1981 (3) TMI 224 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of reassessment notice to legal representatives
2. Compliance with principles of natural justice
3. Limitation period for reassessment order
4. Power of assessing authority to levy penalty on legal representatives

Validity of Reassessment Notice to Legal Representatives:
The case involved a reassessment under the Tamil Nadu General Sales Tax Act, 1959, for the assessment year 1969-70. After the deceased's widow continued the business, a notice of reassessment was issued to her alone. However, it was contended that the notice should have been served on all legal representatives. The Appellate Assistant Commissioner set aside the reassessment order due to lack of notice to all legal representatives. The High Court held that the notice issued to the widow alone was valid as there was no evidence of other legal representatives at the time of the original notice. The reassessment proceedings were deemed validly initiated, and the limitation period was not breached.

Compliance with Principles of Natural Justice:
The Appellate Assistant Commissioner remanded the case to the assessing officer for fresh disposal on merits after notice to all legal representatives. The High Court upheld this decision, emphasizing the importance of providing a reasonable opportunity and complying with the principles of natural justice. The reassessment order was set aside and revised after issuing fresh notices to all legal representatives.

Limitation Period for Reassessment Order:
The petitioner argued that the revised reassessment order made beyond five years from the expiry of the assessment year was illegal. However, the High Court held that the period of limitation should be calculated from the issuance of the notice under section 16, not from the revised reassessment order. Citing precedent, the Court rejected the petitioner's argument on the limitation period.

Power of Assessing Authority to Levy Penalty on Legal Representatives:
The petitioner contested the authority of the assessing officer to levy penalties on legal representatives under section 15 of the Act. The High Court referred to a previous decision where it was held that legal representatives can be treated as dealers for assessment and penalty purposes. The Court clarified that legal representatives are only liable to the extent of the deceased's assets and not personally, thus section 45 on offences and penalties does not apply to them. The Court upheld the Tribunal's decision on the levy of penalties.

In conclusion, the High Court dismissed the revision petition, affirming the Tribunal's order and awarding costs to the respondent. The judgment clarified the validity of the reassessment notice, emphasized compliance with natural justice principles, interpreted the limitation period, and confirmed the assessing authority's power to levy penalties on legal representatives within the specified scope of the law.