1962 (4) TMI 73 - HC - VAT and Sales Tax

Issues Involved:
1. Validity of notice under Section 19(1) of the Madhya Pradesh General Sales Tax Act, 1958.
2. Delegation of the Commissioner's power under Section 19(1).
3. Applicability of Section 19(1) for reassessment.
4. Validity of the notice issued by the Assistant Commissioner.
5. Challenge on the merits of the best judgment assessment.

Detailed Analysis:

1. Validity of Notice under Section 19(1):
The petitioner argued that the notice issued under Section 19(1) read with Rule 33 was a condition precedent to the validity of any assessment on a turnover that had escaped assessment. The court confirmed that a notice under Section 19 read with Rule 33 was indeed issued to the petitioner on 31st December 1960 by the Assistant Commissioner of Sales Tax, which contained the recital, "I am satisfied that your sale during the period from 1-4-1957 to 31-3-1958 has been under-assessed/has escaped assessment." The court found no dispute regarding the issuance of this notice.

2. Delegation of the Commissioner's Power under Section 19(1):
The petitioner contended that only the Commissioner could initiate action under Section 19 after satisfying himself about the necessity of the reassessment. The court held that the Madhya Pradesh General Sales Tax Act, 1958, allows the Commissioner to delegate his powers and duties under Section 30, subject to certain restrictions and conditions. The court pointed out that the Act inherently empowers the Commissioner to delegate his duties, including the function of being satisfied about any turnover escaping assessment, to any officer appointed under Section 3 to assist him. The delegation of the Commissioner's power to the Assistant Commissioner was found to be valid and in conformity with the Act and Rule 68.

3. Applicability of Section 19(1) for Reassessment:
The petitioner argued that the turnover for which he was sought to be charged had already been included and charged in the assessment of Gajanand Satyanarayan, and thus did not escape from assessment. The court clarified that the escapement of assessment is in relation to a dealer and not with reference to whether a particular transaction has been subjected to tax somewhere. The reassessment under Section 19 is a revision of a particular assessment of a particular dealer. Therefore, if the turnover assessed to Gajanand Satyanarayan was actually the petitioner's and was not included in his assessment for the concerned year, it constituted escaped assessment within the meaning of Section 19.

4. Validity of the Notice Issued by the Assistant Commissioner:
The petitioner claimed that the notice was defective and not in accordance with law as it was issued in the prescribed form without scoring out unnecessary words, making it vague. The court dismissed this contention, stating that the petitioner had no difficulty in understanding the case he had to meet and had responded to the notice. The omission to score out unnecessary words did not render the notice invalid, as supported by the Supreme Court's decision in State of Orissa v. Chakobhai.

5. Challenge on the Merits of the Best Judgment Assessment:
The petitioner also challenged the merits of the best judgment assessment, claiming it was capricious and arbitrary. The court held that the merits of the assessment could not be considered in these proceedings. An assessment under Section 19 is appealable under Section 38, and the petitioner should have filed an appeal before the competent authority to contest the merits.

Conclusion:
The petition was dismissed with costs. The court upheld the validity of the notice under Section 19(1), confirmed the delegation of the Commissioner's power to the Assistant Commissioner, and found Section 19(1) applicable for reassessment. The notice issued by the Assistant Commissioner was deemed valid, and the merits of the best judgment assessment were not considered in this proceeding. The petitioner was directed to pay the costs of the opponents, with counsel's fee fixed at Rs. 200.

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