1971 (8) TMI 207 - HC - VAT and Sales Tax

Summary

Issues:
- Questioning the action of the respondent in issuing three independent notices for three assessment years under section 16 of the Tamil Nadu General Sales Tax Act.
- Challenging the power of the respondent to issue such notices based on the proposal made.
- Lack of jurisdiction of the respondent to invoke section 16 of the Act to issue the challenged notices.

Analysis:
The judgment concerns three writ petitions where the petitioner challenges the respondent's action of issuing three separate notices for the assessment years 1962-63, 1963-64, and 1964-65 under section 16 of the Tamil Nadu General Sales Tax Act. The notices accused the petitioner of an escapement of tax related to the exemption allowed on second sales of batteries. The petitioner contested the power of the respondent to issue such notices, questioning the basis of the proposal made by the respondent. The assessment orders for the respective years had already been finalized, accepting that the dealer purchased batteries locally and exempting second sales from tax. The petitioner had previously appealed against a similar assessment for the year 1961-62, where the appellate authority confirmed the exemption on second sales of batteries. Despite this, the respondent issued the impugned notices without providing any objective reason or material to justify reopening the assessments. The court emphasized that the power to revise under section 16 should be exercised cautiously and based on objective grounds, not merely subjective satisfaction. The lack of any valid reason or material to reopen the assessments led the court to conclude that the respondent lacked jurisdiction from the outset to issue the notices under section 16. Consequently, the court allowed the writ petitions, making the rules absolute and deciding no costs to be awarded.

This judgment highlights the importance of having valid reasons and objective material for reopening assessments under section 16 of the Act. It underscores the need for authorities to exercise such powers cautiously and ensure that any revision is based on solid grounds rather than subjective satisfaction alone. The court's decision to disallow the challenged notices due to the lack of jurisdiction emphasizes the significance of adhering to legal requirements and procedural fairness in tax matters. The judgment serves as a reminder of the principles governing the exercise of statutory powers and the necessity of justifying any actions taken by authorities with concrete and objective reasoning.