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of <h1>Validity of transfer order upheld under Karnataka Sales Tax Rules, emphasizing natural justice principles.</h1> <h3>Sapthagiri Enterprises Versus Commissioner of Commercial Taxes, Gandhinagar and Another</h3> Sapthagiri Enterprises Versus Commissioner of Commercial Taxes, Gandhinagar and Another - [1999] 116 STC 279 (Kar) Issues:Challenge to order of transfer without opportunity of being heard, Validity of order of transfer under Karnataka Sales Tax Rules, Requirement of principles of natural justice in case of transfer orders.Analysis:The petitioner challenged the transfer order without being heard, citing the decision in Pannalal Binjraj v. Union of India and Ajantha Industries v. Central Board of Direct Taxes. The Supreme Court upheld the validity of transfer powers under the Income-tax Act, emphasizing non-discriminatory exercise and adherence to natural justice principles. The court stated that notice and reasons should be provided to the affected party before transfer.The second case discussed the mandatory recording of reasons for transfer under the Income-tax Act, 1961. The Supreme Court emphasized following natural justice principles, giving the assessee an opportunity to represent views on potential inconvenience. Non-communication of the transfer order was considered fatal in that case.The order of transfer was defended under rule 59 of the Karnataka Sales Tax Rules, 1957 by the Government Advocate. It was argued that the Commissioner had the authority to transfer the case based on a notification under the Karnataka Sales Tax Act. The argument highlighted that the Sales Tax Act does not require a hearing for the dealer, distinguishing it from Income-tax Act provisions.The petitioner's counsel relied on previous decisions, including an unreported decision of the Court and Commissioner of Sales Tax v. Kalidas Mulji. These cases supported the Commissioner's power to transfer assessment files without hearing the dealer, emphasizing lack of hardship to the assessee in such transfers.Ultimately, the court dismissed the writ petitions, noting that the petitioner's assessment had been transferred for valid reasons under rule 59 of the Karnataka Sales Tax Rules. The department agreed to conduct the proceedings at a convenient location, mitigating any prejudice or hardship to the petitioner. The judgment concluded that dealers under the Act cannot challenge the Commissioner's power to transfer assessments.
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