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PUNJAB & HARYANA HIGH COURT
I.D.Dua and R.S.Narula JJ.
Kishan Chand And Co.
Versus
K.K.Opal, Excise And Taxation Officer (Enforcement)
Civil Writ No. 2073 of 1964,
Decided On : MAY 25, 1965
PUNJAB GENERAL SALES TAX ACT - SECTIONS 10(7), 14 - TRANSFER OF ASSESSMENT PROCEEDINGS - INCONVENIENCE TO ASSESSEE - TRANSFER OF PROCEEDINGS TO RESPONDENT - PRODUCTION OF ACCOUNTS AND DOCUMENTS - PENALTY FOR FALSE OR INCORRECT ACCOUNTS - DEPARTMENT POLICY TO PASS ORDERS OF TRANSFER BEFORE ASSESSEE REQUIRED TO APPEAR BEFORE ANOTHER ASSESSING AUTHORITY.
Fact of the Case:
The petitioner, a partnership firm, filed monthly returns and paid sales tax under the Punjab General Sales Tax Act for the years 1961-62, 1962-63, and 1963-64. The Assessing Authority, Amritsar, was the competent authority for assessing the petitioner. However, the Excise and Taxation Officer, Chandigarh, issued notices to the petitioner under Sections 10(7) and 14 of the Act, requiring the production of accounts and documents and seeking to impose a penalty for false or incorrect accounts. The petitioner challenged these notices, arguing that the Assessing Authority, Amritsar, was the only competent authority to deal with its case.
Finding of the Court:
The court held that the impugned notices were issued without a proper order transferring the assessment proceedings from the Assessing Authority, Amritsar, to the Excise and Taxation Officer, Chandigarh. The court observed that this action caused serious prejudice to the petitioner and violated the rules of natural justice. The court also noted that the department's policy was to pass proper orders of transfer before a dealer was required to appear before another Assessing Authority.
Issues: 1. Whether the Excise and Taxation Officer, Chandigarh, had the authority to issue notices to the petitioner under Sections 10(7) and 14 of the Punjab General Sales Tax Act without a proper order transferring the assessment proceedings from the Assessing Authority, Amritsar? 2. Whether the department's policy to pass orders of transfer before a dealer was required to appear before another Assessing Authority was relevant in determining the validity of the impugned notices?
Ratio Decidendi: The court held that the Excise and Taxation Officer, Chandigarh, did not have the authority to issue notices to the petitioner without a proper order transferring the assessment proceedings from the Assessing Authority, Amritsar. The court reasoned that this action caused serious prejudice to the petitioner and violated the rules of natural justice. The court also noted that the department's policy to pass proper orders of transfer before a dealer was required to appear before another Assessing Authority was a relevant factor in determining the validity of the impugned notices.
Final Decision: The court directed the respondent to proceed further on the impugned notices only after securing necessary orders of transfer. The court also directed that there would be no order as to costs.
Inder Dev Dua, J.
1. The petitioner in this case is a partnership concern with Shri Kishan Chand and Shri Ram Parkash as partners carrying on the business of sale and purchase of Banaspati oils. The firm is a registered dealer with the Assessing Authority, Amritsar. For the years 1961-62 and 1962-63, ending 31st March, 1962, and 31st March, 1963, respectively, the petitioner-firm filed monthly returns as required under the rules and paid under Section 10 of the Punjab General Sales Tax Act (hereinafter called the Act) the amount of sales tax in accordance with the returns. All the returns were filed with the Assessing Authority, Amritsar, which was the competent authority for assessing the petitioner-firm in accordance with the requisite notification, dated 30th March, 1949. Similarly, for the year 1963-64 ending 31st March, 1964, all the monthly returns were filed in time with the same Assessing Authority and the amount of tax was paid as required under Section 10 of the Act. Up to the year 1960-61, the Assessing Authority, Amritsar, assessed the petitioner-firm and for the said year the order was passed on 28th February, 1962, and the amount of tax assessed was paid. On 19th February, 1964, Shri S.K. Jain, the Excise and Taxation Officer, Finance Department, the Assessing Authority, Punjab, Chandigarh, sent notices in Form S.T. XIV for the years 1961-62 and 1962-63, under the Punjab General Sales Tax Act, as also under the Central Sales Tax Act. The petitioner-firm was required to appear before the said Authority on 3rd March, 1964. Shri Jain, according to the averments, was seeking to exercise jurisdiction under a notification, dated 11th June, 1963, authorising him to make assessments for the entire State of Punjab. The Divisional Enforcement Officers, Excise and Taxation, were, by means of a notification, dated 25th January, 1963 (annexure A to the writ petition), authorised to assist the Excise and Taxation Commissioner and were further authorised to make an assessment under the Act within the entire State of Punjab. Shri K.K. Opal, Excise and Taxation Officer (Enforcement), Amritsar, is one of such officers. The notices issued by Shri Jain were challenged in this Court by means of a writ petition in Civil Writ No. 382 of 1964, in which the admitting Bench stayed proceedings before Shri Jain. Here, I may point out that the said writ petition has since been decided and is reported as Kishan Chand and Company V/s. S.K. Jain I.L.R. (1965) 1 Punj. 589 though when the present writ petition was filed arguments in the earlier one had been heard and orders reserved. On 10th August, 1964, the respondent Shri K.K. Opal required the petitioner-firm to produce certain books of account for the years 1961-62 and 1962-63 along with the declaration forms as also list of sales made to Messrs Amar Nath Shiv Kumar of Amritsar, warning the petitioner-firm that failure to produce the accounts and documents would justify an adverse inference and necessary legal action would be taken against the petitioner-firm. A memorandum, dated 9th September, 1964, also required the petitioner-firm to produce account books for the year 1963-64 along with the declaration forms and also evidence relating to actual delivery of goods during that year, again warning that failure to produce such documents would justify adverse inference. This, according to the averments in the writ petition, is in furtherance of the show cause notice under Section 10(7) of the Act.
2. It is these notices, which are the subject-matter of the present writ petition, and it is pleaded that when the matter was pending before Shri Jain for the assessment of the years 1961-62 and 1962-63, which was also the subject-matter of Civil Writ No. 382 of 1964, there was no justification nor any authority in law for issuing any notice to the petitioner-firm under Section 14 of the Act. It is only the Assessing Authority at Amritsar, who is competent to deal with the petitioner-firm and
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