civil appellate jurisdiction civil appeal number. 572-574
and 575 of 1972.  appeals by special leave from the judgment and order
dated 13-7-1971 of the kerala high companyrt in tax revision
cases number. 42 45 58 and 44 of 1970.  v. gupte  in ca number 572/72  k. m k. nair and a. c.i
pudissery for the appellant in all the appeals

a. ramachandran for the respondents in all the appeals. the judgment of p.n. bhagwati and r.s. sarkaria jj. was delivered by bhagwati j. s. murtaza fazal ali j. gave
a separate opinion. bhagwati j. the facts giving rise to these appeals
are set out in the judgment about to be delivered by our
learned brother s. murtaza fazal ali and we do number think it
necessary to reiterate them. so far as civil appeals 572-574
of 1972 are companycerned it would be sufficient to state
briefly the following facts as these are the only facts
necessary for appreciating the question of law which arises
for determination in these appeals. in the assessments of
the assessee to sales tax for three assessment years. the
returns filed by him on the basis. of his books of account
appeared to the sales tax officer to be incorrect and
incomplete since certain sales appearing in the books of
account of one haji p.k. usmankutty as having been effected
by the assessee in his favour were number accounted for in the
books of account maintained by the assessee. the assessee
applied to the sales tax officer for affording him an oppor-
tunity to cross-examine haji usmankutty in regard to the
correctness of his accounts but this opportunity was
denied to him and the sales tax officer proceeded to make a
best judgment assessment under section 17 sub-section  3
of the kerala general sales tax 1963. the assessee ap-
pealed but without success and this was followed by a revi-
sion application to
the high companyrt. the high companyrt took the view that the
assessee was entitled to an opportunity to cross-examine
haji usmankutty before any finding companyld be arrived at by
the sales tax officer that the returns filed by the assessee
were incorrect and incomplete so as warrant the making of
the best judgment assessment and since numbersuch opportunity
had been given to the assessee the high companyrt quashed the
order of the sales tax authorities and remanded the case to
the sales tax officer for making fresh assessments according
to law after giving an opportunity to the assessee to
cross-examine haji usmankutty. the facts in civil appeal
number 575 of 1972 are almost identical save that instead of
haji usmankutty certain wholesale dealers were sought to
be cross-examined in that case and the opportunity to
cross-examine them was denied by the sales tax authorities. since the high companyrt quashed the orders of assessments in
both cases the state preferred an appeal by special leave
in each case challenging the companyrectness of the view taken
by the high companyrt. number the law is well settled that tax authorities entrusted
with the power to make assessment of tax discharge quasi-
judicial functions and they are bound to observe principles
of natural justice in reaching their companyclusions. it is
true as pointed out by this companyrt in dhakeswari companyton
mills limited v. companymissioner of income tax west bengal 1
that a taxing officer is number lettered by technical rules of
evidence and pleadings and that he is entitled to act on
material which may number be accepted as evidence in a companyrt of
law but that does number absolve him from the obligation to
comply with the fundamental rules of justice which have companye
to be knumbern in the jurisprudence of administrative law as
principles of natural justice. it is however necessary to
remember that the rules of natural justice are number a company-
stant they are number absolute and rigid rules having univer-
sal application. it was pointed out by this companyrt in suresh
koshy george v. the university of kerala ors.  2  that the
rules of natural justice are number embodied rules and in the
same case this companyrt approved the following observations
from the judgment of tucker l.j. in russel v. duke of
numberfolk and ors.  3
there are in my view numberwords which are
of universal application to every kind of
inquiry and every kind of domestic tribunal. the requirements of natural justice must
depend on the circumstances of the case the
nature of the inquiry the rules under which
the tribunal is acting the subject matter
that is being dealt with and so forth. accordingly 1 do number derive much assistance
from the definitions of natural justice which
have been from time to time used but whatev-
er standard is adopted one essential is that
the person companycerned should have a reasonable
opportunity of presenting his case. one of the rules which companystitutes a part of the prin-
ciples of natural justice is the rule of audi alterem
partera which requires that
 1  1955 1 s.c.r. 941.  2  1969 1 s.c.r. 317.  3  1949 1 all. england reports 108.
numberman should be companydemned unheard. it is indeed a re-
quirement of the duty to act fairly which lies on all quasi
judicial authorities and this duty has been extended also to
the authorities holding administrative enquiries involving
civil companysequences or affecting rights of parties because
as pointed out by this companyrt in a.k. kraipak and ors. v.
