JUDGMENT JAGANNADHADAS, C.J. - This is an application under sub-section (3) of section 24 of the Orissa Sales Tax Act of 1947 asking us to direct the Revenue Commissioner to state a case and make a reference to the High Court in following circumstances : The applicant is a dealer in betel-leaves. He registered himself under section 9 of the Act in January, 1949, and submitted his return for the quarter ending 31st March, 1949. The Sales Tax Officer accepted that return and assessed him to tax for that quarter; but simultaneously with it, that is, on 4th October, 1949, he also assessed him for the three quarters ending 30th June, 1948, 30th September, 1948, and 31st December, 1948, on the basis of the return of sales for the quarter ending 31st March, 1949, already filed. It is to be noticed that the assessee had not registered himself during those quarters nor did he submit any return in respect thereof. On receiving notices of demand in respect of these three quarters, the assessee made an application on 26th November, 1949, to the Sales Tax Officer stating that he started business in betel-leaves only on the 17th of April, 1948, and that he was not accordingly liable under the Act to pay tax for those three quarters. Not having received any orders in respect of his review application to the Sales Tax Officer, he applied also to the Collector of Sales Tax by way of review. The Collector held that the review was not competent; but took up the mater in revision, suo motu under section 23(3) read with rule 54 of the rules under the Act, but on consideration thereof rejected the application. Thereupon, the assessee went up in revision to the Revenue Commissioner, who also rejected the same. The assessee consequently made an application to the Revenue Commissioner under section 24(1) requiring him to refer certain questions of law to the High Court for its decision. The Revenue Commissioner rejected that application also. Hence the assessee has come up to this Court for a direction to the Revenue Commissioner under sub-section (3) of section 24 of the Act. The substantial point raised by the assessee is as follows : Admittedly he was a person who did not register himself during the year 1948. The Revenue Commissioner rejected that application also. Hence the assessee has come up to this Court for a direction to the Revenue Commissioner under sub-section (3) of section 24 of the Act. The substantial point raised by the assessee is as follows : Admittedly he was a person who did not register himself during the year 1948. If in the opinion of the Sales Tax Officer, he was liable to pay the tax in respect of the three quarters, in 1948, and nevertheless failed to apply for registration action could have been taken against him only under sub-section (5) of section 12. Under that sub-section it was mandatory for the Sales Tax Officer to give the assessee a reasonable opportunity of being heard. The assessee's case is that as a fact he was not liable to assessment during the quarters in question, since he started business only on the 17th April, 1948. Thus, the assessment made on the assumption that he was liable to assessment during the quarters abovementioned and without giving him an opportunity of being heard against the correctness of that assumption, is illegal. It may be mentioned that if it is a fact as the assessee now states that he commenced his business as a betel-leaf dealer only on the 17th April, 1948, he would not be liable to pay tax for the three quarters in question by virtue of sub-section (2) of section 4 of the Act; and if it is a fact that the assessee was doing business during the year ending 31st March, 1948, or earlier, he would be liable to pay tax of the quarters in question. The contention that he started his business only on the 17th April, 1948, and that he should have been given an opportunity to prove his non-liability to tax, in respect of these three quarters were specifically raised in the petition filed before the Collector of Sales Tax and also the application for revision made to the Revenue Commissioner dealt with the grievance of the applicant that he was given no opportunity to prove that he was not in fact liable to assessment for the three quarters in question. The learned Collector though he did not deal with the contention as to want of opportunity, curiously enough says that there is no evidence in support of the assessee's statement that he commenced business only on the 17th April, 1948. Of course, if the assessee's contention that he was not given any opportunity is valid, it is clear that he cannot be found fault with, for not having given evidence. Both the Collector and the Revenue Commissioner however in confirming the assessment made by the Sales Tax Officer and in rejecting the applications by the assessee and in the application which he made to the authorities concerned for his registration as a dealer in the month of January, 1949, had stated categorically that he had a gross turnover of Rs. 30,000 for the year ending 31st March, 1949. The assessee's objection to the use of this material against him by the Collector and the Revenue Commissioner is two-fold : firstly, that that was not the material on which the Sales Tax Officer proceeded to