1971 (7) TMI 151 - HC - VAT and Sales Tax

Summary

Issues:
- Validity of the notice issued under the Andhra Pradesh General Sales Tax Act, 1957
- Statutory obligation to offer to compound an offence under the Act
- Requirement of reasonable suspicion before offering composition of an offence
- Prematurity of the impugned notice

Analysis:
The writ petition in this case challenges a notice issued under the Andhra Pradesh General Sales Tax Act, 1957, proposing an assessment on the turnover of the petitioner for a specified period. The respondent contended that certain turnovers were not included in the returns submitted by the petitioner, leading to the proposed assessment. Simultaneously, another notice was issued alleging that the petitioner's returns were incorrect and offering the option to compound the offence under section 32 of the Act or face prosecution. The court noted that there is no statutory obligation for the authorities to offer to compound an offence; rather, the authority can accept a composition offer made by the offender. The court emphasized that before a reasonable suspicion can be entertained, there must be a completed inquiry to establish the commission of an offence. Mere suspicion is not equivalent to reasonable suspicion, and a proper enquiry is necessary to form a reasonable suspicion. Therefore, the court found the impugned notice premature as it was issued before completing the necessary inquiry. The writ petition was allowed, but it was clarified that the Commercial Tax Officer could proceed with an enquiry based on a different notice and take further action accordingly. No costs were awarded in this case.