1968 (12) TMI 78 - HC - VAT and Sales Tax

Summary

Issues:
Validity of assessment orders made by Commercial Tax Officer Ramasetty based on notices issued under section 14(3)(a) of the Bombay Sales Tax Act before his appointment as a Commercial Tax Officer.

Analysis:
The judgment delivered by the High Court pertained to the challenge of assessment orders made by Commercial Tax Officer Ramasetty based on notices issued under section 14(3)(a) of the Bombay Sales Tax Act. The petitioner, a dealer in Hubli, produced returns before another Commercial Tax Officer, and Ramasetty issued notices under section 14(3)(a) calling for evidence to support the returns. The assessment orders were made by Ramasetty under section 14(4) after the petitioner's family member produced evidence. The petitioner appealed to the Assistant Collector and then to the Collector, but both appeals were dismissed as incompetent. Subsequently, revision petitions were filed with the Sales Tax Appellate Tribunal, which also dismissed them due to the appeals being deemed incompetent.

The primary issue raised in the writ petitions was the validity of the assessment orders made by Ramasetty. It was contended that when Ramasetty issued notices under section 14(3)(a), he was not appointed as a Commercial Tax Officer, which raised concerns about the legality of the notices and subsequent assessment orders. The notices were issued on 10th March, 1960, while Ramasetty was appointed as a Commercial Tax Officer on 6th April, 1960. The Court noted that the power to make a best judgment assessment under section 14(4) arises only when a notice under section 14(3)(a) is issued, and there is a failure to comply with that notice. In this case, since Ramasetty was not a Commercial Tax Officer when the notices were issued, the notices lacked validity, and the dealer was not obligated to comply with them.

The Court emphasized that the opinion formed by Ramasetty under section 14(3)(a) before his appointment as a Commercial Tax Officer could not serve as the basis for issuing valid notices. Therefore, the subsequent acquisition of assessment power upon his appointment did not authorize Ramasetty to make a best judgment assessment in a situation where the notices were issued without legal authority. Consequently, the Court quashed the assessment orders made by Ramasetty, allowing the assessing authority to proceed with assessments in accordance with the law. The Court refrained from opining on the competence of the appeals dismissed by the Collector and the Sales Tax Appellate Tribunal, granting the petitioner the liberty to raise all contentions, including a plea of limitation, during the reassessment process.