The issuance of a valid notice is a mandatory requirement for initiating a reassessment proceeding under Section 19(1) of the Bihar Finance Act, 1981. The notice must record the satisfaction of the prescribed authority, mention the purpose for which it is issued, and clarify the provision of law under which the action is contemplated.

Bisheshwar Prasad Singh, J.

1. The petitioner herein has prayed for issuance of an appropriate writ, order or direction in the nature of certiorari quashing the proceeding purported to have been initiated under Sec. 19 of the Bihar Finance Act, 1981 (hereinafter referred to as "the Act"), and also the notices, as contained in annexures 1 to 3 and the order of reassessment (annexure 5) passed on September 25, 1997. The case of the petitioner is that it was previously a partnership firm carrying on business of manufacturing plastic goods having its factory in the industrial area at Kokar in Ranchi. It was registered under the Bihar Finance Act, 1981 as also under the Central Sales Tax Act, 1956. The partnership firm was subsequently converted into a public limited company, and incorporated under the Companies Act, 1956.

2. For the year 1983-84 the petitioner had submitted quarterly return and deposited the requisite sales tax payable under the Act. Ultimately, a final order of assessment was made on August 5, 1987 and a demand notice was served on the petitioner directing it to pay the balance sales tax payable according to the assessment order, which the petitioner did by depositing the balance amount on August 29, 1988. A copy of the assessment order has been annexed as annexure 4.

3. The petitioner received two notices dated April 21, 1989 and July 21, 1989 informing the petitioner that there was an audit objection and, therefore, the petitioner was required to appear on May 7, 1989 with his books of accounts relating to the years 1983-84 and 1984-85. A copy of the so-called audit objection report was not annexed to the notice nor the notice purported to have been issued under any provision of the Act. Even the details of the audit objection were not stated in the notice. According to the petitioner, they had requested the prescribed authority to supply a copy of the audit objection to enable it to file an effective reply. That, however, is disputed by the respondents, who state that the same was shown to them when the petitioner appeared through its representative, and this fact is mentioned in the show cause filed by them. It is not in dispute that the petitioner appeared before the prescribed authority, and filed a show cause on May 6, 1989. The order sheet of the case, which has been annexed to the counter-affidavit as annexure C discloses that the matter was adjourned on two or three dates, and by order dated 24th July, 1989 the next date fixed was August 22, 1989. Nothing appears to have happened thereafter, and it was only on August 19, 1997, almost eight years later that the matter was again revived and a notice was issued to the petitioner. The aforesaid notice is annexure 3 dated August 19, 1997, whereby the petitioner was again informed that in respect of the years 1983-84 and 1984-85, an audit objection had been raised by the office of the Accountant-General, Bihar. The petitioner was, therefore, informed that his show cause filed on May 6, 1989 was not found to be satisfactory and, therefore, the petitioner was required to appear on August 28, 1997, failing which ex parte order may be passed. This notice also does not refer to any particular provision of law under which it was issued. None of the notices purported to be notices under Sec. 19(1) of the Act and were not issued in the form prescribed for the purpose under the Rules. It appears that the prescribed authority purported to reassess the amount of tax for the year 1983-84 by reopening the proceeding under Sec. 19(1) of the Act. The petitioner appeared before the prescribed authority and after hearing the petitioner the impugned order of reassessment was passed on September 25, 1997 under Sec. 19(1) of the Act, and an order was made for issuance of notice of demand pursuant to the order of reassessment.

4. At the hearing of this writ petition counsel for the petitioner has urged before us five submissions, which are as follows :

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