Mukundilal Bansidhar v. State of Bihar — 1976 DIGILAW 94 (PAT)

K.B.N. Singh, J. The petitioners, in each of these two writ applications, have prayed for quashing orders of best-judgment assessment and demand notices issued in pursuance thereof (Annexures 3' and 4'). As common question of law are involved in these two applications, they have been heard together and this judgment will govern both of them. 2. The petitioners in both the writ applications are partnership firms carrying on business in foodgrains and edible oil-seeds, and each of them hold licence under the provisions of the Bihar Agricultural Produce Markets Act, 1960 (Bihar Act, XVI of 1960)-hereinafter referred to as the Act. The common case of the petitioners is that they purchase different foodgrains and edible oil-seeds, both from within and outside the market area of Begusarai and sell them either within the said market area or outside the area. Petitioners were served with notices under section 27 A (5) of the Act, to produce books of accounts for the period 17th January, to 31st December 1974, on the 29th April, 1975, in the first case, and on the 16th May, 1975, in the second, in the office of the Sub-divisional Officer, Begusarai, who is the Chairman of the Agricultural Produce Market Committee, Begusarai (Respondent no. 4). Time petitions were filed in both the cases, in the first case on the ground that the books of accounts were filed with the sales tax authorities and in the second case on the ground that the Partner conversant with the affairs of the firm had to go to Gujrat. Thereafter another notice in Form 'C' under sub-section (5) of section 27 A of the Act, was served on each of the petitioners, requiring them to produce their books of accounts for the period from the 17th January, 1974, to the 31st August, 1975, on the 15th September, 1975. On the date fixed (i.e., the 15th September, 1975), a time petition was filed before the Secretary of the Agricultural Produce Market Committee, Begusarai (Respondent no. 3), on behalf of the petitioner in the first case stating that the accounts books could not be produced due to the illness of the managing Partner, Shree Bansidhar Sultania. On the date fixed (i.e., the 15th September, 1975), a time petition was filed before the Secretary of the Agricultural Produce Market Committee, Begusarai (Respondent no. 3), on behalf of the petitioner in the first case stating that the accounts books could not be produced due to the illness of the managing Partner, Shree Bansidhar Sultania. A similar petition for time was filed in the second case stating that the partner of the firm acquainted with the affairs of the firm had gone to Gujrat and it is asserted that the Secretary of the Committee told the representatives of the petitioners that orders passed on the petitions for time would be communicated to them afterwards. But, surprisingly, on the 18th October 1975, a demand notice dated the 4th October, 1975, (Annexure 3', was served on the petitioners. levying Rs 58,500/-as market fee for the period from the 17th January, 1974 to the 31st August. 1975, and Rs. 44,227.55 as penalty in the first case, and Rs. 53,820.00 as market fee for the period aforesaid and Rs. 39,658.71 as penalty in the second case. Thereafter, the petitioners obtained certified copies of the assessment orders dated 15th September 1975, copies of which have been filed as Annexure 4' to each of the applications. 3. From the assessment orders, it appears that the time petitions filed on behalf of the petitioners were rejected and in the best-judgment assessment, the purchases made by the petitioners during the aforesaid period in the first case were assessed at Rs. 58,50,000/- on the basis that the petitioner firm had paid Rs. 3,000/- as market fee for the month of March 1975. According to the petitioner of the first case, this amount of Rs. 3,000/- was deposited on the persuation of the Secretary as advance payment, to make up the Committee's target of collection during that financial year, on assurance that it would be adjusted towards future liability. In the second case also it is mentioned that as the petitioner failed to comply with the notice issued, its purchases were determined at Rs. 53,82,000/- On the aforesaid purchases, after adjusting the market fees already deposited, a demand notice for the balance amount as also a penalty equal to the balance amount of fee was issued. In the second case also it is mentioned that as the petitioner failed to comply with the notice issued, its purchases were determined at Rs. 53,82,000/- On the aforesaid purchases, after adjusting the market fees already deposited, a demand notice for the balance amount as also a penalty equal to the balance amount of fee was issued. It is also stated in the second case that the returns filed by the petitioner for the period from the 17th January, 1974, to the 31st January, 1975, did not appear to be based on the books maintained and that no return was filed for the period from February, 1975, to the 31st August, 1975. 