fetter on  the power  of the authority and is not just a bar of  time.   No assessment can be legally made under section 9(4) of the New Act  without service of a notice under section 7(2)  of  the New Act within two years in case where the assessee has  not submitted any return under section 7(1) of the New Act. The words "if a producer or dealer fails to make a return as required by section 7" occurring in section 9 of the New Act make  it clear that section 9 can come into  operation  only when  there is a failure to comply with the requirements  of section  7  and  not the requirements only  under  any  sub- section (1).  Reference may be made to section 11 of the New Act.  Section 11 deals with escaped assessment.  There is  a time  limit  for  initiating  an  escaped  assessment  under section 11 of the New Act.  The time limit is two years from the  end of the return period.  It is the scheme of the  Act that  the service of notice within two years of  the  return period  is  an  imperative  requirement  for  initiation  of assessment proceeding as also reassessment proceeding  under the Act. This  Court  in State of Assam & Anr. v. D. C.  Choudhuri  & Ors. (1970) 1 S.C.R. 780 considered the provisions of  Assam Act IX of 1939.  Sections 19 and 20 of the Assam Act of 1939 are  pari  metteria with sections 7 and 9 of  the  New  Act. Section  19(1)  of the Assam Act of  1939  required  persons whose  agricultural  income exceeded the  limit  of  taxable income prescribed to furnish within thirty days as specified in  the notice a return.  Section 19(2) of the Assam Act  of 1939  stated  that  in the case of any  person  whose  total agricultural  income is, in the opinion of the  Agricultural Income Tax Officer, of such amount as to render such  person liable  to  payment  of  agricultural  income  tax  for  any financial  year,  the Agricultural Income  Tax  Officer  may serve  in  that  financial year a notice  requiring  him  to furnish  a return.  Section 20(4) of the Assam Act  of  1939 provided that if persons failed to make a return under  sub- section  (1) or sub-section (2) of section 19 or  failed  to comply  with  terms  of a notice  under  subsection  (2)  of section  20 or to produce any evidence required  under  sub- section  (3)  of  section 20, the  Agricultural  Income  Tax Officer  shall  make  the  assessment in  the  best  of  his judgment.  Section 30 of the Assam Act of 1939 provided that if  for  any  reason the  Agricultural  income  has  escaped assessment  for any financial year the  Agricultural  Income Tax Officer may at any time within three years of the end of that financial year serve on the person liable to pay tax  a notice as fully mentioned therein and may proceed to  assess or reassess as stated in the section. In the Assam case (supra) the assesses received a notice  in 1961  to furnish returns for the years 1949-50  to  1953-54. The  assesses  did not submit any return.   Thereafter  they received a IC SC/75-25  376 It  is against principle to suggest that the appellants  did anything  wrong  or they are taking  advantage  of  anything wrong.  Jessel, M. R. :in Re.  Hallet’s.  Estate Knatchbtull v. Hallett 13 Ch.  D. 696 at page 727 said "Now, first  upon principle, nothing can be better settled’, either in our own law, or, I suppose, the law of all civilised countries, than this,  that where a man does an act which may be  rightfully performed, he cannot say that  act was intentionally and  in fact  done  wrongly".   The  respondents  were  entitled  to impeach the statute under which they were made liable.   The

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respondents  have  done no wrong.  The respondents  are  not taking  any advantage of any act of theirs.  The  State  was entitled  to  resist the respondents.  The State did  so  by contending  that  the Act was valid, but the State  took  no steps  during  the  pendency  of  the  illigation  to   take directions  from the Count to serve notices of  demand  upon the appellants to keep alive the right of the respondents. For these reasons, the contentions of the Solicitor  General fail.  The appeals are dismissed.  Parties will pay and bear their own costs. MATHEW  J. In these appeals, by special leave, the  question for  consideration  is whether the High Court of  Assam  was right  in quashing the notices issued to the respondents  on the  dates specified in each of the writ petitions filed  by the respondents. The  notices were issued-under the Assam Taxation (on  Goods Carried   by  Road  or  on  Inland  Waterways)   Act,   1961 (hereinafter called ’the Act’) passed by the legislature  of Assam  on 6-4-1961 with retrospective effect from  24-4-1954 and  published in the gazette on 15-4-1961.  The Act was  to be  operative upto 1-3-1962.  It was passed consequent  upon the declaration of the invalidity of the Assam Taxation  (on Goods Carried by Road or on Inland Waterways) Act, 1954,  by this  Court in Atiabari Tea Co. Ltd. v. The State  of  Assam and  others(1).  The respondents challenged the validity  of the Act before the High Court of Assam in writ petition  and they applied for injunction restraining the appellants  from taking  any  proceedings under the Act.  Interim  orders  of injunction  were  passed on various  dates.  The  appellants opposed  the interim orders of injunction.  A  common  order was  passed  by the Court on 18-9-1961.  Making  the  orders absolute  and  restraining the appellants  from  taking  any proceedings  under  the Act.  Thereafter, in  some  ,of  the cases  the appellants did not oppose the orders  of  interim injunction  as it would have been a futile exercise and  the interim orders in these cases were also made absolute. The  High Court allowed the writ petitions on  1-8-1963  and declared  the Act ultra vires the powers of the  legislature and granted certificates of fitness to appeal to this Court. M/s.   Khyerbari  Tea Co. Ltd. and another  approached  this Court  under  Article 32 of the Constitution praying  for  a declaration that (1)  [1961] 1 S. C. R. 809. 377 Estoppel  is  important  as a step towards  relief.  on  the hypothesis  that the defendant is estopped from denying  the truth of something which he has said. In  Dawson’s Bank Limited v. Nippon Menkwa Kabushiki  Kaisha 62  Indian Appeals 100 the distinction between estoppel  and waiver was explained by stating that estoppel is not a cause of  action, but waiver is contractual and may  constitute  a cause of action.  The reason stated there is that waiver  is an agreement to release or not to assert a right.  There  is no such thing "as estoppel by waiver". The  two decisions an which the Solicitor General relied  in support  of  the application of the principle of  waiver  in these  appeals are Vellayan Chettiar v. Province of  Madras, 74  1.  A.  223 and Kammins Ballrooms  Co.  Ltd.  v.  Zenith Investments  (Torquary)  Ltd. 1971 A.C.  850.   In  Vellayan Chettiar’s ease (supra) it was held where the Secretary  of, State  took  objection to the sufficiency  of  notice  under section  80  of the Code of Civil Procedure in  his  written statement, but raised no issue on the point when issues were settled,  and took no objection during the trial, the  Court held that another defendant was not competent to raise  this