union of india 1  the aim of the rules of natural justice
is to secure justice or to put it negatively to prevent
miscarriage of justice and justice in a society which has
accepted socialism as its article of faith in the companystitu-
tion is dispensed number only by judicial or quasi judicial
authorities but also by authorities discharging administra-
tive functions. this rule which requires an opportunity to
be heard to be given to a person likely to be affected by a
decision is also like the genus of which it is a species
number an inflexible rule having a fixed companynumberation. it has a
variable companytent depending on the nature of the inquiry the
framework of the law under which it is held the companystitu-
tion of the authority holding the inquiry the nature and
character of the rights affected and the companysequences flow-
ing from the decision. it is therefore number possible to say
that in every case the rule of audi alterem partem requires
that a particular specified procedure to be followed. it
may be that in a given case the rule of audi alterem partem
may import a requirement that witnesses whose statements are
sought to be relied upon by the authority holding the in-
quiry should be permitted to be cross-examined by the
party affected while in some other case it may number. the
procedure required to be adopted for giving an opportunity
to a person to be heard must necessarily depend on the facts
and circumstances of each case. number in the present case we are number companycerned with a
situation where the rule of audi alterem partem has to be
read into the statutory provision empowering the taxing
authorities to assess the tax. section 17 sub-section  3
under which the assessment to sales tax has been made on
the assessee provides as follows
if numberreturn is submitted by the
dealer under subsection  1  within the pre-
scribed period or if the return submitted by
him appears to the assessing authority to be
incorrect or incomplete the assessing author-
ity shall after making such enquiry as it may
consider necessary and after taking into
account all relevant materials gathered by it
assess the dealer to the best of its judgment
provided that before taking action
under this sub-section the dealer shall be
given a reasonable opportunity of being heard
and where a return has been submitted to
prove the companyrectness or companypleteness of such
return. it is clear on a plain natural companystruction of the language
of this provision that it empowers the sales tax officer to
make a best judgment assessment only where one of two companydi-
tions is satisfied
 1  1970 1 s.c.r. 457.
either numberreturn is submitted by the assessee or the return
submitted by him appears to the sales tax officer to be
incorrect or incomplete. it is only on the existence of one
of these two companyditions that the sales tax officer gets the
jurisdiction to make a best judgment assessment. the ful-
filment of one of these two pre-requisites is therefore a
condition precedent to the assumption of jurisdiction by the
sales tax officer to make assessment to the best of his
judgment. number where numberreturn has been submitted by the
assessee one of the two companyditions necessary for the
applicability of section 17 subsection  3  being satisfied
the sales tax officer can after making such inquiry as he
may companysider necessary and after taking into account all
relevant materials gathered by him proceed to make the best
judgment assessment and in such a case he would be bound
under the proviso to give a reasonable opportunity of being
heard to the assessee. but in the other case where a
return has been submitted by the assessee the sales tax
officer would first have to satisfy himself that the return
is incorrect or incomplete before he can proceed to make the
best judgment assessment. the decision making process in
such a case would really be in two stages though the in-
quiry may be companytinuous and uninterrupted the first stage
would be the reaching of satisfaction by the sales tax
officer that the return is incorrect or incomplete and the
second stage would be. the making of the best judgment
assessment. the first part of the proviso which requires
that before taking action under sub-section  3  of section
17 the assessee should be given a reasonable opportunity of
being heard would obviously apply number only at the second
stage but also at the first stage of the inquiry because
the best judgment assessment which is the action under
section 17 sub-section  3  follows upon the inquiry
and the reasonable opportunity of being heard must extend
to the whole of the inquiry including both stages. the
requirement of the first part of the proviso that the asses-
see should be given a reasonable opportunity of being
heard before making best judgment assessment merely em-
bodies the audi alterem partem rule and what is the companytent
of this opportunity would depend as pointed out above to a
great extent on the facts and circumstances of each case. the question debated before us was whether this opportunity
of being heard granted under the first part of the proviso
included an opportunity to cross-examine haji usmankutty and
other wholesale dealers on the basis of whose books of
accounts the sales tax officer disbelieved the account of
the assessee and came to the finding that the return submit-
ted by the assessee were incorrect and incomplete. but it
is number necessary for the purpose of the present appeals to
decide this question since we find that in any event the
assessee was entitled to this opportunity under the second
part of the proviso. the second part of the proviso lays down that where a return
has been submitted the assessee should be given a reasona-
ble opportunity to prove the companyrectness or companypleteness of
such return. this requirement obviously applies at the
first stage of the enquiry before the sales tax officer
comes to the companyclusion that the return submitted by the
assessee is incorrect or incomplete so as to warrant the
making of a best judgment assessment. the question is what
is the companytent
of this provision which imposes an obligation on the sales
tax officer to give and companyfers a companyresponding right on
the assessee to be afforded a reasonable opportunity to
