1. W.P. No. 888 of 1969 concerns itself with the notice issued by the first respondent under the Central Sales Tax Act. W.P. No. 889 of 1969 deals with a similar notice issued under the Madras General Sales Tax Act. A short history of the earlier proceedings which led to the impugned notices has to be stated. The year of assessment with which these two writ petitions are concerned is 1963-64. In September 1964, it appears, that the premises of the petitioner was searched and the Revenue claims the seizure of certain incriminating materials. The account books, the incriminating materials, and the records seized in the course of the search made in 1964 were admittedly kept with the department till August 1966 when a part of such seized books only were returned to the petitioner. I shall advert to this later. Consequent upon such seizure of records and materials, the Revenue by a notice issued under both the Acts as above called upon the petitioner to state his objections regarding certain proposals of assessment by then mooted by the department in their notices issued on 11-1-1965. The petitioner was called upon to file objections to the said proposals. In his objections, the petitioner expressed his inability to file detailed objections to the proposal made and to the process initiated by the Revenue under both the Acts under what is normally known as the best judgment method. In fact, the petitioner's objection statement which is brought to my notice and as is seen from the records clearly states that the inferences sought to be drawn in the proposed assessment are far-reaching and it would be unreasonable for the revenue to proceed and finalise the proposals in a regular order of assessment without giving the petitioner a reasonable opportunity of scrutinising the records (which were by then with the department) for making a more detailed reply to the proposals made. Apparently this was not heeded to and the result was that the orders of assessment under the Central Sales Tax Act as well as under the Madras General Sales Tax Act were made. The petitioner had to necessarily exhaust his remedies under the statute and he filed appeals against the said order made under the best-judgment method and canvassed their propriety and legality both before the Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal. The appellate Tribunal disposed of these appeals on 6-3-1968.
2. In the meantime, the petitioner came to this Court in W.P. Nos. 1014 and 1015 of 1965; in the former writ petition, he questioned the authority of the assessing authority to levy a penalty when he was assessing him under the best-judgment method under the Central Sales Tax Act. Incidentally he challenged the proposal to assess under the Central Sales Tax Act as well. Venkatadri, J. in W.P. 1014 of 1965 whilst leaving the petitioner to get his appropriate relief in the matter of the main assessment order by approaching the appellate authority before whom an appeal has already been filed held that the Deputy commercial Tax Officer has no jurisdiction to levy a penalty as indicated in the order and therefore quashed that part of the order concerning the imposition of a penalty on the petitioner. He relied upon a decision of this Court reported in Shah and Co. v. State of Madras, (1967) 20 STC 146. The net result of the disposal of this writ petition was that it was left open to the petitioner to approach the satutory appellate authority under the Act for appropriate reliefs in the matter of the main assessment order itself. IN W.P. No. 1015 of 1965 (Mad), the same learned Judge directed a return of all the records in the possession of the revenue expeditiously. This writ petition was disposed of on the 5th December 1967. I have already referred to the fact that some of the records were returned to the petitioner even by October 1966. Presently it is stated that excepting for a few books of accounts all records have been returned.
3. To continue the narrative from the time when the appellate Tribunal disposed of the appeals on 6-3-1968, it is seen that the Tribunal allowed the appeals mainly on the ground that an assessment on a dissolved firm was not possible in law. Incidentally they went into the question whether the petitioner had a real opportunity to state his objections to the proposed levy, which proposal was initiated by the assessing authority on 11-1-1965 for the assessment year in question. On this aspect, there is not much of guidance because the Tribunal recorded the following statement-
'In the appeals..... the question of reasonableness of opportunity to meet the pre-assessment notice issued by the department to the appellants does not arise'.
I am afraid that this statement of fact does not correctly reflect the events that happened. On a perusal of the records it is seen that the petitioner no doubt objected to the proposals in the pre-assessment notice, but the gravamen of the charge was that he was unable to state his real objections thereto without recourse to the books of accounts and the records which were, by then, admittedly (with?) by the department. I am unable to agree that in the circumstances of this case when the petitioner got back a portion of the books only in October 1966, and a major portion of the balance of the records thereafter, he did have a real opportunity to state his objections to the pre-assessment notice in the year 1965. But it transpires that the Revenue did not take up the matter further with the result the order of the Sales Tax Appellate Tribunal became final.
