1967 (3) TMI 99 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of Section 14 of the Bombay Sales Tax Act, 1953 regarding assessment procedures.
2. Jurisdiction of Assessing Authority to reject a portion of the return under subsection (2) of section 14.
3. Validity of notice issued by Assessing Authority and its impact on assessment process.
4. Consequences of defects in the notice served to the dealer.
5. Authority of Assessing Officer to alter or amend returns under subsection (2) of section 14.

Analysis:
1. The judgment pertains to an assessment under the Bombay Sales Tax Act, 1953, where the Assessing Authority rejected a portion of the dealer's return. The petitioner contended that the Authority erred in rejecting the return. The Court examined Section 14 of the Act, which outlines the submission of returns and completion of assessments. Subsection (2) allows the Collector to assess the tax due based on the returns if satisfied with their accuracy without requiring further evidence.

2. The Assessing Authority in this case issued a notice to the dealer but proceeded to complete the assessment under subsection (2) of section 14, finding certain exemptions claimed by the dealer excessive. The petitioner argued that once the Authority acted under subsection (2), it could only accept the return as correct and complete. The Court considered precedents and noted that altering the return without issuing a notice is impermissible under the law.

3. The Court highlighted that the officer's initial issuance of a defective notice did not prevent further action once the dealer appeared. The purpose of the notice is to inform the party and provide an opportunity to participate in the proceedings. Any defect in the notice becomes irrelevant once the party appears. The Court emphasized that defects in the notice should not impede the Authority from proceeding in accordance with the law.

4. The judgment emphasized that the Assessing Authority's ready acceptance of the dealer's argument about the defective notice was an error. The Court directed to set aside the original assessment order and appellate orders, instructing the Authority to re-do the assessment. By setting aside the order, the return is revived, and the dealer is granted an opportunity to present evidence and be heard before the assessment is completed.

5. The Court concluded by setting aside the original assessment order and directing the Assessing Officer to re-do the assessment after providing the petitioner with a reasonable opportunity to produce evidence and present their case. The judgment clarified the impact of setting aside the order on the limitation period and emphasized the importance of following due process in assessments.