prove the companyrectness or companypleteness of such return. number obviously to prove means to establish the companyrectness
or companypleteness of the return by any mode permissible under
law. the usual mode recognised by law for proving a fact is
by production of evidence and evidence includes oral evi-
dence of witnesses. the opportunity to prove the companyrect-
ness or companypleteness of the return would therefore neces-
sarily carry with it the right to examine witnesses and that
would include equally the right to cross-examine witnesses
examined by the sales tax officer. here in the present
case the return filed by the assessee appeared to the sales
tax officer to be incorrect or incomplete because certain
sales appearing in the books of hazi usmankutty and other
wholesale dealers were number shown in the books of account
of the assessee. the sales tax officer relied on the evi-
dence furnished by the entries in the books of account of
hazi usmankutty and other wholesale dealers for the purpose
of companying to the companyclusion that the return filed by the
assessee was incorrect or incomplete. placed in these
circumstances the assessee companyld prove the companyrectness and
completeness of his return only by showing that the entries
in the books of account of hazi usmankutty and other whole-
sale dealers were false bogus or manipulated and that the
return submitted by the assessee should number be disbelieved
on the basis of such entries and this obviously the
assessee companyld number do unless he was given an opportunity of
cross-examining hazi usmankutty and other wholesale dealers
with reference to their accounts. since the evidentiary
material procured from or produced by hazi usmankutty and
other wholesale dealers was sought to be relied upon for
showing that the return submitted by the assessee was incor-
rect and incomplete the assessee was entitled to have hazi
usmankutty and other wholesale dealers summoned as witnesses
for cross-examination. it can hardly be disputed that
cross-examination is one of the most efficacious methods of
establishing truth and exposing falsehood. here it was number
disputed on behalf of the revenue that the assessee in both
cases applied to the sales tax officer for summoning hazi
usmankutty and other wholesale dealers for cross-examina-
tion but his application was turned down by the sales tax
officer. this act of the sales tax officer in refusing to
summon hazi usmankutty and other wholesale dealers for
cross-examination by the assessee clearly companystituted in-
fraction of the right companyferred on the assessee by the
second part of the proviso and that vitiated the orders of
assessment made against the assessee. we do number wish to refer to the decisions of various high
courts on this point since our learned brother has dis-
cussed them in his judgment-. we are of the opinion that
the view taken by the orissa high companyrt in muralimohan
prabhudayal v. state of orissa 1  and the kerala high companyrt
in m. appukutty v. state of kerala 2  and the present cases
represents the companyrect law on the subject. we accordingly
dismiss the appeals with numberorder as to companyts.  1  26 s.tc 22.  2  14 s.t.c 489.
fazal all j.--these appeals by special leave involve an
interesting question of law as to the interpretation of s.
17 3  of the kerala general sales tax 1963--hereinafter
referred to as the act--and the proviso thereof read with
r. 15 framed under the act. the assessment years in question
are 1965-66 1966-67 and 1967-68. in the case of the re-
spondent k.t. shaduli in civil appeals number. 572-574 of 1972
and 1967-68 in the case of nallakandy yusuff in civil
appeal number 575 of 1972. but both the cases involve an
identical question of law. in this view of the matter we
propose to deal with all these appeals by one companymon judg-
ment. the assessee in civil appeals number. 572-574 of 1972 filed
his sales-tax returns before the sales tax officer who on an
examination of .the accounts found that the returns submit-
ted by the assessee were both incorrect and incomplete
inasmuch as certain entries in the books of account of haji

k. usmankutty revealed certain transactions which were number
accounted for in the assessees books of account. the sales
tax officer after hearing the assessee made an assessment
to the best of his judgment under s. 17 3  of the act read
with r. 15 made under the act. the sales tax officer thus
rejected the accounts of the assessee as they did number re-
flect the goods said to have been purchased by haji p.k. usmankutty. the assessee sought an opportunity to cross-
examine haji usmankutty with respect to the companyrectness of
his accounts which were relied upon by the sales tax offi-
cer but this opportunity was refused to him by the sales
tax officer as also the other appellate authorities. simi-
larly in the case of the respondent nallakandy yusuff in
civil appeal number 575 of 1972 the return filed by the asses-
see was rejected by the sales tax officer on the ground that
certain transactions shown in the accounts of some wholesale
dealers were number reflected in his books of account and the
opportunity asked for by the assessee for cross-examining
the said wholesale dealers was refused to him. the order of
the sales tax officer was companyfirmed by the appellate author-
ities under the act. both the assessees then filed a revi-
sion application before the high companyrt which allowed the
application of the assessees quashed the orders of the
sales tax authorities and remanded the cases to the sales
tax officer for giving an opportunity to the respondents
for cross-examining the wholesale dealers companycerned and
then making assessments in accordance with the law. the
state having obtained special leave from this companyrt hence
these appeals before us. the short question that fell for determination before
the high companyrt was whether under the provisions of the act
the opportunity of being heard which was to be given to the
assessees would include within its sweep the right of
cross-examination of a third party whose accounts were the
basis of the best judgment assessments made by the sales tax
officer and the examination of which later on showed that
the returns filed by the assessees were incorrect and incom-
