1985 (1) TMI 296 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the assessing authority in remand proceedings.
2. Validity of the assessment order dated 31st December 1981.
3. Limitation period for reassessment under section 19(1) of the M.P. General Sales Tax Act.
4. Scope of the remand order issued by the Additional Commissioner of Sales Tax.
5. Alternative remedy and writ jurisdiction.

Issue-Wise Detailed Analysis:

1. Jurisdiction of the Assessing Authority in Remand Proceedings:
The petitioner contended that respondent No. 1 exceeded his jurisdiction by reassessing the escaped turnover during the remand proceedings, which was beyond the scope of the remand order issued by respondent No. 2. The remand order was specific to verifying the deduction of Rs. 52,173.20 from the opening stock and did not authorize a fresh assessment or reassessment of escaped turnover. The court held that the assessing authority had no jurisdiction to reassess the petitioner for escaped turnover based on the remand order, which was limited to scrutinizing the stock position.

2. Validity of the Assessment Order Dated 31st December 1981:
The assessment order dated 31st December 1981, passed by respondent No. 1, was challenged on the grounds that it was beyond the scope of the remand order and that the assessing authority had no jurisdiction to reassess the petitioner for escaped turnover. The court found that the assessing authority's action to reassess the petitioner for escaped turnover was without jurisdiction and beyond the scope of the remand order. Consequently, the assessment order dated 31st December 1981, was quashed and set aside.

3. Limitation Period for Reassessment Under Section 19(1) of the M.P. General Sales Tax Act:
The petitioner argued that the reassessment proceedings initiated by respondent No. 1 were barred by the limitation period prescribed under section 19(1) of the M.P. General Sales Tax Act, which is five years from the date of the original assessment order. The original assessment order was passed on 10th April 1974, and no notice for the alleged escaped assessment was issued within the prescribed period. The court observed that the reassessment proceedings were initiated beyond the limitation period, making them time-barred and without jurisdiction.

4. Scope of the Remand Order Issued by the Additional Commissioner of Sales Tax:
The remand order issued by the Additional Commissioner of Sales Tax was specific to verifying the deduction of Rs. 52,173.20 from the opening stock and did not authorize a fresh assessment or reassessment of escaped turnover. The court noted that the remand order was clear and specific, and the assessing authority could not transgress the scope of the remand order to reassess the petitioner for escaped turnover. The court emphasized that the remand order did not set aside the original assessment order but directed scrutiny of the stock position for a specific amount.

5. Alternative Remedy and Writ Jurisdiction:
The respondents argued that the petitioner had an alternative remedy by way of an appeal, which was still pending, and that the court should not interfere in the exercise of writ jurisdiction. However, the court held that the issue raised was about the jurisdiction of the assessing authority, which could be considered in the writ petition. The court found that the appellate authority was not inclined to decide the matter due to the pending writ petition, and therefore, the court could exercise its writ jurisdiction to address the jurisdictional issue.

Conclusion:
The court allowed the petition, quashing and setting aside the assessment order dated 31st December 1981, passed by respondent No. 1, as it was without jurisdiction. The court emphasized that the assessing authority could not reassess the petitioner for escaped turnover based on the remand order, which was specific to verifying the deduction of Rs. 52,173.20 from the opening stock. The court also noted that the reassessment proceedings were time-barred under section 19(1) of the M.P. General Sales Tax Act.