1966 (3) TMI 71 - HC - VAT and Sales Tax

Summary

Issues:
1. Jurisdiction of the assessing authority to assess the petitioner-firm.
2. Validity of making an ex parte order of assessment.
3. Legality of imposing a penalty without affording the petitioner an opportunity to be heard.

Jurisdiction of the Assessing Authority:
The petitioner-firm, registered under the Punjab General Sales Tax Act, challenged the assessment order by respondent No. 1, an Excise and Taxation Officer at Chandigarh. The petitioner argued that since it operated from Ludhiana and was registered there, the Chandigarh officer lacked jurisdiction. Citing legal precedents, the petitioner contended that without a formal transfer order, the Chandigarh officer could not assess the petitioner. However, the court held that the assessment by the Chandigarh officer was valid, as no transfer order was required, and the officer had jurisdiction throughout Punjab.

Validity of Ex Parte Order of Assessment:
The petitioner also contested the ex parte nature of the assessment order by respondent No. 1. The court acknowledged that the petitioner was not given a chance to explain before the assessment was made. Despite this, the court upheld the assessment's validity based on the officer's jurisdiction.

Imposition of Penalty without Opportunity to be Heard:
Regarding the penalty imposed under section 10(7) of the Act, the court found it invalid. The Act required the Assessing Authority to provide a reasonable opportunity to the dealer before imposing a penalty, which was not done in this case. Consequently, the court ruled that the penalty imposition was not valid, and the demand notice related to the penalty amount could not be enforced against the petitioner-firm. Therefore, the petition was partly allowed, and the court issued a writ in favor of the petitioner on this specific issue.

In conclusion, the High Court upheld the jurisdiction of the Assessing Authority to assess the petitioner-firm, dismissed the challenge against the ex parte nature of the assessment order, but deemed the penalty imposition invalid due to lack of opportunity for the petitioner to be heard.