1995 (2) TMI 426 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the assessment orders dated September 7, 1989.
2. Legality of the revisional order dated August 1, 1992.
3. Scope of the revisional authority under Rule 29 of the Rajasthan Entertainments and Advertisements Tax Rules, 1957.
4. Requirement of issuing a show cause notice for enhancement of tax.
5. Validity of the best judgment assessment.

Issue-wise Detailed Analysis:

1. Validity of the Assessment Orders Dated September 7, 1989:
The petitioner challenged the assessment orders for the months of April to August 1988, arguing that the tickets used on August 30, 1988, were from authenticated ticket books used up to December 31, 1987. The assessing authority did not accept this explanation and framed a best judgment assessment for the five months, creating a demand for entertainment tax, interest, and penalty.

2. Legality of the Revisional Order Dated August 1, 1992:
The petitioner appealed against the assessment orders, and the Deputy Commissioner (Appeals) partly allowed the appeal, setting aside the tax and penalty but maintaining the interest. The Commercial Taxes Officer then filed a revision petition. The revisional authority found the appellate order erroneous and unjustified, stating that the finding of no tax evasion by the petitioner was perverse. The revisional authority emphasized the importance of using authenticated ticket books to prevent tax evasion.

3. Scope of the Revisional Authority Under Rule 29 of the Rajasthan Entertainments and Advertisements Tax Rules, 1957:
The petitioner argued that the revisional authority overstepped its jurisdiction under Rule 29, which allows the revisional authority to pass such orders as it thinks fit. The court found that Rule 29 is broad enough to allow the revisional authority to enter into both legal and factual controversies and to confirm, reduce, enhance, or annul the assessment or penalty. The court held that the revisional authority acted within its jurisdiction.

4. Requirement of Issuing a Show Cause Notice for Enhancement of Tax:
The petitioner contended that the revisional authority could not enhance the assessment and penalty without issuing a show cause notice. The court clarified that a show cause notice is required only if the revisional authority enhances the assessment or penalty beyond what was assessed by the assessing authority. In this case, the revisional authority merely restored the original assessment orders, so no additional notice was required.

5. Validity of the Best Judgment Assessment:
The petitioner claimed that the best judgment assessment was actually a worst judgment assessment. The court refused to enter into the factual controversy, stating that such matters cannot be reviewed under Article 226 of the Constitution of India. The revisional authority found that the petitioner was issuing tickets from two series to evade tax, and the explanation provided by the petitioner was not credible. The court upheld this finding, noting that the petitioner failed to produce authenticated records and that adverse inferences were rightly drawn.

Conclusion:
The court dismissed the writ petition, finding no error in the revisional authority's order. The revisional authority acted within its jurisdiction under Rule 29, and the petitioner was given ample opportunity to be heard. The assessment orders and the revisional authority's decision were upheld as just and proper. The petition lacked merit and was dismissed, with each party bearing its own costs.