Judgment :- RAMAPRASADA RAO, J. Thiru L. V. Veeri Chettiar and his minor son V. Shanmugham, the petitioners herein, formed themselves into an association of persons in the year 1961 for carrying on the business of manufacture of handloom and powerloom cloths. They adopted the trading style of "Messrs Shanmugham Textiles" and their factory was set up in Vambadithalam, Salem District. The petitioners later concerned themselves in the manufacture of ready-made garments, and were exporting such garments, art silk fabrics and pure silk zari embroidered sarees, all of which came under the category of handloom cloth and handicrafts within the meaning of the export promotion scheme for handicrafts and handloom cloths initiated by the Government of India. Under the said scheme certain import licences were issued to the petitioners as against the export of handloom cloths and handicrafts. It is not necessary to set out the details of the export promotion scheme, as they are not necessary. The petitioners concede that the import licences so obtained by them were being sold by them by way of forward sale though named brokers in Madras. Such blank transfers enabled the brokers to negotiate further the licences and sell the same. The petitioners would state that once they effected a sale of the licences through the brokers, they were not aware as to who finally imported the goods under cover of the licences and under the letters of authority which they signed in blank contemporaneously along with the sale of the licences. The petitioners' case is that they maintain no accounts in respect of such sale of licences and, according to them, no goods imported under the said licences were sold by them in the Maharashtra State. On 5th October, 1964, the Sales Tax Officer (XI), Enforcement Branch, Greater Bombay, who is the respondent in this case, sent a registered letter stating that the petitioners have made large imports at Bombay and called upon them to furnish to him the details of such imports and the disposal thereof. He characterised the petitioners as non-resident dealers and enclosed various forms to be filled up by the petitioners for the respondent to deal with them in accordance with the sales tax law in force in Bombay. He characterised the petitioners as non-resident dealers and enclosed various forms to be filled up by the petitioners for the respondent to deal with them in accordance with the sales tax law in force in Bombay. One such form which was enclosed with the letter dated 5th October, 1964, was a form which related to a certificate to be issued by a Chartered Accountant relating to the maintenance of the books of account by the petitioners and the statement of sales of imported goods etc. The petitioners replied in their letter dated 9th March, 1965, stating that there were no imports of art silk as claimed during the period 1st January, 1960, to 31st March, 1964. In this view they sent back the statement marked "nil". The petitioners claim that the association of persons was dissolved on 9th June, 1965. In spite of the disowning of any transaction in the nature of import or sale by the petitioners, the respondent was pursuing the petitioners to furnish before him their books of accounts. In their letter dated 4th August, 1966, the petitioners made it clear that there was no clearance of goods at Bombay Port and there was no sale of any commodity by the petitioners who were by then dissolved on 9th June, 1965. They denied liability and stated that the association of persons is under no legal obligation to produce the accounts and documents called for. They reiterated that the licences were sold in accordance with the common practice of the trade through named brokers, and blank papers in the nature of letters of authority were given at or about the time of such sale. The petitioners claim that there was no occasion or necessity for them to keep accounts as there was no actual import of goods subsequent to 1st April, 1964. They categorically stated as follows :- "As soon as transactions are concluded with the brokers, blank papers would be signed to enable them taking necessary steps to effect the imports in the name of the firm, by the ultimate purchasers of the licences. There was no effect contact at any stage between the association and the buyers of the licences. Therefore the association is not in possession of the details regarding the names of parties. There was no effect contact at any stage between the association and the buyers of the licences. Therefore the association is not in possession of the details regarding the names of parties. The names of buyers could be easily verified and found by the Sales Tax Authorities with reference to the import clearance papers with the Bombay Port Trust Authorities. If the officer has any information on which the suspicion that any transaction of sale was effected by the dissolved firm in Maharashtra State is based, the necessary material may kindly be furnished so that it would be possible to explain the nature of those transactions." * In effect, therefore, the petitioners challenged the factual