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1982 Supreme(P&H) 181
PUNJAB & HARYANA HIGH COURT
J.M.Tandon, J.
Atul Glass Industries
Versus
Assessing Authority
Civil Writ Petition No. 975 of 1974,
Decided On : MAY 19, 1982
The High Court has the power to ascertain whether the Assessing Authority had any information as required under Section 11(6) of the Act, but cannot determine whether the information was sufficient to form an opinion to issue a notice.
Headnote:
PUNJAB GENERAL SALES TAX ACT, 1948 - SECTION 11(6) - NOTICE ISSUED UNDER SECTION 11(6) - INFORMATION IN POSSESSION OF ASSESSING AUTHORITY - JUDICIAL REVIEW - LACHES - WRIT PETITION - DISMISSAL - MAIN LEGAL POINT: The High Court has the power to ascertain whether the Assessing Authority had any information as required under Section 11(6) of the Act, but cannot determine whether the information was sufficient to form an opinion to issue a notice.
Fact of the Case:
The petitioner, Atul Glass Industries, was not registered under the Punjab General Sales Tax Act, 1948. The Assessing Authority issued notices under Section 11(6) of the Act to the petitioner for the years 1960-61 to 1963-64 and 1964-65, alleging that the petitioner was liable to pay tax but had failed to apply for registration. The petitioner challenged the notices, arguing that the Assessing Authority did not have any information to satisfy the requirement of Section 11(6) before issuing the notices.
Finding of the Court:
The Court held that the impugned notices per se cannot be assailed by the petitioner. These notices cannot be treated as adverse orders passed by the sales tax authorities against the petitioner. After issuing the impugned notices, the sales tax authorities could pass an order against the petitioner or could drop the proceedings against him. It is understood that in the latter case the petitioner will not be an aggrieved person. He will be an aggrieved person only if the sales tax authorities pass an order against him.
Issues: 1. Whether the Assessing Authority had any information as required under Section 11(6) of the Act before issuing the notices? 2. Whether the High Court can determine whether the information was sufficient to form an opinion to issue a notice? 3. Whether the petitioner can assail the impugned notices per se? 4. Whether the writ petition is barred by laches?
Ratio Decidendi: 1. The Court held that the Assessing Authority had in his possession information before the impugned notices under Section 11(6) of the Act were issued. The ratio of A. Raman and Co.s case [1968] 67 ITR 11 (SC) can hardly be invoked in the instant case. This is apart from the fact that the scheme, scope and wording of Section 147(b) of the Income-tax Act are vitally different from those of Section 11(6) of the Act. 2. The Court held that the High Court has the power to ascertain whether the Assessing Authority had any information as required under Section 11(6) of the Act, but cannot determine whether the information was sufficient to form an opinion to issue a notice. 3. The Court held that the impugned notices per se cannot be assailed by the petitioner. These notices cannot be treated as adverse orders passed by the sales tax authorities against the petitioner. 4. The Court held that the writ petition is barred by laches.
Final Decision: The writ petition was dismissed with no order as to costs.
J.M.Tandon, J.
1. The petitioner, Atul Glass Industries, a partnership firm, is manufacturing mirrors in Faridabad since 1960. It was not registered under the Punjab General Sales Tax Act, 1948 (hereafter "the Act"). The Assessing Authority, Faridabad, issued notice (annexure P2) in form S.T. XIV under Section 11(6) of the Act to the petitioner on 3rd March, 1965, for the years 1960-61, 1961-62, 1962-63 and 1963-64. The petitioner was called upon to produce all the account books for the four years detailed above on 8th March, 1965. This notice was served on the petitioner on 6th March, 1965. The same Assessing Authority issued another notice dated 20th February, 1970 (annexure P3), for the year 1964-65 directing the petitioner to produce the account books for the year 1964-65. The Assessing Authority thereafter created liability of the petitioner under the Punjab General Sales Tax Act as also under the Central Sales Tax Act vide order dated 3rd December, 1965. The petitioner assailed that order of assessment in Civil Writ Petition No. 2544 of 1966 which was accepted on 3rd December, 1970, vide order reported as Atul Glass Industries, Faridabad v. State of Haryana [1971] 28 STC 148. It was held that before an order of assessment could be made, it is the duty of the Assessing Authority to find out whether the assessee is a dealer under the Act as also under the Central Sales Tax Act and the date of liability for the payment of tax was equally to be determined. It was also held that each year of assessment is a separate unit of assessment and that the material for a subsequent year could not be utilised for the assessment of an earlier year. The Assessing Authority, Faridabad, again assessed the petitioner for the year 1962-63 and vide order dated 26th June, 1968, created a demand of Rs. 2,341.96 under the Act and of Rs. 26,730.39 under the Central Sales Tax Act. The petitioner filed an appeal against the order of the Assessing Authority dated 26th June, 1968, which was accepted by the Deputy Excise and Taxation Commissioner (Appeal), Rohtak, vide order dated 28th July, 1971. The assessment order was set aside and the appellate authority remanded the case to the Assessing Authority with the direction to give a finding as to whether the petitioner was a dealer and also to fix the date of liability. The Assessing Authority, Faridabad, vide order dated 22nd January, 1974 (annexure P4), held the petitioner to be a dealer under the Act and also determined the date of liability as 12th April, 1961. The petitioner raised objections against the Order (P4), which were dismissed by the Assessing Authority vide order dated 22nd February, 1974 (annexure P6). The petitioner has assailed the notices (P2 and P3) as also the order of the Assessing Authority dated 22nd February, 1974 (P6), in the present writ.
2. Mr. A. N. Sud, Excise and Taxation Officer-cum-Assessing Authority, Faridabad, in his affidavit, placed on the file, has averred that the petitioner after filing the present writ, filed an appeal against the order of the Assessing Authority dated 22nd February, 1974 (wrongly dated 22nd January, 1974) and the Deputy Excise and Taxation Commissioner (Appeal) vide order dated 1st July, 1974, set aside the same on the ground that Mr. M. L. Kapoor, who had made the assessment, had not been duly vested with the powers of the Assessing Authority and thus was not competent to pass the order. The learned counsel for the petitioner has stated in his arguments that the order of the Assessing Authority dated 22nd February, 1974 (P6), has since been set aside by the Deputy Excise and Taxation Commissioner (Appeal) and as such this writ stands rendered infructuous qua the same.
3. The learned counsel for the petitioner has argued that the Assessing Authority could issue notices under Section 11(6) of the Act after coming into possession of some information which satisfied him that any dealer had been liable to pay tax under the Act, in respect
