1988 (4) TMI 401 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Illegal retention of seized exercise books beyond the prescribed period without the Commissioner's approval.
2. Failure to determine the date of liability for payment of sales tax under Section 6(2) of the Haryana General Sales Tax Act, 1973.

Issue-wise Detailed Analysis:

1. Illegal Retention of Seized Exercise Books:

The petitioner, a karyana merchant, claimed that the Assessing Authority, Faridabad, seized 12 exercise books from his business premises on 20th December, 1978, under Section 36 of the Haryana General Sales Tax Act, 1973. According to the Act, these books should have been returned within 60 days. Despite repeated requests, the books were not returned, and instead, a notice was issued on 21st May, 1979, proposing a gross turnover based on the seized books. The petitioner contended that without the return of the books, he could not understand the basis of the calculations. The Assessing Authority justified the non-return by stating that the petitioner needed to attest the entries and make a statement. The approval for retention of the books was obtained only on 27th June, 1979, after the best judgment assessment order was passed on 15th June, 1979. The court found that the retention of the books beyond 60 days without the Commissioner's approval rendered the assessment order illegal. The refusal to return the books and the insistence on attestation were deemed unjustified, denying the petitioner the opportunity to provide a proper explanation.

2. Failure to Determine Date of Liability for Payment of Sales Tax:

The petitioner argued that the Assessing Authority failed to determine the date on which his gross turnover first exceeded the taxable quantum, as required under Section 6(2) of the Act. This determination is crucial because the liability to pay tax arises 30 days after this date. The court found that the Assessing Authority did not comply with this mandatory provision, and the Tribunal erred in rejecting this contention on the basis that it was not raised at earlier stages. The court emphasized that the Tribunal should have entertained the law point, as it goes to the root of the jurisdiction of the Assessing Authority. The Tribunal's refusal to consider this point was deemed illegal.

Conclusion:

The court allowed the writ petition, quashing the impugned orders (annexures P/6, P/7, and P/9) due to the illegal retention of the exercise books and the failure to determine the date of liability for sales tax. The court clarified that the Assessing Authority could take proceedings in accordance with the Act. Costs were assessed at Rs. 500. The writ petition was allowed.