State-wide assessing authority retains jurisdiction, but penalty fails where statutory hearing before levy is denied.

A special Assessing Authority appointed with State-wide powers did not lose jurisdiction to complete an assessment merely because no formal transfer order had been made, so the assessment was upheld. However, a penalty imposed under section 10(7) of the Punjab General Sales Tax Act, 1948, could not stand because the assessee was not given notice or a reasonable opportunity of hearing before the penalty was levied. The assessment survived, but the penalty was set aside for breach of the statutory hearing requirement.

---

---

Issues: (i) Whether the assessment made by the special Assessing Authority at Chandigarh was without jurisdiction in the absence of a formal transfer order. (ii) Whether the penalty imposed under section 10(7) of the Punjab General Sales Tax Act, 1948, was valid when no opportunity of hearing was afforded.

Issue (i): Whether the assessment made by the special Assessing Authority at Chandigarh was without jurisdiction in the absence of a formal transfer order.

Analysis: The special Assessing Authority had been appointed and invested with power to frame assessments throughout the State of Punjab under the statutory notification. The earlier decisions relied upon dealt with pending proceedings and held that, in such circumstances, absence of a transfer order could vitiate the proceedings on grounds of prejudice. Those decisions, however, did not lay down that an assessment already made by the special authority was void for want of inherent jurisdiction merely because no transfer order had been passed. The assessment was therefore not invalid on the ground of lack of jurisdiction.

Conclusion: The challenge to the assessment on the ground of want of jurisdiction failed and was decided against the assessee.

Issue (ii): Whether the penalty imposed under section 10(7) of the Punjab General Sales Tax Act, 1948, was valid when no opportunity of hearing was afforded.

Analysis: Section 10(7) required the Assessing Authority to afford a reasonable opportunity of being heard before imposing penalty. No notice was issued to the assessee on the proposed penalty and no hearing was granted on that question. In the absence of compliance with the statutory requirement of hearing, the penalty order could not be sustained or enforced.

Conclusion: The penalty was invalid and the assessee succeeded on this issue.

Final Conclusion: The assessment was upheld, but the penalty portion of the demand was set aside for breach of the statutory requirement of hearing.

Ratio Decidendi: A special assessing authority empowered for the whole State does not lose jurisdiction to complete an assessment merely because no formal transfer order was made, but a penalty imposed under a provision requiring a reasonable opportunity of hearing is invalid if that opportunity is not given.

---