hypothesis which prompted the respondent to issue the notice under the provisions of the Bombay Sales Tax Act and purported to exercise jurisdiction thereunder. It appears that the petitioners' representative interviewed the respondent on or about 11th August, 1966, and the position was made clear to him. This personal interview of the representative was followed by a letter of confirmation dated 23rd August, 1966. In this letter, while reiterating that they were not in possession of any particulars of sale of material at Bombay, the petitioners wanted that the details regarding the materials in the possession of the respondent be furnished to them, to enable them to answer the show cause notice. A reminder was sent on 31st August, 1966. There also the position was further elucidated by the petitioners, but with this difference that they gave the name of the broker through whom the licences were sold as Janab Gaffoor Sahib, Sunkurama Chetty Street, Madras-1. The petitioners were so diligent and sincere to enquire the respondent whether the ultimate buyers of the licences misused their names and pretended as if goods were sold in Bombay on behalf of and for the benefit of the petitioners. The petitioners also made out specifically that as they did not have direct contact with those buyers, any information leading to such sale may be forwarded to the petitioners, so that they could clear the suspicion in the mind of the respondent and consequentially work up their rights. The petitioners also made out specifically that as they did not have direct contact with those buyers, any information leading to such sale may be forwarded to the petitioners, so that they could clear the suspicion in the mind of the respondent and consequentially work up their rights. In spite of such a sincere efforts on the part of the petitioners, the respondent appears to have taken no steps in making any further investigation or securing materials to bring home to the petitioners that the goods imported under their licences were sold in the State of Maharashtra and within the jurisdiction of the officer concerned. On the other hand, on 4th November, 1966, the respondent issued the notice, which is impugned in this writ proceeding, which is practically a repetition of what he has stated but bereft of the particulars and materials requested for by the petitioners. The respondent, however, would state in the impugned notice that the petitioners have delivered goods imported in Bombay to local buyers. No attempt has been made to disclose as to who the buyers were, though such information was asked for. Apparently the respondent obtained information about the value of the licences granted for the years 1964-65 and 1965-66 from the Import Control Authorities and incorporated them in his notice under scrutiny by us, and concluded thus : "From this I infer that you must have been granted import licences for similar value in the past for 1960-61. As these goods have been sold after clearance in this State, I provisionally hold you liable from 1st January, 1960. ............ I propose to pass best judgment order after adding 500% to the C.I.F. value." * He would add that information of imports has been disclosed to the representative and he would not agree that notwithstanding the dissolution of the association of persons, there is no obligation on it to produce the books of account etc., and subject itself to the jurisdiction of the respondent. Finally the respondent would state that since the petitioners were the owners of the goods as per documentary evidence, as per conditions of import licence, the responsibility rested with the petitioners, and called upon them to show cause why he should not assess them in the manner proposed and why also a penalty under section 36(2)(a) of the Bombay Sales Tax Act, 1959, be not imposed. He also served a notice under section 33 of the said Act calling upon the petitioners to state their objections, if any, and called upon them to attend his office on a notified date. This notice prompted the petitioners to come up to this court under article 226 of the Constitution of India for the issue of a writ of prohibition prohibiting the respondent from taking any further proceedings in pursuance of his notice dated 2nd January, 1967. In the writ petition, the petitioners' case is that there is total absence of jurisdiction in the respondent to initiate proceedings against the petitioners. This is because the petitioners did not effect any sales as alleged and as only a sale would attract sales tax, and as no particulars of such sales were furnished in spite of several sincere requests made in that behalf, the impugned order is illegal. The petitioners would categorically state that they had not sold any goods in the erstwhile State of Bombay during the period of about five years prior to the date of dissolution. They would also raise a legal plea that the petitioners who formed themselves into an association of individuals having been dissolved the assessing authorities could not take any further action in law to bring to tax any transaction of theirs, even