4. The petitioner's grievance in the writ applications are that the notices issued fixing dates for production of cooks of accounts for assessment of market fee were not issued under the orders and directions of the Assessment Sub-Committee, which has jurisdiction to make assessment under the Act, but were issued under the orders of the Secretary of the Market Committee, which makes the assessment orders illegal. The other grievance of the petitioners is that the best-judgment assessment under sub-section (7) of Section 27 A of the Act, could be made only in cases where statutory returns have been filed and the traders fail to comply with the notice issued under sub-section (5) of the aforesaid Section, which was not the position in any of these cases and, thus the assessment was without jurisdiction. It is, therefore, contended that the best-judgment assessment under sub-section (7) of Section 27 A of the Act, is without jurisdiction as no return as required under sub-section (2) of Section 27A was filed by the petitioners. Lastly, it was contended that the orders of assessment and imposition of penalty equal to the amount of fee due have been arbitrarily made. 5. On behalf of Respondents Nos. 2 to 5 counter-affidavits have been filed denying the imputations and stating that for the period from the 17th January, 1974, to the 31st December 1974, the return filed on the 16th January, 1975, was incomplete and in correct. A copy of the said return has been filed as Annexure 'A' to the counter-affidavits in both the cases. It is further stated that the petitioner deposited Rs. A copy of the said return has been filed as Annexure 'A' to the counter-affidavits in both the cases. It is further stated that the petitioner deposited Rs. 14,272,45 in the first case and Rs.6,047.43 in the second case till December, 1974 and submitted returns thereafter for the whole period on the 16th January, 1975, and that the basis of the actual deposit of market fee was not the actual transaction, but the petitioner deposited whatever amount he wished as market fees at his sweet will Charges showing the details of the same have been filed as Annexure 'B' to the counter-affidavits. The petitioners have filed replies to the counter-affidavits, controverting the assertions made therein. 6. Mr. K.N. Jain, learned counsel appearing on behalf of the petitioners, has submitted the following points, as raised in the writ applications:- (i) That the notice (Annexure 2') for production of books of accounts in form 'C' under sub-section (5) of ' section 27 A of the Act, having been issued by the Secretary of the Market Committee and not by the Assessment sub-Committee, which had jurisdiction under the said sub-section, was not a valid notice in the eye of law calling upon the petitioners to produce their books of accounts for the purpose of assessment which vitiates the orders of assessment. (ii) That the best-judgment assessment as contemplated under sub-section (7) of Section 27 A of the Act, can be made only against a trader who has filed returns but has failed to comply with the notice under sub-section (5), and not in case of those traders who have not filed return, as in the instant case. He has further submitted that there was no material before the Committee to hold that the return filed for the period January to December, 1974 was incorrect. (iii) That the imposition of penalty equal to the amount of fee due, without any finding that the default in question was deliberate, is arbitrary and illegal. 7. The Act, in question was enacted in the year 1960 to provide for better regulation of buying and selling of agricultural produce and the establishment of market area for agricultural produce in the State of Bihar and for matters connected therewith. The primary object of the Act, is the protection of the agriculturists and to provide them facilities of storage at a common place for selling their goods by public auction. The primary object of the Act, is the protection of the agriculturists and to provide them facilities of storage at a common place for selling their goods by public auction. After the establishment of the market area, as laid down in section 4, and creation of a market yard, a restriction is put on any person carrying on trade in selling or purchasing agricultural produce without a proper licence in that area, so that the agriculturists may obtain proper price for their produce. Under section 27 of the Act, the Market Committee is authorised to levy and collect market fee on agricultural produce bought and sold in the market area at the rate of rupees one per one hundred rupees worth of agricultural produce. The fee chargeable shall be payable by the buyer in the manner to be prescribed and the fee so chargeable shall not be levied more than once on a noticed agricultural produce in the same notified market area. This is in nutshell the scheme of the Act. 8. The provisions of this Act, came in for consideration before a Bench of this court in the case of Mangalchand Ramchandra' and others-vs.-The State of Bihar and Others where different provisions of this Act, were noticed in some detail, and I need not refer to them again here. In that case, it was held that neither in the Act, nor in the Rules framed thereunder, as they then stood, any machinery was provided for assessment of market fee which could be levied under the Act, or for deciding any controversial question of fact in that regard. After that decision, Section 27 A has been incorporated in the Act, by Bihar Ordinance No.124 of 1975, which is relevant for our consideration and will be quoted hereinafter. 