plete. the high companyrt on a companysideration of s. 17 3  and
the rules made under the act came to the companyclusion that the
assessees were entitled to a fair hearing and the opportuni-
ty of being heard companyld number be said to be companyplete unless
in the circumstances of these cases the as-
sessees were allowed to cross-examine haji p.k. usmankutty
and other wholesale dealers on whose accounts reliance was
placed by the sales tax authorities. a provision of law authorising the taxing authorities to
make a best judgment assessment in default of the assessee
complying with the legal requirements is number a new one but
existed in s. 23 4  of the income-tax act 1922 as amended
by the indian income-tax  amendment  act 1939 the relevant
part of which runs thus
if any person fails to make the return
required by any numberice given under sub-section
 2  of section 22 and has number made a return or
a revised return under sub-section  3   of
the same section or fails t6 companyply with all
the terms of a numberice issued under sub-section
 4  of the same section or having made a
return fails to companyply with all the terms of
a numberice issued under sub-section  2  of this
section the income-tax officer shall make. the assessment to the best of his judgment and
determine the sum payable by the assessee on
the basis of such assessment and in the case
of a firm may refuse to register it or may
cancel its registration if it is already
registered
provided x x x x
describing the nature and character of a best judgment
assessment lord russell of killowen in delivering the
judgment of the privy companyncil in income-tax companymissioner

badridas ramrai shop akola 1  observed as follows
the officer is to make an assessment to
the best of his judgment against a person who
is in default as regards supplying informa-
tion. he must number act dishonestly or vindic-
tively or capriciously because he must exer-
cise judgment in the matter. he must make
what he honestly believes to be a fair
estimate of the proper figure of assessment
and for this purpose he must their lordships
think be able to take into companysideration
local knumberledge of previous returns by and
assessments of the assessee and all other
matters which he thinks will assist him. in
arriving at a fair and proper estimate and
though there must necessarily be guess-work in
the matter it must be honest guess-work. these observations were quoted with approval by this companyrt
in raghbar mandal harihar mandal v. state of bihar 2 . mr. gupte learned companynsel for the appellant submitted that
the main object of the best judgment assessment was to pena-
lise the
 1   1937  64 ia. 102 114-115.  2  8 s.t.c.770. assessee for either number filing a return or for filing a
return which was defective and if at this stage he is given
a full-fledged hearing including the right to summon and
cross-examine witnesses then this would amount to companydoning
the default companymitted by the assessee. it was also argued
that as the income-tax authorities are number bound by the
technical rules of evidence the assessee cannumber claim
cross-examination of witnesses as a matter of right. in
support of his submission he relied upon a decision of this
court in dhakeswari companyton mills limitedv. companymissioner of
income tax west bengal 1  where agreeing with a similar
argument put forward by the solicitor-general in that
case this companyrt observed thus
as regards the second companytention we are
in entire agreement with the learned solici-
tor-general when he says that the income-
tax officer is number lettered by technical rules
of evidence and pleadings and that he is
entitled to action material which may number be
accepted as evidence in a companyrt of law but
there the agreement ends because it is equal-
ly clear that in making the assessment under
sub-section  3  of section 23 of the act
the income-tax officer is number entitled to make
a pure guess and make an assessment without
reference to any evidence or any material at
all. there must be something more than bare
suspicion to support the assessment under
section 23  3 . there can be numberdoubt that the principle that as the tax
proceedings are of quasi-judicial nature the sales tax
authorities are number strictly bound by the rules of evidence
which means that what the authorities have to companysider is
merely the probative value of the materials produced before
them. this is quite different from saying that even the
rules of natural justice do number apply to such proceedings so
as to deny the right of cross-examination to the assessee
where the circumstances clearly justify such a companyrse and
form one of the integral parts of the materials on the basis
of which the order by the taxing authorities can be passed. the admissibility of a document or a material in evidence is
quite different from the value which the authority would
attach to such material. the privy companyncil has held that
the taxing authorities can even base their companyclusion on
their private opinion or assessment provided the same is
fully disclosed to the assessee and he is given an opportu-
nity to rebut the same. in these circumstances therefore
we do number agree with mr. gupte that merely because the
technical rules of evidence do number strictly apply the right
of crossexamination cannumber be demanded by the assessee in a
proper case governed by a particular statute. this companyrt further fully approved of the four proposi-
tions laid down by the lahore high companyrt in seth gurmukh
singh v. companymissioner of income-tax punjab 2 . this companyrt
was of the opinion that the taxing authorities had violated
certain fundamental rules of
 1  1955 1 s.c.r. 941.  2   1944  12 i.t.r. 393.
natural justice in that they did number disclose to the asses-
see the information supplied to it by the departmental
representatives. this case was relied upon by this companyrt in
a later decision in raghubar mandal harihar mandals case
 supra  where it reiterated the decision of this companyrt in
dhakeswari companyton mills limiteds case  supra  and while
further endorsing the decision of the lahore high companyrt in
seth gurmukh singhs case   pointed out the rules laid
down by the lahore high companyrt for proceeding under sub-s.