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issue at a later stage as the Secretary of State had  waived notice.  A notice under section 80 of the Code of Civil Pro- cedure  is procedural with regard to institution of a  suit. A notice under section 80 of the Code of Civil Procedure  is not  a  part of the cause of action.  In  the  notice  under section  80  of  the Code of Civil Procedure  the  cause  of action has to be stated. In the case of Kammins Balrooms Co. (supra) the tenants made a request for a new tenancy.  The landlords stated that they would  oppose  an  application to the  court  for  such  new tenancy.  When the tenants filed an application for grant of a  new  tenancy, the landlords filed an answer but  took  no objection  to the application being  premature.   Thereafter the  landlords wrote to the tenants that they would  make  a preliminary  objection that the application  was  premature. The  County  Court  Judge held that  section  29(3)  of  the relevant Act which provided time for making the applications went  to the jurisdiction of the court and would not be  the subject of estoppel or waiver.  The Court of Appeal affirmed that decision.  The House of Lords affirmed the decision  on a different ground.  The majority view of the House of Lords was  that the requirements of section 29(3) of the Act  were only  procedural and the landlords had a right to ignore  or object to the tenant’s premature application but could waive that  right.   The  majority  view  further  held  that  the landlords  had  not waived their right to  object  that  the application  was bad.  In a statute dealing  with  landlords and   tenants,  rights  and  obligations  are  created   for landlords and tenants.  A procedural requirement imposed for the  benefit or protection of one party alone has  sometimes been  construed as subject to implied exception that it  can be waived by the party for whose benefit it is imposed.   In that context, ’waive’ means that the party has chosen not to rely  upon  the non-compliance of the other party  with  the requirement, or has disentitled himself from relying upon it either by agreeing with the other 380 the Act was ultra vires the powers of Assam Legislature  and this  Court by its judgment dated 13-12-1963 held  that  the Act was valid(1). Against  the  decision of the High Court declaring  the  Act ultra  vires, the State of Assam filed appeals  before  this Court  on  4-3-1964 and applied for stay  on  10-8-1964  and interim  stay of the order of the High Court  declaring  the Act ultra vires was granted on 28-10-1964 and the orders  of stay  were made absolute on 29-1-1965.  This  Court  allowed the  appeals filed by the appellants on  1-4-1968  declaring the Act to be valid. Notices  were issued by the Superintendent of Taxes  to  the respondents  on  various dates specified in  the  respective writ  petitions after this Court passed orders  staying  the operation  of  the order of the High Court  for  filing  the returns  for the quarters mentioned in the  writ  petitions. These  were  the notices that the  respondents  successfully challenged before the High Court. The  question which arose for consideration before the  High Court  of Assam was, whether, since no notices  were  issued within  the  time  specified  in  s.7(2)  of  the  Act,  the respondents could be called upon to file returns. Before we proceed to consider the question, it is  necessary to set out the relevant provisions of the Act. The  Act  is  an  Act to levy a  tax  on  goods  carried  by vehicles.  Section 3(1) is the charging section and it  says that  subject to the provisions of the Act, there  shall  be levied  a tax on (a) manufactured tea and (b) jute in  bales

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carried  by Motor vehicle, cart, trolley, boat,  animal  and human agency or any other means except railways and  airways in  such  manner and in respect of such period and  at  such rate as specified in the schedule.  Sub-sections (1) and (2) of s.7 read:                " (1) Every producer and dealer shall furnish               returns of manufactured  tea  carried  in  tea               containers  and  of jute carried in  bales  in               such  form  and to such authority  as  may  be               prescribed.               (2)   In  the case of any producer  or  dealer               who,  in the opinion of the  Commissioner,  is               liable  to pay tax for any return period or  a               part  thereof,  the  Commissioner  may   serve               within   two  years  of  the  expiry  of   the               aforesaid  period, a notice in the  prescribed               form  upon  him  requiring him  to  furnish  a               return  of goods carried and such producer  or               dealer  shall  thereupon  furnish  the  return               within the date and to the authority mentioned               in the notice."               Section 9(4) provides:               "If  a  producer  or dealer fuils  to  make  a               return  as required by s.7 or having made  the               return, fails to comply               (1)  See  Khyerba Tea Ltd.   & Another  v  The               State of   Assam,         [1964]               5 S.C,R, 1975.                381               with the terms of the notice issued under sub-               section (2) of this Section, the  Commissioner               shall,  by an order in writing, assess to  the               best  of his judgment the producer  or  dealer               and  determine the tax payable by him  on  the               basis of such assessment;               Provided  that  before making  assessment  the               Commissioner may allow the producer or  dealer               such further time as he thinks fit to make the               return  or  to comply with the  terms  of  the               notice  issued under sub-section (2)  of  this               section." There  is no dispute between the parties that  the  two-year period  specified in s.7(2) expired on 31-12-1963  and  that all  the  impugned notices were issued after the  expiry  of that period. The  High Court was of the view that since no  notices  were issued  to  the respondents by the Commissioner  within  the period specified in s.7(2), the respondents were not  liable to  furnish returns.  