1982 (6) TMI 242 - HC - VAT and Sales Tax

Summary

Issues:
1. Adequacy of opportunity for the assessee to be heard.
2. Validity of assessment order beyond the proposed terms.

Analysis:
The case involved two questions of law referred for opinion under the Punjab General Sales Tax Act. The facts revealed that the Assessing Authority issued notices for assessment to the assessee, who appeared on various dates for hearings. However, on November 27, 1970, no one appeared on behalf of the assessee, leading to a best judgment assessment by the Authority. The assessment included disallowance of deductions and imposition of a penalty. The assessee appealed to the Deputy Excise and Taxation Commissioner and then to the Sales Tax Tribunal, which modified the penalty but upheld the assessment. Subsequently, two questions of law were referred to the High Court for opinion.

Regarding the adequacy of opportunity for the assessee to be heard, the Court considered the notice served on November 26, 1970, for a hearing on November 27, 1970. The Court emphasized the principle that an assessee should have a fair chance to rebut any material collected against them. It was noted that the notice was served late, giving insufficient time for the assessee to prepare a defense, especially concerning proving transactions and explaining seized diary entries. The Court held that the assessee was not granted a reasonable opportunity to be heard, thus answering the first question in favor of the assessee.

As a result of the finding on the first issue, the Court concluded that the second question regarding the validity of the assessment order beyond proposed terms did not arise. The Court directed the Assessing Authority to proceed with the assessment in accordance with the law. The judgment was concurred by both Justices on the bench, and the reference was answered accordingly.