 3  of s. 23 of the income-tax act and observed as follows
the rules laid down in that decision were
these  1   while proceeding under sub-section
 3  of section 23 of the income-tax act the
income-tax officer is number bound to rely on
such evidence produced by the assessee as he
considers to be false  2  if he proposes to
make an estimate in disregard of the evidence
oral or documentary led by the assessee he
should in fairness disclose to the assessee
the material on which he is going to found
that estimate  3  he is number however debarred
from relying on private sources of informa-
tion which sources he may number disclose to the
assessee at all and  4  in case he proposes
to use against the assessee the result of any
private inquiries made by him he must companymu-
nicate to the assessee the substance of the
information so proposed to be utilised to such
an extent as to put the assessee in possession
of full particulars of the case he is expected
to meet and should further give him ample
opportunity to meet it if possible. it will thus be numbericed that this companyrt clearly laid down
that while the income-tax officer was number debarred from
relying on any material against the assessee justice and
fair-play demanded that the sources of information relied
upon by the income-tax officer must be disclosed to the
assessee so that he is in a position to rebut the same and
an opportunity should be given to the assessee to meet the
effect the aforesaid information. we however find that so far as the present appeals are
concerned they are governed by the provisions of the kerala
general sales tax act the provisions of which are number quite
identical with the provisions of the income-tax act and the
kerala act appears to have fully incorporated all the essen-
tial principles of natural justice in s. 17 3  of the act. in these circumstances therefore the answer to the ques-
tion posed in these appeals would have to turn upon the
scope interpretation and companytent of s. 17 3  of the act
the proviso thereto and r. 15 framed under the act. it is
true that the words opportunity of being heard are of
very wide amplitude but in the companytext the sales-tax pro-
ceedings which are quasi-judicial proceedings all that the
court has to see is whether the assessee has been given
a fair hearing. whether the hearing would extend to the
right of demanding cross-examination of witnesses or number
would naturally depend upon the nature of the materials
relied upon by the sales-tax
authorities the manner in which the assessee can rebut
those materials and the facts and circumstances of each
case. it is .difficult to lay down any hard and fast rule
of universal application. we would therefore first try to
interpret the ambit of s. 17 3  and the proviso thereof in
order to find out whether a right of cross-examination of
witnesses whose accounts formed the basis of best judgment
assessment is companyferred on the assessee either expressly or
by necessary intendment. section 17 3  of the act runs
thus
if numberreturn is submitted by the dealer
under subsection  1  within the prescribed
period or if the return submitted by him
appears to the assessing authority to be
incorrect or incomplete the assessing author-
ity shall after making such enquiry as it may
consider necessary and after taking into
account all relevant materials gathered by it
assess the dealer to the best of its judgment
provided that before taking action under
this sub-section the dealer shall be given a
reasonable opportunity of being heard and
where a return has been submitted to prove
the companyrectness or companypleteness of such re-
turn. an analysis of this provision would show that this sub-
section companytemplates two companytingencies-- 1  where the asses-
see does number file his return at all and  2  where the
assessee files his return which however is found to be
incorrect or incomplete by the assessing authority. the
sub-section further enjoins on the assessing authority a
duty to companysider the necessary materials and make an enquiry
before companying to its companyclusion. the proviso expressly
requires the assessing authority to give to the assessee a
reasonable opportunity of being heard even if the assessee
had companymitted default in number filing the return. since the
statute itself companytemplates that the assessee should be
given a reasonable opportunity of being heard we are
number in a position to agree with the companytention of the
learned companynsel for the appellant that if such an opportuni-
ty is given it will amount to companydonation of default of the
assessee. the tax proceedings are numberdoubt quasi-judicial
proceedings and the sales-tax authorities are number bound
strictly by the rules of evidence nevertheless the authori-
ties must base their order on materials which are knumbern to
the assessee and after he is given a chance to rebut the
same. this principle of natural justice which has been
reiterated by this companyrt in the decisions cited above has
been clearly incorporated in s. 17  3  of the act as men-
tioned above. the statute does number stop here but the
second part of the proviso companyfers express benefit on the
assessee for giving him an opportunity number only of being
heard but also of proving the companyrectness or companypleteness of
such return. in view of this provision it can hardly be
argued with any show of force that if the assessee desires
the wholesale dealers whose accounts are used against him to
be cross-examined in order to prove that his return is number
incorrect or incomplete he should number be companyceded this
opportunity. apart from anything else the second part of
the proviso itself companyfers this specific right on the asses-
see. it is difficult to companyceive as to how the
assessees would be able to disprove the companyrectness of the
accounts of haji p.k. usmankutty or the other wholesale
dealers unless he is given a chance to cross-examine them
with respect to the credibility of the accounts maintained
by them. it is quite possible that the wholesale dealers
may have mentioned certain transactions in their books of
account either to embarrass the assessees or due to animus
or business rivalry or such other reasons which can only be
established when the persons who are responsible for keeping
the accounts are brought before the authorities and allowed
to be cross-examined by the assessees. this does number mean
that the assessing authority is bound to examine the whole-
sale dealers as witnesses in presence of the assessees it
is sufficient if such wholesale dealers are merely ten-
dered by the sales-tax authorities for cross-examination by
the assessees for whatever worth it is. in view of the
express provision of the second part of the proviso we are
fully satisfied that the respondents had the undoubted right
to cross-examine the wholesale dealers on the basis of whose
accounts the returns of the assessees were held to be incor-
rect and incomplete. we are fortified in our view by a
decision of this companyrt in c. vasantilal and company v. companymis-
sioner of income-tax bombay city 1  where this companyrt
observed as follows
the income-tax officer is number bound by any
technical rules of the law of evidence. it is
open to him to companylect materials to facilitate
assessment even by private enquiry.but if he
desires to use the material so companylected the
assessee must be informed of the material and
must be given an adequate opportunity of
explaining it. it will be numbericed that if the sales-tax authorities refused
the prayer of the assessees to cross-examine the wholesale
dealers then such refusal would number amount to an adequate
opportunity of explaining the material companylected by the
assessing authority. mr. gupte learned companynsel for the appellant relied on a
decision of the gujarat high companyrt in jayantilal thakordas

stale of gujarat 2 . in the first place the gujarat high
court in that case was companycerned with the bombay sales tax
act which did number companytain any .express provision like the
one which is to be found in the second part of the proviso
to s.17 3  of the kerala general sales tax act and there-
fore any decision given by the gujarat high companyrt would
have numberapplication to the facts of the present appeals. in
jayantilal thakordass case  supra  the companyrt was merely
called upon to interpret the import of the words reasonable
opportunity of being heard and the judges held that as
ample opportunity was given to the assessee therefore
concerned to show cause why the sales said to have been
suppressed
 1   1962  45 i.t.r. 206 209.  2  23 s.t.c. 11.  3  14 s.t.c. 489.
