1967 (4) TMI 190 - HC - VAT and Sales Tax

Summary

Issues:
1. Cancellation of registration certificate under the Punjab General Sales Tax Act.
2. Disallowance of exemptions claimed by the petitioner-firm.
3. Jurisdiction of assessment proceedings for the fourth quarter of 1963-64.

Analysis:

Cancellation of Registration Certificate:
The petitioner-firm, a registered dealer under the Punjab General Sales Tax Act, was issued a notice to produce account books for the financial year 1963-64. The firm surrendered its registration certificate, stating discontinuation of business from March 2, 1964. The Assessing Authority cancelled the registration certificate on July 9, 1964, with effect from March 11, 1964. The petitioner-firm admitted to filing a return for January 1964 but continued business activities beyond the stated discontinuation date. The cancellation was challenged on various grounds, including the legality of the assessment proceedings before the end of the financial year.

Disallowed Exemptions:
The Assessing Authority disallowed a significant portion of the exemptions claimed by the petitioner-firm under section 5(2)(a)(ii) of the Act. The petitioner challenged this disallowance, alleging it was done illegally. The petitioner contended that the assessment proceedings for the fourth quarter of 1963-64 lacked jurisdiction.

Jurisdiction of Assessment Proceedings:
The petitioner argued that the assessment proceedings for the fourth quarter of 1963-64 were without jurisdiction. The petitioner relied on Rule 20 of the Punjab General Sales Tax Rules, which mandates the submission of quarterly returns within thirty days from the end of each quarter. As no special order was passed to shorten this period for the petitioner-firm, it had the right to wait until the end of the thirty-day period. Therefore, the assessment proceedings initiated before the expiry of this period were deemed illegal and lacked jurisdiction. The court agreed with this argument and set aside the impugned order, directing a reassessment for the year 1963-64 in accordance with the law.

In conclusion, the High Court allowed the writ petition, setting aside the order of the Assessing Authority and directing a reassessment of the petitioner-firm for the relevant year. The court also instructed the Assessing Authority to reconsider the exemptions claimed by the petitioner-firm under the Act.