Skip to content


Commissioner, Sales Tax Vs. Mukat Lal Om Prakash - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case NumberS.T.R. No. 12 of 1971
Judge
Reported in[1973]31STC532(All)
AppellantCommissioner, Sales Tax
RespondentMukat Lal Om Prakash
Appellant AdvocateStanding Counsel
Respondent AdvocateNone
Excerpt:
- .....as to who had refused the service. from the report of the process-server, it appeared that the assessee-firm had been closed and the two partners of the firm had separated. the judge (revisions), sales tax, therefore, found it desirable that the name of the person who had actually refused the service should have been mentioned by the postal authorities and as the same was not done the report was not clear and the presumption of service raised by such refusal could not be drawn. the state of u.p. thereupon moved the additional judge (revisions), sales tax, under section 11(3) of the said act for referring the aforesaid questions to this court for opinion.3. question no. (1).-it appears that the assessment order and the demand notice were sent to the assessee-firm by registered post in.....
Judgment:

T.S. Mishra, J.

1.The Commissioner, Sales Tax, Uttar Pradesh, Lucknow, has, at the instance of the State of U.P., referred the following questions for our opinion under Section 11 of the U.P. Sales Tax Act :

(1) Whether under the circumstances of the case, the report of refusal by the postal authorities on the envelope containing assessment order and demand notice sent by registered post to the correct address amounts to proper service ?

(2) Whether it was compulsory on the part of the postal authorities to write the name, etc., of the person who refused the registered letter when the letter was correctly addressed?

2. Mukat Lal Om Prakash of Bulandshahr were dealers in food-grains, oil-seeds, etc. The Sales Tax Officer having found that the assessee did not deposit the sales tax and file quarterly returns for the year 1960-61, proceeded to take action under Section 21 of the U.P. Sales Tax Act. The Sales Tax Officer sent a copy of the notice to the assessee through registered A.D. post, which was returned by the postal authorities with the remark 'refused'. The Sales Tax Officer held the service of the notice to be sufficient and as the assessee did not appear before him he passed ex parte assessment order on 18th October, 1965. The assessee filed an appeal before the Assistant Commissioner (Judicial), Bulandshahr Range, on 28th March, 1966, pleading inter alia, that he came to know of the ex parte order of assessment on 25th October, 1966, when recovery proceedings against him were taken. The Assistant Commissioner (Judicial) found that the copy of the impugned assessment order along with the notice of demand had been sent to the assessee at the address of the firm by registered post but the same was returned by the postal authorities on 24th December, 1965, with the remark 'refused'. The service of the assessment order and the demand notice was, therefore, deemed to have been effected on 24th December, 1965 and as the appeal had been filed on 28th December, 1966, it was held to be barred by time. On revision, the Additional Judge (Revisions), Sales Tax, Agra, observed that in the report of the postal authorities nothing had been mentioned as to who had refused the service. From the report of the process-server, it appeared that the assessee-firm had been closed and the two partners of the firm had separated. The Judge (Revisions), Sales Tax, therefore, found it desirable that the name of the person who had actually refused the service should have been mentioned by the postal authorities and as the same was not done the report was not clear and the presumption of service raised by such refusal could not be drawn. The State of U.P. thereupon moved the Additional Judge (Revisions), Sales Tax, under Section 11(3) of the said Act for referring the aforesaid questions to this court for opinion.

3. Question No. (1).-It appears that the assessment order and the demand notice were sent to the assessee-firm by registered post in an envelope at the correct address of the assessee. Rule 45 of the U.P. Sales Tax Rules provides :

As soon as the assessment has been made the Sales Tax Officer shall send to the dealer a notice in form XI together with a copy of the assessment order free of charge and the dealer shall pay the tax so assessed within the time and in the manner specified in the notice.

4. Rule 77 deals with the mode of service of notice, summons or order. Rule 77 provides:

(1) The service of any notice, summons or order under the Act or the Rules may be effected in any of the following ways, namely....

(c) if the address of such dealer or licensee is known to the Sales Tax Officer, by sending a copy thereof to him by registered post ; or....

5. In the present case, the Sales Tax Officer did send the copy of the assessment order and the demand notice at the address of the assessee-firm by registered post. The envelope containing the said documents, however, was returned by the postal authorities undelivered to the assessee with the endorsement 'refused'. The Additional Judge (Revisions), Sales Tax, in his judgment dated 6th February, 1970, has observed that:

It appears from the report of the process-server in other processes that the firm had been closed and the two partners of the firm had separated. So also it was desirable to know as to who had actually refused the service.