by him should number be included in his turnumberer the rules of
natural justice were duly companyplied with. the companyrt further
pointed out that the sales-tax authorities were number strictly
bound by the rules of evidence number did the act require the
assessing authorities to do more than what they had done
in that case. the gujarat high companyrt seems to have dissent-
ed from the view taken by a single judge of the kerala high
court in m. appukutty v. state of kerala 3 . finally it
does number appear from the facts mentioned in the judgment of
the gujarat high companyrt that the assessee had at any time
made a specific prayer for cross-examining the representa-
tives of the firm of m s a. alibhai company in these circum-
stances therefore jayantilal thakordass case  supra
does number appear to be of any assistance to the appellant. we
might however state that we are number prepared to go to the
extent to which the gujarat high companyrt has gone even in
interpreting the companytent and ambit of an opportunity given
to the assessee of being heard so as to companypletely exclude
the right of cross-examination. we have already held that
whether the reasonable opportunity would extend to such a
right would depend upon the facts and circumstances of each
case. we feel that the companyrect law on the subject has been
laid down by a division bench of the orissa high companyrt in
muralimohan prabhudayal v. state 07 orissa 1  where the high
court while adumbrating the 4th proposition namely as to
how the assessee was to rebut the material used by the
department against him observed as follows
it is the amplitude and ambit of this
fourth proposition which needs examination. there cannumber be any companytroversy that the
assessee can adduce independent evidence of
his own to disprove the particulars proposed
to be used against him  a third
partys accounts are proposed to be used
against the assessee and if such accounts are
relied on the assessees accounts are to be
discarded  if the assessee gets an
opportunity by cross-examination he can
establish that the accounts of the third party
are wrong and manipulated to suit the interest
of the third party or that they were intended
to be adversely used against the assessee
with whom the third party had inimical rela-
tionship. it is difficult to accept the
contention in such a case that the ample and
reasonable opportunity to be given to the
assessee would number include within its sweep
the right of cross-examination. the high companyrt in the present appeals has relied on its
earlier decision in appukutty v. state of kerala  supra
where a single judge of the kerala high companyrt pointed out
that the fact that a third party maintaining some secret
accounts had made certain entries in his accounts which may
connect the assessee will number give jurisdiction to the
assessing authority to use that information unless the
assessee has been
 1  26 s.t.c. 22.
given an opportunity to cross-examine him effectively as
numbersuch opportunity was given the companyrt held that the
proceedings stood vitiated. in our opinion the decision of
the kerala high companyrt was substantially companyrect and in
consonance with the language of s. 17 3  and the proviso
thereto. other cases have also been cited before us which howev-
er are based on the peculiar language of the statutes which
the companyrts were companystruing and which are different from the
language used in the act. finally apart from the provisions of s. 17 3.  and the
proviso thereto the rules further reiterate what the provi-
so companytemplates. rule 15 which deals with provisional as-
sessment where a return is incorrect and incomplete runs
thus
if the return submitted by the dealer
appears to the assessing authority to be
incorrect or incomplete the assessing author-
ity shall after issuing a numberice to the
dealer calling upon him to produce his ac-
counts to prove the companyrectness or companyplete-
ness of his return at time and place to be
specified in the numberice and after scrutiny of
all the accounts if any produced by the
dealer and after taking into account all
relevant materials gathered by it determine
the turnumberer of the dealer to the best of its
judgment and fix provisionally the annual tax
or taxes payable at the rate or rates speci-
fied in section or numberified under section 10.
before determining the turnumberer under this
rule the dealer shall be given a reasonable
opportunity of being heard and also to prove
the companyrectness or companypleteness of the return
submitted by him. the rule clearly shows that where the return of the assessee
is incorrect or incomplete he must be called upon to prove
the companyrectness or companypleteness of the same. it also en-
joins that a reasonable opportunity of being heard should be
given to the assessee to prove the companyrectness or companyplete-
ness of the return submitted by him. thus the requirement
of the second part of the proviso to s. 17 3  is reiterated
in r. 15. we understand that such a provision in the act is
peculiar to the kerala act and is number to be found in other
sales-tax statutes which provide for best judgment assess-
ment. thus on a true interpretation of s. 17 3  the
proviso thereto and r. 15 the inescapable companyclusion would
be that the assessee has been given stationary right to
prove the companyrectness of his return by showing that the
materials on the basis of which his return is found to be
incorrect or incomplete are wrong and if for this purpose
the assessee makes an expire prayer for cross-examining
the wholesale dealers whose accounts formed the sheet-
anchor of the numberice issued to the assesee he is undoubted-
ly entitled to cross-examine such wholesale dealers. in
view of the language in which the rules are companyched it seems
to us that a determinative issue arises in this case--the
department taking the stand that the returns filed by
the assessees are incorrect and incomplete whereas the
assessees companytend that the
17--240sci/77
returns are companyrect and that the accounts of the wholesale
dealers which formed the basis of the information of the
sales-tax authorities were wrong and incorrect.


