1997 (11) TMI 509 - HC - VAT and Sales Tax

Summary

Issues:
1. Limitation period for assessments under the Kerala General Sales Tax Act.
2. Validity of the pre-assessment notice and service of notice to the dealer.
3. Compliance with the provisions of section 55B of the Act regarding service of notice.
4. Conduct of the dealer in evading receipt of notices from the tax authorities.

Analysis:

Issue 1: Limitation period for assessments under the Kerala General Sales Tax Act
The Tribunal found that the pre-assessment notice for all the years was issued within the period of limitation provided in section 19 of the Act. The assessing authority proceeded to determine the turnover that had escaped assessment within the four-year limitation period from the expiry of the relevant tax years. The notice proposing assessment on best judgment was issued on October 26, 1989, well within the deadline. The Tribunal concluded that the assessments were not barred by limitation.

Issue 2: Validity of the pre-assessment notice and service of notice to the dealer
The dealer did not accept the cover containing the pre-assessment notice sent by registered post to his residential address. The Tribunal noted that non-acceptance of the notice by the dealer amounted to a refusal to accept it. The dealer's conduct of evading receipt of notices from the tax authorities was evident from previous instances where he failed to comply with similar requests for producing accounts. The Tribunal found that the notice had been sent by registered post to the dealer's last known address, fulfilling the requirements of section 55B of the Act.

Issue 3: Compliance with the provisions of section 55B of the Act regarding service of notice
The Appellate Tribunal examined the documents and concluded that there was substantial compliance with the provisions of section 55B by the assessing authority. The Tribunal found that the assessing authority had not violated the provisions of section 55B, and the dealer's conduct indicated a deliberate attempt to evade the service of notice. The Appellate Tribunal's factual finding regarding compliance with the notice provisions was upheld.

Issue 4: Conduct of the dealer in evading receipt of notices from the tax authorities
The dealer's conduct of evading receipt of notices was a crucial factor in the case. The Tribunal observed that the dealer's actions, including non-acceptance of previous notices and attempts to avoid service, indicated a conscious effort to evade assessment proceedings. The Tribunal found that the dealer's conduct supported the conclusion that the assessments were not barred by limitation.

In conclusion, the High Court dismissed the tax revision cases, upholding the Tribunal's findings on limitation, validity of the pre-assessment notice, compliance with notice provisions, and the dealer's conduct in evading receipt of notices. The judgment emphasized the importance of compliance with statutory provisions and the consequences of deliberate evasion of tax assessment proceedings.