9911796707
TMI Blog2005 (1) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... ication, etc., apart from recording any statement from any of the responsible person of the business concern. (ii) Basing on such information, if any of the officer of the said Vigilance or Intelligence Wing Department is empowered to make assessments, such officer can proceed to frame assessments basing on the material and such assessments could be completed only after complying the procedure provided under the provisions of the Act and Rules, i.e., granting sufficient opportunity to adduce evidence by the dealer for the proposed assessment, i.e., as to the quantities as well as valuation of the stocks, etc.; otherwise such material or information can be forwarded to the assessing authority having jurisdiction for taking appropriate action including the assessment, reassessment, etc. (iii) There shall be at least a gap of one week between the date of an order of assessment, or demand notice, as the case may be, and an order compounding the offence, wherever the dealer comes forward with such an offer. (iv) The judgments in S.R. Traders and Bhavani Traders v. Assistant Commissioner of Commercial Taxes [ 1993 (3) TMI 339 - ANDHRA PRADESH HIGH COURT] , Kaki Butchi Raju Son v. State o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Government Pleader JUDGMENT S. Ananda Reddy, J. 1. These writ petitions are filed by the dealers registered under the provisions of the Andhra Pradesh General Sales Tax Act, 1957 carrying on various businesses, assailing the action of the vigilance wing of the sales tax department, and praying for the issue of writ of mandamus declaring such action of collecting the tax as well as the compounding fee, without framing necessary assessments determining the tax liability or passing orders, coercing the dealers for compounding the alleged offence and collecting the compounding fee on the day of inspection either through payment of cash or through post-dated cheques, as illegal, and contrary to the provisions of law as well as the judgments rendered by this Court, and consequently sought for a direction to the respondents to refund the amounts collected from the dealers with interest. 2. According to the learned counsel for the petitioners the modus operandi adopted by the department, especially by the Intelligence Wing is that they will inspect the business premises of the dealer and on the alleged irregularities found in the course of inspection they used to obtain statements from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposed, the dealers have come forward seeking compounding the offence in order to avoid further penal action. Therefore, the department was accepting the request of the dealers and collecting the tax as well as compounding fee in respect of the suppressed turnover. It is also the stand of the department that the department never coerced the dealers to give statements accepting the suppressed turnover or unaccounted turnover. In fact, the dealers have come forward voluntarily and have agreed for settlement of the irregularities by getting the offence compounded, apart from paying the tax. Therefore, there is no illegality or irregularity. 4. When these matters came up before a division Bench for hearing, it was represented by the Members of the Bar that there are decisions taking different views. In view of the said representation, the division Bench felt that it is proper to have an authoritative pronouncement by resolving the conflict if any among the decisions of this Court. Therefore, the matter was placed before the honourable the Chief Justice for referring to a larger Bench. That is how the Full Bench was constituted to hear all these matters. 5. As the facts are different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first respondent disputing and denying the allegations. It is stated that the Deputy Commissioner, Commercial Taxes, Kurnool in exercise of her powers under G.O. Ms. No. 625, authorised the first respondent to inspect the premises of the petitioner as she received some credible information that the dealer was indulging in clandestine trade with a view to evade the sales tax and accordingly the premises was inspected on January 23, 2004. It is stated that the authorities at the time of inspection asked one Krishna Murthy, who was found at the time of inspection, to produce the books of accounts or any other registers maintained for the stocks available in the business premises, but he failed to produce any of the books or registers. On the other hand, the said Krishna Murthy voluntarily gave a statement agreeing for compounding the offence by paying a sum equal to the tax. Therefore, the department has collected the said amount accepting the proposal for compounding the offence. It is also disputed that the departmental officials have obtained a statement by coercion or threat. Further, as it is a question of fact the same cannot be adjudicated upon in the present writ petition. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation in this behalf, treat such return to be an incorrect or incomplete return within the meaning of sub-section (1) and proceed to take action on that basis. (1-B) .. (2) When making an assessment to the best of judgment under sub-section (1), the assessing authority may also direct the dealer to pay in addition to the tax assessed a penalty as specified in subsection (8) on the turnover that was not disclosed by the dealer in his return. (3) Where any dealer liable to tax under this Act (i) fails to submit return before the date prescribed in that behalf, or (ii) produces the accounts, registers and other documents after inspection, or (iii) submits a return subsequent to the date of inspection, the assessing authority may, at any time within a period of six years from the expiry of the year to which assessment relates, after issuing a notice to the dealer and after making such