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1967 (10) TMI 52 - HC - VAT and Sales Tax
Issues:
1. Validity of retrospective imposition of sales tax. 2. Legality of best judgment assessment made without notice. Analysis: Issue 1: The case involved a challenge to the retrospective imposition of sales tax on a firm due to the withdrawal of an exemption under the Punjab General Sales Tax Act. The firm argued that unless there is a specific provision charging sales tax retrospectively, they cannot be made liable to pay sales tax for a period when they were exempt. The court considered the amendment made by Punjab Act 8 of 1962, which withdrew the exemption retrospectively from April 1, 1959. The court held that the legislature had the power to withdraw exemptions and impose taxes retrospectively. The judgment in Bhagwan Hotel v. Assessing Authority was cited to support this view, where it was emphasized that the amendment clearly withdrew the exemption, making the firm liable for sales tax retrospectively. Issue 2: The legality of a best judgment assessment made without notice was also challenged. The firm contended that the assessment made without notice was in violation of the provisions of the Act and, therefore, illegal. The court noted that the firm had received notices to appear before the Assessing Authority but failed to do so, leading to an ex parte assessment. The court held that the firm had been given ample opportunity to represent their case but did not avail of it. As a result, the court found no grounds for interference under Article 226 of the Constitution of India and stated that the proper remedy for the firm was to appeal under the Act. The court dismissed the appeal on this issue, emphasizing that the firm had not taken advantage of the opportunities provided to present their case before the Assessing Authority. In conclusion, the High Court of Punjab upheld the retrospective imposition of sales tax and found the best judgment assessment made without notice to be legal, as the firm had failed to participate in the assessment process despite being given opportunities to do so. The appeal was dismissed with no order as to costs.
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