1972 (5) TMI 53 - HC - VAT and Sales Tax

Court upholds validity of incomplete tax returns for assessment under section 11(5).

The court ruled in favor of the department and against the assessee. It held that the incomplete returns filed by the assessee were valid and could be ... - Issues Involved:1. Validity of returns filed by the assessee.2. Limitation and sustainability of the assessment order.3. Jurisdiction of the Assessing Authority.Issue-wise Detailed Analysis:1. Validity of Returns Filed by the Assessee:The first issue was whether the quarterly returns in form S.T. VIII-A filed by the petitioner without depositing the amount of tax and without indicating his gross taxable turnover were returns in the eye of law and could furnish a basis for proceedings under section 11(2) of the Punjab General Sales Tax Act. The court noted that the returns showed 'nil' against all columns and included five notes explaining the assessee's reasons. The court held that the returns, despite being incomplete or incorrect, were still valid returns. The court emphasized that the scheme of the Act differentiates between incomplete/incorrect returns and no returns. Incomplete or incorrect returns should be dealt with under sub-sections (2) and (3) of section 11, while no returns fall under sub-section (5). The court concluded that the returns filed by the assessee, though incomplete, were not cases of no returns and thus could be used as a basis for proceedings under section 11(2).2. Limitation and Sustainability of the Assessment Order:The second issue was whether the order of the Assessing Authority dated 30th October 1965, assessing purchase tax without issuing a statutory notice under section 11(5) of the Act, was within limitation and sustainable in law. The court observed that the assessment was not made under sub-section (5) of section 11, which applies to cases of no returns, but under sub-sections (2) and (3) for incomplete or incorrect returns. Therefore, the question of issuing a statutory notice under section 11(5) did not arise. The court held that the assessment order was within limitation and legally sustainable.3. Jurisdiction of the Assessing Authority:The third issue was whether the Assessing Authority had jurisdiction to make the assessment. The assessee contended that Shri K.K. Uppal, who initially took cognizance of the matter, lacked jurisdiction as the case was not specifically transferred to him. The court noted that Shri K.K. Uppal was appointed under section 3 of the Act as an Excise and Taxation Officer for the entire State of Punjab and was authorized to make assessments. The court held that he had the jurisdiction to make the assessment, and the absence of a specific transfer order did not invalidate his jurisdiction. The court emphasized that the objection regarding jurisdiction should have been raised at the earliest opportunity and not at a later stage. The court concluded that there was no lack of inherent jurisdiction in Shri K.K. Uppal, and his orders were not nullities but, at most, an irregular assumption of jurisdiction.Conclusion:The court answered all three questions in favor of the department and against the assessee. The returns filed were valid in the eye of law, the assessment order was within limitation and legally sustainable, and the Assessing Authority had the jurisdiction to make the assessment. The reference was answered accordingly, with each party bearing its own costs.