2010 (1) TMI 1114 - HC - VAT and Sales Tax

Whether, in the facts and circumstances of the case, the order of assessment passed after a delay of 18 years suffers from the vice of inordinate delay? Held that - In the present case, the assessee had filed his quarterly returns for the assessment year 1978-79, however, the Assessing Authority, Jalandhar, passed the assessment order on July 5, 1996. There could not have been any possibility of having passed any order of assessment, if there was any stay order of the court. As the assessment order was passed after an inordinate delay of 18 years, therefore, we are of the considered opinion that the assessment for the assessment year 1978-79 has to be annulled and the same is annulled. Accordingly, question is answered in favour of the assessee and against the Revenue.

Issues:
1. Delay in passing the assessment order for the assessment year 1978-79.
2. Validity of the assessment order.
3. Claim for rebate under rule 29(xii) for purchase of tax-suffered cooking gas.
4. Liability of the assessee for sales tax not charged from customers.
5. Applicability of penalty provisions under section 10(6) of the Punjab General Sales Tax Act, 1948.

Analysis:

Issue 1: Delay in passing the assessment order
The appellant challenged the order of the Sales Tax Tribunal upholding the assessment order for the year 1978-79 passed after 18 years. The appellant argued that the delay of 18 years in passing the assessment order was unreasonable, citing legal precedents to support the contention that such delays are unjustified. The respondents claimed that the delay was due to pending litigation affecting assessment cases of hotels and restaurants. The court held that in the absence of any stay order, the 18-year delay in passing the assessment order was unjustified. Consequently, the court annulled the assessment for the year 1978-79 in favor of the assessee.

Issue 2: Validity of the assessment order
Given the annulment of the assessment order for the year 1978-79 due to the unreasonable delay, the court did not find it necessary to delve into the other questions of law framed in the case. The court's decision to annul the assessment order rendered further analysis on the validity of the order unnecessary.

Issue 3: Claim for rebate under rule 29(xii)
The court did not address the claim for rebate under rule 29(xii) for the purchase of tax-suffered cooking gas used in food production. Since the assessment order was annulled, the court did not provide a specific ruling on this claim.

Issue 4: Liability for sales tax not charged from customers
The court did not directly address the issue of the assessee's liability for sales tax not charged from customers while catering food in the restaurant. The annulment of the assessment order for the year 1978-79 led to the quashing of the penalty imposed on the assessee, without a specific ruling on this liability.

Issue 5: Applicability of penalty provisions under section 10(6)
As a result of annulling the assessment order and quashing the penalty imposed on the assessee, the court disposed of the reference against the Revenue. The court did not provide a detailed analysis of the applicability of penalty provisions under section 10(6) of the Punjab General Sales Tax Act, 1948, due to the annulment of the assessment order.

In conclusion, the High Court annulled the assessment order for the assessment year 1978-79 due to the unreasonable delay of 18 years in its issuance, thereby ruling in favor of the assessee. The court did not delve into the other legal issues raised, as the annulment made further analysis unnecessary. The disposal of the reference against the Revenue included quashing the penalty imposed on the assessee, without detailed discussion on the penalty provisions' applicability.

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