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1961 (12) TMI 79 - HC - VAT and Sales Tax
Issues:
Challenge to sales tax assessment for the year 1959-60 based on arbitrariness and violation of natural justice principles; Jurisdictional issue regarding the levy of surcharge. Analysis: The petitioner contested the sales tax assessment for the year 1959-60 on grounds of arbitrariness and violation of natural justice principles. The Sales Tax Officer, Hozdrug, issued a communication proposing an estimate of the turnover due to the petitioner's non-compliance with producing evidence. The petitioner submitted objections and records to support the figures in the return, but the officer rejected the books of account, citing reasons such as discrepancies in central excise gate passes and fake sale bills. The petitioner's counsel argued that the officer failed to inform the petitioner of these issues during the assessment, violating principles of natural justice. The assessing officer proceeded to make an assessment on a best judgment basis after rejecting the accounts, which the petitioner's counsel deemed unrelated to facts. The Government Pleader contended that the officer had the authority to make a best judgment assessment since the petitioner did not file objections or produce books of account on the specified date. However, the court disagreed, emphasizing that the petitioner had provided all records on the appointed date, even though formal objections were not filed. The court found fault with the assessing officer for not clearly communicating the rejection of the books of account and the basis for the best judgment assessment to the petitioner, thus violating principles of natural justice. Ultimately, the court set aside the order of assessment, directing the officer to conduct a fresh assessment for the period in question. The court emphasized the importance of affording the assessee a full and fair opportunity to present objections on both legal and factual grounds. The parties were instructed to bear their own costs, and the writ petition was allowed, granting relief to the petitioner.
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