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We have now to see whether the dealers who come within the mischief of s. 11(4)(a) can also be dealt with under s. 11A. Before a person can be dealt with under s. 11A, it must be shown that in consequence of any information which has come into his possession, the Commissioner is satisfied that any turnover of that dealer during any period has been under- assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom. Quite plainly the expression 'dealer' in s. IIA(1) includes both registered and unregistered dealers. In this case we are concerned with the escapement of assessment. Therefore the first question that arises for decision is whether it can be said that the appellants' turnovers for the period 1- 5-52 to 30-10-55 had escaped assessment. There is no dispute that those turnovers had not been assessed. From the fact that those turnovers had not been assessed, can it be said that they had escaped assessment? In Maharaj Kumar Kamal Singh v. Commissioner of Income Tax, Bihar and Orissa,(1), this Court laid down that the expression "has escaped assessment" in s. 34(1)(b) of the Indian Income Tax Act, 1922 is applicable not only where the income has not been assessed owing to inadvertence or oversight or owing to the fact that no return has been submitted, but also where a return has been submitted but the income tax officer erroneously failed to tax a part of assessable income. In Commissioner of Income Tax, Bombay City v. M/s. Narsee Nagsee and Co., Bombay(2) interpreting the words "profits escaping assessment" in s. 14 of the Business Profits Tax Act, 1947, this Court held that those words apply equally to cases where a notice was received by the assessee but resulted in no assessment, under-assessment or excessive relief and to cases where due to any reason no notice was issued to the assessee and there was no assessment of his income. Kapur, J. speaking for the majority of Judges in that case, observed (at p. 993 of the report) that it is well-settled that an income escapes assessment when the process of assessment has not been initiated as also in a case where it has resulted in no assessment after the completion of the process of assessment. The true scope of the expression "escaped assessment" in s. 11A came up for consideration before this Court in Ghanshyam Das v. Regional Assistant Commissioner of Sales Tax, Nagpur(3). This is what Subba Rao, J. (as he then was) who delivered the judgment of the majority of the Judges, observed in that regard:

Mr. Bindra, learned counsel for the revenue, contended that a registered dealer has certain advantages over an unregistered dealer; therefore the classification made under the Act is a reasonable classification. To be a valid classification, the same must not only be founded on an intelligible differentia which distinguishes persons and things that are grouped together from others left out of the group but that differentia must have a reasonable relation to the object sought to he achieved. Both s. 11(4)(a) and s. 11A(1) concern themselves with escaped assessments. The classification suggested has no nexus with that object. That much is established by the decision of this Court in Ghanshyam Das's case(1) which is binding on us. It is true the State can by classification determine who should be regarded as a class for the purpose of legislation and in relation to a law enacted on a particular subject, but the classification must be based on some real and substantial distinction bearing a just and reasonable relation to the object sought to be attained and cannot be made arbitrarily and without any substantial basis. Judged from the object sought to be achieved by the Act, we are of the opinion that the classification made between the registered and unregistered dealers is not a reasonable classification. From this conclusion it follows that s. 11(4)(a) is liable to he struck down as being discriminatory in view of s. 11A(3).

unregistered dealers. As pointed out already, cases of registered dealers falling within s. 11(4) are excluded from the purview of s. 11A(1).

It is next said that s. 11 (4) offends Art. 14 of the Constitution because no period of limitation is prescribed for a notice under it, whereas periods of limitation are prescribed for notices under ss. IIA(L) and 11(5). We see no merit in- this contention. The Act 'deals with registered and unregistered dealers differently in many ways. The classification and differential treatment of re- gistered and unregistered dealers are based on substantial differences having reasonable relation to the object of the Act. A registered dealer unlike an unregistered dealer is under a statutory obligation to file returns without any notice being served upon him and to pay the full amount of tax due from him before furnishing the return (ss. 10 and

12). A dealer who has registered himself under the Act admits his liability to furnish returns whereas a dealer who has not registered himself makes no such admission. A registered dealer has certain advantages under the Act which are denied to an unregistered dealer. Section 2(1)(a)(ii) exempts from tax sales of a registered dealer of goods specified in his certificate of registration as being intended for use by him as raw materials in the manufacture of goods for sale by actual delivery in the State for consumption therein. An unregistered dealer cannot get the benefit of this exemption. Moreover, s. 2(j) (a)(ii) exempts from tax sales to a registered dealer of goods de- clared by him in the prescribed form as being intended for resale by him by actual delivery-in the State for consumption therein. The sales to an unregistered dealer are not so exempt. Consequently, a registered dealer call buy his goods from the producer or the wholesaler at a cheaper price and has thus ail economic advantage over an unregistered dealer. In the matter of penalties, ss. 10(3) and 22C(1) treat the two classes of dealers on the same footing, but ss. 11 (4), 11(5) and 11 A(1) treat them differently. No penalty can be levied on a registered dealer under s. 11(4) but heavy penalties may be levied on an unregistered dealer under ss. 11(5) and 11A(1). While prescribing periods of limitation for proceedings against an unregistered dealer under ss. 11(5) and 11A(1), the legislature has wisely not prescribed a period of limitation for a proceeding initiated under s. 11(4)(a) against a registered dealer considering that (1) the registered dealer is under a statutory obligation to file the return, (2) no penalty is leviable under s. 11(4). and (3) the registered dealer is given many advantages under the Act which are denied to an unregistered dealer. The bar of limitation in the case (if an unregistered dealer and the absence of such a bar in the case of a registered dealer cannot be regarded as unjust or discriminatory. Questions of policy are not to be debated in this Court. There is no compulsion on the legislature to prescribe a period of limitation in every case. In taxing statutes the legislature has a large measure of discretion. We cannot strike down s. 11(4)(a) because of some preconceived notion that the same period of limitation should be prescribed for proceedings against both registered and unregistered dealers. In Ghanshyam Das's case(1), Raghubar Dayal, J. at p. 459 clearly held that s. 11(4) is not violative of Art.