The High Court held that the issue  of notices within the period specified in the sub-section was a condition for the exercise of the power to call for returns. The learned Solicitor General appearing, for the  appellants submitted  that it was on account of orders  of  injunctions passed by the High Court that notices could not be issued to the  respondents  by the Commissioner and  that  before  the period for the issue of notice under s.7(2) expired, namely, 31-12-1963, the High Court bad declared the Act to be  ultra vires  the  powers  of  the  legislature  which   completely disabled  the Commissioner from issuing the  notices  within the period specified in the sub-section. According  to  the  Solicitor  General,  s.7(2)   postulates ability  on  the part of the Commissioner to  issue  notices during  the two-year period as required by  the  sub-section and  therefore  it  cannot  apply to a  case  where  it  was rendered  impossible  for  the  Commissioner  to  issue  the

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notices  within  that  period by an act of  the  Court.   He submitted  that  the  liability to  submit  the  return  was created by s.7(1) and that issue of notice under s.7(2)  was only  a step in the procedure for making the assessment  and therefore  if  a  dealer  failed  to  make  the  return   in accordance  with  s.7 which, of course,  would  include  the liability created by s. 7(1) to file the return, it would be open to the appropriate officer to assess the dealer to  the best of his judgment under s.9(4) and therefore, even if  no notice  under s.7(2) was issued within the two-year  period, that  would not in any way disable the officer concerned  to make  a  best-judgment-assessment under s.9(4).  He  further submitted that by obtaining and enjoying the benefit of  the orders of injunction, the respondents must be deemed to have waived  their  right to insist upon the notices  within  the period  specified in s.7(2). He contended that after  having successfully  prevented  the Commissioner from  issuing  the notices  within  the  period  by  obtaining  the  orders  of injunction, the respondents should not be heard to say  that they were entitled to notices within the period specified in s.7(2) of the Act. 382 On  the  other  hand,  it  was  argued  on  behalf  of   the respondents that issue of notice within the period specified in   s.7(2)  was  a  condition  for  the  exercise  of   the jurisdiction  to make the assessment and as no notices  were issued within the period specified in s.7(2), the  condition precedent  for  the  liability  to  file  returns  was   not fulfilled  and  there was, therefore, no liability  for  the respondents to file returns, or power in the authorities  to make  assessments.   In other words, the  argument  for  the respondents  was that s. 7(1) by itself did not  create  any liability  to submit the return within any period, that  the liability  to  submit the return could arise only  when  the Commissioner  issues the notice within the period  specified in  s.7(2)  and, since no such notices were  issued  to  the respondents  before  the expiry of two years from  the  date specified in s.7(2), the Commissioner became functus officio both  for the reason that the period of two years  specified in  s.7(2)  had  expired and also for the  reason  that  the operation of the Act came to an end and that they could not, therefore, be assessed to tax.  They also contended that  by approaching   the  High  Court  and  obtaining   orders   of injunctions,  they never waived their right to  insist  upon the   notice   within  the  period.   They   submitted,   by approaching   the   Court  and  obtaining  the   orders   of injunction,  they were exercising their rights  as  ordinary citizens  and no inference of waiver of their right  to  the notices  within  the  period specified in  s.7(2)  would  be permissible. The question for consideration is whether, the  respondents, after  having  obtained the orders of  injunction  from  the Court restraining the appellants from taking any proceedings under  the Act and thereby prevented the  Commissioner  from issuing  the  notices during the period  could,  thereafter, insist  upon the notices within that period as  a  condition for  their liability to file the returns or for  the  autho- rities   for  making  the  assessments,  and   whether   the Commissioner  could  have  issued  the  notices  before  the appeals  were preferred against the order of the High  Court declaring  the  Act as invalid and stay of  that  order  was obtained from this Court. The  respondents obtained the orders of injunction from  the Court which, the Court would not have issued, had the  Court known at the time that the Act was intra vires the-powers of

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the  legislature  as it ultimately turned out to be  by  the decision  of  this Court.  The Court issued  the  orders  of injunction on the basis of its view that the respondents had a prima facie case; but when ultimately this Court  declared that  the  Act  was valid, justice requires  that  the  res- pondents should not be allowed to set up the contention that they  were  entitled to get the notices  within  the  period during  which the injunction orders operated or  within  the period during which the judgment of the High Court declaring the Act ultra vires remained in operation.  In other  words, the  respondents,  after having successfully  prevented  the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should  not be  heard to say that they were entitled to notices as  they themselves made it impossible for the Commissioner to  issue the  notices within the’ period by obtaining the  orders  of injunction.   When the orders of injunction were  passed  by the Court restraining the  383 appellants from taking any proceedings under the Act,  could the Commissioner have issued the notices?  Clearly not.   If it was impossible for the Commissioner to issue the  notices to the respondents within the period by virtue of the orders of  injunction, could the law insist upon the issue  of  the notices within that period?  Again, the answer must be ’no’. And,  the  Commissioner could not have  issued  the  notices after  the High Court, by its order, declared the Act to  be invalid until the operation of that order was stayed by this Court. The law in its most positive and peremptory injunctions,  is understood to disclaim, as it does in its general aphorisms, all  intention  of compelling performance of that  which  is impossible.  "...where the law creates a duty or charge, and the party is disabled to perform it, without any default  in him,  and has no remedy over, there the law will in  general excuse  him; and though impossibility of performance  is  in general  no excuse for not performing an obligation which  a party  has  expressly undertaken by contract, yet  when  the obligation   is  one  implied  by  law,   impossibility   of performance  is a good excuse." (see Broom’s  Legal  Maxims, 10th  ed. (1939)pp. 162163).  The same- principle  has  been stated in Craies on Statute Law (6th ed, p. 268):               "Under  certain circumstances compliance  with               the  provisions of statutes  which  prescribed               how  something is to be done will be  excused.               Thus, in accordance with the maxim of Law, Lex               non cogit ed inpossibilia, if it appears  that               the performance of the formalities  prescribed               by  a statute has been rendered impossible  by               circumstances    over   which   the    persons               interested had no control, like the act of God               or  the  King’s enemies,  these  circumstances               will be taken as a valid excuse". We think the circumstance that the appellants were prevented by  the  orders of injunction from  taking  any  proceedings under  the  Act coupled with the fact that  the  High  Court declared  the Act to be invalid, made it impossible for  the Commissioner   to  issue  the  notices  within  the   period specified  in  s.7(2).  There is no  reason  to  distinguish between  an Act of God or King’s enemies preventing  an  act being  done and the circumstances here which put  it  beyond the control of the Commissioner to issue the notices. It  was  argued for the respondents that  issue  of  notices within  the period specified in s.7(2) was a  condition  for liability  to  file  the return and since  no  notices  were

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issued  within the period, the liability to file the  return did  not  arise  and the Court cannot extend  the  time  for issuing the notices. Let us assume that the provision for issue of notice  within the  period  specified  in s.7(2) was mandatory  and  was  a condition  precedent for the liability to file the  returns. Even so, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct.  In  other words, even if the issue of notices within  384 the  period   provided  in  s.7(2)  was  mandatory  and   no liability to file the    returns  arose  until  the  notices were  issued, the respondents could have waived the  benefit of  the  notices as the issue of notices was  only  for  the benefit  of  the  respondents  and  did  not  subserve   any principle of public policy. In Vellavan Chettiar v. Province of Madras (1) the  question arose  whether  notice under the provision of s. 80  of  the Civil  Procedure Code was mandatory and could be  waived  by the  party  entitled  to it.  The Privy  Council  said  that although  the provision for issue of notice  was  mandatory, the party which was entitled to the benefit of notice  could waive it.  The language of s. 7(2) is, no doubt,  mandatory, but  the  sub-section was not enacted on the  basis  of  Any public policy.  Its purpose is only to give a dealer  notice of his duty to submit the return created by sub-section  (1) of s. 7. Whenever a statute makes the performance of an  act within a specified period mandatory and it is seen from  the provisions  of the statute that the performance of  the  act within  the period is solely for the benefit of a party  and no question of public policy is involved in its  performance within  period, it has been held that the party entitled  to insist upon its performance within the period can waive  it. As  the  issue of notice within the period specified  in  s. 7(2) is clearly for the benefit of the dealer and if he,  by his  conduct, evinces an intention that he will  not  insist upon  it, then it will be inconsistent with all  notions  of justice to hold that he should be allowed to insist upon it. The respondents clearly knew when they applied and  obtained the  orders  of injunction that the  Commissioner  would  be disabled  from issuing the notices under s. 7(2) during  the period  of the operation of the orders of  injunction.   And the law made it impossible for the Commissioner to issue the notice as long as the order of the High Court declaring  the Act  as invalid remained in operation.  How then  could  the Commissioner  have  issued the notices  to  the  respondents within the period specified in s. 7(2) ? In  Graham  v.  Ingleby (2), the question  was  whether  the statute  4  Anne,  c. 16, s. 1 1,  which  enacted  that  "no dilatory  plea  shall be received in any  court  of  record, unless the party offering such plea, do, by affidavit, prove the  truth  thereof, or as how some probable matter  to  the court  to  induce  them to believe that  the  fact  of  such dilatory  plea is true" was for the benefit of a  party  and could  be waived.  The defendant pleaded in  abatement,  and purported to verify the plea by an affidavit, but the  words "before  me"  were omitted from the  jurat.   The  plaintiff replied  by  traversing  the plea, made  up  the  issue  and delivered it, with notice of trial for the ensuing Liverpool Assizes.   Also  both  parties took  further  steps  in  the action. Pollock C. B. said:               "The  affidavit  is  bad,  by  reason  of  the               omission  of  the  words ’before  me’  in  the               jurat.  It is the same as if there had been no

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             affidavit.    With   respect  to   the   other               question:" Suppose there had been no affidavit               whatever and the plain-               (1)   A. 1. R. 1947 P. C. 197.               (2)   [1848] 1 Exch. 651, 655,656.               385               tiff  had replied, joining issue, and a  trial               had  taken  place, the event of  which  was  a               verdict in favour of the defendant, upon which               judgment  was  entered  up,  could  the  whole               proceedings   have  been  set  aside   because               there was no affidavit?  It is clear that they               could not.  The question then is, what is  the               meaning  of  the  statute  of  Anne  ?  In  my               opinion,   that Act had not any-public  policy               for its  object, but solely   the   protection               of plaintiffs against the delivery  and effect               of  dilatory pleas.  