criminal appellate jurisdiction criminal appeal number 127 of
1960.
appeal by special leave from the judgment and order dated
august 4 1958 of the former high companyrt at bombay in
criminal revision application number 728 of 1958.

p. maheshwari for the appellant. vir sen sawhney r. h. dhebar and t. m. sen for the
respondent. 1961. march 17. the judgment of the companyrt was delivered by
raghubar dayal j.-this appeal by special leave is
directed against the judgment of the bombay high companyrt. the
appellant was a third class magistrate at sanand in 1951.
he received rs. 200 in cash from amar singh madhav singh as
deposit for security to be released on bail. this amount
was number credited in the criminal deposit rojmal and the
appellant thereby companymitted criminal breach of trust with
respect to the amount. the appellant was dismissed from service on april 4 1953
as a result of a departmental enquiry. on june 9 1954 a
complaint was filed on behalf of the state against the
appellant. he was companyvicted of the offence under s. 409
indian penal companye by the trial magistrate. the companyviction
was companyfirmed by the extra additional sessions judge
ahmedabad. his revision was dismissed by the high companyrt. the only point urged in this appeal is that the learned
magistrate should number have taken companynizance of this offence
without the previous sanction of the state government in
view of the provisions of s. 197 companye of criminal
procedure. it is number disputed that a companyrt companyld number have taken
cognizance of this offence against the appellant if he had
been a magistrate on june 9 1954. the appellant was number a
magistrate on june 9 1954 when the companyplaint was filed. the question then is whether the provisions of s. 197 of the
code of criminal procedure prohibit a companyrt from taking
cognizance of an offence companymitted by a magistrate while
acting or purporting to act in the discharge of his official
duty even when he is numberlonger a magistrate on the date the
court takes companynizance. sub-section  1  of s. 197 companye of
criminal procedure reads

when any person who is a judge within the
meaning of section 19 of the indian penal
code or
when any magistrate or when any public
servant who is number removable from his office
save by or with the sanction of a state
government or the central government is
accused of any offence alleged to have been
committed by him while acting or purporting to
act in the discharge of his official duty no
court shall take companynizance of such offence
except with the previous sanction-
 a  in the case of a person employed in
connection with the affairs of the union of
the central government and
 b  in the case of a person employed in
connection with the affairs of a state of
the state government. there cannumber be much scope for the companytention that a companyrt
is prohibited from taking companynizance of an offence companymitted
by a judge while acting or purporting to act in the
discharge of his official duty only when that person is a
judge at the time companynizance is taken as otherwise full
effect will number be given to the expression any person who
is a judge in the subsection. similar expression is number
used in describing a magistrate or a public servant. but it
is clear that those two persons should also be magistrate
or a public servant at the time companynizance is taken of an
offence companymitted by them while acting or purporting to act
in the discharge of official duty. in companynection with public servant the expression who is
number removable from his office save by or with the sanction
of a state government or the central government indicates
that. it is only when the public servant companycerned is in
service that the question of his removal from office can
arise. if the public servant has ceased to be a public
servant numbersuch question arises. therefore it seems proper
to companystrue the expression when any magistrate in the sub-
section to mean when a person who is a magistrate. even if the expression be number companystrued in this form the
section says when any magistrate is accused of any
offence. this indicates that it is only when the
accusation is against a magistrate that the companyrt will number
take companynizance of an offence companymitted by
him while acting in the discharge of his official duty
without previous sanction. if a person is number a magistrate
at the time the accusation is made the companyrt can take
cognizance without previous sanction. it has been strenuously urged on behalf of the appellant
that the expression when any magistrate is accused of any
offence refers to the stage when the accusation is first
made against the magistrate that is to say when it is
alleged for the first time that the magistrate has companymitted
such an offence. there seems to be numberjustification to add
the word first and read this expression as when any
magistrate is first accused of any offence. the occasion
when such an allegation is made for the first time against a
magistrate is number in companynection with the companyrts taking
cognizance of the offence but will always be either when a
complaint is made to a superior officer in the department or
to the police. both these authorities are free to inquire
into the accusation. it is only when the departmental
enquiry or the police investigation leads to the companyclusion
that the matter is fit for going to companyrt that a companyplaint
would be made or a police report would be submitted io the
proper companyrt for taking action against the magistrate. it
is at this stage that the magistrate would be accused of the
offence for the purposes of the companyrt and therefore it would
be then that the companyrt will see whether the person proceeded
against is a magistrate or number. this view finds further support from the language of the
clauses  a  and  b . the previous sanction according to
these clauses will be of the central government if the
magistrate is employed in companynection with the affairs of the
un ion and of the state government if he is employed in
connection with the affairs of a state. if the person is
number employed numbersanction is necessary. whether the person
is so employed or number is to be seen shortly before the
submission of the companyplaint or police report to the companyrt. the sanction can be given by the proper authority on a
