2000 (11) TMI 1195 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to the legality and validity of a show cause notice under articles 226 and 227 of the Constitution of India.

Analysis:
The petitioner questioned the legality and validity of a show cause notice issued by the Sales Tax Officer, Circle 7, Indore. The court emphasized that the challenge to a show cause notice in a writ is limited to pure legal grounds. The court clarified that the purpose of a show cause notice is to inform the person concerned of proposed actions and allow them to respond before the issuing authority. The court highlighted that the writ jurisdiction is not meant for fact-finding but to assess the legality of the notice itself. The petitioner's detailed factual arguments were deemed more appropriate for the authority issuing the notice to consider during an inquiry.

The court examined the contents of the show cause notice, which mentioned the non-payment of sales tax and the possibility of penal action for cancellation of registration. The court emphasized that the petitioner's detailed facts, which formed the basis of the writ petition, should be addressed in a response to the show cause notice rather than in the writ itself. The court reiterated that the authority issuing the notice should evaluate the facts presented by the petitioner before making a decision on the tax liability and registration cancellation.

The court rejected the petitioner's argument that the respondent did not deny the allegations in the petition, stating that the factual details should be considered by the authority issuing the notice. The court clarified that the legality of a show cause notice cannot be solely challenged on legal or jurisdictional grounds without a thorough examination of the facts presented in response to the notice. The court concluded that the petitioner's efforts to quash the show cause notice based on factual grounds were not suitable for the writ jurisdiction. The court dismissed the petition but granted the petitioner time to respond to the show cause notice with all factual and legal grounds.

In a subsequent submission by the petitioner's counsel, additional points were raised regarding the issuance of the notice to legal representatives and the lack of provision for recovery. The court declined to address these points separately, emphasizing that the petitioner could raise these objections before the authority by filing a reply. The court refrained from examining the legality of assessment and revision orders, leaving the petitioner the option to challenge them in the future through appropriate legal proceedings.

In conclusion, the court dismissed the petition but allowed the petitioner to respond to the show cause notice within a specified timeframe. The court directed the authority to issue a reasoned order after considering the objections raised by the petitioner. The court also noted that the petitioner could challenge assessment and revision orders at a later date if necessary.