1965 (10) TMI 60 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the assessment order for the half-year ending 30th September, 1957, is barred by limitation.
2. Whether the failure to issue a notice under section 15 of the Act has vitiated the assessment.
3. Whether the assessment under section 14(5) of the Act was permissible.
4. Whether the assessee's failure to furnish a return of turnover brings the case within the purview of section 15 of the Act.

Detailed Analysis:

Issue 1: Limitation of Assessment Order
The first issue concerns whether the assessment order for the half-year ending 30th September, 1957, is barred by limitation. The court noted that the assessee did not submit any return for the assessment year 1956-57 and the first half of 1957-58. The assessment proceedings were initiated by the Commercial Tax Officer after issuing a notice in Form 13, as per section 14(5) of the Act. The court concluded that the assessments were made within the prescribed period of limitation, thus not barred by limitation.

Issue 2: Notice under Section 15
The second issue is whether the failure to issue a notice under section 15 of the Act vitiated the assessment. The court examined sections 13, 14, and 15 of the Act, noting that section 14(5) allows the Collector to assess the tax due from a dealer who has not furnished returns, after giving the dealer a reasonable opportunity to be heard. The court held that section 14(5) and section 15 overlap but are distinct, with section 14(5) dealing with assessments and section 15 with reassessments. The court found that the notice in Form 13 was issued within the time prescribed by section 15, and therefore, the failure to issue a notice under section 15 did not vitiate the assessment.

Issue 3: Permissibility of Assessment under Section 14(5)
The third issue is whether the assessment under section 14(5) was permissible. The court held that section 14(5) permits the assessment of turnovers that have not been assessed, and the assessing authority can proceed under either section 14(5) or section 15. In this case, the authority chose section 14(5) and issued a notice in Form 13 within the prescribed time. The court found this approach permissible and valid.

Issue 4: Applicability of Section 15
The fourth issue is whether the assessee's failure to furnish a return of turnover brings the case within the purview of section 15. The court acknowledged that the failure to furnish a return falls within section 15, but also within section 14(5). It concluded that the assessments were validly made under section 14(5), despite the overlap with section 15.

Conclusion:
The court answered all the questions against the assessee, holding that:
- The assessments were not barred by limitation.
- The failure to issue a notice under section 15 did not vitiate the assessments.
- The assessments under section 14(5) were permissible.
- The assessee's failure to furnish a return brought the case within both sections 14(5) and 15, validating the assessments.

The assessee was ordered to pay the costs of the department, with an advocate's fee of Rs. 100. The reference was answered accordingly.