1952 (1) TMI 10 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of assessment without statutory notice under Section 13(2) of the Bihar Sales Tax Act, 1947.
2. Jurisdiction of the Sales Tax Officer to assess without issuing the statutory notice under Section 13(2) of the Bihar Sales Tax Act, 1947.

Issue-wise Detailed Analysis:

1. Validity of Assessment Without Statutory Notice Under Section 13(2) of the Bihar Sales Tax Act, 1947:

The primary contention revolves around whether the assessment made by the Sales Tax Officer was valid in the absence of a statutory notice under Section 13(2) of the Bihar Sales Tax Act, 1947. The Board of Revenue acknowledged that the statutory notice had not been issued but upheld the assessment as valid, reasoning that the assessee had appeared before the Sales Tax Officer and explained the registers and accounts. The High Court, however, emphasized that the failure to issue the statutory notice had caused prejudice to the assessee. The Court noted that the assessee had not been given an opportunity to produce account books and other papers for the relevant period, which led to the conclusion that the assessment was invalid due to the lack of notice.

2. Jurisdiction of the Sales Tax Officer to Assess Without Issuing the Statutory Notice Under Section 13(2) of the Bihar Sales Tax Act, 1947:

The second issue concerns whether the Sales Tax Officer had the jurisdiction to make any assessment without issuing the statutory notice. The High Court clarified that the jurisdiction to assess and the liability to pay tax are not conditional on the issuance of a notice. The Court referenced the principle established in Chatturam v. Commissioner of Income-tax, Bihar, which states that the validity of an assessment does not depend on the issuance of a notice, as the liability to pay tax is founded upon the charging sections of the Act. However, the Court also recognized that the failure to issue the notice had caused prejudice to the assessee in this specific case, thus invalidating the assessment. The Court concluded that the assessment proceedings should recommence from the stage where the notice under Section 13(2)(a) should have been issued.

Conclusion:

The High Court held that the assessment made by the Sales Tax Officer was invalid due to the failure to issue the statutory notice under Section 13(2) of the Bihar Sales Tax Act, 1947, which caused prejudice to the assessee. The case was directed to recommence from the stage of issuing the statutory notice, and the assessment proceedings were to be completed in accordance with the Act. There was no order as to costs of the reference.