1957 (5) TMI 31 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of assessment under section 13(5) of the Bihar Sales Tax Act, 1947, for the period from 1st July, 1947, to 30th September, 1948.
2. Validity of a single assessment order for a 15-month period.
3. Legality of the Inspector's report as a basis for findings.

Detailed Analysis:

1. Legality of Assessment Under Section 13(5) for the Period from 1st July, 1947, to 30th September, 1948:
The High Court examined whether the assessment under section 13(5) of the Bihar Sales Tax Act, 1947, was valid for the entire period from 1st July, 1947, to 30th September, 1948, considering the assessee had applied for registration on 2nd January, 1948. The court noted that the assessee was assessed under section 13(5) for failing to apply for registration in time. The court rejected the assessee's argument that the assessment was illegal, emphasizing that section 4 of the Act imposes the liability to pay tax, and section 13(5) provides the machinery for assessment. The court stated, "the proper interpretation of section 13(5) is that the imposition of the penalty is subject to the condition precedent that the dealer had wilfully failed to apply for registration for the period in question. But the assessment of an unregistered dealer under section 13(5) is not subject to any such condition."

2. Validity of a Single Assessment Order for a 15-Month Period:
The court addressed whether a single assessment order for a 15-month period was legal and valid. The court upheld the validity of the single assessment order, reasoning that section 13(5) allows the Commissioner to assess the tax to the best of his judgment if the dealer fails to apply for registration. The court found no legal impediment to issuing a single assessment order for the entire period, as the statute does not prescribe a limit on the duration covered by a single assessment order.

3. Legality of the Inspector's Report as a Basis for Findings:
The court evaluated whether the Inspector's report dated 27th September, 1948, could be a legal and valid basis for the findings that the books of accounts produced by the dealer were not genuine and that the quantum of turnover was Rs. 925. The court upheld the validity of the Inspector's report as a basis for the findings, noting that the Sales Tax Officer had examined the account books and found them unreliable. The court emphasized that the assessment was made to the best of the officer's judgment, as permitted under section 13(5).

Conclusion:
The High Court concluded that the assessment under section 13(5) of the Bihar Sales Tax Act, 1947, was valid for the entire period from 1st July, 1947, to 30th September, 1948, despite the assessee's application for registration on 2nd January, 1948. The court also upheld the validity of the single assessment order for the 15-month period and the use of the Inspector's report as a basis for the findings. The court answered the reference against the assessee and in favor of the State of Bihar, with the assessee ordered to pay the cost of the reference.