if there were any, on the ground that they have escaped assessment. They claim that the respondent was acting in an arbitrary and high-handed manner in the absence of any material whatsoever and the proposed levy of penalty is capricious. Apprehending, therefore, that final orders would be passed, which would be totally beyond the jurisdiction of the respondent, a rule nisi in the nature of a prohibition was sought. This court issued the rule nisi and the respondent has filed a counter-affidavit.In the counter the respondent's case is that this court has no jurisdiction to entertain and hear the petition as no part of the cause of action has arisen within the jurisdiction of this court. He would claim that the petition as framed is not maintainable. This court issued the rule nisi and the respondent has filed a counter-affidavit.In the counter the respondent's case is that this court has no jurisdiction to entertain and hear the petition as no part of the cause of action has arisen within the jurisdiction of this court. He would claim that the petition as framed is not maintainable. On the facts, it is stated that as a mere proposal has been made under section 33 of the Bombay Sales Tax Act, 1959, and as it is in the nature of a show cause memo., the petitioners are not entitled to challenge the said notice as the Act provides for adequate and efficacious remedies to challenge the final assessment orders by way of appeal, revision etc. The respondent does not admit that the petitioners did not import the goods or did not sell them in the State of Maharashtra or that the petitioners' firm was not aware to whom the imported goods were sold. He adds that as lawful custodian of the relevant documents connected with import licences it was incumbent upon the petitioners to produce the relevant evidence before the respondent to prove that the petitioners had not imported the goods and that they did not sell imported goods in the State of Maharashtra. He would maintain that he was justified in making the proposal as he did and such a proposal to assess even a dissolved association is competent under section 19(3) of the Act read with section 18 thereto. The respondent's specific case is that the onus is upon the petitioners to establish that there was no sale in the State and he had the necessary jurisdiction to issue the order and there has not been a violation of the principles of natural justice. In reply the petitioners contending contra state that under article 226(1-A) of the Constitution of India a part of the cause of action has arisen in the State of Tamil Nadu and the notice initiating the impugned proceedings were all received by the respondent in the State of Tamil Nadu and therefore this court has jurisdiction to entertain the writ petition and pass necessary orders thereon. They deny that no writ can lie against the person of the respondent and that the action proposed by the respondent is wholly without jurisdiction and therefore a writ of prohibition is the only effective remedy, though other alternative remedies are available under the Act after an illegal order of assessment is passed. The petitioners would reiterate that they requested both orally and in writing for the transmission of any material available with the respondent regarding the alleged sale of goods and on such a revelation the petitioners would be in a better position to answer the show cause memo. The petitioners would add that they have given all the particulars relating to the sale of their licences, the names of the brokers with whom they negotiated and having denied that they had anything to do with the later importation or the sale thereof, the respondent cannot assume jurisdiction without initially establishment that there was a sale of goods within the meaning of the Act by the petitioners in the State of Maharashtra.Mr. K. K. Venugopal, learned counsel for the petitioners, says that the writ is maintainable under article 226(1-A) of the Constitution and that the action proposed by the respondent against the association of persons which has been dissolved is ab initio illegal and unsustainable. He would say that a writ of prohibition would lie when there is total absence of jurisdiction and a petitioner in such circumstances need not wait till a final order of assessment is made and exhaust all statutory remedies since it would be practically suffering an order known to be against law and passed without jurisdiction. His other legal contention is that the association of persons once it is dissolved, no proceedings either in the nature of a proposal or by way of final order of assessment under the Bombay Sales Tax Act, 1959, can be made. Therefore the assumption of jurisdiction on the foot that the respondent has the right to do so is wholly without legal basis and is therefore unsustainable. On merits he would say that the respondent has not proved or attempted to place any material which might provoke a reply from the petitioners in the matter of the actual sale or disposal of goods by the petitioners as a dealer in the State of Maharashtra. On merits he would