1. ' SALEEM AKHTAR, J.-The applicant is a manufacturer of shot-guns. It did not collect and pay sales tax claiming exemption from sales tax under Item No,12 of Notification No,9 dated 27th September, 1951. The applicant did not file any returns and when notice under section 8 was issued, it filed returns as stated above. The Sales Tax Officer, however, noticing that the returns were available on record ignored notice under section 28 as unnecessary and assessment was accordingly framed.
2. The applicant filed appeals in respect of assessment years 1972-73, 1973-74 and 1974-75 which were heard and disposed of by a consolidated order. The appeals were dismissed and the applicant filed Second Appeal before the Tribunal where it did not succeed. The applicant then filed applications under section 17(1) of the Sales Tax Act raising five questions but the Tribunal has referred the following questions:
(1) Whether on the facts and the circumstances of the case, the assessment framed under section 10 (3) of the Sales Tax Act based on the returns/statement of sales already available on file could be considered as valid in law notwithstanding the fact that specific notices under section 28 were not issued?
(2) Whether on the facts and in the circumstances of the case, the Tribunal rightly held that shot- guns manufactured by the applicants were sports goods and, therefore not exempt from levy of sales-tax under Item No of the Sales Tax Notification No,9 of 1951?
(3) Whether on the facts and in the circumstances of the case, in the assessment year 1973-74 and 1974-75, the amnesty provided for under section 3-C, read with Fifth Schedule of the Finance Act, 1976, could be available to the applicant?
3. ' QUESTION No, ' The learned counsel for the applicant has contended that as no return as required by section 10 of the Sales Tax Act was filed, without first serving a notice under section 28 of the Sales Tax Act giving at least 35 days for filing the return, the assessment order was illegal. There is a controversy with regard to the filing of return. According to the applicant no return has been filed and only a consolidated statement was filed by it which was made basis for framing the assessment. In this regard the Tribunal has fonnd that the applicant has already filed returns under section 10, subsection (3) of the Sales Tax Act, and therefore, the question of issuing notice under section 28 did not arise and even if such notices were issued the same became infructuous in view of the fact that the returns of sales were already available on record. Therefore, on question of fact the finding has been given that the returns were available on record even before the issuance of notice under section 28. This finding of fact has not been challenged by the applicant at any stage. Even in the application under section 17(1) of the Sales Tax Act the applicant has not sought to challenge this finding of fact. The question opens with the words "on the facts and in the circumstances of the case" which mean that the question is to be considered on the basis of the facts found by the Tribunal. As the finding regarding availability of return on record has not been challenged, this aspect of the case cannot be considered or agitated in this question. The net result, therefore, is that the income tax returns were available on the record and the Tribunal, therefore, was justified in holding that notice under section 28 issued in these circumstances shall be infructuous. The notice under section 28 is issued when a return has not been filed or-if the tax has escaped or the assessee has been under assessed. None of these requirements are available in the present case.
4. We therefore, answer this question in the affirmative.
5. ' QUESTION No, 2: The same question came up for consideration before us in I.T.R. No,27 of 1979 M/s. Saifuddin Ghulamali v. Commissioner of Income-tax and the answer was given in the affirmative. Following our judgment, we answer this question too in the affirmative.
6. ' QUESTION No, ' The applicant claiming amnesty as provided under section 3C read with Fifth Schedule of the Finance Act, 1976. Finance Act, 1976 introduced section 3C to the Income Tax Act which reads as follows:- "3-C. Charge of income-tax on undisclosed income.-- Subject to the provisions of the Fifth Schedule, every person shall pay income tax, in respect of the undisclosed income, referred to in the said schedule, at the rate of thirty per cent of such income."
7. ' The above-quoted section provides that undisclosed income shall be charged at the rate of thirty per cent of such income subject to the provisions of Fifth Schedule to the Finance Act, 1976. Under the Fifth Schedule the definition of undisclosed income has been given as "all income, profits or gains of any previous year or years ending before the first day of July, 1975 which were chargeable to tax but were not so charged." Rule 2 provides that any person who is chargeable to income tax under the provisions of section 3C was to furnish a declaration of his undisclosed income to the Income Tax Officer in the prescribed manner. The tax at the rate provided in rule 3 was to be paid alongwith the declaration and in case of failure to do so additional amount of tax equal to 2% per month for the period it remained unpaid was imposed. Concession and immunity was granted under Rule 6 as follows:- "6. Concession and immunity.- -Where a person has made a declaration under this Schedule.--
(1) he shall be entitled to incorporate in his books of account such undisclosed income as is in tangible form, and
(2) he shall not be liable to any charge, levy, penalty, or prosecution under this Act (except the provisions of Section 3-C and this Schedule), the Sales Tax Act, 1951 (III of 1951), the Wealth-tax Act, 1963 (XI of 1963), or the Central Excise and Salt Act, 1944 (I of 1944), in respect of the income declared under this Schedule: ' Provided that for the purposes of the said Wealth-tax Act, the provisions of this clause shall apply only to assessm ent years preceding the assessment year beginning on the first day of July, 1976."
8. ' A reading of all these provisions makes it clear that the declaration was to be made in respect of undisclosed income on which income tax was chargeable but had not been charged. It does not speak of any other tax which was to be paid and in respect of which no disclosure has been made.
9. Every person who declares according to the Rules was given immunity as provided by rule 6. Apart from the fact that the undisclosed income which was disclosed was to be in corporate in the books of account, the declarant was also given the benefit that he shall not be liable to any charge, levy, penalty or prosecution under the Income Tax Act, (except provided by section 3-C and Schedule V), Sales Tax Act, Wealth Tax Act and Central Excise and Salt Tax Act in respect of income declared under the Schedule. Therefore, before claiming immunity it has to be established that a declaration was made by the assessee of his undisclosed income. The applicant has stated that it has made a declaration of his undisclosed income in terms of section 3C and the Vth Schedule and, therefore, it is entitled to the immunity. From the assessment order passed by the Sales Tax Officer it is clear that the applicant had filed its returns before the Income Tax Officer and declared certain income on the basis of which the returns filed under the Sales Tax Act were verified and the profits and sales determined by the Income Tax Officer. Therefore, the entire sales tax proceedings and the tax imposed was based on the income which was disclosed by the applicant while filing income tax returns, in the normal course and not under section 3C. The immunity is available only in respect of income declared by the assesse which it had not disclosed earlier. This immunity cannot be extended to such assessm ent which has been made on the basis of income already declared in the normal course and in normal manner. It is available only in respect of the income declared under section 3C and the Schedule. The Sales Tax Officer has not imposed any tax on the basis of the declaration made under section 3C. Therefore, in our view immunity under Rule 6 cannot be made available to the applicant. We accordingly answer this question in the negative.