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TMI Blog1988 (6) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... by the petitioner at Vallabh Nagar, in the State of Haryana and that, therefore, the sale of the said A.C. sheets by the petitioner did not represent second sales in the State; they were first sales in the State and, therefore, not exempt from tax. On the basis of the report of the inspecting officer, the assessing authority sought to reopen the assessment; but, the said proposal was given up when it was realised that the reopening of the assessment was barred by that date. Thereafter, on 12th March, 1984 the assessing authority issued the notice calling upon the petitioner to show cause why penalty should not be levied upon it under sub-section (2) of section 7-A of the Andhra Pradesh General Sales Tax Act, inasmuch as by furnishing a false statement containing false particulars, the petitioner-dealer had obtained an exemption to which it was not entitled, and thereby evaded the tax legitimately due. Having received the notice the petitioner did not submit any explanation or objections, whereupon, by his order dated 3rd April, 1984, the authority levied penalty in a sum three times the tax evaded. The tax evaded was Rs. 53,805.31. The assessing authority was of the opinion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... barred by limitation. He submits that even though section 7-A does not mention the period within which the penalty proceedings should be taken, still it goes without saying that such proceedings must be taken within a reasonable time. What is reasonable time must be determined in this case having regard to the provisions in section 14 of the Act, which also provides for reopening of assessment and levying of penalties. During the relevant period, no such penalty could be levied under section 14 beyond a period of four years from the date of service of the order of assessment. The same period must be treated as the maximum under section 7-A too. In this case, the order of assessment was made in January, 1979, and served in the same month. The present proceedings were initiated long after the expiry of four years therefrom and must, therefore, be deemed to be barred, it is argued. For the sake of convenience we shall take up the second contention urged by Mr. K. Srinivasa Murthy, first for consideration, since it is a pure question of law. Section 7-A reads as follows: "7-A. Burden of proof and liability of the dealer to pay penalty.-(1) In the case of an assessment made under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 of the Act and the levy of penalty under section 7-A are distinct proceedings, based on distinct grounds. We see no warrant or justification for importing the period of limitation prescribed in section 14 into section 7-A, more so when sub-section (2) of section 7-A clearly says that such proceedings shall be taken on detecting the issuance or production of a false bill/voucher, or the document, as the case may be. As we have said earlier, it goes without saying that such proceedings must be taken within a reasonable time of the detection. But, what is reasonable time cannot be laid down as a rule of law. It depends upon the facts of each case, and no hard and fast rule can be enunciated in that behalf. In this case, the detection was on 19th April, 1983, and the show cause notice was issued on 12th March, 1984. It must also be seen that the detection was not by the assessing authority, but by another authority who, in turn, must have informed the assessing authority in due course. The penalty proceedings were initiated within one year of the detection. In such a situation, there is no room for contending that penalty proceedings have been initiated after an inordinately long i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner before us were never put forward by the dealer by way of an explanation. And the fact remains that he did produce a list of purchases in support of his claim that the sales of A.C. sheets in an amount of Rs. 60,98,149.10, are exempted from tax, inasmuch as they represent second sales at his hands. In other words, the statement was produced in support of his claim that the said A.C. sheets were purchased by him within the State and, therefore, the seller, Hyderabad Asbestos Cement Industries, was liable to pay the tax, being the first seller in the State. This was evidently false with respect to a turnover of Rs. 7,48,595.34. The A.C. sheets covered by the said turnover were purchased by the petitioner at Ballabgarh (Vallabh Nagar), i.e., outside the State. It is true that even the Ballabgarh factory was owned by Hyderabad Asbestos Cement Industries Ltd., but it is too much to presume that the dealer, who is in this business for the last several years, did not know the distinction between the sales effected within the State, and the sales effected outside the State, and the liability to pay sales tax in that behalf. In any event, he made no effort to prove his bona fides eit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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