9. As regards his first contention, Mr. Jain has submitted that under sub-section (1) of section 27A every Market Committee shall have an Assessment Sub Committee, consisting of the Chairman, Vice-Chairman and the Secretary of the Market Committee for the purpose of assessment and levy of fee in the manner prescribed. The notice to be issued to a trader for submission of returns or production of documents has to be issued by the Assessment Sub Committee and not by the Secretary. The notice to be issued to a trader for submission of returns or production of documents has to be issued by the Assessment Sub Committee and not by the Secretary. Learned Counsel has urged that the notice in Form, C, a copy of which has been filed as Annexure 2', is purported to have been issued by the Secretary and not by the Assessment Sub-Committee of the Market Committee and therefore, the orders of assessment are without jurisdiction. There does not seem to be any substance in this contention of the learned counsel, in as much as sub-section (5) of Section 27 A authorises the issue of a notice in form C in the circumstances mentioned therein. Sub-section (5) of Section 27 A lays down that if a trader has failed to submit return as prescribed in sub-section (2), or the Sub-Committee has reason to believe that such return is incorrect, it shall give notice in Form C. Form C has been made a part of the Act, itself and this form shows that the notice has to be issued under the signature of the Secretary of the Market Committee. The last paragraph of the notice also states that in the event of the failure of the trader to comply with the notice, "the Market Committee shall proceed to assess the amount of mar let fee leviable under sub-section (7) 'of section 27 A, to the best of its judgment." The notice, therefore, cannot be invalid simply because of its having been issued under the signature of the Secretary of the Market Committee and not under the signature of all members of the Assessment Sub Committee. Obviously, the Secretary of the Market Committee is the person authorised to issue such notice for the Assessment Sub-Committee. 10. The petitioners have filed in both the cases copies of the ordersheet as: Annexure 5' to the writ applications, to show that the proceedings had been started by the Secretary and not by the Assessment Sub-Committee. From the ordersheet from the 10th March, 1975, upto the 8th September, 1975, it does not appear, whether the orders passed on those dates were by the Secretary alone or by the Assessment Sub Committee whereas from the order dated the 15th September, 1975, it does appear that a meeting of the Assessment Sub Committee was held, which rejected the time petitions and made the assessment orders. This order is also signed by the Secretary alone and not by all the members of the Sub-Committee. Though notice can be issued under the signature of the Secretary, but issuance of such notice has to be under the direction of the Sub-Committee and not by the Secretary alone, as sub-section (5) of section 27A says, "If any trader fails to submit a return as prescribed in sub-section (2) or the Sub-Committee has reason to believe that any such return is incorrect, it shall, after giving a notice in Form C to the trader...The ordersheet of the assessment proceedings, maintained by the Committee, therefore, should show that the different orders were passed by the Assessment Sub Committee, to avoid any argument that it was the Secretary of the Committee and not the Sub-Committee which dealt with the matter. 11. I shall now take up the second contention of Mr. Jain. Learned counsel has submitted that the scheme of Section 27A, relating to assessment of the market fee, requires a trader to file returns showing his purchases and sales of each agricultural produce within seven days of the transaction and the market committee is also required to maintain a register in Form B showing the total purchases and sales made by the trader and the fees recoverable and recovered from him, as provided under sub-sections (2) and (3) of section 27 A. According to sub-section (4), the Market Committee is to levy fee payable under section 27, on the basis of the returns furnished under sub-section (2) of section 27 A. When a trader fails to submit the returns, as prescribed under sub-section (2), or, when the Committee has reason to believe that any such return is incorrect, it shall issue notice in Form C, fixing a date, time and place, to attend either in person or through an authorised representative, and to produce or cause to be produced any account or other evidence, on which such trader may rely in support of such return, and, under sub-section (6), after examining the accounts and other evidence, as the Sub-Committee may, by notice in writing, require, it shall proceed to assess the amount of market fee leviable on the trader. Sub-section (7) deals with situation in which best judgment assessment of market fee could be made by the Assessment sub-Committee. Sub-section (7) deals with situation in which best judgment assessment of market fee could be made by the Assessment sub-Committee. His main contention is that the power to make best judgment assessment under sub-section (7) is only confined to such cases where returns are filed and not to a case where no return is filed, as in the instant case. Learned counsel has submitted that on a harmonious construction of sub-section (5) and (7) of section 27 A there is no power to order best-judgment assessment where no return is filed. His contention is that notice in Form C has to be issued where a trader fails to submit a return as prescribed under sub-section (2), within seven days of the transaction, or, where the sub-committee has reasons to believe that such return is incorrect, and only in these two cases notice in Form C is to be issued, while sub-section (7) which deals with best-judgment assessment, provides that if a trader, having furnished a return, fails to comply