1988 (5) TMI 335 - SC - VAT and Sales Tax

Court clarifies assessment process under Haryana Sales Tax Act

The Court dismissed the writ petitions challenging the validity of a notice issued under the Haryana General Sales Tax Act, 1973, and the vires of Section ... Whether an order of assessment under sub-section (3) of section 11 of the Punjab Act or section 28(3) of the Haryana Act can now be completed or would that be barred by limitation? Held that:- Appeal dismissed. A period of limitation has been prescribed for bringing the escaped turnover into the net of taxation, such an eventuality cannot be grappled with appropriately unless timely assessment is completed. In several taxing statutes, even in a situation like this, where assessment under section 11(3) or 28(3) of the respective Acts is contemplated, a period of limitation is provided. Until by statute, such a limitation is provided, it is proper for the State Governments to require, by statutory rules or appropriate instructions, to ensure completion of assessments with expedition and reasonable haste but subject to rules of natural justice. Issues Involved:1. Validity of the notice issued under the Haryana General Sales Tax Act, 1973.2. Vires of Section 28A of the Haryana Act.3. Limitation period for completing assessments under Section 11(3) of the Punjab Act or Section 28(3) of the Haryana Act.4. Requirement of notice before the Assessing Authority proceeds to complete the assessment according to the best of his judgment.Issue-wise Detailed Analysis:1. Validity of the Notice Issued under the Haryana General Sales Tax Act, 1973:The petitioner challenged the notice issued by the Excise and Taxation Officer-cum-Assessing Authority under the Haryana Act. The notice was issued for assessment years 1968-69 to 1974-75. The petitioner complied with the initial notice by producing documents, books, and other papers. However, a subsequent notice requiring further records and documents was issued on 24th September 1982. The Court noted that the Assessing Officer intended to complete the assessments following the procedure in sub-sections (2) and (3) of Section 11 of the Punjab Act or Section 28 of the Haryana Act. The Court held that the assessment proceedings were still pending as final orders had not been made.2. Vires of Section 28A of the Haryana Act:The petitioner also challenged the vires of Section 28A of the Haryana Act. However, during the arguments, the State's counsel indicated that action under Section 28A was not intended to be taken. Consequently, the Court found it unnecessary to refer to the provisions of Section 28A or deal with the contentions advanced regarding this provision.3. Limitation Period for Completing Assessments:The Court examined whether an order of assessment under Section 11(3) of the Punjab Act or Section 28(3) of the Haryana Act could now be completed or whether it would be barred by limitation. The Court referred to several precedents, including Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax and Indian Aluminium Cables Ltd. v. Excise and Taxation Officer. The Court concluded that in the absence of a prescribed period of limitation, the assessment should be completed within a reasonable period. The Court did not extend a period of limitation for completion of assessments under Section 11(3) or 28(3) but directed the Assessing Authority to complete all pending assessments within four months.4. Requirement of Notice Before Best Judgment Assessment:The Court discussed the requirement of notice before the Assessing Authority proceeds to complete the assessment according to the best of his judgment. Referring to the Indian Aluminium case, the Court noted that a further notice might be necessary, but it did not finally decide on this issue. The Court left the question open for a larger bench to examine the correctness of the view in the Indian Aluminium case.Conclusion:The Court dismissed each of the writ petitions and directed the Assessing Authority to complete the pending assessments within four months. The Court emphasized the importance of timely assessment for both the State and the assessee. The vires of Section 28A of the Haryana Act and the requirement of notice before best judgment assessment were left open for future consideration. Each party was directed to bear their respective costs.Petition dismissed.