9911796707
TMI Blog2007 (12) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... tated that the petitioner-company had been assessed to sales tax at four per cent on the sale of maize seeds for the period 1997-98 to 2001-02. The further case of the petitioner is that a proceeding under section 19 of the Act was initiated against it on the basis of a judgment of the Patna High Court in the case of SPIC PHI Seeds Ltd. v. State of Bihar [2005] 142 STC 241; [2005] 3 PLJR 470 wherein it had been held that the sales tax on maize seeds was to be paid at eight per cent and not at four per cent. In this regard, the grievance of the petitioner is that the judgment of the Patna High Court in the case of SPIC PHI Seeds Ltd. [2005] 142 STC 241; [2005] 3 PLJR 470 has not attained finality and the issue is still sub judice before the apex court for an authoritative and final pronouncement as to whether the maize seeds are taxable at eight per cent or at four per cent. In the writ application, the initiation of the proceeding under section 19 of the Act by way of notice, dated September 5, 2006, annexure 1 series has however been assailed on the ground that such notice is not in conformity with the mandatory conditions laid down under rule 20 of the Bihar Sales Tax Rules, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5] 142 STC 241; [2005] 3 PLJR 470 and, in fact, the correctness of the said decision on being assailed by the petitioner in a writ application was upheld by this court in the decision reported in SPIC PHI Seeds Ltd. v. State of Bihar [2005] 142 STC 241; [2005] 3 PLJR 470. The respondents, in fact, have also explained in their counter-affidavit that the plea of notice being not in a prescribed pro forma is also untenable and for this purpose the respondents have not only relied on the content of notice, annexure 1 series, but also on the averment made in reply enclosed the reply submitted by the petitioner to the notice and on that basis it has been sought to be conveyed that the petitioner had not at all been prejudiced in the proceeding under section 19 of the Act. By referring to the explanation furnished by the petitioner in its exhaustive reply running into 12 paragraphs, it has been further explained by the respondents that it cannot be said that the petitioner had failed to understand the purport and/or the purpose of the notice. In the counter-affidavit, it has thus been stated that the petitioner was not only given a proper notice under section 19 of the Act, but also an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... launching of reassessment proceeding. In this context, he had placed reliance on the judgment of the Full Bench of this court in the case of Bhimraj Madanlal v. State of Bihar reported in [1984] 56 STC 273 wherein it has been held that the information envisaged under section 18(1) of the Bihar Sales Tax Act, 1959 for purposes of reassessment cannot be based on a second thought or a mere change of opinion of the prescribed authority on the same set of facts and materials. Mr. Lalit Kishore, learned Additional Advocate-General No. III appearing on behalf of the respondents, on the other hand, had submitted that there was no infirmity in the reassessment proceeding. In this regard, he had explained that the content of the impugned notice was not defective or lacking in any manner. He had further taken a stand that a proceeding under section 19 of the Act would not stand vitiated ipso facto in absence of a notice of reassessment in form XIV. The learned Additional Advocate-General No. III in this regard has invited attention of this court to the contents of the impugned notice which in his view clearly went on to show that the prescribed authority had formed his satisfaction on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngunder section 19 of the Act would not stand vitiated ipso facto in absenceof a notice of reassessment in form XIV. The learned Additional Advocate-General No. III in this regard hasinvited attention of this court to the contents of the impugned notice whichin his view clearly went on to show that the prescribed authority hadformed his satisfaction on the basis of the information derived from therecords of the proceeding that the petitioner had been assessed sales tax ata rate lower than one which was correctly applicable in its case for thecommodity hybrid maize seeds and that whereas it was required to paysales tax at eight per cent, it had paid only at four per cent. The learnedcounsel, therefore, was equally emphatic in his submission that the notice, dated September 5, 2006 served on the petitioner was in conformity with the requirement laid down under section 19 of the Act. In the last limb of submission, Mr. Lalit Kishore, learned Additional Advocate-General No. III, had taken a serious objection to the plea of invalid notice raised by the petitioner and he had submitted that once the impugned notice was served and was also answered by the petitioner, leading to passing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the provisions of the Act. The assessing authority, in our view, has exceeded its jurisdiction in making a demand, vide annexures 1 series, regarding amount of tax without making an assessment under the provisions of the Act. It is not a case that the aforesaid amount is due according to the information furnished in the return. It is also not the case that return has not been approved and action has been initiated under section 20 of the Act after giving opportunity of hearing to the petitioner. Thus, the impugned notices, as contained in Annexures 1 series, are quashed. It is made clear that this court is not expressing any opinion as to the rate of tax, which is to be paid by the petitioner. It is for the assessing authority to consider the matter in terms of the provisions of the Act and determine the rate of tax in terms of the statutory provisions/instructions by taking independent decision without being influenced by the direction issued by the Commissioner, who, as we have held, has no authority in law to issue the said direction. It is also made clear that in case the assessing authority on final assessment finds that the information furnished in the returns was