with all the terms of the notice under sub-section (5), or, if the accounts and other evidence produced by the trader are in the opinion of the Sub-Committee incorrect, incomplete or unreliable, either wholly or partly, the Sub-Committee shall assess to the best of its judgment, the amount of market fee leviable on the trader." According to the learned counsel, not only the first contingency, but the second contingency for a best-judgment assessment has to be also in relation to filing of returns. Argument is that sub-section (5) contemplates the second alternative for issue of notice for production of accounts etc,, when the Committee has reasons to believe that the return is incorrect that is to say in a case where section applied. He has submitted that, therefore, there being no provision in the Act, for best-judgment assessment where no return is filed, the impugned orders of best judgment assessment are wholly without jurisdiction. Thus there is a lacuna in the Act. Learned counsel has also referred to a decision of this Court in the case of Commissioner of Income Tax Vs. Sanichar Sah Bhim Sah, in support of his submission that it was not the function of the Court to fill up the gap. Thus there is a lacuna in the Act. Learned counsel has also referred to a decision of this Court in the case of Commissioner of Income Tax Vs. Sanichar Sah Bhim Sah, in support of his submission that it was not the function of the Court to fill up the gap. Learned counsel has submitted that even if two interpretations are possible, equitable considerations are out of place and there should be no importation of provisions in a taxing statute, and, in support thereof, he has relied upon a decision of the Supreme Court in the case of Commissioner of Sales Tax Vs. Modi Sugar Mills Limited. It will be better to refer to the two decisions relied upon by learned counsel. In the first case, it was held that the machinery provided under section 25A of the Income Tax Act, of 1922 was confined to the assessment of a Hindu undivided family which had become separated in course of the assessment year and not to a proceeding taken under section 28 of the said Act, for imposing penalty on a Hindu undivided family after it had disrupted and after the Income-Tax Officer had made an order under section 25A and, there was a gap in the provision of the Act, and it is not the function of the court to fill up the gap. The Supreme Court decision relied upon by Mr. Jain which is in relation to U.P. Sales Tax Act, 1948, laid down as follows : "In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions of assumptions. The court must look squarely at the words of the statutes and interpret them. It must interpret a taxing statute in the light of what is clearly expressed." It that case their Lordship of the Supreme Court were concerned with imposition of a different tariff in course 'of the year and held that the incidence of tax liability may completely be altered by legislature but for effectuating that alternation, the legislature must devise a machinery for enforcing it against the tax payer and, if the legislature has failed to do so, the court cannot resort to a fiction which is not prescribed by the legislature and seek to effectuate that alteration by devising machinery not found in the statute. 12. 12. The learned Solicitor General, appearing on behalf of the Respondents, has urged that the rule of construction applicable to the taxing statutes, as urged by Mr. Jain applies to the taxing provisions in a statute and not to all provisions in a taxing statute to which ordinary rule of construction applies. The submission of the learned Solicitor General on this point is well supported by the decision of the Supreme Court in the case of Grusahai Saigal Vs. The Commissioner of Income Tax as will appear from the following observations of their Lordships : "Now it is well recognised that the rule of construction on which the assessee relies applies only to a taxing provision and has no application to all provisions in a taxing statute. It does not, for example 'apply to a provision not creating a charge for the tax but laying down the machinery for its calculation or procedure for its collection. The provisions in a taxing statute dealing with machinery for assessment have to be construed by the ordinary rules of construction, that is to say, in accordance with the clear intention of the legislature which is to make clear a charge levied effective. Reference may be made to a few cases laying down this distinction. In Commissioner of Income Tax Vs. Mahaliram Rajidas It was said. "The section, although it is part of a taxing Act, imposes no charge on the subject, and deals merely with the machinery of assessment. In interpreting provisions of this kind the rule is that construction should be preferred which makes the machinery workable utres valeat potius quam pereat." To the same effect is the decision in the case of India United Mills Ltd. Vs. Commissioner of Excess Tax, Bombay in which their Lordships of the Supreme Court observed (at page 82) as follows:- "That section is, it should be emphasised, not a charging section, but a machinery section and a machinery section should be so construed as to effectuate the charging sections. In this background the relevant provisions of the Act, have to be examined. 13. Section 27, as already mentioned, is the charging section and authorises the Market committee to levy and calculate market fee on agricultural produce bought or sold in the market area at the rate of rupee one per one hundred rupees worth of agricultural produce. In this background the relevant provisions of the Act, have to be examined. 