1981 (1) TMI 231 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of section 16(1)(a) of the Tamil Nadu General Sales Tax Act, 1959.
2. Requirement of notice under section 16(1)(a) for assessment of escaped turnover.

Detailed Analysis:
The judgment involved an appeal against an order dismissing a writ petition seeking a writ of prohibition against the respondent from taking action on proceedings pursuant to a pre-assessment notice. The appellant, an assessee under the Tamil Nadu General Sales Tax Act, was assessed for the year 1970-71. Subsequently, inquiries were made regarding alleged benami transactions, leading to a notice dated 30th March, 1976, under section 16(1)(a) of the Act. The appellant contended that the notice did not fulfill the statutory requirements for assessing escaped turnover within five years.

The first issue addressed was the interpretation of section 16(1)(a) in light of the requirement to "determine to the best of its judgment" the escaped turnover. The court referred to a Supreme Court decision emphasizing that the final assessment must be made within the specified period. The appellant argued that the decision did not consider a provision similar to section 16(4) of the Act. However, the court held that the presence of section 16(4) did not alter the interpretation, as the purpose was to prevent undue delay in assessment proceedings.

The second issue focused on the requirements of the notice under section 16(1)(a) for assessing escaped turnover. The appellant contended that the notice must expressly state the intention to reopen assessment and mention the alleged escaped turnover. The court found that the notice clearly indicated the purpose of assessing escaped turnover. Additionally, it was established through investigations that the appellant was aware of the nature of the proceedings. The court held that the notice did not need to specify the exact turnover, as its purpose was to inform the assessee and allow for a response.

Ultimately, the court rejected both contentions raised by the appellant, affirming that the notice fulfilled statutory requirements and dismissing the writ appeal. No other points were raised, leading to the dismissal of the appeal.