incor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd cereals. From the aforementioned two decisions of this court on the same issue as raised in the present writ application filed by the petitioner itself, this much is clear that there is an inter-party judgment that the rate of sales tax on maize seeds is eight per cent and not four per cent and admittedly the petitioner from the year 2002-03 is paying such sales tax at eight per cent. It, however, appears that after the said judgment was delivered on April 29, 2005, the authorities including the assessing officer had also looked into the assessment record of the years 1997-98 to 2001-02 and having found that the petitioner had escaped assessment at eight per cent and, in fact, it paid sales tax only at four per cent, a proceeding was initiated for five years by issuing the impugned notice, dated September 5, 2006 in purported exercise of section 19 of the Act. The submission of the petitioner, therefore, that the notice in terms of section 19 read with form XIV having been not issued would vitiate the entire proceedings of reassessment has to necessarily depend on the scope and purport of section 19 of the Act. Section 19 of the Act reads as follows: 19. Turnover of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of escaped turnover. (c) For determining the amount of penalty under clause (a) where the penalty precedes assessment under clause (b) the prescribed authority shall quantify the amount of suppression and tax thereon provisionally in the prescribed manner. (d) No order shall be passed under this sub-section without giving the dealer an opportunity of being heard in the prescribed manner. (3) Any assessment or reassessment made and any penalty imposed under this section shall be without prejudice to any action which is or may be taken under section 49. Thus, from a bare perusal of section 19 of the Act, it becomes crystal clear that such power of reassessment can be exercised upon a valid satisfaction recorded by the prescribed authority that reasonable ground(s) exist and that such satisfaction was based upon information that the turn over of a registered dealer had escaped assessment or the turnover had been under-assessed or the turnover had been assessed at a rate lower than which was correctly applicable or that the turnover had been subjected to wrong deductions. These requirements in the case of the petitioner was found to have been totally fulfilled by the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with section 17(2), part (c) deals with section 17(4), part (d) deals with section 17(5), part (e) deals with section 18, part (f) deals with section 19(1) and part (g) deals with section 25 of the Act. It is only part (f) of the form XIV which for the purposes of this case pertaining to a notice under section 19(1) of the Act is relevant and is quoted hereinbelow: (f) Whereas upon information which has come into my possession I am satisfied that reasonable grounds exist to believe that your turnover for the period mentioned below has escaped assessment/has been under-assessed/has been assessed at a rate lower than that which was correctly applicable/has been subjected to wrong deduction; If the aforementioned requirement of part (f) of form XIV is examined with the contents of the notice, dated September 5, 2006, it can be safely found that there is a clear recital with regard to availability of an information with the prescribed authority gathered from the records of the earlier assessment proceedings which satisfied him that the petitioner in those years of assessment had been under-assessed at a lower rate and thus required reassessment in terms of section 19(1)(g) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. v. State of Bihar [2005] 142 STC 241; [2005] 3 PLJR 470). Under such circumstances, it is difficult for me to accept the submission on behalf of the petitioner that non-issuance of notice in the prescribed pro forma, form XIV would vitiate the entire proceedings. In coming to this conclusion, I find also support from the ratio of Savitha Chemicals [1999] 2 SCC 143 wherein the apex court had upheld the validity of a proceeding under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Union Practices Act, 1971 by repelling a similar contention with regard to the effect of not serving the notice as prescribed under the Rules. The apex court, in fact, went on to hold that if all the requirements of a notice as prescribed in the Rules are fulfilled in a notice, not issued in the prescribed format, the same would not invalidate the entire proceeding and the final order, if the purpose and context of the notice had afforded a reasonable opportunity. In the present case also the content of the notice dated September 5, 2006 (Annexure 1 Series) discloses all the material particulars as prescribed under section 19(1) of the Act and when it has been clearly stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard to reassessment of a registered dealer escaping assessment was not fulfilled. As a matter of fact this court in the Usha Sales Pvt. Limited case [1985] 58 STC 217 in the concurring judgment of Justice Sushil Kumar Jha (as his Lordship then was) has himself made a clear distinction in the cases where there is a complete lack of jurisdiction and the cases in which the defect is confined to procedural technicalities. His Lordships had held as follows (at page 223): . . . So far as the procedural technicalities are concerned I shall be the first person to throw them into the legal dust-bin, and in such matters the principle of waiver and estoppel can be invoked . . . In absence of any challenge on behalf of the petitioner either to the applicability of section 19 of the Act to its case or non-fulfilment of the requirement to the proceedings under section 19 of the Act, the plea on behalf of the petitioner with regard to the defect in the notice of not being in the prescribed pro forma, one relating to defect in procedural technicalities is fit to be rejected specially when in its show cause reply (annexure A), no such plea at all as with regard to the content and/or the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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