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P. Krishnaswamy Gounder Vs. the Deputy Commercial Tax Officer - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberWrit Petition Nos. 541 to 546 of 1968
Judge
Reported in[1971]28STC478(Mad)
AppellantP. Krishnaswamy Gounder
RespondentThe Deputy Commercial Tax Officer
Appellant AdvocateC. Natarajan, Adv.
Respondent AdvocateK. Venkataswami, First Assistant Government Pleader
DispositionPetition dismissed
Excerpt:
- - before doing so, under the provisions that are contained in the said section (1) the assessing authority should be fortified with some reason for such a proposal to assess, (2) the assessing authority should be satisfied that the whole or any part of the turnover of a dealer has escaped assessment to tax for any reason, and (3) the assessing authority should make a proposal and communicate the same to the dealer concerned but contemporaneously give a reasonable opportunity to show cause against such assessment. if cause is not shown against the proposal, then the assessing authority could determine under the best of his judgment, the turnover which has escaped assessment and assess the tax payable on such turnover......8th december, 1967. but the petitioner did not present himself for an enquiry before the concerned assessing authority but preferred to file a writ petition in this court, w.p. no. 3765 of 1967, stating that the department is bound to return the records seized from him as he was not a dealer under the act and as he was an agriculturist doing agricultural operations. this writ petition has been dismissed by me to-day. as the petitioner did not present himself as directed to explain the slips and materials seized by the department on 2nd december, 1967, the respondent gave the impugned notice on 22nd january, 1968, in connection with each of the years referred to above on the ground that there was an escapement of assessable turnover in the hands of the petitioner and called upon the.....
Judgment:
ORDER

Ramaprasada Rao, J.

1. All these petitions are for the issue of rules of prohibition restraining the respondent from proceeding with the threatened assessment as per the notice issued by him on 22nd January, 1968, for the financial years 1962-63 to 1967-68. The facts are that in the course of an inspection or raid effected by the commercial taxes department on 2nd December, 1967, of the premises under the control of the petitioner certains records, materials and slips were seized by the party. The petitioner was asked to appear in connection with such materials seized by the department on 8th December, 1967. But the petitioner did not present himself for an enquiry before the concerned assessing authority but preferred to file a writ petition in this Court, W.P. No. 3765 of 1967, stating that the department is bound to return the records seized from him as he was not a dealer under the Act and as he was an agriculturist doing agricultural operations. This writ petition has been dismissed by me to-day. As the petitioner did not present himself as directed to explain the slips and materials seized by the department on 2nd December, 1967, the respondent gave the impugned notice on 22nd January, 1968, in connection with each of the years referred to above on the ground that there was an escapement of assessable turnover in the hands of the petitioner and called upon the petitioner to show cause why he should not proceed with the assessment under Section 16 of the Madras General Sales Tax Act. The petitioner has come up to this Court for the issue of a rule of prohibition restraining the respondent from proceeding to assess on the materials secured and permanently preventing him from assessing the petitioner at all times. As the facts are similar in each of the writ petitions, it is not necessary to deal with them independently.

2. The learned Counsel for the petitioner contends that before any action under Section 16 is taken, he is entitled as of right to the disclosure of material on which the proposal is based and that there should be an enquiry at that stage without which no action under Section 16 should be taken and above all the revenue should disclose the basis on which they intend proceeding in the matter and particularly in the matter of the additions to be made or the penalty to be levied. I asked the learned Counsel to produce any authority in support of his contentions which prima facie appear to be strange and singular. He has produced none.

3. Under Section 16 of the Madras General Sales Tax Act, the assessing authority has the power to assess the escaped turnover. Before doing so, under the provisions that are contained in the said Section (1) the assessing authority should be fortified with some reason for such a proposal to assess, (2) the assessing authority should be satisfied that the whole or any part of the turnover of a dealer has escaped assessment to tax for any reason, and (3) the assessing authority should make a proposal and communicate the same to the dealer concerned but contemporaneously give a reasonable opportunity to show cause against such assessment. If cause is not shown against the proposal, then the assessing authority could determine under the best of his judgment, the turnover which has escaped assessment and assess the tax payable on such turnover. He is also empowered to make such enquiry as he considers necessary before a final order of assessment is made.

4. Thus scanned, the section does not disclose any public duty on the part of the assessing authority to confer with the assessee prior to the issue of a pre-assessment notice and disclose his mind as to what is the formula on which he proposes to act to reassess or bring to the net of taxation the escaped turnover and also discuss with the assessee about the possible penalty or the quantum thereof that he intends to levy on the assessee.

5. Such a discussion is out of place in the light of Section 16 of the Madras General Sales Tax Act. The section itself contemplates that a pre-assessment notice sent is only a preliminary process by which the assessee is apprised that he is going to be dealt with by the authority on the ground that there has been an escapement of assessable turnover. Such an attitude may be for any reason whatsoever. In the instant case there is ample justification for the authority to give the impugned notice in question as they have discovered certain materials which according to them are incriminating and on which reliance could be placed to act under Section 16. It is this which prompted them to act. In fact, in this case, the petitioner was even called for a discussion to appear on 8th December, 1967, and the petitioner would not submit himself to the taxing authority but has chosen the remedy of filing a writ already referred to. Even on this basis, the petitioner cannot have a grievance. As the assessing authority has followed strictly the procedure under Section 16 as also the substance of the law enabling the respondent to proceed to assess, I am unable to hold that there is any avoidance of public duty or exercise of power not available to the assessing authority. It is only in such circumstances that the extraordinary writ of prohibition is issued. There is no public duty cast on the respondent to stay his hands from proceeding further and assessing the petitioner. In this view of the matter, as the petitioner has no merit to seek for a rule of prohibition, I, in my discretion, discharge the rule nisi. Therefore the petitions are dismissed but under the circumstances without costs.


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