1983 (1) TMI 220 - HC - VAT and Sales Tax

Summary

Issues:
1. Violation of procedural requirements in assessment by the Excise and Taxation Officer.
2. Classification of rice bran oil as edible or inedible oil for sales tax purposes.

Analysis:

Issue 1: Violation of procedural requirements in assessment by the Excise and Taxation Officer
The petitioner-firm filed a writ petition seeking to quash paragraph 3 of a notice issued by the Excise and Taxation Officer, which demanded the payment of sales tax at a rate of 4% on the sales of "non-edible oil" in the course of inter-State trade. The petitioner contended that the assessment was completed ex parte without summoning or hearing them, thus violating the provisions of section 11(2) of the Punjab General Sales Tax Act, 1948. The court agreed with the petitioner, noting that the assessing authority had completed the assessment without following the required procedure of serving a notice and allowing the petitioner to present evidence. The court held that the order was in violation of the statutory provision, which mandates giving the dealer an opportunity to present evidence before finalizing the assessment.

Issue 2: Classification of rice bran oil as edible or inedible oil for sales tax purposes
The petitioner argued that the rice bran oil they sold was edible oil, meeting the standards set by the Excise and Taxation Commissioner. However, the court found that there was insufficient evidence on record to determine conclusively whether rice bran oil should be classified as edible or inedible oil for sales tax purposes. The court noted that the constituents of the oil and the specific components that might render it inedible were not clearly presented. As a result, the court could not decide this question based on the limited information available. The court allowed the petitioner the opportunity to raise this issue before the Assessing Authority in the future when more substantial evidence could be provided.

In conclusion, the court granted the writ petition, quashing paragraph 3 of the notice dated 23rd December, 1981, due to the procedural irregularities in the assessment process and the lack of sufficient evidence to classify rice bran oil definitively.