13. Section 27, as already mentioned, is the charging section and authorises the Market committee to levy and calculate market fee on agricultural produce bought or sold in the market area at the rate of rupee one per one hundred rupees worth of agricultural produce. Section 27 A, as already mentioned, is the machinery section, which provides for assessment of market fees, and may usefully be reproduced : "(1) Every Market Committee shall have an assessment sub-committee consisting of the Chairman, Vice-Chairman and the Secretary of the Market Committee for the purpose of assessment and levy of fee, in the manner prescribed. (2) Every licenced trader and every trader exempted under section 42, shall submit to the Secretary of the Market Committee, a return in form A showing his purchase, and sale of each transaction of agricultural produce within 7 days of the day of transaction. (3) The sub-committee shall maintain a register in form B showing the total purchases and sales made by traders and the fees recoverable and recovered from them. (4) The sub-committee shall levy the fee payable under section 27 on the basis of return furnished under sub-section (2). (5) It any trader fails to submit a return as prescribed in sub-section (2) or the sub- committee has reason to believe that any such return is incorrect it shall after' giving a notice in form C to the trader concerned require him on a date and at a time and place to be specified therein, to attend either in person or through an authorised representative or to produce or cause to be produced any account or other evidence on which such trader may rely in support of such return. (6) On the date specified in the notice or as soon thereafter as may be, the sub-committee, after examining the accounts and other evidence produced by the trader and such evidence, as the sub-committee may by notice in writing require at the specified place, shall proceed to assess the amount of market fee leviable on the trader. (6) On the date specified in the notice or as soon thereafter as may be, the sub-committee, after examining the accounts and other evidence produced by the trader and such evidence, as the sub-committee may by notice in writing require at the specified place, shall proceed to assess the amount of market fee leviable on the trader. (7) If a trader having furnished a return, fails to comply with all the terms of the notice under sub-section (5) or if the accounts and other evidence produced by the trader are in the opinion of the sub-committee, incorrect, incomplete or unreliable, either wholly or partly, the sub-committee shall assess to the best of its judgment, the amount of market fee leviable on the trader. (8) In addition to the market fee levied under sub-section (7), a defaulter trader may be liable to pay a penalty equal to the fee so levied, if so ordered by the sub-committee. (9) Habitual default in submission of returns and habitual submission of false return shall be a sufficient ground for suspension or cancellation of, or refusal to renew a licence, and provision of this section shall apply in addition to and not in derogation of any other law, penal or otherwise applicable to non compliance or defective compliance with any duty imposed upon a trader under this Act, or under the rules made hereunder, or by any law or order of a market committee. (10) The assessment order made under sub-section (1) and order imposing penalty under sub-section (8) shall be communicated to the trader by means of a demand notice in form D and a copy thereof shall be granted to the trader on his making a written application on and paying a sum of two rupees as copying fee to the market committee, the sub-committee shall maintain a register of copying fees. (11) The copy shall be prepared in the office of the market committee and certified to be correct by the Secretary or in his absence by another person appointed in this behalf by the Chairman. Such certificate shall give the date on which the application was received and the copy prepared and delivered to the applicant and shall be conclusive evidence of the correctness of the date." Sub sections (1) to (4) of Section 27 A do not require any illucidation. Such certificate shall give the date on which the application was received and the copy prepared and delivered to the applicant and shall be conclusive evidence of the correctness of the date." Sub sections (1) to (4) of Section 27 A do not require any illucidation. Sub-section (5) authorises the Sub-Committee to issue notice in Form C in case where a trader has failed to file return as prescribed under sub-section (2) or where the sub-committee has reason to believe that any such return filed is incorrect. The said notice in Form C requires the trader to be present and to produce documents on which he may rely in support of his returns. Sub-section (6) provides for assessment, on examination of the accounts. Sub-section (7) provides that if the trader fails to comply with the notice issued under sub-section (5), or if the accounts produced are incorrect, incomplete or unreliable, either wholly or partly, the assessment Sub-Committee shall assess to the best of its judgment the amount of market fee leviable on the trader. Mr. Jain's submission is that although sub-section (5) of section 27 A of the Act, contemplates issue of notice in form C in both the cases, i.e., where a trader has failed to submit his return