1971 (3) TMI 95 - HC - VAT and Sales Tax

Summary

Issues:
1. Opportunity for representation before the assessing authority.
2. Legal objection regarding the dissolution of the firm and assessment proceedings.
3. Interpretation of the order of remit by the High Court under article 226 of the Constitution.
4. Applicability of the rule of limitation in assessment proceedings under section 16 of the Madras General Sales Tax Act.

Detailed Analysis:
1. The petitioner, a trading partnership firm, challenged the ex parte assessment orders issued by the assessing authority for the years 1959-60, 1960-61, 1961-62, and 1962-63, claiming inadequate opportunity to present its case. The High Court, in Writ Petitions, allowed the challenge, emphasizing the necessity of providing the petitioner with an opportunity to explain the correctness of the returns before final assessment. The Court directed the assessing authority to consider the returns after affording the petitioner a proper opportunity for representation.

2. The petitioner raised a legal objection based on the dissolution of the firm, contending that no further assessment proceedings could be conducted post-dissolution. However, the Court noted that an amendment in the Madras General Sales Tax Act, specifically section 19-A, rendered this objection invalid. The Court clarified that the dissolution of the firm did not preclude assessment proceedings under the amended Act, thereby dismissing this objection.

3. The petitioner argued that the assessment proceedings post the High Court's order of remit should be governed by section 16 of the Act, invoking a rule of limitation that would restrict the jurisdiction of the assessing authority. The Court rejected this argument, distinguishing the order of remit under article 226 of the Constitution from a directive issued by a statutory functionary under the Act. It clarified that the High Court's order aimed at rectifying errors in the assessment process and did not transform the nature of the proceedings from section 12 to section 16.

4. The Court referenced precedents to establish that the assessment proceedings, once properly initiated and pending, do not attract the rule of limitation under section 16. As the assessment process was ongoing and had not concluded lawfully, the Court deemed the petitioner's request for a writ of prohibition as misconceived. The Court dismissed the writ petitions, emphasizing the continuous nature of the assessment proceedings under section 12 and rejecting the applicability of the rule of limitation in this context.