1987 (6) TMI 372 - HC - VAT and Sales Tax

Summary

Issues: Validity of pre-assessment notice service under Kerala General Sales Tax Act

Issue 1: Validity of pre-assessment notice service
The case involved a dispute regarding the validity of the service of a pre-assessment notice under the Kerala General Sales Tax Act. The assessing authority had made an assessment for the year 1977-78 to the best of judgment, which was later set aside by the Sales Tax Appellate Tribunal due to lack of valid service of the pre-assessment notice. The key question was whether the notice was properly served on the assessee, as required by section 55B(b) of the Act.

Analysis:
The Appellate Tribunal held that the notice was not validly served based on the endorsement by the department's peon, which stated that the notice was affixed on a shop due to the absence of any person to receive it. The Tribunal determined that this method of service did not comply with the provisions of section 55B(b) of the Act, which outlines the acceptable methods of serving a notice. The crux of the issue revolved around the interpretation of the phrase "could not be found" in the statute.

Interpretation of "could not be found":
The Court examined the meaning of "could not be found" in section 55B(b) and referred to a precedent set by the Madras High Court in a tax case. The Madras High Court had previously held that for a person to be considered as "could not be found," they should either be deceased or missing. If the person is alive and their whereabouts are known or can be ascertained, then they cannot be deemed as "could not be found." Applying this interpretation, the Court concluded that the assessee not being present at the shop did not equate to being "could not be found" as per the statutory requirement.

Conclusion:
The Court upheld the decision of the Appellate Tribunal, ruling that there was no valid service of the pre-assessment notice in this case. Consequently, the assessment order and the appellate order were set aside, and the assessing officer was directed to conduct a fresh assessment after properly serving the notice to the assessee. The Court dismissed the tax revision case, affirming the Tribunal's decision and emphasizing the importance of complying with statutory notice requirements under the Kerala General Sales Tax Act.

Judgment Outcome:
The Court dismissed the Revenue's revision, holding that the service of the pre-assessment notice was not valid as per the statutory provisions. The decision highlighted the necessity of adhering to the prescribed methods of notice service to ensure procedural fairness in tax assessments under the Kerala General Sales Tax Act.