inquiry as he considers necessary, assess to the best of his judgment, the amount of tax due from the dealer on his turnover for that year, and may direct the dealer to pay, in addition to the tax so assessed a penalty as specified in sub-section (8). (4) In any of the following events, namely, where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive times the tax or the fee due in a case where the assessing authority is satisfied that the failure of the dealer to disclose the whole or part of the turnover or any other particulars correctly, or to submit the return before the prescribed date, was wilful; and (b) shall not exceed one half of the tax or the fee, due in a case where such failure was not wilful: Provided that where such failure occurred due to a bona fide mistake on the part of the dealer, no such penalty shall be levied. Explanation: The expression 'assessing authority' occurring in this section shall, in relation to licence fee or registration fee, be construed as referring to the licensing or registering authority, as the case may be, under this Act. Section 15. Provisional assessment of tax. (1) The tax payable under this Act for each year may be provisionally assessed in advance during the year in monthly or other prescribed instalments on the basis of estimated or actual turnover of the dealer; and for that purpose a dealer may be required to submit a return or periodical return of estimated or actual turnover and pay the tax on the basis of such return or periodical returns, in such manner as may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not accompanied by the proof of payments of tax and it shall not be necessary to give minimum time of fifteen days for payment of tax as mentioned in this section; (2)(a) Notwithstanding anything contained in sub-section (1), on an application made by the assessee, the Deputy Commissioner may, by an order, allow extension of time for payment of any tax, penalty or other amount due under this Act, or permit the payment thereof in such instalments, within such intervals and subject to such conditions as he may specify in the said order, having regard to the circumstances of each case; (b) In every case where extension of time for such payment is allowed or where such payment in instalments is permitted, the dealer shall pay, in addition to such tax, penalty, instalment or other amount, interest at the rate of one rupee and fifty paise for every one hundred rupees or part thereof for each month or part thereof, from the date specified for its payment for the period so extended or on the instalments so permitted. (3)(a) If the tax assessed or penalty levied or any other amount due under this Act or any instalment thereof is not paid by any dealer or other person within the time specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information relating to his business. (2) All accounts, registers and other documents maintained by a dealer in the course of his business, the goods in his possession, and his offices, shops, godowns, vessels or vehicles shall be open to inspection by such officer at any time during the business hours prescribed under the relevant law for the time being in force or where no such hours are prescribed at all reasonable times. (3) If any such officer has reason to suspect that any dealer is attempting to evade the payment of any tax or other amount due from him under this Act, he may, for reasons to be recorded in writing, seize such accounts, registers or other documents of the dealers as he may consider necessary and shall give the dealer a receipt for the same. The accounts, registers and documents so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceeding under this Act: Provided that such accounts, registers and documents shall not be retained for more than thirty days at a time except with the permission of the next higher authority. (4) For the purposes of sub-section (2) or sub-section (3), any suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other documents. (6) Any such officer shall have power to seize and confiscate any goods which are found in any office, shop, godown, vehicle, vessel or any other place of business or any building or place of the dealer, but not accounted for by the dealer in his accounts, registers and other documents maintained in the course of his business: Provided that before taking action for the confiscation of goods under this sub-section, the officer shall give the person affected an opportunity of being heard and make an inquiry in the prescribed manner. Explanation. It shall be open to the State Government to authorise different classes of officers for the purpose of taking action under sub-sections (1), (2) and (3). Section 30. Offences and penalties. (1) Any person who (a) fails to pay within the time allowed, any tax assessed on him or any penalty levied, or any fee due from him, under this Act; or (b) being a person obliged to register himself as a dealer under this Act, does not get himself so registered; or (c) wilfully acts in contravention of the provisions of this Act or the Rules made thereunder shall on conviction be liable to be punished with fine which shall not be less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-B fails, without reasonable excuse, to make use of the goods for the declared purpose shall, on conviction, be liable to be punished if it is a first offence with fine which shall not be less than five hundred rupees but which may extend to two thousand rupees and if it is a second offence with simple imprisonment which may extend to one year and with fine which shall not be less than five hundred rupees but which may extend to two thousand rupees and if it is a third or subsequent offence with simple imprisonment which shall not be less than three months but which may extend to one year and with fine which shall not be less than five hundred rupees but which may extend to two thousand rupees. Section 