6. Section 3-C of the U.P. Sales Tax Act empowers the Sales Tax Officer to assess a dealer which is a firm but which had discontinued business. Such a firm which has discontinued its business may be assessed up to the date of such discontinuance as if no such discontinuance had taken place. Sub-clause (b) of Sub-section (1) of Section 3-C, however, provides that every person who was at the time of such discontinuance a partner of such firm shall, notwithstanding such discontinuance, be liable severally and jointly for the payment of the tax assessed and penalty imposed and payable by such firm whether such assessment is made or penalty is imposed prior to or after stich discontinuance and subject as aforesaid, the provisions of the Act shall apply as if every such person or partner were himself a dealer. In the instant case, it was found by the Additional Judge (Revisions), Sales Tax, that the assessee-firm had been closed and the two partners of the firm had separated. The Sales Tax Officer could no doubt assess the firm up to the date of such discontinuance but at the same time the partners constituting the said firm being liable severally and jointly for the payment of the tax assessed as if they were personally the dealers were entitled to have the knowledge of the assessment order and the demand notice sent to the assessee-firm at its address. The statement of case does not disclose that in the address noted on the envelope the name of any of its partners was also mentioned. The presumption to be drawn under Section 27 of the U.P. General Clauses Act is a rebuttable presumption. Hence, under the circumstances of the present case, the report of refusal by the postal authorities on the envelope without indicating as to who refused to accept the envelope containing the assessment order and demand notice cannot be deemed to be a proper service. The presumption to be drawn under Section 27 of the U.P. General Clauses Act is open to rebuttal. Unless it was clear from the report of the postal authorities as to who refused to accept the envelope, it was not possible for the assessee-firm which had discontinued its business and the partners of which had separated, to adduce evidence to rebut the said report of the postal authorities. This view finds support from the provisions of Sub-clauses (2), (3) and (4) of Rule 77 of the U.P. Sales Tax Rules which were added by notification dated 31st August, 1968. Sub-clause (2) of Rule 77 provides that, where a process-server, peon or employee of the Sales Tax Officer delivers or tenders any notice, summons or order to the dealer or licensee or his manager or agent, he shall require the person to whom the notice, summons or order is delivered or tendered to sign an acknowledgment of the service of the notice, summons or order. Sub-clause (3) provides that where the dealer or licensee or his manager or agent, refuses to accept the notice, summons or order tendered to him by a process-server, peon or employee of the Sales Tax Officer, or refuses to sign the acknowledgment after acceptance of the notice, summons or order, such process-server, peon or employee, as the case may be, shall submit a report to the concerned authority stating inter alia the name or names and address or addresses of the person or persons, if any, present at the time of the refusal. Similarly, Sub-clause (4) of Rule 77 provides that in case the notice or order is sent by registered post an acknowledgment purporting to be signed by the dealer or licensee or his manager or his agent or an endorsement by a postal employee that the dealer or licensee or his manager or agent refused to take delivery may be deemed by the concerned authority to be pritna facie proof of the service. So where the service is to be effected either through process-server or by registered post and the assessee or his agent or manager refused to accept the notice or order it is necessary that the person entrusted with the task of serving the same should make an endorsement that the dealer or his agent or manager refused to take delivery. Without such endorsement a presumption cannot be drawn that the service of the notice or order has been effected. The report contemplated by Sub-clauses (3) and (4) of Rule 77 should be a complete one in order to enable the concerned authority to draw the presumption of service of the notice or order, as the case may be. We are, therefore, of the opinion that in the circumstances of this particular case, where it was found that the assessee-firm had discontinued its business and the partners thereof had separated, the. endorsement of 'refused' by the postal authorities on the envelope containing assessment order and demand notice sent by registered post on correct address without mentioning as to who refused to take delivery of the envelope would not be sufficient to raise a presumption of service under Section 27 of the U.P. General Clauses Act nor would be a prima facie proof of the service and would, therefore, not amount to proper service. We, therefore, answer question No. (1) in the negative.

7. Question No. (2).-In view of the above discussion, it was in the peculiar circumstances of this case essential for the postal authorities to write the name of the person who refused to take delivery of the registered letter and we, therefore, answer question No. (2) in the positive.

8. The assessee shall get his costs which we assess at Rs. 100.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //