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Ramchand Tarachand and anr. Vs. Deputy Commissioner of Sales Tax and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case Number Miscellaneous Petition No. 612 of 1982
Judge
Reported in[1988]69STC339(MP)
AppellantRamchand Tarachand and anr.
RespondentDeputy Commissioner of Sales Tax and anr.
DispositionPetition allowed
Excerpt:
.....the prescribed limit of rs. sub-rule (5) of rule 4 provides for admission of the application for grant of licence under section 13 if the sales tax officer, after making due enquiry, is satisfied about the correctness of the turnover and other particulars in the application filed by the dealer. sub-rule (6) of rule 4 provides that if the sales tax officer is not so satisfied about the correctness of the turnover or other particulars mentioned in the application, he shall after making such inquiry as he considered necessary, and after giving the applicant an opportunity of proving the correctness and completeness of the information so furnished, determine the turnover to the best of his judgment. 2) rejected the application by the impugned order which is patently illegal, having been..........1978 it did not exceed to rs. 1,50,000 and, therefore, till the assessment year 1978-79 they were granted licence under section 13 of the act. the firm made a similar application for grant of licence for the assessment year 1979-80 which was misplaced in the office of sales tax officer (respondent no. 2). the petitioners presented the acknowledgement of that application given by the office of respondent no. 2, yet the respondent no. 2 did not agree that such an application was made by the petitioners and the licence was refused for the assessment year 1979-80 against which the petitioners have preferred a revision which is still pending.4. the petitioners submit that again when they made an application under section 13 of the act for grant of licence for the period from 1st april, 1980.....
Judgment:

Faizanuddin, J.

1. By this petition under Article 226 of the Constitution, the petitioners seek quashing of the order dated 30th March, 1981 (annexure P-3) passed by the Sales Tax Officer, Raipur, and order dated 29th December, 1981 (annexure P-4) passed in revision by the Deputy Commissioner of Sales Tax, Raipur.

2. The petitioner No. 1 (hereinafter called as 'the firm') is a registered partnership firm which is also a dealer within the meaning of Section 2(m) of the M. P. General Sales Tax Act, 1958. The firm carries on hotel business and deals in cooked food specified in entry No. 1 of Schedule III to the Act.

3. The petitioners contend that their yearly turnover did not exceed to Rs. 1,00,000 till 1st October, 1978 and after 1st October, 1978 it did not exceed to Rs. 1,50,000 and, therefore, till the assessment year 1978-79 they were granted licence under Section 13 of the Act. The firm made a similar application for grant of licence for the assessment year 1979-80 which was misplaced in the office of Sales Tax Officer (respondent No. 2). The petitioners presented the acknowledgement of that application given by the office of respondent No. 2, yet the respondent No. 2 did not agree that such an application was made by the petitioners and the licence was refused for the assessment year 1979-80 against which the petitioners have preferred a revision which is still pending.

4. The petitioners submit that again when they made an application under Section 13 of the Act for grant of licence for the period from 1st April, 1980 to 31st March, 1981 contending that their yearly turnover did not exceed to Rs. 1,50,000 during the assessment year 1980-81, it was rejected by the respondent No. 2 by order dated 30th March, 1981 (annexure P-3) by holding that on the basis of the petitioners' statement as well as from the information collected by the department, the petitioners' turnover during the assessment year 1980-81 was more than the prescribed limit of Rs. 1,50,000. The petitioners preferred a' revision under Section 39 of the Act against the said order but it was also dismissed by the respondent No. 1 by its order dated 29th December, 1981 (annexure P-4) and as such the petition has been directed against both the aforesaid orders.

5. The petitioners' main grievance is that they were neither given any notice of the material collected and used by the department in rejecting their application for grant of licence under Section 13 of the Act nor they were afforded an opportunity of being heard in this behalf. We find that there is considerable force in this submission.

6. Before examining the facts as alleged by the petitioners, we shall first examine the relevant provision of law. The State Government in exercise of its powers under Section 51 of the Act had framed Rules, which are called as the M. P. General Sales Tax Rules, 1959. Part III of these Rules relates to the grant of licence under Section 13 of the Act and cancellation thereof. Sub-rule (5) of Rule 4 provides for admission of the application for grant of licence under Section 13 if the Sales Tax Officer, after making due enquiry, is satisfied about the correctness of the turnover and other particulars in the application filed by the dealer. Sub-rule (6) of Rule 4 provides that if the Sales Tax Officer is not so satisfied about the correctness of the turnover or other particulars mentioned in the application, he shall after making such inquiry as he considered necessary, and after giving the applicant an opportunity of proving the correctness and completeness of the information so furnished, determine the turnover to the best of his judgment. It has, therefore, to be seen whether this procedure was followed by the sales tax authorities while rejecting the petitioners' application on the grounds mentioned in para 4 above.

7. The respondents have filed a photostat copy of the order sheets of the Sales Tax Officer which are annexures R-II and R-III. The order dated 20th March, 1981 in the order sheet (annexure R-II) will go to show that the record was marked to the Assistant Sales Tax Officer for inquiry into the application of the petitioners for grant of licence under Section 13 of the Act. The order sheet dated 28th March, 1981 further goes to show that the Assistant Sales Tax Officer made some enquiry and found that the petitioners' turnover for the assessment year 1980-81 was more than the prescribed limit and therefore proposed that the licence could not be granted under Section 13 of the Act. On the basis of the said inquiry report the Sales Tax Officer (respondent No. 2) rejected the application by the impugned order which is patently illegal, having been passed in utter disregard to the provisions of Sub-rule (6) of Rule 4. Once the Sales Tax Officer after receipt of the records and the report of the Assistant Sales Tax Officer, had reached the conclusion that he was not satisfied about the correctness of the turnover or any other particulars mentioned by the petitioners in their application, it was obligatory on the part of the Sales Tax Officer under Sub-rule (6) of Rule 4, to afford an opportunity to the petitioners of proving the correctness and completeness of the information furnished by them. The return filed by the respondents does not reveal that such an opportunity was afforded to the petitioners before rejecting their application. Consequently the impugned orders suffer from serious legal infirmity, and, therefore, could not be sustained.

8. In the result, the petition succeeds and is hereby allowed. The impugned orders (annexures P-3 and P-4) passed by the respondents are quashed and the respondent No. 2 (Sales Tax Officer) is directed to decide the petitioners' application afresh after affording them an opportunity as contemplated in Sub-rule (6) of Rule 4. There will be no order as to costs of this petition. The outstanding amount of security deposit be refunded to the petitioners.


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