say that the respondent has not proved or attempted to place any material which might provoke a reply from the petitioners in the matter of the actual sale or disposal of goods by the petitioners as a dealer in the State of Maharashtra. The learned counsel for the respondent maintains that under the provisions of the Bombay Sales Tax Act, the proceedings are well-founded and in any event a writ of prohibition in the circumstances of the case is not the proper remedy. We shall immediately dispose of the contention regarding the maintainability of the writ petition. It is by now well settled that a writ of prohibition will issue in a case where it has been reasonably established that the assessing authority or the authority which issues the impugned order acted without jurisdiction and without any necessary power statutorily derived, to act in the manner it did. It is fundamental to expect an assessing authority to find materials on which to act and which as it were forms the jurisdictional fact on the bed-rock of which its exercise of power depends. An arbitrary and naked attempt on the part of the revenue to attempt to bring to tax dealings which never took place and which have not been prima facie established to have taken place has to be checkmated even at its threshold of operation. In such circumstances it is not necessary for an aggrieved person to suffer an order which can reasonably be stated to be without jurisdiction and later on exhaust the statutory remedies provided under a fiscal enactment. If a litigant were to be driven to this unfortunate and illogical limits, then the court would be encouraging the exercise of power by authorities when there is obviously none and such encouragement is against all fundamental canons of administration of justice. In the instant case the correspondence reveals that there was a sincere attempt on the part of the petitioners to get information from the respondent who was only functioning under the sales tax legislation, as to whether any sale was effected in the name of the petitioners or on their behalf. The impugned notice would state that the petitioners have delivered the imported goods to the local buyers. When repeatedly asked who those local buyers were, no information was furnished. The impugned notice would state that the petitioners have delivered the imported goods to the local buyers. When repeatedly asked who those local buyers were, no information was furnished. The petitioners emphatically deny that there was any sale of any commodity, and in fact, challenged the revenue to the effect that such names, which could be easily found by the authorities, could be ascertained and transmitted to them, so that they could explain the proposed action. In spite of the fact that the revenue was incessantly referring to the fact that the imports made were "disposal of", "sold and delivered to the local buyers"," goods have been sold after clearance in this State" * , there was absolutely no further attempt excepting the bare allegations as above, to substantiate that there was indeed a sale factually and legally. For a sale it is obvious that there are two parties, namely, the purchaser and the seller, and it is impracticable to allege that there was a sale without identifying such sale as an act as between an identifiable buyer and an identified seller. What has been repeated in this case is that the respondent was assuming that the petitioners have sold the imported goods in the State of Maharashtra to local buyers. If really goods which were imported under various manifests and which ought to have gone out of the port through an accredited process were the subject-matter of a sale between one party and the other, it would not have been difficult for the revenue to discover at least one of such sales, its nature, contents, description and character. Beyond saying that the petitioners sold to local buyers, there was no disclosure as to who the buyer was, where the sale was effected, when and by whom and to whom. It is in such circumstances that the petitioners are seeking for the issue of a writ of prohibition.As pointed out by the Allahabad High Court in State of U.P. v. Duli Chand Kashi Prasad "A writ in the nature of prohibition issues to restrain a quasi-judicial authority from exceeding the bounds of its jurisdiction. It may be issued at the threshold of the enquiry before it or soon after it has given a decision on the issue of its jurisdiction. It issues at the threshold of the enquiry before it if there is patent want of jurisdiction. It may be issued at the threshold of the enquiry before it or soon after it has given a decision on the issue of its jurisdiction. It issues at the threshold of the enquiry before it if there is patent want of jurisdiction. If the jurisdiction depends on the existence of certain facts it is generally proper that the court should not interfere with the enquiry until it has decided the issue of jurisdiction, for then full facts relating to its jurisdiction would be before the court. It may be that if there is prima facie no evidence to give it jurisdiction, the court