4. It is only thereafter that the two challenged notices have been issued by the respondent demanding the tax as and for the assessment year, which followed the pre-assessment notice referred to above and called upon the petitioner, to pay the tax within a notified date giving the petitioner, however, an opportunity to state his objections thereto. It is at this stage that the petitioner has come up to this Court for the issue of writs of prohibition restraining the respondents from collecting the tax demanded in the notices as according to him the notices suffer from various infirmities and illegalities as well.
5. The first contention of Mr. Ranganathan, learned counsel for the petitioner is that he did not have an effective opportunity to state his objections to the pre-assessment notice issued in the process of best-judgment method of assessment and in this view, the demand made in the challenged notices with out a further investigation into the factual position is not only inequitable but also unfair. Learned Government Pleader, however, relies upon the statement of fact as recorded by the Appellate Tribunal and extracted by me above and would state that this is not a case where the principles of natural justice in any way have been violated. He would say that the petitioner did have at every appropriate time an opportunity to state his objections and in this view no writ of prohibition as asked for should issue. No doubt, the petitioner is not entitled to an absolute rule by way of prohibition, but in the light of the facts already noticed by me, he would certainly be entitled to certain directions so that justice cannot only be said to have been done but seem to have been done. The petitioner if he filed his objections in 1965, could have done so only without reference to the books and records. I am unable to appreciate the reasoning of the Appellate Tribunal that the question whether the petitioner had an effective opportunity to state his objections to the pre-assessment notice does not arise. It does very much arise because even the objection statement made by the petitioner is a pointer to the effect that the principles of natural justice are being violated even then, since he is called upon to make a statement without reference to his account books and records. A quasi judicial Tribunal dealing with rights of parties and particularly functioning under a taxing enactment should see that at every possible step, the person aggrieved is not only formally before him but should also make it appear that the aggrieved person is person is fully equipped with the material so as to object to the proposals of assessment made by the said taxing officer. This opportunity is not an empty formality which has to be observed lightly as has been done in the instant case. Such an opportunity should be really effective in the sense that the aggrieved person should be in a position to state his case and object to the proposals on a hypothesis which has to be culled out from his own records and account books. In a situation where such materials or records are screened from the aggrieved person, but yet he is called upon to state his objections, it appears to me that in such circumstances it cannot be said either in law or in equity that the person who is called upon to state his objection was given an effective, real or fair opportunity to object to the proposed assessment. In this view of the matter the direction that has to be given to the respondent is that he should not automatically proceed with the demand as if the matter has been concluded beyond controversy but he should give, yet another opportunity to the petitioner to state his objections to the proposals made on 11-1-11965 within a time to be fixed by him for the purpose and thereafter proceed with the assessment under the relevant provisions of law. In fact the learned counsel for the petitioner would state that he would not raise any pleas of limitation as well in the matter of rehearing or the reappraisal of the proposal to assess and in this view also. an opportunity to the person appears to all the more necessary.
6. The other question which has been raised before me, though elaborately argued at one stage is as to what is the scope of Section 5 of the Validating Act 12 of 1968. The question posed was that the Sales Tax Appellate Tribunal having followed the law which was prevailing on that date and having allowed the appeal of the assess, whether the Revenue, by taking shelter under the validating provision as above, can demand the tax without any further proceedings or without any further processing as required under law. As I stated the question in the instant case is academic and I am not inclined to go through it as to what the purport of the validating provision is.
7. On the facts, and as I am satisfied that the principles of natural justice has been validated I direct the respondent to give the petitioner a fresh opportunity as indicated above. It is represented by the learned Government Pleader that during the pendency of these writ petitions by way of abundant caution the respondent has passed orders of assessment consequent upon the demands raised under he challenged notices. Those orders, in view of the rule nisi being made absolute in these two writ petitions, shall be deemed to be non est by the assessing authority and he shall proceed afresh in the light of the observations already made.
8. The writ petitions are allowed. There will be no order as to costs.