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TMI Blog2006 (5) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of account and other related documents by November 16, 1995 for verification and subsequently, by notice dated January 11, 1996, the petitioner was directed to show cause as to why compulsory registration should not be made or effected. The books of account of the petitioner were seized on June 17, 1996 on the ground of petitioner's failure to get himself registered under the Act. After such seizure, the respondent No. 4 issued two notices dated June 19, 1996 and July 4, 1996 for production of books of account and to show cause why the compulsory registration should not be effected and other penal action should not be taken against the petitioner. The petitioner on July 10, 1996, submitted his reply to the show cause notice dated July 4, 1996 denying his liability of registration and tax under the Act. It is the case of the petitioner that the respondent No. 4 without considering his reply, issued notice dated January 20, 1997 intimating the petitioner that the seized books of account revealed gross turnover of Rs. 1,47,426 during the year 1995-96 and asked the petitioner to show cause as to why he should not be registered under section 12 of the Act and also as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -lease but does not include any transfer on hire-purchase or any system of payment by instalments; (25) 'operating lease' means a lease other than a financial lease; (33) 'sale' with all the grammatical variation and cognate expressions means any transfer of property in goods by any person for cash, deferred payment or other valuable consideration, and includes (i) to (iii) . . . (iv) any transfer of the use of any goods under an operating lease; (v) to (vi) . . . 7.. (7) For the purpose of this section 'taxable quantum' means: (i) in the case of a dealer who has more than one place of business in the State or who is an importer or a manufacturer or a casual dealer or a non-resident dealer or an agent of the non-resident dealer or a dealer in whose case the tax is leviable at the point of last purchase . . . Nil; (ii) in the case of a dealer, being a lessor under an operating lease . . . Rs. 1,00,000 (iii) in respect of any other dealer or contractor or lessor . . . Rs. 1,00,000. 8.. (1) The tax leviable under section 7 for any year shall be charged on the taxable turnover during such year (a) to (e) . . . (f) in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch form, in such manner and within such time-limit as may be prescribed. (4) If any dealer has not furnished a return within the time allowed under sub-section (3) or, having furnished a return under that subsection, discovers any omission or other error therein, he may without prejudice to the charge of any interest or penalty under Chapter VI furnish a return or a revised return, as the case may be, at any time before the assessment is made and such return shall be accompanied by receipt showing payment of tax due, if any, on the basis of such return. (5) Every return under this section shall be signed and verified in the prescribed manner, (a) In the case of an individual, by the individual himself, and where the individual is absent from India by the individual concerned or by some person duly authorised by him in his behalf and where the individual is mentally incapacitated from attending to his affairs by his guardian or by any other person competent to act on his behalf; (b) In the case of a Hindu undivided family, by the karta and where the karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Rashtriya Ispat Nigam Ltd. [2002] 126 STC 114 (SC); [2002] 3 SCC 314. Dwijendra Kumar Bhattacharjee v. Superintendent of Taxes [1990] 78 STC 393 (Gauhati). Mr. D. Saikia, learned counsel appearing for the Revenue, made submissions in reference to the counter-affidavit filed by the respondents. According to him the petitioner's transaction is covered by the definition of lease under section 2(19) of the Act making him, liable for compulsory registration and tax. He also made submissions in reference to sections 8(1)(f), 11 and 12 of the Act. According to him, the seizure of books of account was rightly done as per the provisions of section 44 of the Act. He also placed reliance on the following decisions to bring home his points of argument: Harbans Lal v. State of Haryana [1993] 88 STC 357 (P H). Modern Decorators v. Commercial Tax Officer [1990] 77 STC 470 (WBTT). Aggarwal Brothers v. State of Haryana [1999] 113 STC 317 (SC); [1999] 9 SCC 182. HLS Asia Ltd. v. State of Assam [2003] 132 STC 217 (Gauhati). Lakshmi Audio Visual Inc. v. Assistant Commissioner of Commercial Taxes [2001] 124 STC 426 (Karn). Rohini Panicker v. Additional Sales Tax Officer [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the petitioner, inasmuch as even if we go by the said definition, the