1960 (4) TMI 55 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of the notice dated 8th of October, 1959, in relation to the assessment proceedings for the year ending 31st of March, 1956.
2. Jurisdiction of the assessing authority to proceed with assessment under section 11(4) of the East Punjab General Sales Tax Act.
3. Compliance with notice requirements under section 11(2) and the timeline for initiating best judgment proceedings.
4. Availability of writ of prohibition under Article 226 of the Constitution to restrain assessing authority.

Analysis:
1. The judgment concerns a petition filed by a partnership firm registered under the Indian Partnership Act, challenging a notice dated 8th of October, 1959, related to assessment proceedings for the year ending 31st of March, 1956. The petitioner sought a writ of certiorari to quash the notice and a writ of prohibition to restrain the assessing authority from assessing them for the said period. The respondent contended that the assessment proceedings were still pending due to various reasons and that the petitioner had been given opportunities to produce account books. The court held that the notice was legitimate, allowing the petitioner to raise objections and appear for assessment, dismissing the petitioner's plea to quash the notice.

2. The petitioner argued that the assessing authority lacked jurisdiction to assess the tax amount under section 11(4) after three years from 31st of March, 1956. The court acknowledged this argument but found that there was no conclusive evidence to show that the proceedings under section 11(4) were initiated after the three-year period. As long as the proceedings began within three years, the final assessment need not be completed within that timeframe. The court emphasized that the existing record did not justify restraining the assessing authority from continuing the proceedings, highlighting the petitioner's right to appeal any adverse order.

3. The counsel stressed the importance of compliance with the notice requirements under section 11(2) and raised concerns about the assessing authority's actions after the expiry of three years from 31st of March, 1956. The court noted that the notice of 8th of October, 1959, did not indicate a violation of section 11(4) and rejected the petitioner's contention. It emphasized that unless a clear violation was established, the court could not intervene through a writ of prohibition under Article 226 of the Constitution.

4. The judgment highlighted the discretionary nature of writ jurisdiction under Article 226 and cited precedents where the High Court refused to interfere in tax assessment matters unless a gross miscarriage of justice was evident. The court emphasized that the petitioner had not challenged the validity of the law under which the assessing authority was proceeding, concluding that the petitioner had not made a case for the court to intervene and quash the notice. The petition was dismissed, with costs awarded to the respondent in both the original petition and the related case.