assess him for the quarters in question, because a reference to the assessment order shows that he was assessed "as directed by the Government Order" which has not been reproduced, either in the assessment order or in any of the orders of the Collector or Revenue Commissioner in these proceedings. Secondly, the application for registration relied upon could not be used as evidence against him, without his being given an opportunity to show that the statements in that application were inaccurate and that in fact the truth was that he started his business only in April, 1948. It is not disputed before us by learned counsel for the Sales Tax Authorities that the assessee did not receive any notice under section 12(5) of the Act; but it is stated by him that even apart from his admission in the application for registration of a gross turnover of Rs. 30,000 during the year ending 31st March, 1949, the very fact of his having applied for registration in January, 1949, would show that his statement that he commenced business in April, 1948, must be false in view of sub-section (2) of section 4. 30,000 during the year ending 31st March, 1949, the very fact of his having applied for registration in January, 1949, would show that his statement that he commenced business in April, 1948, must be false in view of sub-section (2) of section 4. The question therefore that arises in these proceedings is whether in the absence of such a notice the assessment was legal and whether the statements contained in the application for registration or the fact of such application itself could be used as evidence against the assessee to make out his liability for assessment during the three quarters in question, when he had no opportunity given to him of showing the contrary and when that was not the material relied on by the Sales Tax Officer in his order of assessment. Learned counsel for the taxing authority contends that the question of the liability to assessment in this case depends merely on the fact whether the assessee was not carrying on business prior to April, 1948, as he now contends and that on this matter there are clear and categorical findings which bind us. Learned counsel has also stated to us that the Government Order referred to in the Sales Tax Officer's assessment order contains a statement to the effect that in view of certain previous history and negotiations between the Government and the betel-leaf dealers it was agreed that though they are to register themselves and submit return for the first time only in January, 1949, i.e., in the last quarter of 1948-49, they should all be liable to be assessed in respect also of the first three quarters of the year 1948-49 on the basis of the return for the said last quarter. So far as this last contention is concerned, the necessary material does not find any mention in the orders of the Sales Tax Authorities, nor is it before us at this stage. Indeed, if the facts in respect of this point be as the learned advocate states, a question may well arise whether in fact this particular assessee was a party to the said agreement and whether such an agreement can deprive him of his statutory right under section 12(5) of the Act. Indeed, if the facts in respect of this point be as the learned advocate states, a question may well arise whether in fact this particular assessee was a party to the said agreement and whether such an agreement can deprive him of his statutory right under section 12(5) of the Act. Leaving alone such a question for the present, as not arising before us, the questions that substantially arise are (i) whether the assessments is question are legal and valid, in the absence of an opportunity having been given under sub-section (5) of section 12, and (ii) whether in view of the absence of that opportunity, and in view of the fact that the order of assessment by the Sales Tax Officer relies merely on the Government order the statements made in the assessee's application for registration in January, 1949, or the fact of that application itself, could be used as legal evidence against him, in proof of the liability for assessment for the three quarters in question. To satisfy ourselves that the questions so raised are not of a merely unsubstantial and academic nature we asked the assessee's counsel, whether apart from any substantive evidence that he might have given if he had opportunity, he has any definite case as regards the statements in the application for assessment or the fact of such application in January, 1949, having been made and if so to put it in writing. His case as regards the statements in the application has accordingly been set out in the affidavit which we have allowed him to file in this Court, and his case with reference to the argument arising from the fact that he made his application in January, 1949, is set out in para 3 of his review to the Collector of Sales Tax. We are therefore satisfied that the above-stated substantial questions of law arise for consideration in these proceedings. Learned counsel for the Sales Tax Authorities however contends that these questions cannot be said to arise out of the order of the Revenue Commissioner and draws our attention to the language of sub-section (1) of section 