may in a suitable case interfere at the threshold of the enquiry." * We respectfully adopt the observations made by the learned Judges. We are of the view that in the absence of any disclosure of acceptable material or reasonable data to entertain a doubt at least that the goods were sold in the State of Maharashtra, then it is proper for this court to stop the enquiry at its threshold even at its inception, for neither the jurisdiction fact which would vest the revenue with the power to proceed is present or the normal facet of jurisdiction to exercise a power is apparent in the proceedings. We are unable to appreciate the line of argument of the learned counsel for the respondent that this application is premature. This argument ignores the plain intention of the notice which calls upon the petitioners to prove the negative to show that they did not effect a sale and in its absence to submit to the heavy assessment and the consequential penalty indicated therein. This places upon the assessee considerable hardship, harassment and liability, for if it is established that there was no sale and the inchoate and incomplete material to the assessing authority is a myth, then it would constitute in presenti an encroachment on and an infringement of the petitioners' right which entitles them to immediately appeal to the appropriate court for redress - see the observations of the Supreme Court in Bengal Immunity Co. v. State of Bihar. We are therefore unable to accept the argument that this writ is not maintainable because an alternative remedy is available and the respondent is outside the jurisdiction of this State. v. State of Bihar. We are therefore unable to accept the argument that this writ is not maintainable because an alternative remedy is available and the respondent is outside the jurisdiction of this State. One other incidental contention is that this court has no jurisdiction to issue a writ because no part of the cause of action has arisen within the jurisdiction of this court. We do not agree. Under article 226(1-A) of the Constitution of India, the High Court has the power to issue directions, orders or writs to any Government, authority or person provided the cause of action for the issuance of such a rule under article 226(1-A), wholly or in part, arises, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories. What then is the cause of action that is referred to in this sub-clause of article 226 of the Constitution ? "Cause of action" has always been understood as referable to the bundle of facts in a legal proceeding and if a limb of that bundle of facts is available, seen or discernible in one particular place which is a seat of the High Court, then such High Court has the power to exercise all the powers conferred on it under article 226(1-A) notwithstanding the fact that the authority against whom the ultimate rule has to be issued and whose act has created a cause of action as a whole or in part, is situate outside its territorial limits. The person primarily affected by the respondent issuing the notices from time to time to the petitioners and calling upon them to produce the accounts of their business carried on in the State of Tamil Nadu and again by proposing to assess them to the best of his judgment on the assumption of certain jurisdiction facts, is the addressee of such notice and such affectation relates to the bundle of facts in the totality of the lis or proceeding concerned, and such impact necessarily gives rise to a cause of action, though it may be in part. It is established that in fiscal laws a proposal to assess forms part and parcel of the machinery of assessment and thus understood, the service of notice to assess and calling upon the petitioner to explain has given rise to a cause of action as is popularly and legally understood and the machinery of assessment has been set in motion and the impact of that motion is felt by the petitioners within the territorial limits of this State. We have therefore no hesitation in holding that a part of the cause of action has arisen in the State of Tamil Nadu.One other contention which is substantial is that the impugned notice cannot be proceeded with and no action thereunder can be taken because the petitioners were originally an association of persons and as they were dissolved on 9th June, 1965, the notice under consideration dated 2nd January, 1967, is without jurisdiction and cannot be pursued. It is common ground that beyond sections 18 and 19 of the Bombay Sales Tax Act, 1959, there is no express provision in the Act which would enable the revenue to proceed against a dissolved firm or a dissolved association of persons. "Dealer" has been defined in section 2(11) of the Act as meaning any person who for commission, remuneration or otherwise carries on the business of buying or selling goods in the State. We have already expressed the view that there is no material for us to hold that the petitioners either bought or sold goods in the State of Maharashtra. Even assuming that the impugned notice presumes that the petitioners are dealers, which include an association