1982 (5) TMI 172 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of notices issued by Assessing Authority under section 11(6) of the Punjab General Sales Tax Act, 1948.
2. Determination of liability and date of liability for payment of tax.
3. Jurisdiction of the High Court under article 226 of the Constitution to review Assessing Authority's actions.

Analysis:

1. The petitioner, a partnership firm manufacturing mirrors, challenged notices (P2 and P3) issued by the Assessing Authority under section 11(6) of the Act for the years 1960-61 to 1964-65. The petitioner contended that the notices were invalid as the Assessing Authority lacked information before issuing them. The court examined the language of section 11(6) and found that the notices were issued within the prescribed five-year period and stated the Authority had information to believe the petitioner was liable for tax. The court rejected the petitioner's argument that the notices were premature due to the subsequent determination of liability in 1974.

2. The Assessing Authority determined the petitioner's liability in 1974, setting the date of liability as 12th April, 1961. The petitioner argued that since this determination occurred after the issuance of notices in 1965 and 1970, the notices were invalid. The court held that the Authority's discretion to assess liability under section 11(6) was not restricted by the timing of information acquisition. The court emphasized that the Authority's opinion based on available information justified the issuance of notices, even if subsequent assessments were made.

3. The petitioner contended that the High Court could review the Authority's possession of information before issuing notices under section 11(6). Citing Commissioner of Income-tax, Gujarat v. A. Raman and Co., the petitioner argued for the Court's power to quash notices lacking necessary information. However, the court distinguished the case law, asserting that the Assessing Authority had sufficient information before issuing the notices. The court emphasized that the Authority's decision to issue notices was not subject to judicial review under article 226.

4. The court addressed the petitioner's delay in challenging the notices and highlighted that the petitioner did not contest the notices in a prior writ petition. The court emphasized that the petitioner could only challenge subsequent orders based on the notices, not the notices themselves. The court dismissed the writ petition, noting the petitioner's belated challenge and lack of grounds to contest the notices directly.