Improper service under Rule 77 defeated the assessment notice, as agency could not be presumed from prior notice acceptance.

Service of an assessment order and notice of demand under Rule 77 of the U.P. Sales Tax Rules was ineffective where there was no finding that the assessee, manager or agent could not be readily found, that the copy was left at the last known place of business or residence, or that the recipient was an adult male family member. Service also failed under Rule 77(a) because agency cannot be inferred merely from prior acceptance of notices; mutual consent and authority must be shown. The documents were therefore not duly served on the assessee, and the limitation-based finding could not be sustained.

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Issues: Whether the assessment order and notice of demand were duly served on the assessee in terms of Rule 77 of the U.P. Sales Tax Rules, and whether such service was sufficient to sustain the finding on limitation.

Analysis: The assessment order and notice of demand were tendered to Ram Swarup. Rule 77(b) was held inapplicable because there was no finding that the assessee or his manager or agent could not easily be found, nor that the copy was left at the last known place of business or residence, nor that Ram Swarup was an adult male member of the family. Rule 77(a) also failed because the finding that Ram Swarup was a manager or agent rested only on circumstances showing that he had accepted notices on earlier occasions. Agency requires mutual consent, and the conduct of the alleged agent alone is insufficient to establish that the assessee had authorised him to act as agent or manager.

Conclusion: The assessment order and notice of demand were not duly served on the assessee, and the reference was answered in favour of the assessee.

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