1966 (8) TMI 55 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Non-service of notice to show cause for reopening assessment.
2. Validity of ex parte reassessment order and notice of demand.
3. Jurisdiction of criminal courts to question the validity of assessment orders.
4. Compliance with fundamental provisions of the statute.

Detailed Analysis:

1. Non-service of Notice to Show Cause for Reopening Assessment:
The primary issue was whether the non-service of notice to show cause why an assessment already made should not be reopened affects the validity of the reassessment order. The court found that the notice under section 14(4) of the Andhra Pradesh General Sales Tax Act was not served on any of the accused, who were partners of the dissolved firm. The purpose of issuing this notice is to provide the dealer with an opportunity to contest the reopening of the assessment. The court held that the expression "after issuing a notice to the dealer" means "after notice is issued and served on the dealer." The failure to serve this notice invalidated the reassessment order.

2. Validity of Ex Parte Reassessment Order and Notice of Demand:
The reassessment order dated 30th March 1961, and the subsequent notice of demand were issued without the accused having received the initial notice to show cause. The court noted that the reassessment order and notice of demand were sent by registered post without acknowledgment due, and the accused denied receiving them. The court held that the reassessment order and notice of demand were not satisfactorily served, and thus, the reassessment order was void.

3. Jurisdiction of Criminal Courts to Question the Validity of Assessment Orders:
The court considered whether a criminal court could go behind an assessment order that had become final. The learned Public Prosecutor argued that it is not open to a criminal court to question the validity of a final assessment order, citing the Full Bench decision in Public Prosecutor v. Bhavigadda Thimmaiah and Others. However, the court referred to the Supreme Court's observations in Firm of Illuri Subbayya Chetty and Sons v. State of Andhra Pradesh, which stated that non-compliance with fundamental provisions of the statute could render the proceedings illegal and void, thus allowing the validity of the assessment order to be challenged.

4. Compliance with Fundamental Provisions of the Statute:
The court emphasized that compliance with fundamental provisions of the statute is essential for the validity of any assessment order. The court cited several precedents, including Secretary of State v. Mask and Company and Firm Radha Kishan v. Ludhiana Municipality, which established that even if a statute excludes the jurisdiction of civil courts, the courts can examine cases where the provisions of the Act have not been complied with. In this case, the non-service of the notice to show cause constituted non-compliance with a fundamental provision, rendering the reassessment order void.

Conclusion:
The court concluded that the non-service of notice to show cause why an assessment already made should not be reopened affects the assessment order due to non-compliance with the fundamental provisions of the statute. Consequently, the prosecution failed, and the criminal appeal was dismissed. The court held that the accused could not be held liable for failing to pay the tax assessed under a void reassessment order.