2004 (5) TMI 543 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the assessing officer can assess the dealer without calling upon him to file a return.
2. The procedure to be followed for assessment under the Delhi Sales Tax Act, 1975.
3. The validity of the assessment orders issued without following the prescribed procedure.

Issue-wise Detailed Analysis:

1. Whether the assessing officer can assess the dealer without calling upon him to file a return:
The core issue revolved around whether the assessing officer had the authority to assess a dealer without first requiring the dealer to file a return. The court examined Section 23 of the Delhi Sales Tax Act, 1975, which outlines the assessment procedure. Sub-section (1) mandates that the tax amount due from a registered dealer should be assessed separately for each year. The proviso to sub-section (1) allows the Commissioner to assess the tax due for any period within a year if the dealer fails to file a return by the prescribed date. However, the court emphasized that the dealer must be given a reasonable opportunity of being heard. In this case, the dealer was not called upon to file a return before the assessment, which the court found procedurally incorrect.

2. The procedure to be followed for assessment under the Delhi Sales Tax Act, 1975:
The court elaborated on the assessment procedure as detailed in Section 23 of the Act. Sub-section (2) allows the Commissioner to assess the tax based on the returns furnished by the dealer if they are found to be correct and complete. Sub-section (3) provides the procedure if the Commissioner is not satisfied with the returns, requiring the dealer to produce evidence. Sub-section (5) allows for a best judgment assessment if the dealer fails to furnish returns by the prescribed date, but only after giving the dealer a reasonable opportunity of being heard. The court noted that the assessment in question did not follow these procedures, particularly the requirement to call upon the dealer to file a return.

3. The validity of the assessment orders issued without following the prescribed procedure:
The court scrutinized the validity of the assessment orders issued without adhering to the prescribed procedure. It highlighted that the assessing officer issued a notice on July 18, 2002, to the dealer for the quarter April 1, 2002, to June 30, 2002, even though the dealer was required to file the return by August 14, 2002. The court found that the notice was not in accordance with the prescribed forms and did not call upon the dealer to file a return. Consequently, the court quashed the assessment orders dated September 25, 2002, and August 31, 2002, as they were issued without following the due process outlined in the Act.

Separate Judgments Delivered:
The court also addressed other related writ petitions:
- In W.P. (C) Nos. 1826 of 2003 and 6235 of 2003, the court allowed the assessing officer to proceed in accordance with the law and complete the assessment.
- In W.P. (C) No. 1830 of 2003, the court directed the appellate authority to dispose of the pending appeal in accordance with the law.
- In W.P. (C) Nos. 8274-75 of 2004, the court directed the dealer to prefer an appeal or revision within four weeks, which should then be disposed of in accordance with the law.

Conclusion:
The court concluded that the dealer could not be assessed without being called upon to file a return. It emphasized the necessity of following the statutory procedure, including giving the dealer a reasonable opportunity to be heard. The assessment orders were quashed, and directions were given for the proper procedure to be followed in related cases.

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