9911796707
TMI Blog1996 (12) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... by a Division Bench of the High Court of Gujarat. It dismissed a writ petition filed by the appellant. The appellant carries on the business of manufacture and sale of ball and roller bearings at Vadodara in Gujarat. It is registered as a dealer under the Central Sales Tax Act, 1956, and the Gujarat Sales Tax Act, 1969. The writ petition was filed to quash the order of the Deputy Commissioner of Sales Tax dated 31st August, 1987, passed under section 42(1) of the Gujarat Sales Tax Act and rule 37-A of the Rules thereunder staying until 31st August, 1988, the appellant's assessments for the period 1st September, 1976 to 31st August, 1984, and to restrain the Sales Tax Officer from making any assessment and penalty orders for the said period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no order for stay of the assessment proceedings had in fact been passed on 31st August, 1987 and, thus, the assessment proceedings had become time-barred; that the order dated 31st August, 1987 ("the said order") was null and void inasmuch as no show cause notice in that behalf had been given to the appellant nor had it been heard before the said order was passed; and that the reasons given in the said order did not justify its passing. The High Court held against the appellant on the first contention and, that being a finding of fact, we do not concern ourselves therewith. In so far as the second contention was concerned, the High Court considered whether the power of staying assessment proceedings was quasi-judicial in nature. The High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner, had to record the reasons for passing of such order and that order had to be served upon the assessee; that was the only requirement of the principles of natural justice which could be read into the provision. The third contention does not appear to have been dealt with separately by the High Court but, in the course of the discussion of the second contention, it was observed that assessment proceedings might be required to be stayed not only because of any difficulty in completing assessment proceedings individually. A war or a strike by the officers of the Sales Tax Department, for example, might make it impossible or difficult to complete assessment proceedings within the period of limitation. In such cases, in order to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus: "Rule 37-A. Conditions subject to which Commissioner may grant stay.- Conditions subject to which the Commissioner may, under the first proviso to sub-section (1) of section 42, stay the assessment proceedings of a dealer or a class of dealers, shall be as follows, namely: 1.. No assessment proceeding shall be stayed by the Commissioner for a period more than five years at any time. 2.. The Commissioner shall reduce in writing the reasons and circumstances necessitating stay of any proceedings in respect of a dealer or a class of dealer." Under the terms of rule 37-A, the Commissioner must put the reasons and circumstances necessitating stay of assessment proceedings in writing. In the instant case, the reasons and circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of rule 37-A, the Commissioner is required to put in writing the "reasons and circumstances" that necessitate the stay of proceedings. The stay of assessment proceedings has consequences of a civil nature upon an assessee, which the High Court has, as aforesaid, noted. The more the time that elapses the more difficult it is for the assessee to prove his accounts and claim set-off, exemptions and the like. We take the view that, in the circumstances, the power under rule 37-A may not be exercised by the Commissioner without first giving to the assessee notice to show cause why his assessment proceedings should not be stayed for a stated period. The notice should set out what the reasons and circumstances are which, according to the Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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