1963 (9) TMI 45 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of notice under the C.P. and Berar Sales Tax Act, 1947 for the assessment period.
2. Limitation period for assessment under section 11(5) of the C.P. and Berar Sales Tax Act, 1947.

Analysis:

Issue 1: Validity of Notice
The case involved a reference under section 44 of the Madhya Pradesh General Sales Tax Act, 1958, regarding the validity of a notice issued to the assessee under the C.P. and Berar Sales Tax Act, 1947. The assessee, Messrs. L. J. Patel Co., was assessed for the period from 19th January, 1950, to 26th November, 1954, after failing to apply for registration as a dealer. The Board of Revenue contended that a clerical error in the notice did not invalidate the assessment, as the Sales Tax Officer had correctly informed the assessee of the assessment period. The Court relied on a Supreme Court decision related to a similar provision in the Orissa Sales Tax Act, stating that separate notices for each period were not necessary as long as the dealer was given a reasonable opportunity to be heard. Therefore, the Court concluded that the notice given to the assessee for the assessment period was valid.

Issue 2: Limitation Period for Assessment
The second issue pertained to whether the assessment for the period from 19th January, 1950, to 26th November, 1954, was barred by limitation under section 11(5) of the Act. The Court referred to a previous decision in Battulal v. Commissioner of Sales Tax, where it was established that the word "period" in section 11(5) encompassed the entire duration during which a dealer failed to apply for registration, not limited to quarterly periods. The Court rejected the argument that a recent Supreme Court decision altered the interpretation of "period" in this context. It distinguished the application of the term "period" under section 11(5) from its interpretation under section 11-A, emphasizing that the assessment must be made within three years from the expiry of the period for which the dealer was liable to pay tax. Consequently, the Court held that the assessment for the specified period was not time-barred.

In conclusion, the Court answered the first question affirmatively, confirming the validity of the notice for the assessment period. The second question was answered negatively, indicating that the assessment for the period in question was not barred by limitation. The assessee was directed to pay the costs of the reference, with counsel's fee fixed at Rs. 100.