9911796707
TMI Blog1988 (2) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner-company is engaged in the manufacture of tyres, tubes and other rubber products. It has two factories, one in West Bengal and another in Tamil Nadu. The company purchases natural rubber from Kerala and despatches the same to its factories in West Bengal and Tamil Nadu for use in its manufacturing process. According to the petitioner, the purchase turnover of rubber was subjected to tax under section 5A(1)(c) of the Kerala General Sales Tax Act, 1963, and assessed as per the impugned orders of assessment. The petitioners in the original petition have challenged the validity of section 5A(1)(c) of the Act as unconstitutional and beyond the competence of the State Legislature for the reason of entry 92B of List I of the Seventh Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r cess paid cannot be included in the purchase turnover of the assessee. The only other contention raised by learned counsel for the assessee is against the arbitrary estimate of rubber cess paid as in violation of the principles of natural justice. The assessee has no objection to the taxable turnover determined except as regards rubber cess. Exhibits P-1 (a), P-1 (b), P-1 (c) and P-2 (d) are the pre-assessment notices proposing estimates of rubber cess as equal to the purchase value of rubber during the assessment years in question. These notices require the assessee to file objections to the pre-assessment notice within seven days from the date of receipt of the same. Exhibit P-1(a) is dated January 20, 1984, and the same was received b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-assessment notices, was equal to the purchase value of rubber. In exhibit P-3, the assessee has stated that the cess payable up to August 1975 was at the rate of Rs. 300 per ton and from September 1975, at the rate of Rs. 400 per ton. In paragraph 11 of the original petition, the petitioners have stated that the rate of cess payable under the Rubber Act is fixed by a notification issued by the Central Government and it was fixed initially at 30 paise per kilogram of rubber and was later enhanced to 40 paise per kilogram. The estimate of rubber cess as equal to the purchase value of rubber is, to say the least, arbitrary. The orders of assessment, exhibits P-4(a), P-4(b), P-4(c) and P-4(d), are, therefore, unsustainable in so far as they r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es tax under a valid Act was open to challenge under article 32 on the ground of misconstruction of the Act or a notification under it. It was held that the answer was in the negative. That case has given some trouble in view of the different opinions expressed in it. It is, therefore, necessary to state simply the propositions which are settled by this court. The ruling recognises the existence of a right to move this court under article 32 where the action is taken under an ultra vires statute, or where, although the statute is intra vires, the action is without jurisdiction or the principles of natural justice are violated. Errors of law or fact committed in the exercise of jurisdiction founded on a valid law do not entitle a person to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice in reaching their conclusions. It is true, as pointed out by this court in Dhakeswari Cotton Mills Ltd. v. CIT [1954] 26 ITR 775 ; [1955] 1 SCR 941, that a taxing officer 'is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence in a court of law', but that does not absolve him from the obligation to comply with the fundamental rules of justice which have come to be known in the jurisprudence of administrative law as principles of natural justice." On the facts of the case, it is clear that even before the time granted for filing objections to the pre-assessment notices had expired, the assessing authority had passed the impugned orders of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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