It enacts, that  no  such               plea  shall  be received, unless  verified  by               affidavit.   If a plaintiff chooses  to  waive               that  provision, which is introduced  for  his               benefit,  he cannot afterwards  sign  judgment               for want of such affidavit.......               Parke B. said               "I  concur  in  opinion with  the  Lord  Chief               Baron.  The present affidavit is equivalent to               no  affidavit.  The question then is, what  is               the  meaning  of the statute  of  Anne,  which               requires  an  affidavit of verification  as  a               condition   precedent  to  a  valid  plea   in               abatement ? If that enactment be intended  for               the sole benefit of plaintiffs, then the maxim               applies  ’Quilebet potest renunciare juri  pro               se   introducto".  It  is  evident  that   the               requirements  of that statute are  solely  for               the  benefit  of plaintiffs, and in  order  to               prevent them from being delayed in their suits               ; and that they have to reference whatever  to               other  suitors or to the rest of  the  Queen’s               subjects.    It  follows,  that  although   an               affidavit  is so defective as to amount to  no               affidavit,  a  plaintiff may,  if  he  choose,               Waive the benefit of his right, and join issue               on  the plea and go to trial ; and if he  does               so, he cannot afterwards avail himself of  the               provisions  of the statute.  So, if he  should               demur to this plea, be would, in like  manner,               waive the benefit of the statute.  If it  were               otherwise,  the inconvenience would be  great,               as already pointed out." These observations were quoted with approval by Lord  Pearce and  their correctness affirmed by Lord Diplock  in  Kammins Co.  v.  Zenith Investments (M.  L. E.) (1).   Lord  Diplock made  it  clear that ’waiver’ is a word which  is  sometimes used loosely to describe a number of different legal grounds on  which  a  person  may  be  debarred  from  asserting   a substantive right which he once possessed or from raising  a particular  defence  to  a claim  against  him  which  would otherwise be available to him.  He observed that there is  a type of waiver which arises in a situation where a person is entitled to alternative rights inconsistent with one another as when he has knowledge of the facts which give rise in law to  these alternative rights and acts in a manner  which  is consistent  only  with his having chosen to rely on  one  of them and the law holds him to his choice even though he  was

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unaware that this would be the legal consequence or what  he did.   He  then said that there is a second type  of  waiver which debars a person from raising a particular defence to a claim (1)  [1971] A. C. 850. 386 against  him when he either agrees with the claimant not  to raise  that particular defence or so conducts himself as  to be estopped from raising it. Isaacs,  J. in delivering the judgment of the High Court  of Australia  in Craine v. Colonial Mutual Fire  Insurance  Co. Ltd. (1) said               introduced  by  the law to prevent  a  man  in               certain  circumstances  from  taking  up   two               inconsistent positions (see per James L. J. in               Pilcher  v. Rawlins (1872), 7. Ch.  App.  259,               at  pp. 268 et seq. It is a conclusion of  law               when the necessary facts are established.   It               looks,  however,  chiefly to the  conduct  and               position  of  the person who is said  Lo  have               waived,  in  order  to  see  whether  he   has               ’approbated’   so  as  to  prevent  him   from               ’reprobating’-in English terms, whether he has               elected  to  get some advantage  to  which  he               would not otherwise have been entitled, so  as               to  deny  to  him  a  later  election  to  the               contrary (see per Lord Shaw in Pitman v.  Crum               Ewing,  (1911)  A.  C. 217, at  p.  239.   His               knowledge  is necessary, or he cannot be  said               to have approbated or elected." In Corporation of Torounto v. Russell the Judicial Committee held that where a notice in writing of intention to purchase compulsorily was required to be given to the owner of lands, the provision being entirely for his benefit, he might waive it. The High Court granted the orders of injunction on the basis that there was a prima facie case for the respondents.   The High Court held that the Act was invalid on the basis of its view  that  it  was ultra vires the  powers  of-  the  State Legislature.   But  when this Court declared that  the  High Court was wrong and that the Act was valid, justice requires that  neither the order of injunction nor the order  of  the High  Court declaring the Act invalid should  prejudice  the rights  of the parties as ultimately declared.  No act of  a court should prejudice a party.  That is the first principle of  justice.  It was the orders of injunction and the  order declaring the Act a,-, ultra vires which made it  impossible for the Commissioner to issue the notices within the  period specified  in  s. 7(2).  When this Court, by  its  judgment, upheld  the appellants’ contention that the Act  was  valid, how  could the appellants be put in the position which  they would  have  occupied had the High Court  not  passed  those wrong  orders,  except by dispensing with the  necessity  of issuing   notices  within  the  time?   The   principle   of restitution  requires that the party prejudiced by  a  wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. It  was  contended  on behalf of the  respondents  that  the appellants  should have specifically told the High Court  at the time the injunc- (1)  [1920] 28 C. L.  R. 305, at p. 327. (2)  [1908] A C. 493. 387 tion orders were made absolute that if the Commissioner  was not  permitted  to  issue  the  notices  within  the  period

