1970 (10) TMI 58 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to best judgment assessment order for failure to furnish evidence.
2. Late filing of returns and seizure of documents by Central excise authorities.
3. Compliance with statutory provisions for assessment orders.
4. Interpretation of penalty provisions for late filing of returns.
5. Consideration of surrounding circumstances for fair assessment.

Detailed Analysis:
1. The petitioner challenged the best judgment assessment order by the Additional Assistant Commissioner of Sales Tax, claiming he failed to furnish evidence for exemptions from sales tax. The petitioner's account books and documents were seized by the Central excise authorities, making it impossible for him to provide necessary evidence. The order was deemed illegal as the assessing authority wrongly assumed the petitioner's responsibility for the lack of evidence, failing to exercise statutory powers to access seized documents.

2. The petitioner received a notice for late submission of returns and continuously sought adjournments due to the unavailability of necessary documents seized by the Central excise authorities. Despite a lapse of seven years since the seizure, the investigation remained incomplete. The Board of Revenue had previously set aside a similar best judgment assessment order, acknowledging the petitioner's inability to furnish evidence due to the seized documents.

3. The assessing authority's failure to comply with statutory provisions and exercise the power granted by law led to an illegality in passing the best judgment assessment order. Rule 33 of the Madhya Pradesh General Sales Tax Rules, 1959, requires the assessing authority to consider surrounding circumstances and other relevant factors to make a fair assessment. In this case, the assessing authority did not consider the circumstances leading to the petitioner's inability to furnish evidence.

4. The court interpreted the penalty provisions for late filing of returns, emphasizing that while penalties could be imposed for late filing, preventing the assessee from furnishing any evidence altogether was not warranted. The court highlighted the discretion of the assessing authority to impose penalties under specific sections of the Act, without automatically disallowing the assessee from presenting evidence.

5. The judgment emphasized the importance of considering surrounding circumstances and other relevant factors for a fair assessment. It directed the assessing authority to summon specific documents specified by the petitioner to assist in making a fair estimation of the taxable turnover. The court allowed the petition, quashed the impugned assessment order, and remanded the case for a fresh order in compliance with the law, with no costs imposed on the petitioner.