24, whereby the assessee's right is only to require the Revenue Commissioner to refer to the High Court any question of law "arising out of such order". He urges that the High Court's power under sub-section (3) of the same section must also therefore be taken to be to require the Revenue Commissioner to state a case only with reference to any question of law "arising out of such order". He contends that neither of the questions above formulated can be said to arise out of the order of the Revenue Commissioner passed in revision. That order is very brief and is as follows :- "In this case the petitioner claims that his business was started in April, 1948, and that he paid his dues for the quarter ending March, 1949, because during that quarter he found that he had come to the assessable limit. This is a point of fact and has not been accepted by both the lower courts. In his application for registration, he has shown his income ending March, 1949, as Rs. 30,000. It cannot be said his income for three quarters of 1948-49 was lower than the prescribed limit. In view of this fact, I cannot disagree with the combined views of the two lower courts. Revision rejected." Now the question whether the statement in the application for registration, on which the Revenue Commissioner relied, is legal evidence against the assessee in the circumstance already mentioned, is certainly one that arises out of the order of the Revenue Commissioner himself. The question however as to whether the assessment made without any opportunity having been given under sub-section (5) of section 12 of the Act is legal, is no doubt one which has not been dealt with in the Revenue Commissioner's order. But that question has been categorically raised in the grounds of revision to the Revenue Commissioner, being ground No. 2, thereof. It may be also mentioned that the same question has been raised in the grounds of revision to the Sales Tax Collector, being ground No. 1, wherein it has been stated that the learned Sales Tax Officer should have given sufficient opportunity to the petitioner to prove his non-liability to tax in the particular circumstances. It is contended that this question though raised in the grounds, not having been dealt with in the order of the Revenue Commissioner, cannot be said to arise out of his order. It is contended that this question though raised in the grounds, not having been dealt with in the order of the Revenue Commissioner, cannot be said to arise out of his order. Learned counsel on both sides have drawn our attention to the phrase "arising out of the order" which appears in the analogous section 66(1) of the Indian Income-tax Act, from which this phrase appears to have been borrowed. Undoubtedly, there is goods deal of conflict in the decided cases as to the proper connotation of this phrase. To illustrate that conflict, it is sufficient to refer to New Piece-goods Bazar Co., Ltd., Bombay v. Commissioner of Income-tax, Bombay ([1947] 15 I.T.R. 319), Madanlal Dharnidharka v. Commissioner of Income-tax ([1948] 16 I.T.R. 227; A.I.R. 1949 Bom. 24), Abboy Chetty v. Commissioner of Income-tax ([1947] 15 I.T.R. 442; A.I.R. 1948 Mad. 181), Commissioner of Excess Profits tax, West Bengal v. Jeewanlal Ltd., Calcutta ([1951] 20 I.T.R. 39) and Chainrup Sampatram v. Commissioner of Income-tax, West Bengal ([1951] 20 I.T.R. 484). It is unnecessary for us to canvass this question fully and express any opinion thereon. But even on what may be called the narrower view which is reflected in Abboy Chetty v. Commissioner of Income-tax ([1947] 15 I.T.R. 442; A.I.R. 1948 Mad. 181), it cannot be said that his Lordship Justice Patanjali Sastri (as he then was) has ruled that a question raised before a Tribunal, but not dealt with in the order is not one that arises out of it. There is no reason to think that, that decision lays down that it is only a question which is found referred to and discussed within the four corners of an order that can be said to arise out of it. Undoubtedly, the actual order itself is good evidence as to what questions arise out of it but when a particular point has been categorically raised in the petition filed before the authority concerned, and there is nothing to show that that point has been given up, I think it must be taken that it is a point raised before the Tribunal and hence arising out of the order of the Tribunal. Indeed, it arises out of it, if only because it ignores it. Indeed, it arises out of it, if only because it ignores it. I am therefore satisfied that it is open to us to direct the Revenue Commissioner to refer to us the two questions above formulated, and we hereby require him to do so. It may be mentioned that in the application made to the Revenue Commissioner under section 24(1) and in the application made to us under section 24(3), the questions have been formulated in somewhat different form, but that does not preclude us from directing a reference on the question which we think really arise out of the order of the Revenue Commissioner in these proceedings. It may be added that in view of the contentions raised by the learned advocate for the Sales Tax Authorities, that in fact there has been an agreement to waive the procedure of the Act and that Government