of individuals, the question is whether after dissolution of such an association, proceedings can be initiated against the quondam association through its members. Even assuming that the impugned notice presumes that the petitioners are dealers, which include an association of individuals, the question is whether after dissolution of such an association, proceedings can be initiated against the quondam association through its members. Learned counsel for the respondent relied upon sub-section (3) of section 19 of the Act which provides as follows : "Where a dealer, liable to pay tax under this Act, is a firm, and the firm is dissolved, then every person who was a partner shall be jointly and severally liable to pay to the extent to which he is liable under section 18, the tax (including any penalty) due from the firm under this Act or under any earlier law, up to the time of dissolution, whether such tax (including any penalty) has been assessed before such dissolution but has remained unpaid or is assessed after dissolution." * It is contended that this sub-section read with section 18 of the Act provides sufficient authority to the respondent to issue the notice against the petitioners notwithstanding the dissolution of the association of persons. It is a common norm of fiscal law that if a person's dealings or transactions can be brought into the net of taxation, then the concerned fiscal enactment should expressly provide for such bringing to tax the dealing or the transaction concerned and an assessment or taxing of that deal or act on the part of a person cannot be assumed or presumed by necessary implication. In fact, the law is well established that if there is a doubt whether a particular person is liable to tax at all under a tax law, then the benefit of such doubt should go to the proposed assessee. We have not been shown any provision in the Bombay Sales Tax Act, expressly conferring authority on the revenue which could prompt the respondent to assess or propose to assess a defunct firm or a dissolved association of individuals. Sub-section (3) of section 19 is sought to be pressed into service. This sub-section is not a charging section. It merely declares the liability of the quondam members whether assessment has been made before such dissolution or assessed after dissolution. It is this last expression in this sub-section which is very strongly relied upon. Sub-section (3) of section 19 is sought to be pressed into service. This sub-section is not a charging section. It merely declares the liability of the quondam members whether assessment has been made before such dissolution or assessed after dissolution. It is this last expression in this sub-section which is very strongly relied upon. On a fair reading of this sub-section we are unable to conclude that this by itself is sufficient to infer an express power in the statutory authority to assess an association of persons after dissolution. This sub-section is only declaratory of the liabilities of the erstwhile members of an association of individuals, but it does not proprio vigore give an indication that a dissolved firm or association of individuals could be taxed notwithstanding dissolution. Under the Madras Act there was no such provision originally, but now a new section has been introduced as 19-A. Sub-clause (a) of section 19-A of the Madras General Sales Tax Act expressly provides for such tax liability on a dissolved association of persons even after dissolution, but for the pre-dissolution period as if no such dissolution had taken place. Clause (b) of section 19-A of the Madras General Sales Tax Act is in pari materia with sub-clause (3) of section 19 of the Bombay Sales Tax Act, 1959. We shall presently consider the necessity for the introduction of section 19-A in the Madras General Sales Tax Act, 1959, by amending Act 12 of 1968. At this stage, however, it is sufficient for us to say that we are unable to agree with the learned counsel for the respondent that sub-clause (3) of section 19 read with section 18 of the Act is sufficient indication that a person who is a dissolved association can be subjected to tax under such provisions. The net result of the discussion is that there is no express provision in the Bombay Act which enables the respondent to issue a notice and proceed thereafter to assess an association of persons which has been dissolved on the date of such issuance of notice. No doubt, the liability of the quondam members may be there. The net result of the discussion is that there is no express provision in the Bombay Act which enables the respondent to issue a notice and proceed thereafter to assess an association of persons which has been dissolved on the date of such issuance of notice. No doubt, the liability of the quondam members may be there. But in the absence of a charging section, the respondent cannot assume jurisdiction and issue a notice proposing to assess on the best of his judgment.That an association of persons, which is also a legal entity like a partnership firm, cannot be proceeded against after dissolution, for its pre-dissolution