1980 (9) TMI 247 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether an application for registration had to be made for the year 1964-65 when the earlier application for 1963-64 had not been decided?
2. Whether assessment was maintainable under section 11(6) of the Punjab General Sales Tax Act in view of the pendency of the application?

Analysis:
1. The case involved the assessment of a firm for sales tax for the years 1963-64 and 1964-65, along with the imposition of penalties under section 11(6) of the Punjab General Sales Tax Act, 1948. The Tribunal referred two questions of law to the High Court for opinion regarding the necessity of a new registration application for 1964-65 when the previous application for 1963-64 was pending.

2. The Assessing Authority had assessed the firm for sales tax and penalties for both years. The first appeal partially waived the penalty, and the second appeal was accepted by the Tribunal. However, the Excise and Taxation Commissioner applied for a review of the Tribunal's order for the year 1964-65, leading to the reference of legal questions to the High Court by the assessee under section 42(1) of the Act.

3. The assessee argued that since the registration application for 1963-64 was pending, a best judgment assessment under section 11(6) could not be justified. The High Court acknowledged the pending application but clarified that the inaction of the Assessing Authority did not absolve the assessee of liability under the Act, except for penalties related to registration.

4. The Assessing Authority, due to the firm's failure to produce account books, conducted a best judgment assessment based on evidence of purchases. The High Court agreed that the Authority was justified in this action, as the firm's excuses for missing account books were not credible. The liability of the assessee was to be determined by the Act's charging provisions, not affected by the pending registration application.

5. The High Court ruled in favor of the assessee regarding the first question, stating that the pending registration application did not impact liability under the Act, except for penalties. However, the second question was decided in favor of the revenue, upholding the maintainability of the assessment under section 11(6). The judgment concluded without costs, answering the reference questions accordingly.