Order referred to in the Sales Tax Officer's order is on that agreement, it will be open to the Revenue Commissioner so chooses, to go into the question raised thereby and to find the facts, in their relation to this individual assessee after giving him opportunity and if he finds that there was any such agreement was the procedure in the Act, he may consider whether he ought not refer the legality of such a waiver also for the decision of this Court. MOHAPATRA, J. - I agree. In pursuance of the above order, the Member, Board of Revenue, stated a case to the High Court on three questions of law. JUDGMENT MOHAPATRA, J. - This is a reference made by the Member, Board of Revenue, Orissa, under the provisions of section 24 of the Orissa Sales Tax Act, 1947. MOHAPATRA, J. - I agree. In pursuance of the above order, the Member, Board of Revenue, stated a case to the High Court on three questions of law. JUDGMENT MOHAPATRA, J. - This is a reference made by the Member, Board of Revenue, Orissa, under the provisions of section 24 of the Orissa Sales Tax Act, 1947. This Court by the order dated 25th July, 1952 (Printed at p. 341 supra), had called upon the Member, Board of Revenue, to state a case on two questions of law framed by the Court running as follows :- (i) Whether the assessments in question are legal and valid in the absence of an opportunity having been given under sub-section (5) of section 12; and (ii) Whether in view of the absence of that opportunity and in view of the fact that the order of assessment by the Sales Tax Officer lies merely on the Government order, the statements made on the assessee's application for registration in January, 1949, or the fact of that application itself, could be used as legal evidence against him, in proof of the liability for assessment for the three quarters in question. In our order of the said date, we have made certain observations in paragraph 7 of the judgment running as follows :- "It may be added that in view of the contentions raised by the learned advocate for the Sales Tax Authorities, that in fact there has been an agreement to waive the procedure of the Act and that the Government order referred to in the Sales Tax Officer's order is based on that agreement, it will be open to the Revenue Commissioner if he so chooses, to go into the question raised thereby and to find the correct facts, in their relation to this individual assessee after giving him proper opportunity; and if he finds that there was any such agreement waiving the procedure in the Act, he may consider whether he ought not to refer the legality of such a waiver also for the decision of this Court." 2. The Member, Board of Revenue, in pursuance of the above observations, has also framed a third question running thus :- "Whether there has been an agreement to waive the procedure of the Act and the Government order referred to in the Sales Tax Officer's order is based on that agreement and, if so, the effect of such a waiver." 3. The facts leading to this reference are extremely simple. The petitioner is a betel-leaf dealer. According to him, he started his business in betel-leaves from 17th April, 1948. He made an application for getting himself registered under the provisions of section 9 of the Act on 7th January, 1949, and accordingly he was so registered. He submitted return for the quarter ending on 31st March, 1949, on 29th April, 1949. The Sales Tax Officer accepted the return and assessed him to tax for the quarter. Simultaneously with it, that is, on 14th October, 1949, he also assessed the petitioner for three other quarters ending on 30th June, 30th September and 30th December, 1948, on the principle of assessment on best judgment on the basis of the return of sales for the quarter ending on 31st March, 1949, which had been filed by the petitioner. The assessments of the three aforesaid quarters, that is, 30th June, 30th September and 30th December, 1948, the being challenged by the petitioner as being illegal on account of the non-observance of the mandatory provisions of section 12(5) of the Act (Orissa Sales Tax Act, 1947). 4. It will be pertinent before proceeding further to quote sub-sections (4) and (5) of section 12 of the Act :- "(4) If a registered dealer does not furnish returns in respect of any period by the prescribed date, the Collector shall, after giving the dealer a reasonable opportunity of being heard, assess, to the best of his judgment, the amount of tax, if any, due from the dealer. (5) If upon information which has come into his possession, the Collector is satisfied that any dealer has been liable to pay tax under this Act in respect of any period and has nevertheless wilfully failed to apply for registration, the Collector shall, after giving the dealer a reasonable opportunity of being heard, assess, to the best of his judgment, the amount of tax, if any, due from the dealer in respect of such period and all subsequent periods and the Collector may direct that the dealer shall pay, by way of penalty, in addition to the amount so assessed, a shall pay, by way of penalty, in addition to the amount so assessed, a sum not exceeding one and a half times that amount." It appears, on a reading of the provisions of the sections quoted above and