or the sub committee has reasons to believe that any return filed is incorrect, sub-section (7) authorises the sub committee to make best judgment assessment only where the trader, having furnished a return, fails to comply with all the terms of the notice under sub-section (5), or, if the accounts etc. furnished by him are incorrect, incomplete or unreliable. The power of best judgment assessment, therefore, according to him, is beyond the ambit of sub section (7), where no return is filed. This submission of Mr. Jain completely ignores the contents of the notice in Form C, the relevant portion of which may be usefully reproduced : Whereas, (a) You have not furnished return-correct return in Form A for the period from.. .. .. to.. .. (b) You have habitually made default in the submission of return for the period from...... to..:.....and it appears to the market committee that you have wilfully failed to furnish such return in respect of the above mentioned period. .. .. to.. .. (b) You have habitually made default in the submission of return for the period from...... to..:.....and it appears to the market committee that you have wilfully failed to furnish such return in respect of the above mentioned period. And whereas it appears to be necessary to make assessment under section 27 A (7) of the Bihar Agricultural Produce Market (Amendment) Ordinance, 1974, in respect of the above mentioned period; you are hereby directed to attend in person or by an authorised agent at (Place)......on) (date).......at (time)... .and produce or cause there to be produced, at the said time and place, accounts and documents specified below for the purpose of such assessment, together with the objection which you may wish to prefer and any evidence you may wish to adduce in support thereof and show cause why in addition to the Market fee levied on the basis of assessment, a penalty prescribed under sub-section (8) should not be imposed upon you, In the event of your failure to comply with this notice the Market Committee shall proceed to assess the amount of market fee leviable under sub-section (7) of Section 27 A to the best of its judgment. Secretary, Market Committee.” The notice in Form C, which is a part of the Act, itself, clearly lays down that notice has also to be issued where no return is filed, and best judgment assessment could be made under sub-section (7) of section 21A where no return is filed or the trader fails to comply with the terms of the notice, to the last but one paragraph of the said notice is common to all cases contemplated by the earlier part of the notice, which includes within its ambit case of traders who have not filed any return, Sub-section (7) is not to be read in isolation but in conjunction with the notice in Form C, which clearly authorises best judgment assessment also in cases where no return is filed. It is well settled principle of construction that the provisions contained in the form of a notice, which has been made a part of the Act; cannot be ignored while construing the main provisions of the statute, inasmuch as it is also an integral part of the Act. It is well settled principle of construction that the provisions contained in the form of a notice, which has been made a part of the Act; cannot be ignored while construing the main provisions of the statute, inasmuch as it is also an integral part of the Act. The essential conditions for best judgment assessment is failure to comply with the terms of the notice in Form C issued under sub-section (5), of the accounts being found to be incorrect, incomplete, or unreliable, whether wholly or partly. The filing of the return does not seem to be the sine qua non for application of the provision of sub-section (7), calling for best judgment assessment. In my opinion, it only emphasises that even in cases where returns have been filed, failure to comply with the notice issued under sub-section (5) or where the accounts produced are incorrect, incomplete or unreliable, best judgment assessment can be resorted to. If sub-section (7) could be applied to those cases where returns have been filed, it will apply with equal force to cases where no return is filed in the event of failure to comply with the terms of notice in Form C. The Legislature could never have intended that such failure on the part of a trader, who has filed a return would only call for best judgment assessment and not the one who has been guilty of filing neither return nor document in spite of notice. Therefore, a trader who has not filed return and has been asked to appear and produce documents for the purpose of assessment, but all the same, has failed to appear and produce documents, also comes under the mischief of sub-section (7). To hold otherwise, would be not only to frustrate the charging section levying market fee, but also to allow such defaulting traders to go scot-free, and defeat the very object for which the Act, has been passed. A careful analysis of the different provisions of the Act, shows that sub-section (7) of section 27A read with Form C is meant to cover equally cases of all those traders who furnish returns as well as those who fail to comply with the terms of the notice issued under sub-section (5), that is to say, who have neither filed returns nor produced any document. The view I have taken is consistent with the principles of interpretation of machinery section in a taxing statute, whose purpose is to effectuate the charging section and not to defeat it. 14. Another argument advanced in this regard by Mr. Jain may