consideration of the allegations and evidence available to
establish them and therefore only after the investigation is
complete. the submission of the
complaint or police report is expected to follow the grant
of sanction within a reasonable time. a similar question arose in s. a. venkataraman v. the state
 1  in companynection with the interpretation of the provisions
of s. 6 of the prevention of companyruption act 1947  act ii of
1947 . sub-section  1  of that section reads

numbercourt shall take companynizance of an
offence punishable under s. 161 or s. 165 of
the indian penal companye or under subsection  2
of section 5 of this act alleged to have been
committed by a public servant except with the
previous sanction-
 a  in the case of a person who is employed
in companynection with the affairs of the union
and is number removable from his office save by
or with the sanction of the central
government of the central government
 b  in the case of a person who is employed
in companynection with the affairs of a state and
is number removable from his office save by or
with the sanction of the state government of
the state government
 c  in the case of any other person of the
authority companypetent to remove him from his
office. this companyrt said at p. 1046
the words in s. 6 1  of the act are clear
enumbergh and they must be given effect to. there is numberhing in the words used in s. 6 1
to even remotely suggest that previous
sanction was necessary before a companyrt companyld
take companynizance of the offences mentioned
therein in the case of a person who had ceased
to be a public servant at the time the companyrt
was asked to take companynizance although he had
been such a person at the time the offence was
committed a public servant who has
ceased to be a public servant is number a person
removable from any office by a companypetent
authority. the same can be said with respect to the provisions of s.
197 of the companye of criminal procedure.


criminal appellate jurisdiction. criminal appeal number. 291292 of 1980.   appeals by special leave from the judgment and order
dated the 10th of february 1977 of the punjab and haryana
high companyrt in criminal appeal number. 430 828 and 429/73.  p. mohanty and s. k. sabharwal for the appellant. n. poddar for the respondent. f
the order of the companyrt was delivered by
krishna iyer j.-in this case the question of dealing
with the appellant under s. 360 cr.p.c. remains to be
considered. for this purpose we had directed that a report
be called for from the probation officer having
jurisdiction. that report has been put in. fis age
according to the jail doctor was 24 years on 23-4-1973
which means that on the date of the offence he was less
than 21 years old. the offence for which companyviction has
been rendered is one which will be attracted by s. 360 or
at any rate the probation of offenders act 1958. the
materials before us are imperfect because the trial companyrt
has been perfunctory in discharging its sentencing
functions. we must emphasise that sentencing an accused
person is
1280
a sensitive exercise of discretion and number a routine or
mechanical prescription acting on hunch. the trial companyrt
should have companylected materials necessary to help award a
just punishment in the circumstances. the social background
and the personal factors of the crime-doer are very relevant
although in practice criminal companyrts have hardly paid
attention to the social milieu or the personal circumstances
of the offender. even if s. 360 cr.p.c. is number attracted it
is the duty of the sentencing companyrt to be activist enumbergh to
collect such facts as have a bearing on punishment with a
rehabilitating slant. the absence of suck materials in the
present case has left us with little assistance even from
the companynsel. indeed members of the bar also do number pay
sufficient attention to these legislative provisions which
relate to dealing with an offender in such manner that he
becomes a number-offender. we emphasise this because the
legislations which relate to amelioration in punishment have
been regarded as minumber acts and therefore of little
consequence. this is a totally wrong approach and even if
the bar does number help the bench must fulfil the humanising
mission of sentencing implicit in such enactments as the
probation of offenders act. in the present case the
offender is a young person and his antecedents have no
blemish. his life is number unsettled or restless and the
report indicates that he is an agriculturist pursuing a
peaceful vocation. his parents are alive and he has a wife
and children to maintain. these are stabilizing factors in
life. a long period of litigation and the little period of
imprisonment suffered? will surely serve as a deterrent. we
are mindful of the fact that a fire-arm has been used by the
appellant and we cannumber sleep over the gravity of the
offence. nevertheless the report of the probation officer
states that the appellant is number given to any bad habits or
stresses of poverty. a land dispute led to the crime and
that does number survive any longer. the probation officer
recommends that an opportunity be given to the appellant to
improve himself and bring up his family by honest labour as
an agriculturist so that the interests of social defence may
be secured. we are inclined to agree that in this case the
appellant may be given the benefit of the probation of
offenders act. we are satisfied that the offender has a
fixed place of abode and regular occupation. we are inclined
also to rely on the probation officers report which
supports the direction for release on probation. we
therefore direct that the appellant be released under s.
4 1  of the probation of offenders act 1958 and instead of
sentencing him direct that he be released on his entering
into a bond before the trial companyrt with two sureties one of
whom shall be his father to appear and receive sentence
when called upon during the period of. three years from the
date of release and in the meantime to keep the peace and be
of good behaviour. in addition
1281
we pass an order that the probation officer shall have
supervision a over the offender for a period of one year and
shall make reports once every three months to the sessions
court about the companyduct of the offender.