1976 (12) TMI 174 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of Sales Tax Officer to issue penalty notices u/s 22A(1) after assessment completion.
2. Requirement of satisfaction by the assessing authority for initiating penalty proceedings.
3. Maintainability of writ petitions despite pending statutory remedies.

Summary:

1. Jurisdiction of Sales Tax Officer to issue penalty notices u/s 22A(1) after assessment completion:
The primary issue was whether Mr. U.R. Jain, a different Sales Tax Officer, could issue penalty notices u/s 22A(1) of the Bengal Finance (Sales Tax) Act, 1941, after the original assessments were completed by Mr. R.K. Bhatia and Mr. Madan Mohan. The court held that Mr. Jain could not issue penalty notices as his predecessors had not recorded their satisfaction regarding the concealment of sales or furnishing inaccurate particulars.

2. Requirement of satisfaction by the assessing authority for initiating penalty proceedings:
The court emphasized that satisfaction of the assessing authority during the assessment proceedings is a condition precedent for initiating penalty proceedings u/s 22A(1). The satisfaction must be evident in the assessment order itself. The court found that neither Mr. Bhatia nor Mr. Madan Mohan recorded such satisfaction in their assessment orders, which was necessary to form the foundation for penalty proceedings.

3. Maintainability of writ petitions despite pending statutory remedies:
The revenue argued that the writ petitions were not maintainable as the petitioner should have availed of the statutory remedies provided under the Act. The court rejected this preliminary objection, stating that the question of jurisdiction raised by the petitioner could appropriately be answered by the court. The court held that the writ petitions were maintainable as they involved a point of law regarding the jurisdiction of the assessing authorities.

Conclusion:
The court allowed the writ petitions, quashing the penalty notices u/s 22A(1) and the consequent orders dated 2nd April, 1969, imposing penalties. The court left the parties to bear their own costs.