32. Composition of offences. (1) The prescribed authority may accept, from any person who has committed or is reasonably suspected of having committed an offence under this Act, by way of composition of such offence (a) where the offence consists of the failure to pay or the evasion of any tax, recoverable under this Act, in addition to the tax so recoverable, a sum of money not exceeding three thousand rupees or double the amount of the tax recoverable, whichever is greater, and (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imated or actual turnover of the dealer for which the dealer may be required to submit a return or periodical returns. The assessing authority has been given the power to vary the amount of tax payable under such provisional assessment. But, however, where there is an enhancement of the provisional assessment, the dealer is required to be issued a notice and the assessing officer is obligated to make an enquiry. If any dealer fails to pay the provisionally assessed tax, he shall be liable to pay penalty, which is to the extent of 30 per cent of thetax where the dealer has charged the tax from the purchaser; and in any other case 20 per cent of the amount of tax, and such penalty has to be levied only after giving the assessee an opportunity. Section 16 provides for payment of tax and other dues payable under the Act. The tax assessed, whether provisionally or finally, and the penalty levied shall be paid by the dealer within the time fixed by the authority, but such time is not being less than 15 days from the date of service of notice of assessment or the penalty. The time-limit prescribed above for collection of the tax would not be applicable to casual traders. But, however, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of any tax or other amount due under the Act may, for the reasons to be recorded in writing, seize such accounts, registers and other documents of a dealer and shall give the dealer a receipt for the same, and the officer can retain such seized registers, documents only for so long as may be necessary for their examination and for any inquiry, which shall not extend beyond 30 days. With reference to the residential accommodation of a dealer, only an officer of the rank of Deputy Commissioner or authorised by such officer alone having jurisdiction and all searches shall be in accordance with the provisions of the Code of Criminal Procedure, and the Rules made in that behalf. The officer referred to earlier is also having the power to break open any box or receptacle in which any goods, accounts, registers or other documents of the dealer may be contained, but such break open shall be exercised only after giving the owner or any other person in occupation, a notice and if he fails or refuses to open the door on being called upon, such officer has also given the power to seal the premises or the box or receptacle or godown for a period not exceeding 24 hours. The above referr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s one lakh with simple imprisonment, which shall not be less than three months, but may be extended to one year together with fine, as referred to earlier. It is also provided that any person while purchasing goods makes a declaration under the proviso to sub-section (1) of proviso to section 5-B, fails without reasonable excuse to make use of the goods for the declared purpose, shall, on conviction, be liable to be punished in a similar way as referred to earlier. The owner or other person-in-charge of a boat or goods vehicle, who fails to carry with him any of the records or documents specified in sections 26 and 27, on conviction shall be liable to be punished with simple imprisonment, which may extend to one year in addition to the fine of Rs. 500 to Rs. 2,000. The owner of the boat or the goods vehicle, however is also held liable to be punished similarly, unless he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of such offence. If a driver or any other person-in-charge of a boat or goods vehicle refuses on demand by an officer-in-charge of the check-post or any other officer empowered under sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e procedure sanctioned by law. It is also their contention that in many cases even after such action of collecting the compounding fee as well as the tax for the alleged irregularities, no orders are being passed. Therefore, such actions of the officials of the department of the Vigilance Wing have to be declared as illegal, apart from lack of jurisdiction, and the amounts collected by adopting such methods have to be directed to be refunded with interest as well as imposing exemplary costs. This stand of the dealers is opposed by the department stating that it is only the voluntary action of the dealers, which made the department to accept the compounding of the offence, and, accordingly, they are collecting compounding fee and the tax payable by the dealers. 11. Both sides have relied upon various decisions in support of their respective claims. Hence, it would be appropriate to refer to those decisions here. The first set of decisions relied upon by the petitioners are as under: In Annam Jewellers v. Deputy Commercial Tax Officer [1996] 102 STC 506, a division Bench of this Court had an occasion to examine the action of the department in similar situation. In that case two writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisional or final assessments as the case may be, or to take such other steps as are open to the assessing authority to safeguard the interests of revenue pending such assessments. But, this procedure has been given a go-bye despite the deprecation of such practices by a division Bench of this Court in Annam Jewellers v. Deputy Commercial Tax Officer [1996] 102 STC 506. Holding so, the respondents were directed to return the postdated cheques collected from the petitioners. However, it was left open to the respondents