C.A. Vaidialingam, J.
1. In this writ petition Mr. V. Rama Shenoi, learned counsel for the petitioner, challenges the order of assessment passed by the Sales Tax Officer, Hozdrug, under exhibit P-1, making the petitioner liable for payment of sales tax for the year 1959-60.
2. The main attack that is made as against this order of assessment are twofold viz.,
(i) that the order is arbitrary and also is passed in violation of the principles of natural justice ; and
(ii) that there is no jurisdiction in the officer to levy surcharge and that the provisions relating to the levy of surcharge are illegal and void.
3. It is not really necessary to consider the second contention that has been raised also, in these proceedings. In the view that I take regarding the first ground of attack as against this order, this writ petition can be disposed of on that basis.
4. The petitioner appears to have sent his return for the year in question and though there were one or two notices issued to him for production of evidence in support of the return, the petitioner appears to have not complied with that requirement. Therefore, the Sales Tax Officer issued a communication dated 24th September, 1960, evidenced by exhibit P-4 stating that he proposes to make an estimate of the turnover of the petitioner for the year in question in the manner mentioned in that communication. There are several aspects referred to therein and it is not necessary for me to go into them for the purpose of this writ petition.
5. Ultimately under exhibit P-4 the petitioner is asked to submit his objections, if any, before 11 a.m. on 4th October, 1960, along with all records to substantiate the objections also.
6. The petitioner-there is no controversy-on 4th October, 1960, produced his books of account and other documents which according to him, will support the figures mentioned in the return. The assessing officer, as will be seen from the order of assessment, exhibit P-1 was not satisfied about the various entries found in the books of account and therefore, he was prepared to reject the books of account. There are two main reasons given by the officer for rejecting the accounts.
7. Though no doubt this Court exercising jurisdiction under Article 226 is not really concerned with the reasons given as such for the rejection of the books of accounts produced by an assessee, they will have to be considered to find out whether the matters mentioned therein are really based upon the materials on record and whether the assessee was made aware of that particular circumstance which is used against him in the assessment order. One reason is that the central excise gate passes issued in this case mention a godown at Nileswar, but the books of account do not show any payment of rent or maintenance charges. The learned counsel for the petitioner attacks that if an opportunity had been given to his client and if this matter had been mentioned by the officer, the petitioner has an effective explanation for the same.
8. Another reason given by the officer for rejecting the account books is that according to him, on 7th November, 1959, the Central Excise Authorities intercepted 50 tins of, cocoanut oil when under transport to Kokkanassery Bazaar and it was clearly established that the relative sale bill produced by the dealer was faked. Mr. V. Rama Shenoi, learned counsel for the petitioner, in my view, quite rightly urged, that this aspect was never made known to the petitioner when the books of account were being considered by the assessing officer. I am only adverting to some of these matters referred to in the assessment order to consider the justification of the attack made by Mr. V. Rama Shenoi that the order has been passed in violation of the principles of natural justice.
9. After rejecting the accounts, it will be seen, the officer makes an assessment on a best judgment basis and it is the contention of Mr. V. Rama Shenoi that the various figures mentioned therein are absolutely unrelated to facts.
10. The learned Government Pleader rather very strenuously urged that the officer actually issued a notice evidenced by exhibit P-4 stating that he proposes to make an assessment on the best judgment basis. The petitioner did not admittedly file any objections to the same and the petitioner had also not produced his books of account on the date when he was called upon to produce. Therefore, the learned Government Pleader urged that it was entirely within the powers and jurisdiction of the assessing authority, after considering the books of account, either to accept them or to reject them and make an assessment on a best judgment basis. I am not inclined to accept this contention of the learned Government Pleader especially when exhibit P-4 clearly gives an opportunity to the assessee namely, the dealer in this case, to produce his records on 4th October, 1960, to substantiate the objections that he may file in response to the notice. No doubt, no objection as such appears to have been filed in this case by the petitioner. But, as I mentioned earlier, the petitioner did appear before the officer on 4th October, 1960, with all his books of account and attempted to satisfy the officer regarding his estimates proposed in the order, exhibit P-4.
11. As to whether the assessing officer was satisfied with the explanation offered by the dealer having due regard to the various entries in the books of account, is a totally different matter and if the position rested only on that basis, it would be very difficult for this Court to interfere under Article 226. But it will be seen that after the books of account were produced by the dealer, there is no material placed before me to show that the officer in any way, indicated to the assessee that he is not accepting the books of account and that he still proposes to make an assessment on the best judgment basis. In my view, it was not open to the officer, in the circumstances of this case, to fall back upon making an assessment on a best judgment basis, without giving again an opportunity to the assessee as to why exactly the assessing officer is not prepared to place reliance on the books of account and also to make known to the assessee any further particulars or basis, which he proposes to adopt in relation to the matter of making best judgment assessment in this case.
12. The officer admittedly has not done anything, after the books of account have been filed and produced before him except stating that the books of account are rejected and that the assessment is made on a best judgment basis. In my view, the order, apart from being arbitrary, suffers also from the infirmity of violation of the principles of natural justice under Article 226 of the Constitution and therefore, the order has to be set aside by this Court.
13. The order under attack, exhibit P-1, is therefore set aside. But it is open to the officer to take up the question of making a fresh assessment for the period in question, after giving a full and fair opportunity to the assessee to place all his objections that may be available to him, both on law and on facts. Subject to the directions mentioned herein, the writ petition is allowed and parties will bear their own costs.