1971 (3) TMI 96 - HC - VAT and Sales Tax

Summary

Issues:
1. Violation of principles of natural justice in assessment proceedings.

Detailed Analysis:
The petitioner was originally assessed to sales tax for the year 1964-65 in connection with his business as a general merchant. Subsequently, incriminating material was seized, leading to proceedings under the Madras General Sales Tax Act. The Appellate Assistant Commissioner set aside the original assessment and remanded the matter to allow the petitioner to explain the incriminating material. However, the assessing authority failed to provide a fair opportunity for the petitioner to scrutinize and explain the material recovered during the search. The petitioner requested an adjournment to inspect the material fully, but the assessing authority refused and proceeded with the assessment, leading to the petitioner seeking a writ of certiorari to quash the assessment order.

The main contention raised by the petitioner was the lack of opportunity to explain the incriminating material after scrutinizing it. The petitioner argued that the extracts provided by the assessing authority were not self-explanatory, necessitating a further opportunity to scrutinize the material and submit a comprehensive explanation. The Government Pleader contended that the petitioner had already inspected the material and taken notes on prior occasions, satisfying the requirements of natural justice. However, the Appellate Assistant Commissioner acknowledged a violation of natural justice due to the lack of a real opportunity for the petitioner to scrutinize the material.

The High Court emphasized the importance of adhering to principles of natural justice in assessment proceedings. It noted that the petitioner's request for additional time to re-inspect the material and provide a detailed explanation should not have been disregarded. The Court found that there was a violation of natural justice as the opportunity given to the assessee was not adequate. Consequently, the Court allowed the petition, directing the assessing authority to provide the petitioner with a fresh opportunity to examine the incriminating material before proceeding with the assessment. The assessing authority was instructed to grant fifteen days for this purpose to ensure a fair and just assessment process.