to proceed against the petitioners in accordance with law. 13. This issue was considered again in Life Line Devices v. Commercial Tax Officer [2000] 119 STC 52 by another division Bench of this Court. In this case the petitioner filed the writ petition aggrieved by the action of the respondents in collecting cheques for a sum of Rs. 13,12,563 towards tax and compounding fee on the spot without making an assessment or demand as illegal and contrary to the provisions of the Act. The petitioner is a registered dealer, dealing in life saving cardiology equipment. It has a branch at Calcutta. There was a surprise inspection by the staff of the Regional Vigilance and Enfo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve referred judgments, further made the following observations: Despite the disapproval of the action of the Vigilance and Enforcement Officials in language as clear as it could be, the said officials have not learnt to obey the rule of law and the impact of the judgment of this Court has not been felt at all. The illegal and arbitrary action of collecting the post-dated cheques under pressure is persisting. We have to again condemn this action and further warn the concerned officials of the Vigilance and Enforcement Department or the Intelligence Wing that they should forthwith stop collecting the post-dated cheques or money towards the tax estimated or even admitted to be due and leave it to the competent assessing officer to do this part of the job after giving opportunity to the assessee before passing an order in conformity with the provisions of the Andhra Pradesh General Sales Tax Act and the Rules. Otherwise, they will be liable to be dealt with under the Contempt of Courts Act. 14. In Sree Rama Trading Company v. Commercial Tax Officer (Int.) No. 1, Hyderabad (1989) 8 APSTJ 57 a division Bench of this Court had an occasion to consider the issue of collecting the compoundin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1957, before 25th October, 1972, showing the turnover of Rs. 3,62,378, and the tax payable thereon as Rs. 10,871. The return, however, was not accompanied by a receipt from a Government treasury or a crossed cheque in favour of the assessing authority for the full amount of the tax payable as per the return. The respondent issued a demand notice in form CST-VII, referable to rule 14-A(4) of the said Rules, on July 21, 1973, for the payment of the said amount within 21 days of the receipt of the said notice. The said action of the respondent was challenged in the writ petition. The contention of the petitioner was that under the provisions for the recovery of the admitted tax when the return was not accompanied by proof of payment of tax, even before the final assessment is made, the Central Rules do not make any provision for making a best judgment assessment and for the recovery of the said tax. According to the petitioner, as per the Rules, the best judgment assessment can be made provisionally only where a return is not filed or the return filed is incorrect, but not where the turnover disclosed in the return is not disputed or the return is not accompanied by proof of payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is an acceptance by the prescribed authority. The statute does not contemplate an offer to proceed from the prescribed authority for composition of an offence. The learned Judge further observed, The dealer is given a chance to show cause that the returns submitted by him are correct and the turnover proposed to be included in the said return for the purpose of provisional assessment cannot be validly included. It is only after hearing the objections of the petitioner, could it be positively held that the petitioner had submitted an incorrect return. Before the completion of enquiry, while the respondent may suspect that the petitioner has not submitted a correct return of the turnover, it cannot be held that the Commercial Tax Officer, Guntur, has a reasonable suspicion. Mere suspicion cannot be equated with reasonable suspicion. Only the result of an enquiry could form the basis for any reasonable suspicion that the petitioner has committed an offence, which he may or may not agree to be compounded in accordance with section 32 of the Act. Until an enquiry, pursuant to the Notice G.I. No. 2717/69-70/1 is completed, in my opinion, the Commercial Tax Officer cannot entertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... negativing the claim of the petitioners that such statements were obtained by coercion and duress. The relevant observations of the Bench are as under: Further, we find from the statements filed by the petitioners that 'Further on verification of our books of accounts, you have noticed that we have recorded above transactions in our books of accounts, we have not reported in return and paid taxes to the department. The taxable rates as per our books of account is worked out as under: We are herewith pay the tax of Rs. 2,36,474 on above turnover, vide Cheque No. 981177, dated 21st February, 1993'. In respect of the petitioner in W.P. No. 2444 of 1993 also, a similar statement was recorded. In other words, they have admitted that the transactions recorded in the books of account have not been reported in the returns filed by them. Having accepted before the authority that they have suppressed the inclusion of the transaction in the returns and having paid the tax by way of cheques, to avoid the seizure of stocks and seal of the business premises, it is now not open to the petitioners, to seek for a direction not to encash the cheques issued by them. It is open to the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o effect compounding of the offence, and therefore, a suit is held maintainable to the extent the collection of tax, which is allegedly done under undue influence or coercion and under threat of arrest and imprisonment. Observing so held that there is an alternative remedy to the petitioner, and therefore, the issue cannot be decided under article 226 of the Constitution of India. 