transactions, is now very clear from the decision of the Supreme Court in State of Punjab v. Jullundur Vegetables Syndicate In that case, a partnership firm was dissolved on 11th July, 1953. On 3rd September, 1955, the Sales Tax Officer made an assessment on the firm under the provisions of the East Punjab General Sales Tax Act, 1948. At the relevant time there was no provision expressly empowering the assessing authority to assess a dissolved firm in respect of its turnover before its dissolution. In those circumstances the Supreme Court held that the assessment was bad and observed as follows : "In interpreting a fiscal statute the court cannot proceed to make good the deficiencies, if there be any, in the statute. It shall interpret the statute as it stands and in case of doubt it shall interpret it in a manner favourable to the taxpayer. In considering a taxing Act, the court is not justified in straining the language in order to hold a subject liable to tax. Though under the partnership law a firm is not a legal entity but only consists of individual partners for the time being, for tax law, income-tax as well as sales tax, it is a legal entity. On the dissolution of the firm it ceases to be a legal entity, and on principle, thereafter, unless there is a statutory provision permitting the assessment of a dissolved firm, there is no longer any scope for assessing the firm, which ceases to have a legal existence. There cannot be a distinction on principle between an assessment made on a firm under a proceeding initiated before its dissolution and one made in a proceeding started after the dissolution. There cannot be a distinction on principle between an assessment made on a firm under a proceeding initiated before its dissolution and one made in a proceeding started after the dissolution. In either case, unless there is an express provision, no assessment can be made on a firm which has lost its character as an assessable entity." * The above decision was the primary cause for the introduction of the new section 19-A in the Madras General Sales Tax Act. Reference was also rightly made by the learned counsel for the petitioners to the provisions of the Income-tax Act only to sustain his argument that there should be a specific provision in a fiscal enactment enabling the assessing authority to assess a dissolved firm and bring to tax its dealings during its pre-dissolution period. Though an argument was hesitatingly raised by the counsel for the respondent that a father and a minor son cannot form an association of persons within the meaning of the Bombay Sales Tax Act, 1959, yet this was not seriously pressed in view of the ratio in M. M. Ipoh v. Commissioner of Income-tax which was confirmed later by the Supreme Court in M. M. Ipoh v. Commissioner of Income-tax wherein such a situation has been held to be valid and such a union has been treated as an association of persons. Thus, even the second contention raised by the learned counsel for the petitioners that no proceedings as initiated by the respondent can be furthered is well-founded. It is not in dispute that the alleged dealings were of the quondam association of persons. A notice is served on one of its members. Unless there is a provision which enables the respondent to assess a dissolved association of persons, he cannot proceed under the Act and set afoot the process and machinery of assessment against two members of the quondam association merely on the strength of section 19(3) of the Bombay Sales Tax Act, 1959 "Before the discretion conferred by section 237(b) of the Companies Act, 1956, to order an investigation can be exercised, there must exist circumstances which in the opinion of the authority suggest what has been set out in sub-clauses (i), (ii) or (iii). If it is shown that the circumstances do not exist or that they are such that it is impossible for any one to form an opinion therefrom suggestive of the aforesaid things, the opinion is challengeable on the ground of non-application of mind or perversity or on the ground that it was formed on collateral grounds and was beyond the scope of the statute." * With respect we restate the rule to suit the facts of this case as follows : Before a proposed notice of assessment on the best judgment formula can be issued, the fiscal authority should establish that there exist circumstances which in its opinion suggest that there has been a sale or a purchase by a dealer under the Bombay Sales Tax Act, 1959. But if it is shown that circumstances do not exist or that they are such that it is impossible for a reasonable and a prudent and well instructed person to form an opinion therefrom suggestive of a sale under the Sales Tax Act, then the opinion and the consequential action is challengeable on the ground of non-application of mind or on the ground that it was formed on collateral grounds. Thus, therefore, the notice issued, without even the requisite material to act, is beyond the scope of the respondent. For all the above reasons, this writ petition has to be allowed. It is accordingly allowed with costs. Counsel's fee Rs. 250.