also examining the scheme of the Act, that the provisions of sub-section (5) of section 12 are mandatory and the non-observance of them will render the assessment illegal and invalid. From the statement submitted before us by the Member, Board of Revenue, it appears that in fact no notice was given to the assessee before the Sales Tax Officer had passed the order of assessment in respect of the above three quarters. It also appears that in fact no opportunity was given to the assessee of being heard before the said assessment was made. 5. Mr. B. Mohapatra, appearing on behalf of the Sales Tax Authorities, however, strongly relies upon the antecedent facts leading to the assessment made by the Sales Tax Officer to show that in fact there has been no prejudice to the assessee and further that he had accepted the position and acted upon it. It appears from the Press Note dated 23rd December, 1948, that in fact some negotiations were going on prior to that date between the Betel-leaves Dealers' Association and the Sales Tax Authorities (that is, the Government). The present petitioner is a dealer carrying on his business in betel-leaf at Jaleswar. By the aforesaid Press Note the Government extended the time for getting the dealers to be registered under the provisions of the Act by 31st December, 1948, and further ordered that if any penal proceedings have been instituted against any dealer for his failure to get himself registered, these proceedings would be withdrawn. By the aforesaid Press Note the Government extended the time for getting the dealers to be registered under the provisions of the Act by 31st December, 1948, and further ordered that if any penal proceedings have been instituted against any dealer for his failure to get himself registered, these proceedings would be withdrawn. Nevertheless the present petitioner along with several other dealers had not really filed their petitions for registration before the date fixed in the Press Note, that is, before 31st December, 1948. Again in consequence of further negotiation between the Betel-leaves Dealers' Association and the Government of Orissa a further order was passed on 30th April, 1949. The relevant portions of the order which appear in paragraph 2 of letter No. 6236-F, dated 30th April, 1949, run as follows :- "The following concessions will be allowed to the registered betel-leaf dealers mentioned in the preceding paragraph viz. :- (i) The recovery of the tax payable for the two quarters from the 1st October, 1947, to the 31st March, 1948, will be waived. (ii) The dealers shall have to pay the tax from the 1st April, 1948. (iii) The arrears of tax for the three quarters from the 1st April, 1948, to the 31st December, 1948, will be computed as follows :- (a) If a dealer has already paid his tax for any of the three quarters no further tax for the quarter or quarters will be payable by him. (b) If the tax for any or all of the three quarters has not been paid, the tax will be computed, as suggested in the petition on the basis of sales from the 1st January to the 31st March, 1949. (iv) Arrears of tax as above should be paid not later than the 15th June, 1949. (v) Dealers who have paid the tax for any of the quarters from the 1st October, 1947, to the 31st March, 1948, will, on application, get refund of the amount." Mr. (iv) Arrears of tax as above should be paid not later than the 15th June, 1949. (v) Dealers who have paid the tax for any of the quarters from the 1st October, 1947, to the 31st March, 1948, will, on application, get refund of the amount." Mr. Mohapatra relies upon two particular clauses embodied in this paragraph 2 of the letter, the clauses being that the dealers shall have to pay the tax from the 1st April, 1948, and further that if the tax for any or all of the three quarters has not been paid, the tax will be computed, as suggested in the letter on the basis of sales from the 1st January, to the 31st March, 1949. Mr. Mohapatra contends that the present assessments for the aforesaid quarters are based upon the clauses contained in the order dated 30th April, 1949, which was based in consequence of the negotiation between the Betel-leaves Dealers' Association and the Government. There is, as found by the Member, Board of Revenue, no direct proof that this particular assessee (the present petitioner) had ever taken part in the negotiations. He simply presumed that in fact he would be carrying on these negotiations along with the other members of the Association. It is clear to us that there being no legal evidence that in fact the present assessee was a party to the order passed by the Government, the assessee cannot be bound by the said order, and particularly to the extent that the order will override the mandatory provisions of the Act. It cannot be suggested for a moment that on account of this order the Sales Tax Officer or the authorities are exempt from examining the individual cases on merits before passing an order of assessment under sub-section (5) of section 12 of the Act. It is manifest to us that on account of non-observance of the mandatory provisions of this sub-section, the assessee has suffered serious prejudice. If really an opportunity was afforded to him before passing of the order of