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TMI Blog1996 (12) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 said order states that notice to show cause why the assessments should not be stayed was given to the appellant. The number of the notice is mentioned and its date is stated to be "Nil". The writ petition averred that no such notice had been served upon the appellant. The affidavit in reply to the writ petition did not counter the averment: it stated that no hearing was necessary. The High Court proceeded upon the basis that the notice had not been served, and it held that a notice was not required. As set out above, we do not agree. - Civil A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completed within the prescribed time, and the assessment for the period 1-9-1976 to 31-3-1984 for the assessee cannot be completed within time-limit prescribed under section 42(1) of the Gujarat Sales Tax Act, 1969. Hence it is considered proper to stay the assessment in the case of the said assessee up to 31-3-1988, and in this respect show cause notice was given vide letter No. Japrut/SK/Anve/Ch/S.42/87-88/JA dated nil as to the period of assessment should not be extended. In response to the said notice, the assessee has not remained present nor did he make any representation either by post or in person. The assessee has made representation vide letter dated nil. Accepting the representations of the assessee, I under the authority conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appointed by the State Government and it gave its report in 1967. This showed that the position of cases of assessment lingering for years was unsatisfactory as dealers had to preserve account books for long periods of time and it became difficult for them to produce evidence at late stages to support their claims to set-off, exemptions and the like: also, because recoveries became difficult and Government revenues were jeopardised. It was then that the period of three years for the completion of assessment proceedings had been prescribed in the State Act. In 1979 this period was reduced to two years and, simultaneously, the provision in respect of stay of assessments was introduced into the State Act. The High Court found no merit in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment proceedings where such question was involved might have to be stayed. While the writ petition was pending before the High Court, there was a stay of assessments for the period covered by the said order. When leave was granted by this Court, stay was refused. Consequently, assessment orders are stated to have been passed. Necessarily, their validity depends upon the validity of the said order. Section 42 of the State Act, as it then stood, so far as it is relevant, reads: "Section 42. Time-limit for completion of assessments. -(1)(a) No order of assessment for a year or part of a year shall be made under sub-section (3) or (4) of section 41 at any time after the expiry of two years from the end of the year in which the last mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .it is considered proper to stay the assessment......". To accept the aforesaid as good reason to stay assessment proceedings is to hold that the Commissioner, or the State Government, can give a go-by to the statutory provision prescribing the period during which assessment proceedings shall be completed only because the sales tax authorities have not completed the assessment proceedings within the stipulated time. We cannot accept this as a good reason. The aforestated power to stay assessment proceedings can be exercised only in extraordinary circumstances and for supervening reasons which cannot be attributed to the default or failure of the assessing authorities. It would be a valid exercise of the power to stay assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d into it. The said order states that notice to show cause why the assessments should not be stayed was given to the appellant. The number of the notice is mentioned and its date is stated to be "Nil". The writ petition averred that no such notice had been served upon the appellant. The affidavit in reply to the writ petition did not counter the averment: it stated that no hearing was necessary. The High Court proceeded upon the basis that the notice had not been served, and it held that a notice was not required. As set out above, we do not agree. In the premises, the impugned order must be set aside. Consequently, all proceedings taken and assessment orders passed on the strength thereof must also be set aside. The Commissioner of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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