1986 (7) TMI 361 - HC - VAT and Sales Tax

Issues Involved:
1. Legality of the ex parte assessment order.
2. Failure to grant exemption under the M.P. General Sales Tax Act.
3. Improper assessment under the Central Sales Tax Act.
4. Denial of a fair hearing by the assessing and revisional authorities.
5. Failure of the revisional authorities to consider legal objections and amendments.

Detailed Analysis:

1. Legality of the Ex Parte Assessment Order:
The petitioner, a registered sales tax dealer, challenged the ex parte assessment order dated 28th January 1982, passed by the Sales Tax Officer (respondent No. 3). The assessment was based on information collected from the books of account and other documents seized during a raid conducted on 9th January 1979. The petitioner contended that the assessment was illegal as it was conducted without giving a proper chance of hearing and failed to consider the material available on record.

2. Failure to Grant Exemption Under the M.P. General Sales Tax Act:
The petitioner, registered as a small-scale industry, claimed exemption from sales tax for the period 1st April 1978 to 31st March 1979, based on a notification dated 25th November 1969 (annexure-P2). The notification was amended to extend the exemption period up to 31st March 1979 and allowed the petitioner to furnish the necessary statements at any time before assessment. The assessing authority failed to consider these amendments and improperly included exempt sales in the taxable turnover.

3. Improper Assessment Under the Central Sales Tax Act:
The petitioner argued that the assessing authority had a legal obligation to determine inter-State sales separately under the Central Sales Tax Act. The ex parte assessment improperly mixed inter-State and intra-State sales. The assessing authority ignored material evidence regarding inter-State sales and failed to give notice to the petitioner to furnish C forms, which was not a condition precedent for claiming exemption under section 6(2) of the Central Sales Tax Act.

4. Denial of a Fair Hearing by the Assessing and Revisional Authorities:
The petitioner filed a revision petition under section 39(1) of the M.P. General Sales Tax Act before the Deputy Commissioner, Sales Tax (respondent No. 2), which was rejected on the grounds of non-cooperation despite several opportunities given. The petitioner then filed suo motu revisions under sections 39(1)(a) and 39(1-A), which were also rejected without proper consideration of the legal points raised and without giving a chance of hearing.

5. Failure of the Revisional Authorities to Consider Legal Objections and Amendments:
The revisional authorities, including the Deputy Commissioner and the Commissioner, failed to consider the legal objections raised by the petitioner, including the amendments to the notification extending the exemption period. The orders were passed in a mechanical manner, ignoring the legal pleas and material evidence submitted by the petitioner.

Conclusion:
The High Court quashed the impugned orders (annexures-P3, P5, P7, and P9) and remanded the case to the assessing authority (respondent No. 3) to reassess and decide the case afresh in accordance with law. The court emphasized the need for the assessing authority to consider the amendments and give the petitioner an opportunity to make submissions regarding the exemptions claimed. The petitioner was directed to pay the costs of the respondents, amounting to Rs. 750, within two weeks. The petition was allowed.

← Previous Next →