1972 (6) TMI 68 - HC - VAT and Sales Tax

Issues Involved:
1. Jurisdiction of the notice issued under section 19-A of the Assam Sales Tax Act, 1947.
2. Basis for holding prima facie that the escaped assessment was to the tune of Rs. 97,830.
3. Delegation of powers under section 19-A to the Superintendent of Taxes.
4. Constitutionality of section 19-A under article 14 and article 19(1)(g) of the Constitution of India.
5. Liability of gunny bags used as containers for supply of flour to payment of sales tax (not argued at this stage).

Issue-wise Detailed Analysis:

1. Jurisdiction of the Notice Issued under Section 19-A:
The petitioner challenged the jurisdiction of the notice issued under section 19-A, arguing that the condition precedent for the exercise of power under this section was absent. The court examined whether the Superintendent of Taxes had received new information subsequent to the original assessment that justified the reopening of the assessment. The court found that the Superintendent had knowledge of the Roller Mills Wheat Products (Price Control) Order, 1965, at the time of the original assessment, as evidenced by references in the assessment order. Therefore, the initiation of proceedings under section 19-A was based on a mere change of opinion rather than new information, rendering the notice without jurisdiction and invalid.

2. Basis for Holding Prima Facie that the Escaped Assessment was to the Tune of Rs. 97,830:
The petitioner contended that there was no basis for holding prima facie that the escaped assessment amounted to Rs. 97,830. The court did not delve deeply into this issue as it was not seriously advanced by the petitioner. However, it was noted that the escaped assessment was calculated based on the value of the containers (gunny bags) used for wheat products, which was included in the price fixed by the Roller Mills Wheat Products (Price Control) Order, 1965.

3. Delegation of Powers under Section 19-A to the Superintendent of Taxes:
The petitioner argued that the powers under section 19-A, specifically conferred on the Commissioner of Taxes, could not be delegated to the Superintendent of Taxes. The court analyzed the statutory provisions and rules governing the delegation of powers. It concluded that the Commissioner could delegate his powers under section 19-A(1) to the Superintendent, as permitted under section 50 of the Act and the relevant rules. The court found no bar against such delegation and held that the notice issued by the Superintendent was valid on this ground.

4. Constitutionality of Section 19-A under Article 14 and Article 19(1)(g) of the Constitution of India:
The petitioner claimed that section 19-A conferred arbitrary power on the Commissioner, violating articles 14 and 19(1)(g) of the Constitution. The court noted that the petitioner could not make any grievance as the notice was issued by the Superintendent. The court also observed that the Commissioner, after delegating powers, typically does not exercise the same powers, thus minimizing the risk of arbitrariness. Consequently, the court did not entertain the objection regarding the constitutionality of section 19-A in this case.

5. Liability of Gunny Bags Used as Containers for Supply of Flour to Payment of Sales Tax:
The petitioner reserved the right to argue this point at a future stage and did not address it in the current proceedings. Therefore, the court did not make any determination on this issue.

Conclusion:
The court concluded that the initiation of proceedings under section 19-A was invalid due to the absence of new information subsequent to the original assessment. The notices issued were quashed, and the application in each of the Civil Rules Nos. 214, 215, 216, and 217 of 1968 was allowed. No order as to costs was made. The judgment was concurred by both judges.

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