1988 (10) TMI 272 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to ex parte assessment orders and penalty imposed under the M.P. General Sales Tax Act, 1958.
2. Justification for proceeding ex parte against the petitioner.
3. Disputed question of fact regarding the receipt of telegram requesting adjournment.
4. Incorrect levy of tax at 8% instead of the correct rate of 6% on cycles.

Detailed Analysis:
1. The petitioner, a registered dealer under the M.P. General Sales Tax Act, challenged ex parte assessment orders and a revisional order imposing a penalty under section 43(1) of the Act. The assessment was initiated for two periods, and despite the petitioner challenging the assessment orders, they were upheld. The petitioner contended that the assessment was unjustified, leading to the legal challenge before the High Court.

2. The petitioner argued that the ex parte assessment by respondent No. 1 was unwarranted as the petitioner had missed a train and sent a telegram requesting an adjournment. However, the respondents denied receiving the telegram, creating a disputed question of fact. The Sales Tax Officer's affidavit supported the denial, leading the court to uphold the denial of receiving the adjournment request and proceeding with the ex parte assessment.

3. The petitioner further contended that the tax rate on cycles was erroneously levied at 8% instead of the correct rate of 6% as per a notification. The court examined the notification presented during arguments, confirming the correct tax rate. The respondents admitted the error in their return, acknowledging the reduction of the tax rate from 8% to 6%. Consequently, the court found the levy of tax at 8% to be incorrect and unjustified, ordering the correct application of the 6% tax rate.

4. In the final judgment, the High Court partly allowed the petition, quashing the revisional order and modifying the ex parte assessment orders to apply the correct tax rate of 6% on the assessment. The court also directed the imposition of a proportionate penalty based on the revised assessment. Additionally, the department was ordered to pay costs, and any outstanding security amount was to be refunded to the petitioner, concluding the legal proceedings on a partially successful note.