22. In Bharat Metals v. Special Assistant Commercial Tax Officer [1999] 112 STC 63 (AP); (1998) 27 APSTJ 72 a division Bench of this Court had an occasion to consider whether Vigilance and Enforcement Officer can collect tax at the time of inspection of the business premises of a dealer. In this case on November 25, 1991, the place of business of the petitioner was inspected by the respondents and found certain rough figures in a diary relating to reconciliation of accounts with the petitioner's supplier. The respondents also noticed the payments of certain amounts entered in the said diary. According to the petitioner, the respondents forced the Managing Partner of the petitioner-firm to give statement as if the purchases were made in the month of October 1991 and payments made by the petitioner were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Wing have no power to resort to the spot collections either by way of cash, cheques or even by way of post-dated cheques. The Vigilance Officers of the department have got the power to enter the premises of the dealer to inspect not only the books of accounts maintained by the dealer, but also the verification of the stocks, etc. The said inspecting authorities may also have the power to record statements from the dealers, but thereafter there is no provision to make a demand for payment of the tax/penalty or compounding fee on the spot. The Vigilance Officers, if they have got the power of assessment, can make the assessments after complying the procedure provided under the provisions of the Act; or otherwise those authorities can forward the statements recorded from the dealer to the concerned assessing authority, who can make assessment either provisional or final or even revise the assessment basing on the material in accordance with law. Until and unless an assessment is made, no liability can be fastened on the dealer and equally the department is not entitled to collect any amount on the premise that the dealer has come forward accepting the alleged suppressed turnover or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instances even considered by this Court. Invariably, the departmental authorities have violated the compliance of such requirement and made demands as well as collections almost on the spot, which resulted in creating a situation where serious allegations were made by the dealers against the department. The conduct of the authorities also had given scope for making such allegations, which were, in fact, found to be true in some of the cases. 26. Another peculiar feature of the alleged actions of the departmental officers is that even before making an assessment, compounding fee is being levied equal to or double the amount of the alleged amount of tax sought to be evaded, even in the absence of any assessment order quantifying the tax liability. Such levy and collection is clearly contrary to the provisions of the Act. In fact a learned single Judge of this Court in Brugumalla Venkatappaiah Son and Co. v. Commercial Tax Officer [1973] 32 STC 34, quashed a notice issued proposing to compound the offence, when issued along with a notice for assessment of the alleged suppressed turnover, as the learned judge was of the view that such a notice could not be issued even before coming to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided in this Act, no court shall entertain any suit, or other proceeding to set aside or modify, or question the validity of any assessment order or decision made or passed by any officer or authority under this Act or any rules made thereunder, or in respect of any other matter falling within its or his scope. 29. The division Bench of this Court though noticed that a suit or other proceedings are not maintainable either to set aside, modify or question the validity of any assessment order or other proceedings under the Act, but, however expressed that a suit is maintainable to question the collection of tax, which is allegedly done under undue influence and coercion and under the threat of arrest and imprisonment. The division Bench also felt that there is no machinery provided under the Act to question the nature of the order, which is said to have been passed and the tax collected under undue influence and coercion as well as threat of arrest and imprisonment. In the absence of any specific machinery, the court felt that the provisions of section 36 may not come in the way to institute a suit in a civil court. But, we are unable to agree with the said view expressed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment, and taxes as well as compounding fee are said to have been collected on the spot by using threat and coercion. It is alleged that no formal orders of assessment were passed nor the procedure prescribed by law was followed. When the writ petitions came up for hearing before a division Bench, it emerged that different division Benches of this Court have taken conflicting views, as to the legality of the action of the authorities of the commercial tax department, in collecting the alleged dues of sales tax and compounding fee on the spot, without passing any order of assessment. In that view of the matter, the matters were placed before the honourable the Chief Justice, for appropriate orders, as to posting. It was in this context, that the Full Bench was constituted to hear and dispose of the matters. 3. In the affidavits filed in support of the writ petitions, the common plea raised by the petitioners is that they were forced to part with cash or post-dated cheques, at the time of inspections undertaken, mostly by the vigilance wing. It was alleged that the very proposal for compounding the alleged violations emerged from the departmental authorities, in the form of coercion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compounding the offences. He too relies upon certain judgments rendered by this Court. 