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specified  in  s.  7(2),  it would  be  impossible  for  the appropriate  authority to call for the returns and make  the assessments and that at any rate the appellants should  have subsequently  applied to the Court for modification  of  the injunction   orders   to  the  extent  of   permitting   the Commissioner to issue the notices within the period and  the failure  of the appellants to do so shows lack of  diligence on their part and that the Court should not help parties who were not diligent in their conduct. We do not think there is any substance in the argument.   It was after consideration of the arguments of both sides  that the court made the interim orders of injunction absolute  on 18-9-1961  stating that the appellants were restrained  from taking  any proceedings under the Act.  Thereafter  in  some applications  for injunctions, the appellants did not  enter appearance and object to interim orders of injunction  being made  absolute, knowing full well that since the  Court  had passed  a considered order on 18-9-1961, it would be  futile to urge further objections to the grant of injunction by the Court.   That apart, the Commissioner had time to issue  the notices  from 1-8-1963 when the High Court declared the  Act to  be ultra vires till 31-12-1963 when the two-year  period expired.  But as the Act was declared bad, it was impossible for  him  to issue the notices within the  period.   Nor  is there any substance in the argument of the respondents  that the  appellants should have approached this Court when  this Court by its judgment in Khyerbari Tea Co. Ltd. case (supra) declared  the Act to be intra vires and moved the Court  for stay of the operation of the judgment of the High Court.  We think that the appellants were bound to appeal to this Court against  the  order of the High Court declaring the  Act  as invalid  in order to get rid of the effect of that  judgment as  that  judgment  was binding between the  parties  to  it notwithstanding the decision in Khyerbari Tea Co. Ltd.  case (supra)  that  the  Act was  valid.   The  appellants  were, therefore,  entitled  to  a  reasonable  period  for  filing appeals  and  for applying for stay of the judgment  of  the High Court declaring the Act to be ultra vires. It  may be recalled that the judgment in Khyerbari  Tea  Co. Ltd.  case  (supra)  was  rendered  on  13-12-1963  and  the appellants preferred the appeals to this Court on  4-3-1964. How is it possible to say that the appellants were guilty of laches  when it is seen that they filed the  appeals  within the  period  of limitation prescribed by law ?  We  have  to judge the rights of the parties on the basis of the law  and cannot  allow  ourselves  to be swayed  by  any  sentimental considerations. We think the respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2).  The liability to file the return  was created by, s. 7(1) and as the requirement of notice  within the period specified in s. 7(2) could not have been insisted upon by the respondents for the reasons 388 which  we  have given, the authority empowered to  make  the assessment  under s. 9(4) was competent to do so.  We  think the High Court went wrong in allowing the writ petitions. We  should,  therefore,  set aside the orders  of  the  High Court,  dismiss  the writ petitions and  allow  the  appeals without any order as to costs. BEG, J. I have had the advantage of going through the  judg- ments  of the learned Chief Justice and my  learned  Brother Mathew.  I regret that I am compelled to reach a  conclusion which  amounts to holding that the taxing authorities  will, in   the  circumstances  of  these  cases,  have  no   right

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whatsoever  left to assess the respondents for  taxes  which they were found finally entitled to realise when this  Court held  the  Assam Taxation (on Goods Carried by  Road  or  on Inland  Waterways) Act, 1961, (hereinafter refer to as  ’the Act’),  to be valid on 13-12-1963.  Under the provisions  of the  Act  which we have to interpret, this seems to  be  the inevitable  result.   As  my approach  is  perhaps  slightly different from the one adopted by Mylord the Chief  Justice, I will state my reasons also. If  it shocks one’s conscience to think that the  mere  fact that  the High Court’s orders prohibiting  the  Commissioner from  proceeding under the Act  should-completely  frustrate the  intentions of a statute which was ultimately  found  by this  Court to be quite valid and existing for the  relevant period in the eye of law, it should disturb one’s equanimity no  less  that those who represented or advised  the  taxing authorities  of  the State should not have  brought  to  the notice of the High Court the great loss to the exchequer  of the  State  and  the possible automatic  victory  which  the respondents  may  secure by mere lapse of  time.   The  High Court  would,  I have no doubt, have suitably  modified  its orders  to meet the requirements of law and justice in  such cases  if the possible consequences of its orders  had  been brought to it’s notice. In  agreement with Mylord the Chief Justice, I do not  think that  taxing  authorities  of the State were  faced  with  a situation  which could approximate to one where an  "Act  of God" had robbed them of the power to act or that they  could not possibly have done anything at all within the time fixed by  Section 7, sub. s. (2) of the Act.  I fully   share  the view that the taxing authorities were inexcusably nonchalant or  unconcerned  about the possible  consequences  of  their neglect  or inactivity upon the revenues of the  State.   It was  at  least the duty of the party adversely  affected  to have  brought  the  relevant provisions of the  law  to  the notice of the Court before it issued the injunctions, or, at any rate, even afterwards but within the time prescribed for the notice under Section 7(2) of the Act.  A party  affected cannot  go    to sleep over its rights and then  attempt  to shift  the blame on to the Court for the consequences  which flow from the orders passed so that it may be able to  plead :"Actus Curiae Neminem Gravabit" (An act of the Court  shall prejudice  no  man").   Such  a plea appears  to  me  to  be disingenuous.  it  cannot apply to a case where  the  damage done   to   the  powers  of  the  taxing   authorities   was attributable  to  their own remissness or to that  of  their legal advisers.  389 The  next  question  is:  Did the acts  or  conduct  of  the petitioners respondents or anything else in the case operate as  a  waiver  or  an estoppel  which  prevented  them  from agitating  the  serious question whether the  right  of  the taxing  authorities to realise any tax from them  under  the Act  had  become  extinguished by lapse  of  time  with  the Commissioners  power to issue notices prescribed by  Section 7(2) of the Act ? If a waiver is a matter of agreement and not of an inference from  any  misleading conduct, the  parties  concerned  must apply their minds to the subject matter of what is waived by an  agreement  between them before any  alleged  waiver  can arise.  It is contended here on behalf of the State that  it must  be assumed that the respondent waived their  right  to get  a  notice  under  Section 7(2) of  the  Act  when  they obtained   the  injunctions  from  the  High   Court.    The authorities  cited  on behalf of the appellant,  which  have

