1964 (1) TMI 40 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of reassessment proceedings post-dissolution of the firm.
2. Validity of joint petition for assessments of multiple years.
3. Existence and adequacy of alternative remedies.

Detailed Analysis:

1. Legality of Reassessment Proceedings Post-Dissolution of the Firm:
The petitioners argued that reassessment proceedings initiated after the dissolution of the firm were illegal, relying on the Full Bench decision in Jullundur Vegetable Syndicate v. Punjab State. The firm, M/s. Mangat Rai Madan Mohan, was dissolved on 31st May 1962, and the reassessment notice was issued on 3rd August 1963. The respondents countered that the reassessment was valid under the amended Punjab General Sales Tax Act, as the Assessing Authority had definite information of escaped assessment discovered during an inspection on 19th May 1962. The court found that the reassessment proceedings were initiated before the firm's dissolution, supported by records showing notices dated 26th May 1962 and an inspection note from 19th May 1962. Consequently, the court held that the reassessment proceedings were legally initiated before the firm's dissolution and were valid.

2. Validity of Joint Petition for Assessments of Multiple Years:
The respondents raised a preliminary objection that a joint petition for assessments of two years was not competent. The petitioners contended that since the grounds for challenging both assessments were similar, a joint petition was permissible. The court decided that dismissing the writ petition on this ground would be improper, especially since the grounds of challenge were identical. Thus, the joint petition was deemed competent.

3. Existence and Adequacy of Alternative Remedies:
The respondents argued that the petitioners had an adequate alternative remedy through an appeal, which should have been pursued instead of filing a writ petition. The petitioners maintained that if the impugned order lacked jurisdiction, the existence of an alternative remedy was not a bar. The court acknowledged that while alternative remedies are generally preferred, they are not always a sufficient reason to refuse a writ, especially in cases of clear jurisdictional overreach. However, the court emphasized that too much interference via extraordinary remedies in taxation matters is discouraged. The court found that the issue of whether the reassessment notices were served on 26th May 1962 involved factual disputes better resolved by the departmental authorities. Additionally, the court noted that the recent Supreme Court decision in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax allowed for the completion of assessment proceedings initiated within the prescribed period without a strict time limit. Given these considerations, the court declined to delve into the factual disputes and suggested that the statutory machinery should handle the matter.

Conclusion:
The court dismissed the petition, holding that the reassessment proceedings were validly initiated before the firm's dissolution and that the joint petition was competent. The existence of alternative remedies and the factual nature of the disputes warranted resolution through the statutory process rather than a writ petition. The court also noted that the petitioners' failure to pursue statutory remedies in a timely manner was a risk they assumed. The petition was dismissed without costs.