7. The scheme of the Act as well as the purport of the relevant provisions has been dealt with extensively by my learned brother Justice S. Ananda Reddy. Hence, it is not necessary to repeat the same. His Lordship has also referred to the decided cases on this aspect. From a perusal of the relevant provisions of the Act, and in particular sections 12 to 16 and 28 to 32, it is evident that a dealer registered as such under the Act, is under obligation to submit the return of the turnover. A dealer may be required to submit even a provisional assessment. Section 16 mandates that the tax shall be paid, and it provides for levy of penalty as well as interest on delayed payment of undisputed tax. It is not necessary to refer to the minute details thereof. 8. Section 28 empowers the officers, not below the rank of Assistant Commercial Tax Officer, authorised by the State Government, in this behalf, to require any dealer to produce the accounts, register and other documents, and to furnish any information, relating to his business. He is also vested with the power to enter and search the offices, shops ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the commercial tax department is entitled to levy and collect tax on the spot, that too in the form of cash or post-dated cheques. Such practice was deprecated. In Life Line Devices v. Commercial Tax Officer [2000] 119 STC 52, this Court expressed its concern over the continued infraction of the procedure, by the enforcing officials, and warned that such a practice is liable to be dealt with under the provisions of the Contempt of Courts Act. Reference was made to earlier judgments in Annam Jewellers v. Deputy Commercial Tax Officer [1996] 102 STC 506 (AP) and Priyanka Wines v. Assistant Commissioner [1998] 110 STC 73 (AP). His Lordship Justice P. Venkatarama Reddi, as he then was, observed as under: ..........the Andhra Pradesh General Sales Tax Act within the realm of which the second respondent and his superiors are supposed to discharge the functions, does not authorise the on-the-spot collection of tax by coercion. The Act provides for assessment provisional or final and a procedure therefor... In no other judgments, this authoritative pronouncement was either dissented or departed from. 11. The respondents seek to take shelter under certain observations made by this Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n exists for levy of the same. Inasmuch as the States' prerogative to levy tax is almost unbridled, the only protection that can be accorded to a citizen is in the form of ensuring procedural safeguards. It is for this reason, that time and again courts insisted that the provisions of taxation statutes have to be construed strictly. The law in this regard was aptly stated by Lord Cairns in Partington v. Attorney-General (1869) LR 4 HL 100, as under: if the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be. In other words, if there be admissible, in any statute, what is called an equitable construction, certainly such a construction is not admissible in a taxing statute, where you can simply adhere to the words of the statute. In Commissioner of Sales Tax v. Modi Sugar Mills [1961] 12 STC 182 (SC); AIR 1961 SC 1047, Justice Shah, as he then was, held as under: In int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money not exceeding three thousand rupees or double the amount of the tax recoverable, whichever is greater, and (b) in other cases a sum of money not exceeding three thousand rupees. (2) Any order passed or proceeding recorded by the prescribed authority under sub-section (1) shall be final and no appeal or application for revision shall lie therefrom. 16. A reading of the same discloses that it is permissible for a person to offer for composition of offences, both when it is found that he is committed offence, or, where he is reasonably suspected to have committed the same. In either case, an order, fixing the liability to pay the tax has to exist. Liability to pay the tax, on the one hand, and liability to be punished for non-payment of the same are two different aspects. While the former ensues on account of non-payment of tax, irrespective of the reason therefor, the latter follows only when it is established that there was an intention on the part of the person concerned to evade the tax. In the context of sub-section (2) of section 32, adding finality to orders compounding the offences, the prescribed authority is under obligation, to meticulously follow the procedure. Once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference is answered with the following observations and directions: (i) Under the provisions of the Act and the Rules, the Officers of the Vigilance/Intelligence Wing of the Department can exercise the powers that are conferred, such as inspection of the business premises, books of accounts, stock verification, etc., apart from recording any statement from any of the responsible person of the business concern. (ii) Basing on such information, if any of the officer of the said Vigilance or Intelligence Wing Department is empowered to make assessments, such officer can proceed to frame assessments basing on the material and such assessments could be completed only after complying the procedure provided under the provisions of the Act and Rules, i.e., granting sufficient opportunity to adduce evidence by the dealer for the proposed assessment, i.e., as to the quantities as well as valuation of the stocks, etc.; otherwise such material or information can be forwarded to the assessing authority having jurisdiction for taking appropriate action including the assessment, reassessment, etc. (iii) There shall be at least a gap of one week between the date of an order of assessment, or dem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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