1971 (9) TMI 179 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of the notice issued under the Central Sales Tax Act.
2. Validity of the notice issued under the Madras General Sales Tax Act.
3. Opportunity to state objections to the pre-assessment notice.
4. Scope of section 5 of the Validating Act 12 of 1968.

Analysis:
1. The judgment concerns two writ petitions, one related to a notice under the Central Sales Tax Act and the other under the Madras General Sales Tax Act for the assessment year 1963-64. The petitioner's premises were searched in 1964, leading to the seizure of records. The petitioner objected to the proposed assessment under the best judgment method, citing the lack of access to seized records. Despite appeals, the orders of assessment were made. The Appellate Tribunal later allowed the appeals on the ground that assessment on a dissolved firm was not possible. The petitioner challenged the subsequent notices demanding tax, alleging various infirmities and illegalities.

2. The petitioner contended that he did not have an effective opportunity to state objections to the pre-assessment notice, leading to unfair demands in the challenged notices. The court noted discrepancies in the Tribunal's statement on the petitioner's opportunity to object, emphasizing the importance of natural justice in tax assessments. The court directed the respondent to provide the petitioner with a fresh opportunity to state objections, considering the lack of access to records during the initial assessment process.

3. Another issue raised was the interpretation of section 5 of the Validating Act 12 of 1968. The court deemed the question academic and chose not to delve into it, focusing instead on rectifying the procedural irregularities in the assessment process. The court found that the principles of natural justice were violated and directed the respondent to allow the petitioner to present objections afresh, disregarding the earlier assessment orders made during the pendency of the writ petitions. The court ruled in favor of the petitioner, deeming the earlier assessment orders as non-existent and requiring a fresh assessment process to be initiated by the assessing authority.