Skip to content


K.S. Shivji and Co. Vs. Joint Commercial Tax Officer, Esplanade Division, Madras - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberWrit Petn. No. 213 of 1965
Judge
Reported inAIR1967Mad135; [1965]16STC769(Mad)
ActsConstitution of India - Article 226
AppellantK.S. Shivji and Co.
RespondentJoint Commercial Tax Officer, Esplanade Division, Madras
Appellant AdvocateV.K. Thiruvenkatachari, Adv. for ;S. Sampath Kumar, Adv. and ;V. Aravamudan, Adv.
Respondent AdvocateSpecial Government Pleader
Excerpt:
- - this amount is supposed to have been arrived at on totaling six items, but the total appears to be clearly wrong. the assessing authority, in this case, has obviously failed to do his duty. (4) we have no hesitation in finding that the assessment order was clearly vitiated by an apparent error......according to the assessing officer, in the stock books recovered on an inspection by the intelligence staff of the sales tax department. the omissions were worked out to rs 2,94,737,83. the assessee had arrived at the stock valuation of rs. 2,79,058-43. with reference to these figures, working on a proportionate basis, the assessing authority fixed rs 8,32,000 as the suppressed turnover.(2) it is not in dispute that the assessee has filed an appeal against the impugned order of assessment and the same is pending disposal nevertheless it is argued for the petitioner that in view of obvious errors which go to the roof of the correctness of the assessment and also of the fact that the petitioner had not been given a proper and reasonable opportunity to show that the turnover.....
Judgment:

Veeraswami, J.

(1) This is a petition under Art, 226 of the Constitution to quash an order of assessment dated 15-12-1964, made on the petitioner in respect of the assessment year 1963-64. The petitioner had reported a turnover of Rs. 7,09,985-28. The assessing officer, however, determined the taxable turnover to be Rs. 15,42,415-33. This was preceded by a notice dated 8-12-1964, asking the petitioner to show cause why the total turnover should not be determined at that figure. The difference between the turnover reported and the turnover determined related to omissions, according to the assessing officer, in the stock books recovered on an inspection by the intelligence Staff of the sales tax department. The omissions were worked out to Rs 2,94,737,83. The assessee had arrived at the stock valuation of Rs. 2,79,058-43. With reference to these figures, working on a proportionate basis, the assessing authority fixed Rs 8,32,000 as the suppressed turnover.

(2) It is not in dispute that the assessee has filed an appeal against the impugned order of assessment and the same is pending disposal Nevertheless it is argued for the petitioner that in view of obvious errors which go to the roof of the correctness of the assessment and also of the fact that the petitioner had not been given a proper and reasonable opportunity to show that the turnover reported was correct, we should interfere with the order of assessment.

(3) When a remedy is available to an assesee under the Statue, he must first resort to it and when actually he has resorted to it and the appeal is pending, this Court would be reluctant to interfere with an order of assessment. But there may be cases where this rule may not outweigh other considerations which may compel interference by this Court. We are of the view that this is one such case. The report of the Intelligence Staff, who had apparently raided and recovered certain books, contains details as to how the sum of Rs 2,94,737-83, was arrived at as relating to the value of items omitted in the stock books. A perusal of how this amount has been arrived at shows that it is a mistake. This amount is supposed to have been arrived at on totaling six items, but the total appears to be clearly wrong. As a result of this mistake nearly about Rs. 97,000 has been wrongly included which has certainly entered into the computation of the sum of Rs. 8,32,000. No argument is required for any on to be convinced about this mistake and it is so patent when one totals the six items. The mistake occurred in the report of the Intelligence staff of the Sales Tax Department, and this has been, it is rather disturbing to note, bodily embodied by the assessing authority without any scrutiny.

We need hardly observe that the assessment proceedings are quasi judicial in nature and therefore the assessing authority has an independent duty to carefully scrutinise the materials for assessment and satisfy himself, thoroughly uninfluenced by any direction of superior officers, and assess the tax payable on that basis. The assessing authority, in this case, has obviously failed to do his duty. We also note that when hundreds of figures relating to omissions are reported by the Intelligence Staff, they were placed before the petitioner's representative just on the day of the assessment order and asked to explain then and there. It is patent that such an opportunity is no opportunity at all. It is expected that the assessee ought to be given, both in law and in fairness, reasonable opportunities to look into all the necessary documents and other books so as to enable him to explain and show cause why the proposed turnover ought not to be taken as the basis for assessment.

(4) We have no hesitation in finding that the assessment order was clearly vitiated by an apparent error. It is quashed. The petition is allowed with costs.

(5) Petition allowed.


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