The main legal point established in the judgment is the principle of exercising power in a reasonable manner and the relevance of delay in exercising the power, as well as the relevance of the petitioner's conduct in seeking relief under article 226 of the Constitution.

M.P. MENON, J.

The petitioner-firm is engaged in the business of buying and selling coconut oil, coir, copra, etc. Its principal place of business is in Kerala State, but it has also a branch office at Patna in Bihar. Assessment under the Central Sales Tax Act for the year 1973-74 was completed in July, 1975; but it was subsequently noticed that certain "branch transfers" in respect of which exemption had been granted, were not really branch transfers. It was therefore proposed to rope in this escaped turnover also, and exhibit P1 detailed notice dated 16th March, 1978 under rule 6(7) of the C.S.T. (Kerala) Rules, was served on the petitioner. The proposal was to bring to tax a turnover of over Rs. 1,00,00,000 which had allegedly escaped assessment, and to levy tax at the rate of 10 per cent., as the transactions were not covered by C forms.

2. The petitioner filed exhibit P2 objections on 18th May, 1978 and on 6th December; 1978 another notice (exhibit P3) was served on the firm requiring it to produce the books of accounts for the year 1973-74, in order to verify the facts and circumstances relied on in exhibit P2. According to the petitioner, the books were so produced on 23rd December, 1978 and was later returned to it. The firm was thereafter under the impression that the matter was closed.

3. However, exhibit P4 notice was again issued by the department on 24th December, 1983 for production of records and books relating to the years 1973-74 and 1974-75, for finalising/determining the firm's tax liability for the said years. The firm furnished the following reply (exhibit P5) on 10th January, 1984 :

"We are in receipt of the above notice. As you are aware our branch is located at Patna and we have to gather the required particulars, documents, etc., from them. This will take sometime. Hence we are constrained to request you to grant us at least two months' time to take further action in the matter."

The request was granted, and time was given up to 12th March, 1984 but in the meanwhile, the firm appears to have become wiser : it gave a twist to the stand taken in exhibit P5 and wrote the following letter (exhibit P7) on 15th February, 1984 :

"We have for acknowledgment your letter under reference wherein you have required us to produce all accounts relating to the assessment year 1973-74 on or before 12th March, 1984. You have stated in the said letter that we had applied for two months' time for production of accounts. You will note from our letter dated 10th January, 1984 that we had only requested you for time to take further action in this matter. We are informed that an assessment can be reopened within a period of five years and in our case it is about ten years since the expiry of that assessment year. We shall hence thank you to kindly let us know the provision of law under which you have proposed to reopen the assessment. Please note that you have no jurisdiction to revise the assessment for 1973-74 at this stage.

In this connection, we may mention that we had produced our accounts for the year 1973-74 before you as early as December, 1978 and the accounts had been examined for about 15 days continuously and you had closed the proceedings on the ground that there is no basis for reopening the assessment. In these circumstances, the present notice is wholly without jurisdiction.

We shall proceed further in this matter after receipt of your reply."

The department was not impressed by this new approach, and it furnished exhibit P8 reply on 3rd May, 1984, reiterating the need for producing the books, etc., and pointing out that failure to do so would have the result of the assessment getting completed on the lines indicated in exhibit P1.

4. This writ petition by the firm seeks to quash the proceedings connected with exhibits P1, P4 and P8 on the ground that if the department was desirous of proceeding against turnover alleged to have escaped, it should not have acted in the fitful manner of taking the first