1973 (9) TMI 88 - HC - VAT and Sales Tax

Issues Involved:
1. Validity of the assessment order dated 30th April 1961.
2. Examination of accounts by the assessing officer.
3. Compliance with Section 16(2)(b) of the Bihar Sales Tax Act, 1959.
4. Role of Inspectors in the assessment process.
5. Remand of the case by the Tribunal.

Issue-wise Detailed Analysis:

1. Validity of the assessment order dated 30th April 1961:
The primary question referred to the court was whether the assessment order dated 30th April 1961, passed by Shri R.S.P. Sinha, Superintendent of Commercial Taxes, Gaya, was valid in law despite him not examining the accounts himself. The court concluded that the assessment order was valid. The Tribunal's view that the assessment order was not in accordance with the mandatory provision laid down in Section 16(2)(b) of the Act was found to be erroneous.

2. Examination of accounts by the assessing officer:
The Tribunal had held that it was obligatory for the assessing officer to examine the accounts personally. However, the court found that the prescribed authority (assessing officer) could rely on the reports furnished by an Inspector. The court noted that Shri R.S.P. Sinha did ask the dealer to produce complete account books and examined several matters and materials before passing the assessment order. Therefore, the assessment order was not invalid merely because Shri R.S.P. Sinha did not personally examine all the accounts.

3. Compliance with Section 16(2)(b) of the Bihar Sales Tax Act, 1959:
Section 16(2)(b) mandates that the prescribed authority shall, after examining the accounts and other evidence produced by the dealer, assess the amount of tax due. The court interpreted this provision to mean that while the prescribed authority is generally expected to examine the accounts, it is not mandatory if the dealer does not produce evidence to contradict the Inspector's report. The court found that Shri R.S.P. Sinha had complied with the provision by considering the Inspector's report and giving the dealer an opportunity to present his accounts.

4. Role of Inspectors in the assessment process:
Rules 14 and 15 of the Bihar Sales Tax Rules, 1959, allow the prescribed authority to require an Inspector to examine the accounts and other evidence. The Inspector then submits a report, which the prescribed authority considers while making the assessment. The court clarified that the prescribed authority is not obligated to re-examine the accounts if the dealer does not produce additional evidence to contradict the Inspector's findings. This interpretation supports the validity of the assessment order even if the accounts were primarily examined by the Inspector.

5. Remand of the case by the Tribunal:
The Tribunal had remanded the case on the grounds that the assessment order was not in accordance with Section 16(2)(b) because the accounts were not personally examined by Shri R.S.P. Sinha. The court found this view to be incorrect and held that the Tribunal should have examined the merits of the assessment order instead of remanding the case solely based on this procedural point. The court's decision implies that the Tribunal must now hear the revision on its merits.

Conclusion:
The court answered the reference in favor of the department and against the assessee, holding that the assessment order dated 30th April 1961 was valid in law even though the accounts were not personally examined by Shri R.S.P. Sinha. The Tribunal's remand was based on an erroneous interpretation of the law, and the case should be heard on its merits. There was no order as to costs of this reference.

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