assessment he could be in a position to prove before the authorities that his turnover was much less than on the basis of which the assessment had been made. If really an opportunity was afforded to him before passing of the order of assessment he could be in a position to prove before the authorities that his turnover was much less than on the basis of which the assessment had been made. He could also prove before the authorities that in fact he is not liable to any assessment whatsoever on the basis of the position, as he alleges before us, that his business was started only on 17th April, 1948. We are to make it clear that it is no part of our business to give a finding that in fact he has started his business on 17th April, 1948; but nevertheless this feature is pertinent for our consideration for the purpose of showing that the assessee has suffered serious prejudice on account of no opportunity having been given to him before the order of assessment was made. 6. Mr. Mohapatra, however, very strongly relies upon the petition filed by the assessee before the Sales Tax Officer showing the date of commencement of his business as 17th April, 1947. It is manifest that it was open for the assessee to have proved that it was on account of a mistake that this date had been inserted in the petition. He could have been in a position to prove to the satisfaction of the authorities that the date of commencement of his business is otherwise than what is contained in the petition. But the more important feature arising out of this is that in the absence of an opportunity given to the assessee the petition cannot serve as the legal evidence for assessment for the quarters in question. 7. Mr. Mohapatra has relied upon two decisions, Harmukh Rai v. State ([1952] 3 S.T.C. 153; A.I.R. 1952 Pat. 278) and Chatturam v. Commissioner of Income-tax, Bihar ([1947] 15 I.T.R. 302; A.I.R. 1947 F.C. 32), to build up his argument that the Sales Tax Authorities derive their jurisdiction to proceed against the assessee in the matter of assessment not on the basis of section 12 but on the basis of other sections of the Act. The provisions regarding notice or opportunity to the assessee are provisions made to facilitate the machinery for the realisation of the taxes and do not go to the very root of the jurisdiction of the authorities. The provisions regarding notice or opportunity to the assessee are provisions made to facilitate the machinery for the realisation of the taxes and do not go to the very root of the jurisdiction of the authorities. Their Lordships of the Patna High Court (Ramaswami and Sarjoo Prosad, JJ.) have drawn a distinction between the two aspects of such cases that even though in cases where there has been no issue of notice or no valid service of notice, the assessment cannot be challenged as without jurisdiction, but it can be set aside as being invalid and illegal if really there has been prejudice to the assessee. The Patna case is to a great extent similar to our present case and involved a question of notice under section 13(2)(b) of the Bihar Sales Tax Act which exactly corresponds to section 12(2)(b) of the Orissa Act. Their Lordships set aside the assessment on the finding that the assessment was illegal and invalid as the assessee was not given an opportunity to submit his accounts before the authorities. The Federal Court decision lays down almost the same principle as mentioned above drawing a distinction between these two features. Their Lordships of the Federal Court being in the midst of a case under sections 3 and 4 of the Income-tax Act observed that non-issue or non-service of notice does not go to the root of the jurisdiction of the case, but nevertheless they have definitely observed to the effect "It may be urged that the issue and service of a notice under section 22(1) and (2) may affect the liability under the penal clauses which provide for failure to act as required by the notice." It is clear therefore to us that the present assessment must be found as illegal on account of the non-observance of the mandatory provisions of section 12(5) as the assessee has suffered serious prejudice on account of non-service of notice. We would therefore answer the questions in the following manner :- The answer to question No. 1 is in the negative, that is, the assessments are not legal and valid in the absence of an opportunity having been given under sub-section (5) of section 12 of the Act. We would therefore answer the questions in the following manner :- The answer to question No. 1 is in the negative, that is, the assessments are not legal and valid in the absence of an opportunity having been given under sub-section (5) of section 12 of the Act. The answer to question No. 2 is in the negative, that is to say, that the application itself cannot be used as legal evidence against him in proof of the liability for the assessment of the three quarters in question. The answer to question No. 3 is in the negative as there has been no agreement to waive the procedure of the Act. 8. The reference is disposed of accordingly. The petitioner is entitled to costs of these proceedings. Hearing-fee is assessed at rupees one hundred (Rs. 100). MISRA, J. - I agree. Reference answered accordingly.