also be mentioned. He has submitted that in the case where notice in form C is issued to a trader who has not filed a return, it may only require his presence and as the petitioners agents were present and filed petition for time, there could not be any best judgment assessment under sub-section (7). He has submitted that sub section (5) requires the trader to produce accounts or other evidence only in such cases where he wishes to rely on them in support of such return. The emphasis is on the words only in such cases where he wishes to rely on them in support of such return. This argument not only puts too narrow a construction on sub section (5) but completely overlooks the contents of the notice in Form C, which have already been quoted and discussed above. The notice requires the trader not only to attend in person or through his authorised agent, but also to produce accounts, documents etc" as mentioned therein, and on his failure to comply with it, he is made liable to best judgment assessment. As already discussed sub-section (5) has to be read with the notice in Form C. Mr. Jain has also argued that where no return is filed it is the market committee which will make the assessment and not the Assessment sub-committee, as the notice in form C has been issued under the signature of the secretary of the Market committee. This argument is without any substance, in as much as the notice in form C, as quoted and discussed above, makes no distinction between a trader who has filed a return and a trader who has not filed a return. In either case the assessment has to be made by the Assessment sub committee, as constituted under-section (1) of Section 27 A of the Act, of which the Secretary of the market committee is a Member. 15. There is some controversy between the parties as to whether the petitioners filed returns and, if so for what period. In either case the assessment has to be made by the Assessment sub committee, as constituted under-section (1) of Section 27 A of the Act, of which the Secretary of the market committee is a Member. 15. There is some controversy between the parties as to whether the petitioners filed returns and, if so for what period. It is contended on behalf of the petitioners that late filing of returns will be a case of non-filing of returns in the eye of law. On the other hand, on behalf of the respondents it is contended that the petitioners filed returns for the period from January, 1974, to January, 1975, in the first case, and from January, 1974 to March, 1975, in the second case. Respondents have also filed a statement at Annexure B, to show that for the period from February, 1975, to August, 1975, and from April, 1975 to August, 1975, respectively, they did not submit any return. Mr. Jain has submitted that filing of return beyond seven days of the transaction amounts to non-filing of return and should be held to be a case of non-filing, and, relied upon certain decisions in support of his submission with reference to the Income Tax Act, cases. It is needless to go into this question as I have held that the provisions of sub-section (7) as to best-judgment assessment are applicable even in case of a trader who has not filed return and has failed to comply with the notice issued in form C under sub-section (5). 16. Mr. Jain has lastly submitted that the best-judgment assessment has been arbitrarily made, in as much as the deposit of Rs.3,000/- in the month of March, 1975, has wrongly been taken to be admitted fee for the month of March, 1975, when the statement (Annexure 'B') filed by the respondents and the stand taken in counter-affidavit would show that the deposit made had no relation to the amount of sale or purchase. The deposit made for March, 1975 is not in accordance with the amount leviable as market fee on the transaction for March, 1975. He has urged that the sum of Rs.3,000/- was deposited at the request of the Market committee to complete its target of collection by the close of the financial year. He has advanced a similar argument about the best-judgment assessment being arbitrary in the other case also. He has urged that the sum of Rs.3,000/- was deposited at the request of the Market committee to complete its target of collection by the close of the financial year. He has advanced a similar argument about the best-judgment assessment being arbitrary in the other case also. His argument is that Imposition of a sum of Rs.44, 227.55, in the first case, and Rs. 39,658.71, in the second case, equal to amount of market fee dues as penalty being maximum amount leviable under subsection (8) is also arbitrary. His contention is that this being the first year of assessment, after section 27 A was incorporated in the Act, the orders of assessment as well as imposition of penalty were arbitrary and unduly harsh to the petitioners. 17. Learned Solicitor General appearing on behalf of the respondents has fairly conceded that he has no objection to the assessment orders and the imposition of penalty being quashed, these being the very first assessment orders after the incorporation of section 27A in the Act, and. in our opinion, rightly. Consequently, the impugned orders contained in annexures 3' and 4' in both the writ applications are quashed and the assessment subcommittee of the Begusarai Agricultural Produce Markets Committee is directed to proceed with the re-assessment in accordance with law. 18. These applications are accordingly allowed, but, in the circumstances of the case, 1 make no order as to costs. I agree. Applications allowed.