1992 (3) TMI 341 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to notice under section 10 of Rajasthan Sales Tax Act, 1954 for assessment years 1966-67 to 1975-76. Interpretation of limitation period for assessments under section 10(1)(b) of the Act. Prematurity of writ petition before exhausting statutory remedy.

Analysis:
The petitioner challenged a notice under section 10 of the Rajasthan Sales Tax Act, 1954, for assessment years 1966-67 to 1975-76. The petitioner contended that if complete returns were not filed and no assessment was made under section 10(1)(b) of the Act, it would be considered as a case of escaped assessment, triggering the application of section 12 of the Act, which imposes a limitation period of 8 years. The petitioner argued that the notice for assessment years 1966-67 to 1970-71 had become time-barred under section 12. However, assessments for the years 1971-72 to 1975-76 were within the time limit prescribed by the introduction of section 10B in the Act. The petitioner's writ petition was found to be premature for the later years but maintainable for the earlier years.

The Sales Tax Department contended that prior to April 7, 1979, no limitation was provided for assessments under section 10(1)(b) of the Act, and assessments pending on that date were within limitation due to the introduction of section 10B. The Department argued that the writ petition was premature, as the petitioner should have responded to the show cause notice and raised objections before the assessing authority. The Court rejected the pre-maturity argument, citing a Supreme Court decision that allowed a writ petition to proceed even without exhausting statutory remedies.

The Court analyzed the contentions and legal precedents cited by both parties. Referring to a Division Bench decision, the Court held that if no return was filed by the dealer and no assessment was made under section 10(1)(b), it would be deemed as a case of escaped assessment necessitating a notice under section 12(1). Since no best judgment assessment was made under section 10(1)(b) before April 7, 1979, the 8-year limitation period under section 12 applied. Consequently, the proposed assessment for the years 1966-67 to 1970-71 was deemed time-barred and the notice was quashed. However, the assessing authority was permitted to assess the petitioner for escaped tax assessment for the years 1971-72 to 1975-76 under section 10(1)(b) of the Act.

In conclusion, the Court disposed of the writ petition accordingly, ruling in favor of the petitioner for the earlier years and allowing assessments for the later years to proceed.