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been  discussed  by  my learned Brother  Mathew,  do  afford grounds  for contending that a compliance with  a  provision intended  for  the benefit of a party may be waived  by  the party  for  whose protection it is designed.  But,  even  in such cases, I think it must be at least present to the  mind of the party waiving a right by adopting a course of  action what the underlying assumption is or what the consequence of its conduct is going to be.  One can only make an assumption on which an injunction rest if it flows necessarily from the language,  of the Court’s order or anything else on  record. But, there is nothing here, either in the Court’s orders  or anywhere  else  on  record to provide a basis  for  such  an assumption. Furthermore,  the waiver, even where both sides have  agreed to  waive  the operation of a  statutory  provision,  cannot extend  to a case in which the effect may be either to  oust the  jurisdiction  conferred  by  statute  or  to  confer  a jurisdiction which, according to the statute, is not  there. In other words, if a notice under Section 7(2) of the Act is a  condition  precedent to the exercise of  jurisdiction  to make  the best judgment assessment, I do not think that  the doctrine of waiver will confer jurisdiction so as to  enable parties  to  avoid  the  effect  of  violating  a  mandatory provision on a jurisdictional matter even by agreement.  If, on the other hand, want of notice under Section 7(2) of  the Act  is  not  a  condition  precedent  to  the  exercise  of jurisdiction to make a   best judgment assessment-and,  that seems to me to be the crux of the matter on this question-it does not appear to me to be necessary to resort at all to  a doctrine  of  a  dubious or deemed waiver.   In  that  case, waiver  or  no waiver, the power to  assess  would  subsist. And, as that power has to be exercised quasi-judicially, the taxing  authorities could issue a notice to show  cause  why they should not assess on such materials as they have,  even if  their power to issue a notice asking for a return  under Section 7(2) may have been lost by lapse of time.  The power to issue a suitable notice to show cause according to  rules of natural justice when a quasi-judicial function has to  be exercised,  can be, as we have repeatedly held, implied  and read into the nature of the function to be performed even if it is not expressly mentioned. Again,  I do not see what representations  the  petitioners- respondents had either made or could be deemed to have  made by any silence 390 of  theirs  so as to mislead the  taxing  authorities.   The presumption is that everybody knows the law whether this  be so  or  not  in  fact.  Hence,  no  "estoppel  in  pais"  or equitable  estoppel,  as contemplated by Sec.  115  Evidence Act,  could arise here.  Also, there could be no "  estoppel by record" as it was neither actually nor constructively  in issue  whether  the  party obtaining an  injunction  in  its favour  was  or was not to get the benefit of lapse  of  the time prescribed for a notice under Section 7 (2) of the Act. And,  therefore,  there  could be  no  decision,  actual  or constructive, on such an issue.  That issue could only arise after the time prescribed had expired whatever be the reason why a party could not act during the prescribed time. We have been reminded by both sides of what Rowlatt, J.,  an outstanding  authority on law relating to taxation, said  in Cape Brandy Syndicate v. I.R.S. (1) :               "...in a taxing Act one has to look at what is               clearly  said.   There  is  no  room  for  any               intendment.   There is no equity about a  tax.               There is no presumption as to a tax.   Nothing

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             is  to be read in, nothing is to  be  implied.               One  can  only  look fairly  at  the  language               used". I do not think that this was meant to exhaust all principles of interpretation or construction of every type of provision in a taxing statute or to apply to every situation which may arise.    In   a   system,   such   as   ours,   where   the Constitutionality  of all statutes, including taxing  statu- tes,  can be subjected to judicial review  other  principles also  are, not infrequently, invoked.  If, however,  Section 9(4) of the Act read is to be literally interpreted on  this point,  we cannot read into it, by implication, an  obstacle to  the  best judgment assessment which is  not  there.   It reads as follows :               "9(4) if a producer or dealer fails to make  a               return as required by Section 7 or having made               the return, fails to comply with the terms  of               the  notice  issued under su-bsection  (2)  of               this  Section, the Commissioner shall,  by  an               order in writing,    assess to the best of his               judgment the producer or dealer     and               determine the tax payable by him on the  basis               of such    assessment;               Provided that   before  making assessment  the               Commissioner may allow the producer or  dealer               such further time as he thinks fit to make the               return  or  to comply with the  terms  of  the               notice  issued under sub-section (2)  of  this               Section". It will be seen that Section 7 deals with "returns"  whereas Section  9 deals with "assessment", and Section  9(4)  deals specifically  with  the  power to  make  the  best  judgment assessment.  On a reading of Section 9 (4), it appears  that the two conditions for an exercise of jurisdiction under  it are alternative conditions linked with the disjunctive ’or’. A  failure  to comply with the terms of  the  notice  issued under Section 7(2) is only one of these two alternative sets of conditions.  And, this set of (1)  [1921]I K.B. 64,71.  391 conditions comes into existence only after the issue of  the notice  under Section 7(2) which initiates the  proceedings. It is, however, difficult to see how a mere failure to  make a  return  by itself amounts to initiation  of  proceedings. Even  if  the first part of Section 9(4)  could  conceivably apply to a party after the expiry of two years, during which period a dealer or producer "may" get a notice under Section 7(2)  of the Act to make return, yet, the  proceedings  will have  to be commenced by some kind of notice that could,  as indicated above, be a notice in exercise of an implied power to  observe rules of natural justice although it could  not, after  the  lapse of the prescribed time, be  technically  a notice  under  Section 7(2) of the Act.  