transactions with which we are concerned do satisfy the requirements of the term lease , which according to the definition of operating lease as contained in section 2(25) of the Act means a lease other than a financial lease. Much emphasis has been placed on the decision of the apex court in Rashtriya Ispat Nigam Ltd. [2002] 126 STC 114; [2002] 3 SCC 314, by the learned counsel for the petitioner. In that case the transaction in question did not involve transfer of right to use the machinery in favour of the contractors. The respondent therein was the owner of the steel project and for the purpose it allotted different works to contractors. The respondent undertook to supply sophisticated machinery to the contractors for the purpose of being used in execution of the contracted works and received charges for the same. The appellant made provisional assessment levying tax on hire charges under section 5-E of the Andhra Pradesh General Sales Tax Act, 1957. The respondents filed writ petition seeking declaration that the tax levied, exercising power under section 5-E of the Act on the hire charges colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact-situation involved in the present proceeding. In the case of Dwijendra Kumar Bhattacharjee [1990] 78 STC 393, the division Bench of this court dealing with the best judgment assessment held that the same being a quasi-judicial proceeding, the rules of natural justice must be followed. This aspect of the matter shall be dealt with at a later stage. In the case of Harbans Lal [1993] 88 STC 357, the Punjab and Haryana High Court was concerned with the business of giving tents, kanats, crockery, utensils, furniture, shuttering to the builders/contractors for the purpose of construction of buildings, supply of gas in cylinders and cylinders on returnable basis and giving buses on hire belonging to the petitioner to the third parties. The writ petitions were filed on the issuance of notices by the sales tax authorities for levy of the proposed tax or where the assessing authority has framed initial assessment. Referring to clause (29A) of article 366 of the Constitution of India, it has been held in the said case that the ambit of entry 54 of List II of the Seventh Schedule to the Constitution, was wide to a considerable extent which provides definition to the tax on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration is sufficient so as to come within the purview of the Act in question and that the transfer of the goods itself is not necessary. It has been held that hiring of shuttering by the owner thereof to builders and contractors for use in construction of buildings constituted deemed sale. All the aforesaid decisions fully support the findings already arrived at about the liability of the petitioner for compulsory registration under the Act and payment of tax for the transactions involved in the business of the petitioner, constituting lease . This now leads us to the case of Dwijendra Kumar Bhattacharjee [1990] 78 STC 393 (Gauhati), which has been pressed into service to buttress the argument that even if the petitioner is liable to payment of tax, adequate opportunity ought to have been given to him to submit the returns and before the best judgment assessment was arrived at. In the aforesaid case, it has been held that the assessing officer invested with the power to make assessment of tax discharges quasi judicial functions and he is bound to observe the principles of natural justice in reaching his conclusions. It has further been held that the assessing officer cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k for any documents and/or materials from the taxiing authority and sat over the matter. Situated thus, the impugned assessment order dated May 8, 1997 was passed on the basis of the materials available on record holding the taxable turnover to be Rs. 1,47,426. The revisional order is also in respect of the liability of the petitioner to pay tax upon his compulsory registration. In the aforesaid case of Dwijendra Kumar Bhattacharjee [1990] 78 STC 393 (Gauhati), the petitioner wanted time on the ground that assessment for four years was being taken at a time and it was not possible on his part to furnish the same within the stipulated time. His prayer was rejected without considering the reasons given by him. The returns submitted by the petitioner were rejected noting certain defects in the accounts. The defects were also not brought to the notice of the petitioner to enable him to explain or clarify the same. It was in those circumstances, it was held that the petitioner was denied reasonable opportunity of hearing. It was also found that the assessment was based on pure guess and surmises. Same is not the case at hand. The petitioner was asked to submit his return, which he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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