2007 (2) TMI 603 - HC - VAT and Sales Tax

Summary

Issues Involved: Challenge to order passed by Commercial Taxes Tribunal u/s 20(1)(b) of the Act for imposition of sales tax, additional sales tax, interest, and penalty. Allegation of lack of notice containing the gist of accusations u/s 19(4) of Bihar Sales Tax Rules, 1983.

Summary:
The petitioner, a firm selling diesel pump sets, challenged the order passed by the Commercial Taxes Tribunal, Bihar, Patna, which imposed sales tax, additional sales tax, interest, and penalty amounting to Rs. 3,13,024 for the assessment period 1998-99 u/s 20(1)(b) of the Act. The petitioner contended that the notice did not contain the required "precisely and clearly the gist of accusations" as mandated by rule 19(4) of the Bihar Sales Tax Rules, 1983.

The petitioner was registered as a dealer in 1999 with tax liability from 1998. The Revenue Authorities obtained sales receipts from a bank, revealing sales far exceeding the petitioner's reported turnover. A notice was issued initiating proceedings u/s 33(1) of the Act, followed by another notice u/s 20(1)(b) directing the petitioner to appear with account books.

The Tribunal rejected the petitioner's claim of lack of gist of accusations, stating that the petitioner was aware of the allegations due to previous proceedings. However, the High Court found the notices deficient and the order unsustainable due to non-compliance with rule 19(4). The impugned orders were set aside, directing the petitioner to appear before the Assistant Commissioner, Commercial Taxes, to file a show cause within one month for a fresh order.

The judgment highlighted the importance of providing clear accusations in notices to enable effective defense, emphasizing that failure to comply with rule 19(4) vitiates orders u/s 20(1)(b) of the Act. The petitioner was granted an opportunity to present its case with full details of accusations, ensuring a fair hearing and timely resolution of the matter.