2000 (12) TMI 880 - HC - VAT and Sales Tax

Issues:
1. Setting aside of an assessment order due to lack of notice to the petitioner.
2. Compliance with rule 63 of the Madhya Pradesh General Sales Tax Rules, 1959.
3. Validity of assessment and reassessment orders.
4. Jurisdiction of the impugned proceedings.
5. Interpretation of rule 63 regarding service of notice.

Analysis:

Issue 1: Setting aside of an assessment order due to lack of notice to the petitioner
The petitioner filed a writ under articles 226 and 227 of the Constitution of India, challenging assessment orders that were claimed to be ex parte and without notice. The petitioner argued that the procedure for service of notice under rule 63 of the Madhya Pradesh General Sales Tax Rules, 1959, was not followed by the department. The court found merit in the petitioner's submission and set aside the impugned proceedings, directing a fresh de novo assessment after providing the petitioner with an opportunity to participate.

Issue 2: Compliance with rule 63 of the Madhya Pradesh General Sales Tax Rules, 1959
Rule 63 of the M.P. General Sales Tax Rules, 1959 outlines the procedure for the issuance of notice and summons. The rule allows for service by delivery, tendering, or post, with provisions for affixing the notice in specific circumstances. The court emphasized that before resorting to affixture, the sales tax authorities must record reasons for being satisfied that the addressee is evading notice or that other methods of service are not feasible. Failure to comply with rule 63 in serving notice to the petitioner led to the assessment orders being set aside.

Issue 3: Validity of assessment and reassessment orders
The petitioner was assessed ex parte for the periods 1981-82, 1982-83, and 1983-84, without being given notice. Subsequent reassessments were also conducted ex parte. Despite the petitioner's efforts to challenge these orders through revisions, the orders were upheld. The court held that the assessment and reassessment orders were passed behind the petitioner's back, denying them the opportunity to participate in the proceedings, and thus, these orders were quashed.

Issue 4: Jurisdiction of the impugned proceedings
The petitioner argued that the impugned assessment and revisionary orders were without jurisdiction and could not be enforced against them due to the lack of notice and non-compliance with rule 63. The State defended the proceedings, but the court sided with the petitioner, finding that the impugned proceedings lacked jurisdiction and were set aside accordingly.

Issue 5: Interpretation of rule 63 regarding service of notice
The court's analysis of rule 63 highlighted the importance of following the prescribed methods for serving notice before resorting to affixture. The court noted that the sales tax authorities must establish that the addressee evaded notice or that other methods were not feasible before using affixture. In this case, the lack of compliance with rule 63 rendered the service of notice ineffective, leading to the quashing of the assessment and reassessment orders.

In conclusion, the court allowed the petition, quashed the impugned orders, and directed the assessing officer to conduct a proper assessment de novo within six months, ensuring the petitioner's participation in the process.

← Previous Next →