Assuming  that  the power  to issue notice under Section 7(2) is  not  mandatory but only directory, inasmuch as the Commissioner "may" issue the  required notice, and, furthermore, even  assuming,  for the purposes of argument, that such a notice, meant for  the benefit of a party can be and has been waived by it, yet,  I fail  to  see  how an assessment under  Section  9(4)  could escape  the  bar  created by Section 11 of  the  Act.   This Section  shows  that a notice to make a  return  within  two years  of  the expiry of the return period  is  a  condition precedent  to exercise jurisdiction to assess.  And, such  a notice could only be one under Section 7(2) of the Act. Section  11  of the Act, which seems to clinch  the  crucial

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issue, reads as follows :               "11.    If   in   consequence   of    definite               information   which   has   come   into    his               possession, the Commissioner is satisfied that               any  producer or dealer, though liable to  pay               tax in respect of any period, has nevertheless               failed  to make the return required of him  or               that tea or jute chargeable to tax has escaped               assessment  in any period or has  been  under-               assessed,  the Commissioner may, at  any  time               within two years of the expiry of that period,               serve on the producer or dealer liable to  pay               tax  a notice requiring him to furnish  within               such  period,  as  may  be  mentioned  in  the               notice,  a return of manufactured tea  in  tea               container’s  or jute in bales carried, in  the               prescribed  form and may proceed to assess  or               reassess  the  producer  or  dealer  and   the               provisions  of this Act shall, so far  as  may               be, apply according :               Provided that the tax shall be charged at  the               rate  at which it would have  ordinarily  been               charged, had there been no escape or evasion". If this provision imposes a limitation upon the power of the Commissioner to assess in every case of escaped  assessment, whatever may be the reason for the escape, the best judgment proceedings  against the respondents would be barred by  the passage  of two years after the return period.  This  result must,  on the language of Section 11, flow from it, and  not from  mere  failure of the Commissioner to  issue  a  notice under Section 7(2) of the Act, which the Commissioner  "may" only  serve  within two years of the expiry  of  the  return period. 10 SC/75-26 392 Here,  I  May  refer  to State Of  Assam  &  Anr.   V,  D.C. Choudhuri  & Ors., (1) where, inter-alia, Section 30 of  the Assam  Agricultural  Income,  tax Act, which  was  found  to correspond,  to  section 34 of the Indian  Income  tax  Act, 1922, was relied upon% by this Court to hold that there is a bar against the proceedings for escaped assessment.  Section 30 of the Act reads as follows               "If  for  any reason any  agricultural  income               chargeable  to  agricultural  income-tax   has               escaped assessment for any financial year,  or               has  been  assessed at too low a rate  or  has               been  the subject of undue relief  under  this               Act, the Agricultural Income tax Officer  may,               at  any time within three years of the end  of               that  financial  year,  serve  on  the  person               liable to pay agricultural income-tax on  such               agricultural  income  or,  in the  case  of  a               company  on the principal officer  thereof,  a               notice   containing   all  or   any   of   the               requirements  which  may  be,  included  in  a               notice  under sub-section (2) of  section  19,               and  may  proceed to assess or  reassess  such               income, and the provisions of this Act  shall,               so far as may be, apply accordingly as if  the               notice  were a notice issued under  that  sub-                             section :               Provided........................... If  we compare Section 11 of the Act before us with  Section 30  of the Assam Agricultural Income tax Act, we find  that, although,  the language of Section 1 1 of the Act before  us

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is  somewhat different from that of Section 30 of the  Assam Agricultural  Income tax Act, yet, the effect is  the  same. On  the language of Section 11 of the Act before us,  it  is evident that every case where tea or jute chargeable to  tax has  escaped  assessment for any period or  has  been  under assessed, the Commissioner must take action within two years of the expiry of the return period.  I think it is this part of  the Act which will operate as a bar to the  jurisdiction of  the Commissioner to tax  any escaped  assessment  beyond two years of the return period.  Therefore,quite apart  from the  question whether on the mere language of sec. 7(1)  and sec  7(4) a failure to issue a notice under Section 7(2)  of the  Act  within  return period constitutes a  bar  to  pro- ceedings under Section 9(4) of the Act, I do not see. how  a failure to issue such a notice would not become a bar due to the clear provisions of Section 11 of the Act.  This bar, at any  rate,  is against exercise of  jurisdiction  to  assess beyond the prescribed period, The notice here is part of the procedure for assessment.  There is no power given to  issue it  beyond the period fixed.  There is no provision  of  the Act  making  anything like Section 5 or Section  14  of  the Limitation   Act  applicable  to  proceedings  for   escaped assessment under the Act.  We cannot, by an exercise of  our judicial power of interpretation defeat the clear effect  of the  enacted  law.   If the law wag  badly  drafted  or  has revealed a gap which its makers did not foresee, the  remedy of the State lies elsewhere. (1)  [1970] I SCR 780.  393 I  would,  therefore, in  agreement with  Mylord  the  Chief Justice,  dismiss these appeals,  but, in the  circumstances of these cases, and no costs to either side. ORDER In  accordance  with  the judgments of   the  majority,  the appeals are dismissed.  The parties will pay and bear  their own costs- V. M. K. 394